Going to the Dogs

Going to the Dogs

Entrepreneurs by Janet Leiser | Senior Editor

Sharn Veterinary's three-year average annual growth rate of 371% has it well on its way to becoming the industry leader with its medical devices for animals.

Like other entrepreneurs, Andrew Schultz Sr. saw a market need where most others didn't, and his vision remained clear when others wavered.

It has been nearly 15 years since Schultz convinced Tampa-based Critikon Inc., a subsidiary of Johnson & Johnson, to manufacture blood pressure monitors for pets. Critikon already made the devices for humans. It modified the device for animals, whose hearts vary from 20 beats a minute for a horse to hundreds of beats per minute for kittens.

But pet monitors weren't an overnight success. At first, only a couple hundred monitors sold annually.

Schultz took early retirement as Critikon's marketing director in the '90s, but he agreed to continue to market the monitor. After Critikon was sold in 1998, the company was no longer interested in veterinary services.

The entrepreneur thought about giving up on pet monitors, he says. Instead, he found a new manufacturer that made a better monitor and called it a Cardell.

Today, he and his son, Andrew Schultz Jr., are proving he was right.

Tampa-based Sharn Veterinary, spun off in 2001 from another Schultz business called Sharn Inc., made Inc. 500's newest list of the fastest growing private companies. With an average three-year growth rate of 371%, Sharn Veterinary's revenue is expected to hit $4.5 to $5 million this year, up from $2.9 million in 2005.

If all goes as planned, the company will hit $15 million in revenue in five years, $30 million in 10 years. That's about 20% growth annually.

"It's an industry that's growing like crazy," the elder Schultz, called Andy, says. "If you go to a veterinary conference you'll see 200 to 300 exhibitors marketing everything from ultrascan devices to everything that's in a human hospital."

One-man show

For the first five years of this century, Andy Schultz, 57, ran the company out of his Tampa home. Basically he waited for sales reps that sell to veterinarians to call with orders. He attended a couple annual conferences for veterinarians. But he didn't aggressively push the company.

Then he stepped up marketing, spending about 2% of the firm's annual budget, which he says is about $100,000 this year, to advertise in the 15 or so publications that target veterinarians.

As sales climbed, he added a couple employees. He worked 12- to 15- hour days. His wife took care of accounting and a sister-in-law helped with the paperwork. His son, a certified public accountant, accepted his offer to work with him, moving from Atlanta, where he ran nonprofit businesses, to Tampa.

"We've transformed the company from a one-man show to an organization that's growing," says Andrew Schultz Jr., who will soon take over the business as his father tries to cut back on his work week.

"As the business has taken off, we have thousands of clinics that own our monitors. We have more customers calling with questions or to order accessories and parts. Now we have our booth at six to eight trade shows. We've gone from just putting out a newsletter to doing training at sales meetings."

In addition to stepped up marketing, business is booming because more people own pets now than in the past and more owners are willing to spend more of their income on their pets. An estimated 63% of all U.S. households, or 69.1 million, have at least one pet.

The American Pet Products Manufacturers Association Inc. cites statistics that show Americans will spend $38.4 billion this year on pets, up from $32.4 billion in 2003. About $9.4 billion is spent on veterinary care.

"As the pet population expands, the number of veterinarians are expanding," Schultz Sr. says. "We used to just put an animal out of its misery when it had a health problem. Now people pay for $5,000 surgeries."

The United States isn't the only country spending more on its pets. Sharn Veterinary sells monitors around the world.

Monitors retail from about $2,200 for a blood pressure monitor to $10,000 for a device with a color monitor that tracks oxygen levels, temperature, respiration and other vital signs. Monitors work on the small- or large-animal mode, with different attachments for different animals.

The San Diego Zoo recently used the Cardell for a sick mountain gorilla.

A little more than a year ago, Andy Schultz was working from a card table at his house along with the three others when he realized it was past time for more space.

Sharn Veterinary moved into an office on North Dale Mabry Highway in September 2005. It doubled its space to about 2,600 square feet this week with the addition of an adjacent office.

In addition to the six people that work for the firm, Sharn plans to hire two inside sales people to take calls from field reps and to call prospective customers. The company relies on a network of about 30 independent companies that employ about 1,700 sales reps to sell its products, as well as those of its competitors.

They say the Cardell is used in every vet school in the country because it's a high-quality product. Sharn holds an estimated 35% to 40% market share.

"We find out whatever the best technology is in medicine and use it," Andy Schultz says. "Our blood pressure monitor is the only technology that has been studied in veterinary medicine and compared to the gold standard."

Not all veterinarians monitor sick animals. But Andrew Schultz says an animal's survival rate is improved 60 times during surgery if vital signs are monitored.

His father agrees.

"The only obstacle is getting the veterinarian to realize how much better care he can give by monitoring more parameters," Schultz Sr. says. "I've talked to veterinarians who have no monitoring at all. One said to me he tries to do his surgery as quickly as possible so he didn't get in any trouble. Now he has monitors that make it easier for him."

Growth plans

Within the next three to six months, Sharn Veterinary plans to come out with equipment that will allow a veterinarian to monitor an ailing animal's vital signs from a home computer so doctors aren't stuck all night or all weekend at the clinic. In addition, the company will sell monitors linked to a main station similar to monitoring stations now used in hospital intensive care units.

To further ensure its success, the father-and-son hired a national consultant firm, Six Disciplines, to implement what they hope is a cannot-fail strategy, with steps spelled out in detail. The management firm's strategy is based on the 2004 management guide, Six Disciplines for Excellence, by author Gary Harpst (see sidebar).

The elder Schultz, a Penn State graduate with an advertising degree, says it's important for a company to spend as much as possible on marketing.

He has seen time and time again, he says, the differences that marketing can make in a company. Sharn Veterinary's recent growth is one example.

LEARN, LEAD AND LAST

Author Gary Harpst wrote "Six Disciplines for Excellence: Building Small Businesses that Learn, Lead and Last," a 2004 business improvement book some entrepreneurs say can make a lasting difference.

Andrew Schultz Sr. and Andrew Schultz Jr., the father and son that run Tampa-based Sharn Veterinary Inc., an international company that distributes medical monitoring devices for animals, decided to hire the Six Disciplines consultant firm after it opened a Tampa office earlier this year. The company's annual average growth rate over three years is 371%.

According to Six Disciplines, the best performing small businesses have a passionate leader who seeks excellence in their business, wants to improve short- and long-term planning and wants team members to perform to their potential.

To achieve lasting excellence, Harpst says, a company must transition from "product building to business building."

According to the www.refresher.com, the "Six Disciplines" are:

DECIDE WHAT'S IMPORTANT. The foundation of all strategy formulation is deciding what is most important or unimportant to an organization so the allocation of resources - time, money and creativity - are directed at the goal.

SET GOALS THAT LEAD. Well-defined goals are the most effective communications tools available to a leader. Produce annual goals that are clear and measurable.

ALIGN SYSTEMS. One barrier an organization faces in pursuing its goals is itself. The systems that make up the business - policies, processes, technologies, measures, and people - are often at cross-purposes with the priorities of the company. Most organizations don't have an organized approach to keep systems aligned with their strategy. This discipline taps the knowledge of the workforce to identify areas where the company will get the greatest return on its investment in policies, processes, measures, technologies and people.

WORK THE PLAN. The individual quarterly plan is a great organizational learning tool. In this discipline, every person in the company works with a team leader to develop individual plans for the upcoming quarter. Goals are reviewed and checked for alignment with company goals. Individuals learn how to set goals, understand company priorities, take responsibility for their own goals, report progress and use innovative capability to solve problems.

INNOVATE PURPOSEFULLY. Everyone in the company has the ability to solve problems. Unlike other disciplines, this one provides tools and principles used throughout the other disciplines to help people set clear goals. These goals align with company priorities, and then employees use creativity to meet or beat the goals.

STEP BACK. This annual discipline helps the whole organization step back from the pressure of everyday business to gain perspective on business performance through a series of 'discovery exercises,' exploring externals such as competitors, the industry and economic conditions, in addition to internals such as goal performance, stakeholder feedback and measures.