For MobilTek Medical, a big contract led to big plans and new challenges

National competitive bidding, oxygen rental caps, and accreditation standards. Each stands as a sobering reminder that whatever government giveth, government also taketh. But equally true is that, at least in some circumstances, government’s beneficence can handily exceed its rapacity.

No arguing that point with Jim Hall, the owner of MobilTek Medical Inc, a full-spectrum DME/HME company he started a mere 8 years ago out of his Franklin, Ind, garage to service scooters (and, occasionally, power wheelchairs). Today, MobilTek is about to make a home for itself in a brand-new, state-of-the-art, 29,000-square-foot facility on 7.5 acres that will feature 8,100 square feet of retail showroom space, plus separate defined sections for equipment repairs, cleaning, and lift installations. One reason MobilTek Medical has been able to expand at so heady a pace is that, in 2004, it landed a 5-year contract with the government—namely, the Veterans Administration. “This one contract has helped us grow faster than we normally would have,” Hall insists. “Last year, we grew two-and-a-half times more than we did the year prior, and this year we are hoping to grow at least double compared to 2005.”

Opportunity Knocked
MobilTek Medical’s contract with the feds works a bit differently than what might be expected. Rather than buy products from MobilTek Medical, the government purchases equipment and supplies direct from manufacturers and retains MobilTek Medical to warehouse those goods. MobilTek Medical then delivers items on demand to patients’ homes. The company also is responsible for product cleaning and servicing.

Acquiring this contract was not easy. Hall says it took him nearly 5 years of laying groundwork with the government before being allowed to bid. Hall’s relationship with Uncle Sam began shortly after MobilTek Medical was tapped to serve as a scooter maker’s factory-authorized service center in Franklin. The manufacturer had been selling scooters in quantity to this same agency of the government, which obliged Hall to visit various federal installations from time to time to perform on-site warranty work. In the course of those service calls, Hall became a familiar—and much welcomed—face.

Eventually, the government began asking Hall to repair mobility products from companies he did not represent. Without hesitation, he agreed to do so. “I made it a point to never turn down any request the government made of me, and that’s one of the reasons why they kept giving me more and more business,” he says.

The opportunity to bid on a formal contract with the government required Hall to devote long hours crunching numbers and looking at his costs every way imaginable to make sure the figure he submitted would be as competitive as possible while still ensuring an adequate margin. “I sharpened my pencils and did the math, but I kept wondering if I had sharpened them the right way,” he muses. “The trickiest part was factoring in the costs of product delivery. We would be traveling a lot of highway miles and consuming a lot of gasoline in the process, so we had to be very accurate in our estimates.”

When all was said and done, MobilTek Medical came in with the winning bid. “That’s when the real work began,” Hall says. “We had to scurry to open two additional warehouses to be able to service all of the area we now cover—one in Marion, Ind, and the other in Danville, Ill.”

Took Right To It
What is remarkable in all of this is that Hall has done so well despite his relative newness to health care (new, that is, if you don’t count the handful of years early in his adult life when he served as an Army medic). For most of the 2 decades leading up to 1998, Hall—a structural engineering graduate of Oklahoma State University—worked in construction.

Hall started MobilTek Medical after health problems forced him into early retirement. “I wasn’t ready to lie around all day and vegetate, so I looked for a line of work to get into, something I could do at my own, relaxed pace,” he says. “My brother-in-law happened to be selling scooters and suggested I call the manufacturer to discuss setting up and running a service center for them here in this area.”

The scooter company liked Hall’s proposal and trained him in the repair of its products. He took to it like a duck takes to water. “I became so good at it that it was like second nature to me,” he says.

Initially, Hall worked alone. Although his factory-authorized service center had a physical address (namely, the garage of his home), he spent most of his time operating out of the back of a Jeep Cherokee. “That first year, I netted about $2,000,” he remembers, “and plowed all of it right back into the business”—a practice Hall employed every year thereafter, one of the reasons the company grew to the point of having to move in 2001 to a building of its own.

That new home was a 10,000-square-foot build-to-suit structure, and it presented Hall with the chance to try his hand at showroom retailing. “I didn’t know much about selling product, so I hired people who did,” he tells.

Putting Others First
The swift growth of a venture that was supposed to be little more than a leisurely pursuit causes some who know Hall to fret whether things have gotten out of hand and are putting his health back in danger. Hall (soon to bring aboard a vice president of operations to oversee most day-to-day matters for him) simply shrugs off such concerns: “I’ve probably got more stress in this job than in any other I’ve ever had, but I never worry about myself—I can’t because I’m too busy worrying about the people who are depending on me to make their lives better. Look, the thing that most sets MobilTek Medical apart is our willingness to go to people’s homes and to do so in a timely fashion. We have a lot of elderly folks in this area who can’t drive and are dependent on their adult children and grandchildren to take them around, which makes it hard for them to come to us with their mobility products for repairs. I think our going out of our way to be of service is the biggest reason this company has taken off the way it has.”

The second biggest reason is Hall’s insistence on delivering highest-quality service. “I send my service staff to manufacturer-sponsored schools every chance we get, year-round,” he reveals.

And if there is a third biggest reason for the company’s good fortunes, it would have to be the entrepreneurial spirit that pervades the place. “I’ve never been afraid to take risks,” Hall asserts. “I have pretty much all my career had my own businesses, and the lesson I learned early on is you’ve got to be bold, got to be willing to chance it. No doubt about it—I’m chancing a lot by building this new facility just now. We are coming into national competitive bidding, and we don’t know what is going to happen or how that is going to impact our business.”

Hall says he thinks the best way to shield MobilTek Medical from competitive bidding’s ruinous potential is to extensively diversify his product and service lines as well as his customer base. “We’re right now attempting to build up our retail, Medicare, and Medicaid revenue to equal what we’re receiving from our government contract,” he says. “We’re doing this by aggressively marketing to nursing homes, community hospitals, and other kinds of health care entities, making Mobil-Tek Medical known to them and coming right out and asking how we can be of service to them. We’re also looking to do more with home modifications and certain limited types of vehicle modifications, and we’re going to become bigger in mobility equipment rentals—which will also take in short-term and long-term rentals of cars and vans equipped to transport mobility devices.”

(Moreover, Hall is pursuing the idea of transforming some of his new warehouse space into a distribution center that would enable DME makers on the West Coast to more efficiently and less expensively deliver product to dealers east of the Mississippi.)

If entrepreneurs have a reputation for being risk-takers, they also are known for growing restless after a time. However, Hall assures he has no intention of selling his stake in MobilTek Medical to go off and pursue other dreams. “I have only one dream, really, and that is to pass this legacy on to my three sons,” he says. “My sons are already integral parts of this company. It is their future. And I feel that it’s going to be a bright one.”

Rich Smith is a contributing writer for Dealer/Provider.