In The News

Small Business Person of the Year
Company started in legal trouble, now roars to triple-digit growth

Houston Business Journal - by Jennifer Darwin

As the owner of TMC Orthopedic Supplies Inc., 34-year-old Joe Sansone has built one of the fastest-growing businesses in Houston. The medical equipment supplier posted revenues of $1.8 million last year. By growing the firm's revenues 243 percent from 1993 to 1995, Sansone earned the No. 36 spot on the Houston 100 list of fastest-growing companies. But in his younger days, he would not have been voted "most likely to succeed." And while his company's future looks promising now, that wasn't the case in the beginning. When TMC Orthopedic Supplies was first established, Sansone's former boss sued him and the company to force him out of business.

The other obstacle he had to overcome before he could succeed, he says, was himself.

Sansone had always been interested in science and he wanted to be a doctor. In high school, he turned a hobby - fish breeding -- into a science project that won a scholarship to Rhodes College. He attended the small, private liberal arts college for four years but left without earning a degree.

"I lost my scholarship after my first year because of my grades," says Sansone, who had only a 1.6 grade-point average upon leaving Rhodes College. "I don't know what I was thinking back then." His next stop on the higher education highway was Memphis State University, where he obtained a bachelor's degree in microbiology. All in all, it took Sansone 8 1/2 years to finish college, and he graduated with a 2.16. He knew his GPA wasn't very impressive and was afraid it would be difficult to find a good position.

After graduation, however, Sansone landed his "dream job" selling chemicals to pulp and paper companies. He was able to combine his science background with outside sales, which was just what he wanted to do. He spent the next few months traveling around the country and living out of hotels while he trained for the new sales job. He then relocated to Hattiesburg, Miss., where he would be based. Two weeks later, he was terminated.

"They said I was the worst salesperson they'd ever seen," he recalls. "They said I should not be a salesman; that I didn't have the personality to be a salesman."

The experience was devastating, Sansone recalls. After taking a few months off, he got a job selling disposable tops for Suzuki Samurai jeeps to car dealers nationwide. Sansone says he saw it as his last chance to make it in sales, so he worked hard and did well. Less than a year later, he was hired by Dallas-based Mediscos to sell orthopedic goods in Houston.

It was job he enjoyed and he did very well, Sansone says. He credits the company with teaching him how to do medical sales and how to deal with doctors.

But he saw some things he thought he could do better, so he decided to start his own business. When TMC Orthopedic Supplies opened its doors, however, Sansone was slapped with a lawsuit by Mediscos for violation of a non-compete agreement. The next 1 1/2 years spent fighting the lawsuit were extremely difficult, he says. "My reputation was on the line. My life savings were on the line." What he found during those tough times was a loyal employee. Charlotte Dodge, who now owns 3 percent of the company, worked with him when others shied away from a company with legal troubles.

There were times when Sansone had to get a cash advance on his credit cards in order to pay his employees. "The employees were earning more than me back then," he says. More than $120,000 in legal fees later, TMC Orthopedic Supplies and Mediscos settled out of court. Business owners need a second opinion when it comes to important legal advice, he says now. "I needed to shop around and make sure I had the right attorney. If you try to cut corners, it will come back to haunt you." What he learned from the experience was to accept personal responsibility. That philosophy now spills over into other aspects of his business, he says. When it comes to a situation like deciding whether to pay employees as full-time workers or independent contractors, Sansone says entrepreneurs should go out of their way to play by the book.

"A lot of companies my size don't even provide workers compensation insurance," he says. "One claim, and they're out of business." For people who are thinking about going it alone in the same line of business as their current employer, Sansone advises them to document everything to show they aren't stealing trade secrets. Also, do not start selling while still employed and don't breach the fiduciary duty to the employer, he says. Sansone highly recommends legal advice, but he says a small firm specializing in employment law will do.

The accountability that Sansone has learned is now felt by his customers. Since TMC Orthopedic Supplies guarantees delivery of equipment within two hours, it is not uncommon for a surgeon to call from the operating room to place an order, he says. That reliability has helped his business grow.

TMC Orthopedic Supplies, which started off by selling 17 products, now offers 400 different items. Sansone is also branching out into new areas of business by stocking inventory in doctor's offices and helping in the preparation of equipment for surgery. The company -- with a total of 19 employees -- is also expanding by opening offices in Austin, San Antonio, Louisiana and Alabama. "You've got to guarantee that nothing goes wrong," Sansone says. "Service comes before making a profit." All contents of this site © American City Business Journals Inc. All rights reserved