Lessons learned from starting in the trenches

Keep overhead costs as low as possible

There have been many peaks and valleys in the nearly 10 years since a former clinical trial coordinator founded Mountain View Clinical Research of Denver, CO.

"When I opened Mountain View in 2000, I was already working as a clinical trial coordinator in the area and working with physicians, and they were willing to transition to working with me as a coordinator in their offices to contracting with me," says Kristen Johnson, BSRRT, CCRC, president of Mountain View Clinical Research.

Johnson's goal was to start a stand-alone company that conducted a variety of studies.

"I started the company with my personal funds and debt on credit cards, and it was hard work that required dedication," Johnson says.

"While it's gratifying on one hand, you have to be committed to putting in a tremendous amount of blood, sweat, and tears to make it work," she adds. "And you'll have sleepless nights."

She achieved her goal very rapidly, and that was the first lesson she learned about starting new clinical trial sites: Don't grow too fast.

"At one point it grew too fast, and that's the biggest word of caution I could offer anybody starting their own business," Johnson says. "Be careful growing too quickly."

It's easy in this industry to be blinded by contracts coming across the desk, thinking that it might not be an economic feast for long, she notes.

"Then before you know it you have way too many studies and not enough help," Johnson says. "So you have to hire more staff, expand your space, and six months go by, and you have more space and help than you need."

This happened with Mountain View Clinical Research. The small clinical trial site grew to seven employees, but now has decreased to four employees.

"Now I'm trying to do more work with contract employees who can come and go with the studies," Johnson says. "This can save you money on the back end in taxes, unemployment insurance, and, in Denver, an occupational privilege tax."

Johnson quickly learned this lesson and was able to reduce her overhead costs and weather the economic downturn.

"We took over two other research practices this summer," she notes. "They were closing, and the only difference between my business and theirs was I keep my overhead low."

Here are some of the other lessons Johnson learned while running a small clinical trial site:

Seek alternative sources of business financing.

Clinical trial site start-ups should seek out all and any available funding because cash flow could become an issue.

"The small business association is more willing right now to give loans than they were nine years ago," Johnson says.

"There's also an association for disadvantaged business owners, female or minorities," she adds. "And micro-loans are available."

If a site manager can convince a bank that the money will come in, but the site needs a loan to keep the business running, the bank might be open to making the loan, Johnson says.

"Also, there are peer-to-peer lending clubs," she adds.

Find staff through cheap or free advertising sources.

"I've advertised for part-time help on Craig's List before, and I've gotten good employees through that," Johnson says.

Craig's List is an online classified advertising Web site that doesn't charge people who post information.

"I'm very active here with the Association of Clinical Research Professionals, and that's a good way to identify experienced coordinators," Johnson says.

If Johnson is looking for a skilled contractor, she also checks out ACRP news.

Commit only to studies you know will meet enrollment.

"It took me five years to realize I can't make that commitment of a study that can't be enrolled," Johnson says.

"When I was just starting I was eager to take any study," she says. "Now, I encourage people to look carefully at a study, protocol, and budget, and to turn down those studies where you think it won't be possible to enroll patients."

Everyone loses when a CT site begins a study and then has to close without enrolling a single patient, she adds.

"Studies are harder to enroll now because patients have access to more medications," Johnson notes.

For example, patients who once needed to enroll in a clinical trial for the latest and greatest medications for high blood pressure, now can choose between more than a dozen generic drugs on the market, she explains.

Of course the current recession has shifted the balance slightly as now more people are uninsured and might be more interested in participating in clinical research, Johnson adds.

"One thing I tell people is to capitalize on our current economy by offering options to patients who potentially do not have access to care," she says.

Keep your overhead low.

"I buy used and refurbished equipment from a local vendor," Johnson says. "I have negotiated and found facilities that do MRIs and other procedures at lower costs."

These facilities are willing to negotiate at a much lower cash fee than what sponsors typically will pay for the procedure, so the CT business can benefit from this difference, she adds.

Johnson suggests sites ask themselves these key questions in order to make sure their overhead costs are where they need to be:

- Have you evaluated the space you need?

- Do you need a big fancy office?

- Do you need a coordinator assistant, recruiter, and other extraneous employees?

- What do you really need for both space and employees?

It might also be wise to negotiate with physician investigators about having all of the study visits conducted at their locations to save money and space, Johnson says.

• Be prepared for ups and downs.

Although Johnson has tried to keep steady with CT work, there are inevitable shifts in workload.

"I'm in a position now where at the beginning of the year things were slowing down, so I looked at studies I might have potentially turned away, and now they're coming to fruition," Johnson says.