XCEL tries to keep small-company feel

March 23, 2005  

BY SANDRA GUY

An Evanston-based medical supply company that began as a one-man, one-item start-up seven years ago is using technology as a growth engine.

Josh Silvers, founder and president of XCEL Medical, says his success in building the company to its current $13 million in yearly sales resulted from a combination of luck and hard work to compete against a slew of established rivals such as MedLine and McKesson Corp.

XCEL sells disposable supplies, equipment and specialty mattresses to nursing homes, assisted-living centers and other health-care institutions.

"We're constantly searching, including overseas, to find products that are more cost-effective for our customers. Many of these products are designed to improve the quality of life for patients too," Silvers said.

Silvers, 35, started the business by selling gloves that help prevent nurses and other workers from being exposed to bacteria. He used his relationship with a friend in China to introduce him to overseas manufacturers of the gloves.

Silvers quickly realized he could make an attractive profit by selling disposable gloves and other products to nursing homes and health-care institutions.

The technology that XCEL uses is a far cry from a Wi-Fi phone network or a new computer software application. Instead, it provides just enough of an edge on an old-fashioned product to generate extra value.

For example, XCEL sells mops with anti-microbial mop-heads. The mops are lighter than the old-fashioned bucket-reliant mops.

"You're not dipping these mops back into dirty water, and they are washable," said Al Wiggs, XCEL's sales manager.

Wiggs, 43, has worked in the medical supply industry for 26 years and quickly boosted XCEL's sales by introducing a high-performance blood-glucose machine to the company's product line, and by starting a payment plan for the expensive specialty mattresses.

The mattresses differ according to a patient's medical problems. They reduce pressure on joints and parts of the body that tend to develop wounds by moving air around in a way that relieves pressure and keeps a cool layer of air between the patient and the mattress.

XCEL set up a system in which nursing homes and other long-term care centers can own the mattresses by paying for them on a six- to 12-month plan.

"We've reduced our profit margins and expanded our payment terms so customers can own the mattresses," Silvers said. 

The mattresses cost $600 to $2,950. A regular pressure-reducing foam mattress costs about $125. 

The company also sells big-ticket items such as IV pumps and ventilators, and trains people to use the products 

XCEL, which now operates predominantly in the Midwest and employs 25, is planning an expansion into Florida this year.

But XCEL's leaders want to keep their small-company feel.

"We're a big family," Silvers said.