CNNMoney.com
Companies Economy International Corrections Pre-market Trading After-hours Trading Winners/Losers/Actives Bonds Currencies Commodities World Markets Money Magazine Real Estate Taxes Jobs Ask the Expert Money 101 Autos Mutual Funds The Help Desk Loan Center Best Places to Live Ask the Expert Ultimate Guide to Retirement Retirement Calculators Rules of Retirement Best Funds Best Places to Retire Fortune Brainstorm Tech Apple 2.0 Blog Big Tech Blog Sectors and Stocks Tech Talk Resource Guide Small Business Makeovers Questions & Answers Small Business Video 100 Best Places to Launch FSB 100 Fortune Small Business Fortune 500 Brainstorm Tech Investing Management C-Suite Rankings Main Create Portfolio Edit Portfolio Create Alerts Edit Alerts
Hooked on Profits
After FSB's intervention, an addiction-treatment firm shows 50% sales growth.
By Brian O'Reilly

(FORTUNE Small Business) – ONE YEAR AFTER ITS MAKEOVER, Addiction Intervention Resources (AIR) is going strong. The St. Paul-based company, which used to specialize in interventions designed to persuade addicts to enter treatment, has refined its business model. Revenues are up 50% so far this year, to about $1.5 million.

"The consultants came in and looked at all the nooks and crannies," says founding partner Andrew Wainwright. One advisor told Wainwright and co-founder Bob Poznanovich that AIR was really in the "continuing care for addicts business" and that interventions were just one of their products, not the whole company. So now, instead of simply persuading addicts to enter treatment, the company devotes most of its energy to helping addicts stay clean and sober after they leave. AIR's counselors stay in touch with recovering addicts when they return home, making sure they attend counseling sessions and avoid companions and locations that could tempt them to start using again.

Instead of relying on referrals, AIR salesmen travel the country flogging their products to unions, trade associations, and employee-assistance programs. AIR also revamped its website (addictionintervention.com), making it easier for visitors to learn about the company. About 60% of AIR's business now comes from its marketing (vs. referrals), up nicely from 40% last year.

Some Makeover advice has been harder to implement. One consultant shrieked when he heard AIR was giving a whopping 25% to 40% of intervention revenues to its freelance intervention specialists. Better to incentivize key associates by granting them equity in the company. That proved difficult to pull off, Wainwright says, mainly because there's lots of competition for skilled intervention personnel. The consultants also suggested that AIR borrow money to make acquisitions. "At the time, we were very proud that we had no debt," says Wainwright. "But in the last year we've been approached by several employee-assistance programs and some small treatment centers that asked us if we wanted to acquire them. We haven't done it yet. But we've thought about it and concluded it's a prudent way to grow."

Poznanovich and Wainwright also followed an FSB marketing consultant's advice and cobbled together a book with the help of a ghost writer. The volume has a long but arresting title: It's Not Okay to Be a Cannibal: How to Keep Addiction From Eating Your Family Alive. Hazelden, the Minneapolis addiction-treatment center, plans to publish it next year.

To give feedback, please write to fsb_mail@timeinc.com.

© 2009 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy. Advertising Practices.
Copyright © 2009 BigCharts.com Inc. All rights reserved. Please see our Terms of Use.
MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc.
Intraday data provided by Interactive Data Real-Time Services and subject to the Terms of Use.
Intraday data is at least 20-minutes delayed. All times are ET.
Historical, current end-of-day data, and splits data provided by Interactive Data Pricing and Reference Data.
Fundamental data provided by Morningstar, Inc..
SEC Filings data provided by Edgar Online Inc..
Earnings data provided by FactSet CallStreet, LLC.