Oxygen therapy wins converts

Building a small business from scratch can be a daunting task - and it's even more difficult when launching a new product or service.

Peter Young's first and biggest challenge was to convince his market - doctors - of the benefits of hyperbaric medicine. Young is the founder of Oxygen Therapies, the first specialist centre for hyperbaric medicine in New Zealand.

The therapy involves patients sitting inside an enclosed chamber filled with pure oxygen under pressure.

It is used to treat internal and external wounds, and Young says the treatment has been conservatively estimated to improve healing by 40 to 50 per cent. After 25 years working in hyperbaric medicine on oil-rig paramedic teams, he returned to New Zealand from Cambodia in 1997 convinced that oxygen therapy could be a business success.

It has taken a long while to get established, but with Accident Compensation Corporation approval to pay for treatment and increased bookings, there are signs the company is past the worst.

The specialist nature of the therapy and the high capital outlay means it has little competition - apart from the Devonport naval base, which runs a hyperbaric chamber used for treating divers with the bends, and, says Young, some wound treatment.

But apart from Christchurch Hospital, health authorities have been discouraged because the price tag for setting up a chamber is about $1 million. Four years ago Young spent $400,000 to get the project going, but could not get bank finance.

The breakthrough came after he saw a TV advertisement for the Government's Business in the Community mentoring scheme.

He was given free support and advice, including how to reach equity investors, and as a result located enthusiastic backers. "Before that I felt like I was banging my head against a brick wall."

There is probably a market for people using the chambers to promote a general sense of wellbeing.

But Young limits use of his chamber to medical problems to avoid undermining its credibility with doctors, and so hyperbaric medicine does not become wrongly perceived as an alternative treatment. Convincing doctors and hospitals about the value of the therapy has been, and still is, a time-consuming part of Young's business. His clinic started three years ago on the North Shore, but recently moved to new facilities in central Auckland.

He says a lack of referrals from North Shore Hospital meant most of his clients were from the city side of the harbour bridge, and location had become a barrier to success - "people still have this thing about going across the bridge".