In 2009, Felix Mirando was a little disappointed in himself.
His company, ArcPoint Labs, had just lost out on a statewide drug and alcohol testing contract worth millions to a Pennsylvania firm. That led to somewhat of an epiphany for Mirando to look into why his company didn’t secure the business and to fix it.
“We really looked at the fact that we were a state company but we didn’t have all the pieces,” Mirando said.
So, over the next seven years ArcPoint Labs grew from a Greenville company that handled drug and alcohol screenings to a national franchised brand complete with laboratory and diagnostic services as well as a third-party entity responsible for billing, logistics and administrative duties.
ArcPoint Franchise Group oversees franchise opportunities that have expanded up and down the East Coast, into the Midwest and into California, Arizona, Nevada and Washington state. Then there is the diagnostic arm of the company — ArcPoint Diagnostics — and ArcPoint Occupational Solutions, a third-party group that handles administrative, logistical and billing services.
“It’s a three-legged stool and it has allowed us to get a lot of traction with larger companies and with state contracts,” Mirando said.
In a reversal of fortune, the South Carolina State Fiscal Accountability Authority awarded a statewide drug, alcohol and background screening contract to ArcPoint in February. The five-year, $51 million contract is the largest contract ArcPoint has been awarded to date, according to Mirando.
It is not, however, the first statewide screening contract for the company. In 2016, ArcPoint signed a contract with the state of Alaska and in the first few months of 2017 did the same with New Hampshire and Nebraska. All of the new work will mean the addition of staff, both in Greenville and abroad, but Mirando said he didn’t know yet what that expansion looked like.
Over the last year, Mirando said the company has experienced a 28% growth in sales year-over-year and recently opened its 100th franchise location. While the company started with drug and alcohol screens, he said it has grown into much more, including genetic testing, or relationship DNA testing.
“The industry we are in is the medical industry and it is popular and growing,” Mirando said. “It’s a much more robust field we are into now. We touch a lot of different areas.”
That DNA testing started as simple paternity determinations, but has since grown into preventive health and biometric screenings. Mirando said the purpose is to be more proactive with health than reactive. Because of the company scale, Mirando said ArcPoint has been flexible to the market demands, which has led to sustainability.
“We’ve been able to be reactive and a lot of that is because we are small,” Mirando said. “This is not a want business, it’s a need business.”
Part of that reactive approach has led to ArcPoint MD Telehealth Services. The add-on is similar to the offerings of such hospital groups as Greenville Health System and Bon Secours Health System which provide access to a physician via telephone or online.
“Our market has been people without insurance or small businesses that may not offer insurance but see this as an added benefit they can offer employees,” Mirando said.
He said the intent is not to compete with larger lab companies like Lab Corp. or Quest — what Mirando calls “800-pound gorillas” — or even hospitals, but to find the niche of small and mid-sized companies. Doing that has meant growing the network of franchises.
In order to make those franchises successful, ArcPoint Franchise Group established the other “legs of the stool” like the diagnostic arm and the third-party administrative support service.
“We’ve spent time getting the brick and mortar throughout the country and our franchisees are boots on the ground and that sets us apart because those people have skin in the game,” Mirando said.
Now, Mirando can focus on fulfilling the new state contract with South Carolina which, he said, could lead to completing nearly 400,000 tests per year. He said the company competed with 11 other lab companies for the contract, including FirstLab — the same company that beat him out eight years ago.
“This will be a game-changer for our industry and it is big because we are a Greenville-based company,” Mirando said.
However, the growth may come with a cost. He said the company will have to find ways to pay for that growth.
“We are going to need more growth capital, but it is important to find the right partners,” Mirando said. “We are here to start a sustainable business that’s a national brand.”