Wednesday, June 01, 2016
David Whitlock, owner of Winyah Pharmacy in Georgetown, South Carolina, suspected that the timing was right to expand further after a second location he had opened in 2009 in Charlotte, North Carolina, took off—but he didn’t just trust his gut. After doing extensive market research, he acquired a third outpost, Preferred Care Pharmaceutical Services in Hollywood, South Carolina, just south of Charleston, earlier this year. The move enables the small chain to serve a broader client base in a new market.
“My interest was in our customers,” says Whitlock. “How could I continue that relationship and better service their needs?” The new move was the answer for Whitlock, who opened the original Winyah in 2004.
Many small and midsize business owners are as optimistic as Whitlock about growth this year. In a 2015 survey, SunTrust Banks found that 78% of businesses with $2 million to $10 million in revenue are preparing for growth. But roughly a quarter of those surveyed reported that they had done little or no planning for expansion.
Here are some of the key issues the team at Winyah Pharmacy addressed as they developed a strategy.
A successful business combined with solid economic conditions can push a team toward favoring expansion, but is the current structure positioned to succeed? If you plan to expand, ask yourself a few questions:
In Whitlock’s case, he knew his in-house team had the experience to navigate a new market and location, based on Winyah’s successful move into Charlotte. He also had a key, and unique, advantage: a previous relationship with the owners of the Charleston-area pharmacy he wanted to acquire. His wife had gone to pharmacy school with the owners and had known them for 25 years.
Homework, and plenty of it, is crucial for a successful growth plan. Winyah’s team carefully worked through the financial aspects of the deal long before any paperwork was signed. It also did an analysis of the market and its need for the services the pharmacy planned to offer. When branching out into a new market, consider the following questions:
Whitlock’s firm, which targets institutional clients such as skilled nursing facilities, determined that there was potential to bring on new clients, including facilities that support mental and behavioral health, at the Charleston-area pharmacy.
The economy and conditions in your industry can either put the wind at your back or hit you with headwinds that slow you down. Conditions can change overnight so don’t get so immersed in your plans that you lose sight of the big picture for your business. When Whitlock realized he’d found the right partners and that the market could support their shared endeavors, he moved ahead quickly with his plans for the third location.
If you’ve done your due diligence and have found that a new market can support your business, create a timetable for your expansion and stick with it as much as possible to avoid losing the opportunity to a speedier rival.
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