Why Do So Many New Pharmacies Fail?

OCTOBER 11, 2015
Most pharmacies own about 2% of the total business in any category within their trading zone. So, if you own a pharmacy and you’re doing 2% of the pharmacy business (including front-end), then you’re invisible to the other 98%!

Do patients drive past other pharmacies on their way to their favorite one? You bet they do!

But this only happens when they're offered compelling reasons to do so. I mean to them, not just to you.

So, ask yourself: what differentiates you from your competitors? What specific reasons have you given potential customers to come to your pharmacy?

If I lived in your community, what would I see upon entering your pharmacy? What would captivate me? What would impress me? What would I hear when I am greeted? And finally, what would be my total shopping experience?

Would I discover your core beliefs about how you help people “feel better, live longer, and become more energetic?” Or would I leave and never to return, becoming part of the 98% to whom you remain invisible?

For more information on how to differentiate your pharmacy, read 3 Tips to Attract New Patients.

Why Do So Many New Pharmacies Fail?
According to research, 83% of all new pharmacies go out of business within an average of 2.5 years. Why does this happen to so many brilliant individuals setting up new pharmacies in pursuit of their dreams?

The answer is multi-faceted, as you will discover when you answer the following questions:
  • How much about business and marketing did you learn in pharmacy school?
  • Did you really choose the right location for your pharmacy?
  • Did you make certain that you chose the right business model? What did you use as the basis for this selection?
  • Did you have the right amount of money, especially to weather the first few months of underachievement before you passed the break-even point?
  • How did you differentiate your pharmacy in the marketplace to give enough would-be patients sufficient reasons to visit it?
  • Did you have the right quantitative and qualitative marketing to do the job?
It’s a shame to see all those years of yearning to own a pharmacy go down the drain with a lifetime of savings, but it’s completely avoidable.
 
How to Avoid It
Marketing is the only element of your pharmacy business that creates significant results because everything else is just a cost. To be successful at the highest level, your marketing should be built around the business model that is most successful today, which is a mix of compounding, natural medications, fee for expertise, and direct response marketing.

Equally important is the ambiance of your store, which should be decidedly different from that of your competitors. More specifically, your pharmacy should not look like just another pharmacy that anyone else could visit.

Also, develop teams and teamwork to the level of the precision of a Navy SEAL. Acknowledge that training is a never-ending system, and lay out a training program that is designed to upgrade your associates’ knowledge, skills, and especially customer education.

You should be fully aware of the fact that you are in the information business, and that information can become a mighty tool for building your brand.

A pharmacy with all of these elements is needed in every neighborhood and every trading zone throughout the country. Each owner behind one of these unique pharmacies will have more money and less stress.

Will you become one of them?

Lester Nathan, MS
Lester Nathan, MS
A powerhouse in the world of independent pharmacy, Lester offers free business resources for Pharmacy Owners on his website, ThePharmacySage.com. Offering insight, wisdom, and strategy, Lester is an esteemed voice in pharmacy business. Lester helps his clients increase patients and profits in spite of the 3rd party payment fiasco.
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