7 Steps to a More Profitable Independent Pharmacy
Organize your time, effort, and activities to become more efficient, effective, and ultmately, more profitable.
Times have changed. So has the basis of success in your independent pharmacy. Today, it requires more business acumen, that is, more knowledge of entrepreneurship, leadership, and management.
There are 7 steps you should be taking that will help you focus on how you should be organizing your time, efforts, and activities, to be efficient and effective. When you develop and implement the following, your efforts will be concentrated on achieving results. You will have an unstoppable pharmacy; one capable of becoming renowned in your community, and delivering the level of financial freedom you wish.
1. Vision. Your vision depicts what your pharmacy is all about. It describes the products and services you offer, who your team is comprised of, and the ambiance of your facility, as well as your marketing and community relationships.
2. Goals. Your goals should consist of both long-range and short-range objectives, and have the strategies in place necessary to reach those goals. To be effective, each goal should be specific and contain a measuring unit, as well as a timeline. For example, increase sales of nutraceuticals by 30% by June 30th.
3. Strategies. These are your action plans showing how you will achieve your goals. If goals tell you where you’re going, strategies tell you how you are going to get there. Having the right strategies is basic and fundamental to your success.
Pursuing the wrong strategy not only can lead to chaos and confusion, but it can cost you money and time. The road to achieving your goals should be carefully chosen.It’s about allocating scarce resources, such as your time, to create a fail-safe pathway to your goals.
4. Business model. Your business model represents the way you do business and the way you serve your customers. It also relates to the products and services you provide and what you get paid for, as well as how you get paid. The most productive, the most profitable model I have encountered for independent pharmacies is as follows:
- Natural meds. Higher quality and broader assortments than are found in chains and big box stores.
- Compounding. Offering your patients customized scripts for whatever is ailing them. It beats the one-size-fits-all traditional scripts.
- Fee for services. When you become significantly knowledgeable about chronic diseases, you can and will get paid for your expertise, just as a medical doctor does for his or her knowledge.
- Marketing. You can be the greatest pharmacist in the country, but you will remain a secret, unless and until you present your community with compelling marketing messages.
5. Marketing. Your marketing is the only element of your business that creates significant results. Everything else is just a cost. In order to be effective, it must be meaningful, that is, marketing that gets read and creates a response.
To the degree that you have some alternative solutions to patients’ aches, pains, and maladies that go beyond prescription meds, don’t remain the best kept secret in your community. Get the word out that you are the go-to pharmacy for chronic diseases in your community. You’ll notice a decided improvement in your cash flow.
When you have all the components of a total marketing machine, which should include both online and offline marketing, direct mail, and a website that sells, you will increase sales of your high margin products and services.
6. Analytics helps you keep score. You wouldn’t expect a football game, baseball game, or a basketball game to be played without their keeping score, would you? Neither should you attempt to run your pharmacy without being analytical. You need to know the score.
Here are a couple of examples of where your analytics should be focused:
- Your gross profit as a percentage of sales
- Your gross profit dollars—are they adequate to cover your expenses? Pay you an adequate salary? And leave you a sufficient residual profit? Does the profitability of selected departments justify their existence? Have you done the complete analytics to determine your answer?
Knowing your analytics provides you with leverage and accountability. It improves your effectiveness, efficiency and profitability.
7. Never, ever, do that which can be done by someone else equally as well, if not better, and at a lower cost. Few things are as destructive to an organization as having its leader do work that could—and should—be done by its employees. The opportunity costs are just far too large. Think of it this way, if you want to be worth $250 an hour, then why are you spending your time doing $15 an hour work?
Time is the scarcest resource we all have. Your scarce time is best spent by doing the things that build your business bigger and more profitable. Concentrate on results, not just efficiencies. Start making your pharmacy work for you, not the other way around.
Once you embrace and organize your time around the 7 steps to a more successful pharmacy, you will discover a greater joy in owning your pharmacy.
The Pharmacy Sage can be reached at (518) 346-7021 or firstname.lastname@example.org