How to Make 2016 a Success for Your Independent Pharmacy
The first step is to determine the business you want and the business you don't.
If you totally dislike the trend your independent pharmacy is currently following and want to create a new destiny for it, simply change your strategies and you’ll change your results.
The first step is to determine the business you want and the business you don’t.
Essentially, the business you want is very profitable. It comprises the sale of services and products at margins that are high enough for you to pay the bills and support your family in the style you would like to continue.
An average storewide margin for your pharmacy should be no less than 25%, and even that may be meager. Truly successful pharmacies have storewide margins exceeding 50%.
The business you do not want relates to transactions that are marginal, which make very little money, if any at all.
When calculating the true cost of these transactions, you should consider the following:
- The hard cost of product.
- The cost of bottles and labels.
- The true cost of delivery, if you provide it.
The second thing you want to do is become highly analytical.
Your job as the owner of your pharmacy is to lead it, not to be another person performing a repeatable but substitutable function. In other words, stop doing a job that somebody else can do and stop doing work that can be replaced by an individual making $12 an hour, or even someone who is paid $55 an hour. If you want to be worth $250 an hour, then you need to do $250-an-hour work.
Your analytics should include:
- Where you spend your time.
- What’s producing your profits.
- What’s decreasing your profits.
- What’s working in marketing and what’s not.
- Which individuals are members of the A-team, and which are not.
- Which other resources are producing desired results and which are not.
In your analytics, you’ll also want to determine which items on your front end are selling and which are not. By all means, abandon items that do not turn at least 4 times per year.
Be certain to know how to calculate this number. Most pharmacy owners do not.
Products that produce the largest amount of sales and make the biggest contribution to total store profits should be given more space and more emphasis, especially in your front-end presentations. Consider giving your best-selling products careful display on endcaps accompanied by signs with prices.
The Pharmacy Sage can be reached at (518) 346-7021 or Lester@ThePharmacySage.com