Tip of the Week: Use Business Planning to Ensure Longevity
Ideas for potential new services are often plentiful, but these ideas must be carefully evaluated in order to select the right one and see it to fruition.
Although most organizations have a strategic plan, it is somewhat rare that pharmacy organizations go through all the steps recommended in the business planning process when contemplating a new product or service offering. Ideas for potential new services are often plentiful, but these ideas must be carefully evaluated in order to select the right one and see it to fruition.
These steps are part of the process to produces a business plan. Other steps in the process include defining the business or program, conducting market research and analysis, identifying the target market, conducting competitor analysis, assessing clinical and quality requirements, defining processes and operations, developing a marketing strategy, developing financial projections, identifying an action plan, assessing critical risks and opportunities, and establishing an exit plan.
Tichy et al employed a formal business planning model to develop a transplantation pharmacy service.1 Their planning helped them identify a relative lack of competition in the area but also revealed the significant start-up resources necessary to effectively launch the practice. The evaluation of processes and the market made crystal clear the myriad rules and regulations under which the practice would operate as well as the potential funding sources and funding hurdles they would have to navigate to make the practice a success.1
Based on these findings, Tichy et al developed both a financial and clinical justification for the new practice, which took into account the clinical expertise required in addition to the necessary personnel to perform diligent billing activities from payers who might not otherwise been accustomed to providing payment for these pharmacist-led services. The end result was an entirely unique service that was viable from the start, and which grew more clinically relevant and financially solvent with the passing of time.1
Effective business planning is paramount not only in the development of new services but in the ongoing evaluation of existing ones, and even for the entire business enterprise. We often plan at least informally, and this is helpful. But more systematic and comprehensive planning are what makes the difference between a service’s long-term success and failure. The initial excitement phase of anything new eventually wanes, and without careful planning, that waning enthusiasm can spell doom. There are plenty of printed and online resources available for pharmacists and managers wanting to more seriously invest the time and effort needed for proper planning.
Additional information about Business Planning for Pharmacy Programs can be found in Pharmacy Management: Essentials for All Practice Settings, 5e.
Shane P. Desselle, RPh, PhD, FAPhA, is a professor of social and behavioral pharmacy at Touro University in California.
Tichy EM, Pilch NA, Smith LD, et al. Building a business plan to support a transplantation pharmacy practice model. Am J Health Syst Pharm. 2014;71:717-757.