Top 10 Business Tips for Pharmacy Owners from Billionaire Entrepreneur Kevin O'Leary
Top 10 Business Tips for Pharmacy Owners from Billionaire Entrepreneur Kevin O'Leary
Independent pharmacy owners face significant business challenges in a market dominated by large retail pharmacy chains.
In fact, research has shown that 83% of all new pharmacies go out of business within an average of 2.5 years.
Pharmacy Development Services (PDS) recently brought independent pharmacy leaders together at its annual conference in Orlando, Florida, to discuss building business strength and solvency.
In a keynote session called “How Truly Wealthy Entrepreneurs Secure Big Gains with Their Money,” Kevin O’Leary, who’s also known as Mr. Wonderful on ABC’s “Shark Tank,” candidly offered no-nonsense advice for independent pharmacy businesses to not only stay afloat, but also reach the next level of success.
Specifically, he advised PDS attendees to abide by the following 10 tips that can help strengthen their businesses.
1. Employees are valuable, but they aren’t your friends.
O’Leary said businesses built on interpersonal relationships and dynamics are often more troublesome than advantageous.
“Even when [your employees] are family, they are not your friends,” O‘Leary said matter-of-factly. “If your mother works with you and you aren’t prepared to take her behind the shed and shoot her, she shouldn’t be working in your business.”
On the contrary, some independent pharmacy owners strongly believe in the value of personal relationships in a small business environment. Jason Kasiar, RPh, owner of Beck’s Drugs in Eldorado, Illinois, greatly disagreed with O’Leary’s analysis of businesses based on family and friends.
Like many other independent pharmacy owners, Kasiar’s business began as a family business that was run by his father and has been passed down to him. He spoke with Pharmacy Times after O’Leary’s session and described the benefits of owning a family-run independent pharmacy.
“My employees are my family—not literally, but these are people I’ve known since kindergarten or since they were born,” Kasiar said. “I’ve typically found that when I hire people who know I’ll be there for them, I’ve gotten more out of them. I would only hire my friends or family if they are the right people and can understand the differences in relationships during work hours and outside of working hours.”
2. Maintain a clear line of command.
Beyond avoiding friendships within business associates, O’Leary further clarified that it’s important for business leaders to communicate boundaries and establish an understanding of who’s calling the shots. However, commanding a business doesn’t mean micromanaging an employee’s every move.
“Everyone should know you’re the boss, but if you start micromanaging…that can destroy a culture,” O’Leary told PDS attendees.
3. Be accessible.
“To everyone,” O’Leary added. “If you don’t want people calling you, the solution is simple: don’t be a leader, or a boss, and definitely don’t own a company.”
Of note, every employee at every company where O’Leary has at least a 51% ownership stake knows his cellphone number.
“They know that they can call me every time there’s a problem,” O’Leary said.
He said everyone from management to stock room employees has access to him, and although this means the number of those who could contact him is very high, his phone hardly rings.
O’Leary did say that he has a separate phone for his family. And that phone rings all the time.
In an independent pharmacy setting, where the main service provided is patient health care, accessibility is critical. If a patient comes in with specific questions about a medication or disease state, the pharmacy owner should be available to discuss treatment options with the patient.
4. Delegate, delegate, delegate.
“I’ve seen many would-be successful business leaders fail in this respect,” O’Leary said. “As your business grows, you have to accept that you cannot, and should not, do it all.”
Delegating is especially important in a pharmacy setting, where pharmacists and technicians are filling anywhere from 300 to 400 prescriptions per day while providing patient counseling, managing drug shipments, and promoting sales in the front end of the store. All of these tasks translate directly to market value, so it is important that each task be completed to the best of everyone’s ability.
Lester Nathan, MS, a renowned mentor and consultant for pharmacy owners, believes that the maximum payoff of being an independent pharmacy owner is getting the best leverage from your staff.
“First train, then delegate,” he advises. “Do your own work and not the work of someone else on your payroll Make certain you that that you have only members of the A-team…If they are not trainable, then dismiss them.”
O’Leary cautioned that “if you don’t trust the people who work for you, then you will never succeed.”
5. Don’t procrastinate.
O’Leary said this is especially true with respect to letting employees go.
“The minute you think of firing someone, you should,” he advised. “I’ve whacked a lot of people in my day, and it never gets easier. I know that sounds cold, but it’s part of the Darwinian nature of business.”
Anyone at an independent pharmacy who stays in a silo or doesn’t perform his or her job to show any investment in the success and health of the business should be considered dispensable.
6. Never pass the buck.
True leaders and owners should never pass the buck.
If a patient complains about a bad experience in an independent pharmacy setting, the owner should accept responsibility and blame. This may be the only way to salvage that customer’s relationship with the pharmacy, and customer retention is absolutely crucial for a pharmacy’s bottom-line.
“Being a great leader means you’re the one who will accept the challenge of fixing whatever issues there may be and working to make sure it doesn’t happen again,” O’Leary said.
7. Service trumps price.
When customers receive exemplary service, they are more likely to return to the same place for that service in he future, even if it means paying a couple of extra dollars, O’Leary noted. This is especially relevant for independent pharmacy owners, who often lament that preferred networks preclude them from offering the deep discounts and other incentives that patients can often obtain from big-box retailers.
In fact, the only pharmacist in Congress, US Representative Earl L. “Buddy” Carter (R-Georgia), recently told Pharmacy Times that “preferred networks for pharmacies are another reason why many independent pharmacists are closing their doors.”
O’Leary maintains that consistently great service can help encourage patients to pay extra for a product or service.
“I go to the same pharmacy each time I need to fill my prescriptions because I like the girl who works at the counter,” O’Leary said. “And I always go home with more things than I need. She always recommends extra vitamins and supplements, and I just go for it.”
8. Use technology as a weapon.
“Your competitors definitely are,” O’Leary warned.
All pharmacies essentially provide the same products and services, but using technology helps businesses reach their maximum efficiency and potential, which can set one independent pharmacy apart from another. The importance of optimizing technology opportunities is a sentiment shared by PDS President and CEO Dan Benamoz, RPh.
In an interview at PDS, Benamoz explained the technology trends he believes independent pharmacy owners need to keep an eye on, such as sensor technology, 3D printing, artificial intelligence, virtual reality, and augmented reality. To be successful in this era of technology, pharmacy owners will have to learn to think exponentially, rather than linearly, he said.
With the Internet, pharmacists and patients have access to an unprecedented amount of information. Learning how to analyze and use that information is key.
“There’s no politics and no emotion in data,” Benamoz said. “If you are making decisions based on your gut, you cannot make good decisions.”
9. The boss shouldn’t necessarily make the most money.
Making money is every business owner’s goal, but intentionally stopping others from profiting more than you can be damaging to the business.
Anecdotally, O’Leary mentioned that he would never put a cap on how much money any of his sales people could make.
“High-performing sales reps should be your highest-paid employees,” he said. “This may not always be the case, but if it is, let them make their money. They’re helping you live a great life, too.”
10. Business is war.
“Your competitors want to do horrible things to you, and you either need to crush them or be crushed,” he said. “There are winners and there are losers…if you’re not in it to win it, then you won’t survive. Period.”
Meanwhile, while O'Leary was providing these tips, an artist was drawing them: