• LATEST PHARMACY NEWS AND EDITORIAL

    LATEST PHARMACY NEWS AND EDITORIAL

Our latest thoughts and inspirations on buying a pharmacy, starting a pharmacy, and ongoing pharmacy operations

Buying a Pharmacy? Don’t Fumble the Football during the Transition

No matter if you have worked at a pharmacy for 10 years or have never worked there a day, the transition from one owner to another is hard. It is also very important to the success of the business to the new owner.

Many new owners we work with are entrepreneurial, as such have great ideas and they are excited. They want to make changes to improve the business, put new energy into the brand and the employees. All of this is important and should be done but the most important transition strategy is something we call not fumbling the football.

What is this concept? The idea is that in many cases you as the buyer have purchased a business that has operated profitably for many many years, so let it keep doing that at first. Spend a month observing, getting to know the customers that make the pharmacy profitable, get to know and understand the strengths/weaknesses of the staff. This will allow you to really grasp what the business does well and what it does not. Then once acclimated to the business you can focus on the improvement that makes the largest impact to the business!

Seems simple but it is hard to do, so good luck!
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The Most Important Position in the Pharmacy

I was talking with a client recently and we hit upon a very frequent topic, personnel management.  We were going over each person and position and when we got to the clerk who waited on the customers he told me "she used to be a tech but she was recently demoted to clerk".  I said to him don't you mean that she was promoted?

I think we can all agree the most important thing in our pharmacies is our relationships with our patients.  Yet we continually trust that interaction with the least experienced member of our staff.  Think about the last time you had a new hire.  What was the first thing they were taught?  It's usually how to run the register.

Most technicians feel the data entry and dispensing positions are the top positions in the store.  We feed into that by placing our most experienced people in those spots.  But since patient relationships are so important wouldn't it be great to make the rule that all staff members have to "earn" the right to talk to customers?  Think of the value of having someone at the front counter who can get to know each person, solve problems, and be the face of your pharmacy.  What if everyone would understand that waiting on the patient is really the most prestigious position?

Obviously everyone in the store should strive to have great relationships with the patients, but you will only develop that culture if you consistently walk the walk not just talk the talk.
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Why Buying a Pharmacy is a Good Financial Investment

People ask us all the time is buying a pharmacy a good investment.  Of course have owned pharmacies and have entire business around consulting pharmacies so we say yes.  But why?  Below we have outlined some reasons:


1.   Return on Investment – as an investor myself I always ask myself what is the return?  And if you buy a pharmacy the return is better than any investment I can find.  I can put $100,000 into buying a pharmacy and in the first year return $100,000 plus gain equity in the business.  If I put $100,000 in the stock market I would at best make $12,000 on that same money, in a bond $3,000, in a savings account $1,000, in real estate $20,000. 

2.  Knowledge – why invest your money into public companies, real estate and other investments when you have no knowledge of these businesses.  I personally have been in pharmacy all my life and that is what I know so shouldn’t that be where I put most of my money?  Same with you as a pharmacist, it is what you know most so shouldn’t you consider putting your money toward a pharmacy?  
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Improving Operating Efficiencies: The Pharmacy Back Office

Check out our CE with NCPA on pharmacy operations.

http://www.ncpanet.org/innovation-center/education-opportunities/ce-webinar
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Operating a Pharmacy is All about 3 Things!

Revenue, Inventory and Payroll.  

We hear regularly from clients, prospects and other owners that it is so hard to run a pharmacy, it is so hard to make money, it is so hard to know what to do, etc.  But in our opinion it is pretty simple, its just 3 things Revenue, Inventory and Payroll.  

In a pharmacy three areas impact profitability, how much revenue the pharmacy has, Inventory (both how much you pay and how much you have on the shelf) and how much payroll you have to support that revenue.  You have to have enough revenue to make money and inventory and payroll make up 90% of your expenses.  

So if you wake up every day, think what can I do to increase revenue, what can I do to lower my cost for inventory and find ways to control the amount of payroll needed you will have a good pharmacy.

Are we over simplifying it, maybe but if you do not have these 3 things figured out you will not have a foundation to improve in any other area, you won't have enough cash to pay staff to implement other improvements, you won't have time to make new decisions, etc.  It all begins with having processes to improve revenue, lower cost of goods and keep payroll controlled.


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