• 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

Owen BonDurant, President: Owen is 2nd generation (his Dad is part owner in a 9 store pharmacy chain) in the pharmacy business and has worked in independent pharmacies since before he can remember. He has worked in almost every role a small pharmacy has to offer from cleaning the bathrooms, working as a pharmacy technician, marketing, starting and running a durable medical equipment company and managing employees. Owen graduated from Miami University of Ohio with a degree in marketing and a minor in management information systems (MIS). After graduating he briefly worked for Western and Southern Financial Group before deciding he wanted to return to the pharmacy industry where he started medical equipment business for a chain of 9 independent pharmacies. From there he moved to Chicago and started working for Experian QAS and for the last 7 years has been selling software to major retail organizations along with managing the Midwest sales team. Recently the itch to come back to the pharmacy industry, as it truly is all he knows, and Independent Rx Consulting was born.

Starting, Buying or Own a Pharmacy? Read These Books

Every year I set a goal for the number of books I want to read during the course of the year (last year it was 24 and I read 27) and try to ensure at least ¾’s of these books will help us make a positive impact on the pharmacies we own, our consulting practice or our clients. The below list outlines some of my favorites and the lessons learned from each. Hopefully these will help you too.

The E-Myth Revisited by Michael Gerber – this book outlines why individuals with a technical skill who start businesses tend to fail or not grow. This applies directly to the pharmacy industry where pharmacists start pharmacies because that is what they know. In many cases, however they are not as successful as they should be. He outlines what technical professionals “pharmacist” need to know to be business owners within their field. I would highly recommend this to anyone interested in buying or starting a pharmacy and any current owner of a pharmacy.

Ready, Fire, Aim by Michael Materson – what I really like about Michael is he simply outlines what you as the owner or CEO need to do to grow your business and the barriers you will face along the way. For this reason it is the best business book I have read in many years. For me it made it very clear what we need to do to take our businesses to the next stage of growth and what we can do to help our clients grow into extraordinary pharmacies.

The Lean Startup by Eric Ries – Both Eric and Michael Materson take similar approaches to innovation. The concept is to introduce new products and processes quickly and with very little cost. For any business owner, including us, it is difficult to create change in the organization. There are a million reasons, you may not have enough cash, not enough time, your employees are stretched too thin or maybe you are just a new startup. This book will provide you insight and guide you through constant innovation which will lead to profits and growth.

Traction by Gino Wickman – As an entrepreneur and leader every day it is difficult to find time. For me it was always difficult to know what 2 or 3 items I should focus on and how to get our team to focus on them as well. Gino provides the Entrepreneurial Operating System (EOS) and it will allow you to not be overwhelmed, have fun and improve your business.

Bold by Peter Diamandis – this book is about big ideas, some of which seem crazy. But I think it applies to pharmacy today because the industry is changing, being disrupted and we as entrepreneurs within the industry must think differently in order to thrive in the future. Go into this book with an open mind and be prepared to think how could we as a company do something completely different.

Solution Selling by Ed Wal – if you have ever spoken with me or seen any of my other postings about books, this book is always on the list. First Ed, personally taught me much of what I know about how a business works and how to sell to any organization. I consider him a mentor to me and many others. But also it is my opinion (and Michael Materson’s) that as an owner of a business you must also be its number one salesperson. This book will teach you how to sell, follow it, try everything in it and you will sell!
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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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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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