8 out of 10 Businesses Fail- Don’t Let Your Pharmacy Be One of Them!
According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. We know that businesses fail when they run out of money, but there are many reasons why difficult times can result in a business closing its doors. Understanding why 80% of businesses crash and burn will help prevent the possibility that your pharmacy could become part of that statistic.
Here are five different factors that can contribute to a pharmacy business failure:
1. Leadership Breakdown
Some small business owners self-sabotage by not placing enough emphasis on the development of leadership and business planning skills. Your pharmacy depends on you to succeed. If you lack the ability to relate well with other people and motivate your staff, you will need to gain the necessary skills or hire an experienced, talented manager. If pharmacy accounting is not your forte, take a financial leadership course or hire a professional. Recognize areas where you need to invest in your own skills or need to hire someone to fill a role you are not able to, is an indispensable element of successful pharmacy ownership.
2. Ignoring the Customer Voice
Your patients hold the keys to your success, so running a profitable pharmacy begins with listening to their opinions and meeting their needs. When an entrepreneur sees a potential opportunity or dreams up a new idea, they often retreat and stop listening to their customers and staff, but pharmacy marketing needs to be a conversation, not a one-way monolog.
3. Lack of Differentiation in the Local Market
In one sentence, can you verbalize what differentiates your pharmacy from the competition? If you can’t, it’s critical that you figure out why your pharmacy is special and market that value to your community. Whether you offer a service others lack, like a medication synchronization program, or cater to a niche group of patients, make sure your local neighbors know why you are different and better than others.
4. Failure to Communicate Value
Do you know how to communicate your pharmacy’s value to your target audience? Many entrepreneurs work hard to discover a point of differentiation, but fail to communicate their message in a clear, concise and compelling manner. Listen to what your customers are telling you and speak their language.
5. Inability to Generate Dependable Revenue
At the end of the day, your pharmacy needs to be making money. Independent pharmacies need to move quickly while conserving cash to find their piece of the local industry pie. Don’t be afraid to make mistakes and bounce back quickly. The inability to turn a profitable business model into profitable revenue is a recipe for independent pharmacy disaster.
Being aware of the five primary reasons for failure is the first step toward preventing them. Develop your skills as a leader, listen to your customers, know your value and how to market your business, and work hard to locate dependable sources of revenue. There is a plethora of information available to pharmacy owners who want to get started and need guidance. Contact a pharmacy business consultant or begin by watching our On-Demand Webinar “Leadership on Fire”. You will pick up a few tips on pharmacy leadership that can be implemented immediately.