Pharmacy Profits You’re Leaving Behind
We tell every pharmacy owner that we meet that pharmacy profits ARE good right now, and the truth is that many don’t know how good it can get for independents. All it takes is a shift in thinking. This is critical to growing pharmacy profit margins. Stop focusing on what is out of your control and start focusing on optimizing what is working in your pharmacy market. Prioritize your efforts to work on items that directly impact your bottom line, and this will diminish the effect outside influences have on your pharmacy business.
What kind of results can you expect with this shift in thinking? Great question.
Below is a visual aid showing you precisely what you are leaving at the table if you aren’t a PDS Member. These results are real, from real pharmacy owners across the nation.
Ask yourself, do you want to walk away from these profits?
Save your seat for the most important pharmacy conference we have ever held here, where you’ll have a chance to listen to these same PDS members tell you EXACTLY how they generated millions in profits.
Pharmacy Resolution: Use Smarter Tax Strategies
Make 2016 the year that you stop giving the government more money than you have to! When facing financial difficulty, we often think about ways to increase our income, but what about saving more of the money we have already worked so hard to earn? There are countless ways to save money on taxes that you don’t even know exist. That’s why “Use Smarter Tax Strategies” is number three on our list of Top New Year’s Resolutions for Pharmacy Owners in 2016.
Most tax accountants and CPAs use fifteen to twenty strategies when preparing a client’s tax return, but that is not even a fraction of what the tax code allows. When properly documented, more than 400 legal deductions are available to you! It is almost guaranteed that you are paying more taxes than you are required to. If you took advantage of all the deductions available, you could be putting more cash back into your business, a rainy day fund or toward your next family vacation.
The majority of a tax professional’s work occurs in the two to three month period culminating on Tax Day. They may have to prepare several hundred returns in a short period of time, so they often “staff up” with temporary employees and work 80-90 hours each week just to stay afloat. Under those circumstances, they can’t possibly provide you with the level of research and analysis you need to maximize your savings.
Additionally, tax professionals have been deputized by the IRS, which severely penalizes them for submitting returns with questionable or undocumented deductions. This forces them to play it safe, because most clients are unable to provide proper documentation for many types of deductions. Therefore, it is your responsibility to become familiar with the tax strategies that will save you thousands of dollars.
Did you know that you can charge your business to hold meetings in your home up to 14 times each year? This creates a deduction on the corporate or business side while creating income that you do not pay taxes on.
Did you know that you can save thousands of dollars and generate tax-free income by hiring your children? According to the law, you can pay them up to $6,300 each year for things like managing your social media or answering the phones.
Wondering why tax-free dollars are important? If you have a $50,000 expense and you’re in the top tax bracket, it actually costs you $83,000 to spend $50,000 with after-tax money. If you use before-tax money, the same $50,000 expense can be paid for with just $50,000. That’s a savings of $33,000!
At the 2015 PDS Conference, Ernest Nesmith of Tax Savings Professionals wowed the audience with winning tax strategies that could save pharmacy business owners anywhere from three to six figures in one year. Click here to watch his Tax Savings Webinar and learn more about how you can generate tax-free income, uncover hidden deductions and keep more of your hard-earned money.
What other game-changing strategies are you missing? Don’t miss the opportunity to hear from more experts like Ernest and pick up techniques for saving money, earning more cash and improving your business. Join us at the 2016 PDS Conference! This year’s lineup of speakers is exceptional.
Like any small business, independent pharmacies are always looking for ways to increase profits. As a pharmacy owner, you may be under the assumption that you must obtain new customers to make more money, but that is not necessarily true. Of course, your pharmacy always needs new customers, but remember that your easiest and most predictable source of revenue is right under your nose. It comes from the loyal customers who already know and love your business.
Upselling current customers is a much more cost effective method of increasing income than working to attract brand new patrons. In fact, some estimates report that acquiring a new customer is five to ten times the cost of retaining an existing one. Before you focus on attracting new customers, use these steps to make sure you are maximizing the profitable opportunities that lie within every one of your current patient relationships.
Do not be nervous about the concept of upselling. It is much more than a sales tactic – it is a component of good customer service that helps build deeper patient relationships by delivering better value. For example, when a customer comes to pick up their monthly vitamins, take the opportunity to offer them another brand with a variety of flavors, even if it is more expensive. They will appreciate the personalized recommendation and consider switching if they believe in the added benefit from the upgraded product.
Work Smarter, Not Harder
Maximizing the potential of your existing patients is a surefire way to work smarter, not harder. In the same way, you can use existing data to decide which patients are appropriate candidates for upselling and which drugs to target. Profitability Pathways is a system developed by that encourages your team to tap into existing niches and anticipate needs based on trends. It also focuses on finding ways to convert low-profit opportunities into high-profit customers. You will begin by running reports that determine which products are most profitable, as well as areas you are losing money.
A great way to stay ahead of competitors and bolster profits is to provide a unique service. In particular, you will help customers and yourself by introducing programs that increase efficiency, such as medication synchronization. These types of programs increase customer satisfaction, build relationships and reduce pharmacy workload. You can use the extra time to mine your pharmacy’s database to increase sales
Do you want to learn how to increase sales?
According to recent sales data, the average repeat customer spends a whopping 67 percent more cash than a new one. Following the steps outlined in this article will certainly provide one method for increasing sales, but there are numerous other opportunities for profit. Utilizing the Profitability Pathways designed by Dan Benamoz will ensure that you do not miss out.
Last night I saw something truly frightening on TV. It wasn’t a scary movie or even something terrible on the news. It was actually a commercial. A commercial where a drug company was touting their new program allowing patients to fill their prescriptions online, directly through the manufacturer’s website. One more facet of competition for independent pharmacies already fighting to thrive in an environment where they already face competition at every turn.
Of course, I mulled over this different form of competition all evening, wondering if this will become a major trend and pondering how an independent pharmacy can effectively combat drug manufacturers trying to take a bigger piece of the pie. I tried to think about how many people would actually use a service like that, rather than going to their local pharmacy. I suppose only time will tell whether this is a trend that will catch on or whether it will eventually fizzle out but personally, I think that there are a number of things that give independent pharmacies an edge, not only in this situation, but over box stores, chain grocery store pharmacies and many more forms of competition.
The most successful independent pharmacies that I have had the opportunity to work with seem to embody everything that box stores aren’t. Here are the three top things I notice about some of RMS’ most successful customers.
1) Their patients are more than names on a label
Our customers are extremely busy during the day, so when I speak with pharmacies, I’m always conscious that I’m probably interrupting something. So I definitely don’t mind being put on hold for a while or the pharmacist setting the phone down for a few minutes to handle something else. More often than not, the pharmacist, pharmacy manager or technician will ask me to hold on for a moment, simply to greet a patient that’s come in. I hear them greet the patient by their name, ask how the kids are, or how work is. That personal relationship can help to solidify a customer’s loyalty to your pharmacy and it’s something no one is getting from the box store down the street.
2) They consider their patients overall health as their responsibility
Independent pharmacies are more than just a place to pick up prescriptions. It may be what gets a customer through the door the first time, but it isn’t what makes them stay. Successful pharmacies try to engage their customers to work with them on disease state management and be a part of their healthcare team, rather than assembly line prescription filling. Instead of hold music, I often hear custom greetings, inviting patients to take advantage of programs to better their health such as smoking cessation or weight loss.
3) They use technology to its fullest advantage.
There are vast array of different technology solutions out there to allow pharmacies to achieve their goals. Being aware of and comfortable with new technology options for pharmacy systems, point-of-sale systems, robotics, IVR and more makes sure that your pharmacy stays on the cutting edge and helps you project a modern, professional and efficient image to match the above and beyond service that your pharmacy provides. In 15 years working exclusively with independent and institutional pharmacies, we’ve found that the right technology can make the difference and truly help a pharmacy to thrive.
While these 3 qualities are by no means all-encompassing when it comes to what makes a pharmacy successful, they definitely are a key component of that overall success. What do you think? What helps your pharmacy to flourish with every increasing competition?
Read below for 3 ways you can set your pharmacy up for success with an interesting new niche you could establish in your pharmacy!
- Distinguish your pharmacy from chain stores.
Create an inviting space with well-defined areas for specific product types. Couple this with caring staff that seek out opportunities to help the customer. This pairing will help develop relationships and create repeat customers.
Your products are non-negotiable to a successful retail pharmacy. Using effective, high quality and unique products will create product loyalty. Try offering a combination of well-known big sellers and plenty of unique, reputable products.
Share what you know to help others bring their bodies back into a state of health. Train your staff on this as well as both seasonal and common items and trends.
- Establish yourself as a local healthcare expert.
Creating an image ofauthority and trust in the community is invaluable to your sales and retention efforts. Pharmacy tip: Offer webinars or in-store workshops on specific health topics (i.e. addressing high blood pressure or losing weight). Distribute brochures and flyers on providing information on adjunct or alternative therapies and products is a great way to get more people in the door.A great way to showcase your pharmacy as a local healthcare expert is to amp up your blog activity and distribute a weekly or monthly e-newsletter. Invite customers to subscribe to your blog and use that space to offer healthy tips (i.e., introduce natural medicines and therapies).
- Have a plan and share it with your team.
Developing a plan with your team will help them get on board with the company agenda and make them feel that their voice matters. Once you develop a plan, focus on a different sales goal each month. Training your team to be knowledgeable will give them the tools they need to confidently interact with your customers. Product and health care training opportunities should be provided each month. Then, reward your staff for a job well done!
About the Author:
Natural Creations is an exhibitor at the 2014 PDS conference and distributor of alternative medicines. They produce the highest quality products strictly operating according to cGMPs and made in a safe & controlled environment. Their product line is of USP grade & have a purity of 98-102%.
To speak with a representative, stop by booth #59 at the Independent Pharmacy Business Growth Conference to learn about the alternative medicines available to you, or visit Natural Creations online at www.natural-creations.net.