4 Foundations of Pharmacy Business Ownership
PDS teaches owners how to find success; we cannot create it for you. Members that have built a thriving pharmacy business all started from the same place; deciding to do something differently. You may be struggling through challenges and feeling alone in running your business, but the fact that you are reading this blog despite these challenges means you’re ahead of the game. It is time to listen to that voice in your head that keeps telling you there has to be a better way.
Do you…
- Struggle to balance control and delegation?
- ‘Go with your gut’ instead of data to make business decisions?
- Lack the clarity of a plan to maximize pharmacy profits?
- Need to focus and prioritize pharmacy work?
If you responded YES to any of the questions, you should continue reading. In 20 years as an industry leader, Pharmacy Development Service (PDS) has identified Four Foundations needed to create a successful and sustainable pharmacy business.
1. People 2. Process 3. Performance 4. Profits
This is your starting point.
In this blog, we take a look at the Four Foundations to identify self-sabotaging behaviors keeping you from running your best pharmacy and show you how to outline ideas to start building momentum behind your goals. You’ll also find that the Four Foundations have some overlap. These concepts are meant to be developed together to achieve the most impact.
People: The Key to Pharmacy Business Success
Self-Sabotaging Behavior: Trying to do Everything Yourself
It’s tempting to try and control every aspect of your pharmacy. Tackling it all alone and micromanaging will not only exhaust you, but it also sets a terrible example for your team.
According to a Gallup Employee Engagement Poll, keeping employees engaged will improve your numbers and overall business. Start seeing positive outcomes in your team and the overall patient experience.
Companies with engaged employees see…
- 17% increase in productivity
- 10% increase in customer satisfaction
- 20% increase in sales
If you want to start seeing the benefits of engaged employees, you can begin with these four easy-to-implement solutions. Create a culture that sets you and your team up for success.
• Define the Company’s Purpose, Expectations, and Values
• Celebrate and Reward the Behaviors That Support this Vision
• Create a Solid Communication Infrastructure
Engaged & Empowered: Leading an Exceptional Pharmacy Team
Performance: Get a Better View of Your Pharmacy
Self-Sabotaging Behavior: You Have Excuses Instead of Benchmarks
Operating a successful pharmacy business requires long and short-term goals with clearly defined metrics. Deciding what to measure can be overwhelming, but stop letting that get in the way of your success. There are hundreds of Key Performance Indicator (KPIs) examples, and choosing which ones to track is contingent on your pharmacy goals.
The purpose of tracking is to drive improvements in your business. Using the right metrics will help you to identify potential problems and opportunities.
For effective tracking, all pharmacy KPIs need to be:
- Balanced – Define KPIs for short and long-term goals.
- Relevant – Selected metrics should support specific goals.
- Shared – Everyone should be invested in and understand why they are important.
- Benchmarked – Moving forward is difficult if you don’t understand where you started.
Measuring Profitability in Your Pharmacy
Tracking your financial performance ensures that you have a clear picture of how your business is operating.
- Gross Profit Margin
- Inventory Cost of Goods
- Average Fee per Prescription Category
Measuring Pharmacy Sales & Growth Potential
Manage growth and identify opportunities for expansion.
- Inventory Cost of Goods
- Total Return-to-Stock Prescriptions
- Prescriptions & Sales per Prescriber
Measuring performance is essential to growing your pharmacy business and deciding where to concentrate your efforts. You should always have a clear answer to the question, “How effective is your pharmacy business operating?“
What Gets Measured Gets Managed
Profits: Don’t Settle for Shrinking Margins
Self-Sabotaging Behavior: Stop Focusing on Prescription Volume
The average pharmacy owner operates on very thin profit margins. Not knowing how to maximize profitability can be frustrating if you don’t know where to look. Hint: It isn’t just about increasing volume. It IS about getting more of the right kind of prescriptions through the door.
Learn to see opportunity where others see impossibility. On average, PDS members earn an additional $127,000 a year proving that profits and patient outcomes aren’t mutually exclusive. Innovative programs such as RxAnalytics, help owners find the most profitable revenue streams. Below we have outlined three ways to start improving your margins today.
Buy Smarter with Pharmacy Wholesalers
One way to protect your profit margins is by diversifying your pharmacy wholesalers. Rarely will a single wholesaler be able to provide you with all your purchasing options. PDS has developed exclusive partnerships for our members, providing access to strategies and tools to help increase profits. Pro-Tip: Make sure your wholesaler is compliant and meeting industry standards to avoid new problems.
Identify Your Top-20 In Every Pharmacy Category
20% of your product is responsible for 80% of your profits. This is an example of the Pareto Principle working in your pharmacy. Applying this concept allows you to focus on areas that will drive results.
Focus on the Top-20 in your…
- Patient Base
- Prescriber Relationships
- Front-End Merchandise
Maximize Pharmacy Reimbursements
Owners need to ensure they are recovering the maximum on insurance reimbursement claims. Every pharmacy should regularly review the items below.
- Set an accurate cash price for prescriptions by regularly updating U&C price points.
- Routinely examine switch data to find claims that paid out at U&C to maximize reimbursements.
- Ensure accurate reimbursements by training your team to be attentive on DAW Claim Code accuracy.
Profit Doesn’t Have to be a Four Letter Word
Process: Work Smarter, Not Harder/pharmacy-game-changers?utm_source=Game+Changers+Blog+%231&utm_medium=Blog+%231&utm_content=eBook&utm_campaign=Game+Changers
Self-Sabotaging Behavior: Doing Things as They Have Always Been Done
Doing things as you always have can be an expensive mistake. Success in the past doesn’t guarantee it for the future; this is especially true in our industry.
Refining pharmacy workflows will improve the overall operation of your business. Every pharmacy executes on the same expectations: accurate Rx filling, quality patient care, and customer satisfaction. Your competitive edge is going to be determined by how well these are done. Smart workflows and systemization are critical to optimizing efficiency.
Essential Pharmacy Workflows
- Standard Operating Procedure – Create a structure of pharmacy workflows with step-by-step information to ensure the team understands expectations, the vision, and their role in the big picture.
- Inventory Workflows – Appointment-based models such as Medication Synchronization helps mitigate ordering issues, allows for more accurate dispensing, and supports medication adherence.
- Will Call Bin Management – Locating a prescription in your pharmacy should be easy, regardless of how many steps in the workflow or who is working.
Take time to consider your process; identify what is working and what needs to be refined. Overall, your pharmacy will benefit from clear expectations, fewer errors, and improved productivity.
Increase Efficiency, Improve Your Pharmacy
Game-Changers…
- Disrupt the Status Quo
- Enable Business Growth
- Empower People
- Drive Results
Are you ready to change the game? For 20 years, Pharmacy Development Services (PDS) has been helping thousands of owners across the country shift their business into high gear. We know firsthand what it takes to keep you operating at the top of your license.
