This site is intended for Healthcare Professionals only

Is the time right to grow your business?

Finance bookmark icon off

Is the time right to grow your business?

Once you own more than one pharmacy, your mindset has to change

Thinking about growing your business? Mandeep Mudhar, Numark’s marketing director, discusses the relevant issues

Recent research by Lloyds Bank Commercial Banking found 78 per cent of pharmacists expect their profits to rise in the next 12 months – up from 46 per cent in 2014. More than three quarters of pharmacists want to grow their business, with 39 per cent planning to expand their existing site and another 39 per cent wanting to acquire new property.

With an ageing population, the demand for healthcare is only going to increase. But with the NHS under severe pressure, there is a huge opportunity for pharmacy to take centre stage as the healthcare professional on the high street.

We all know that independent pharmacy has changed. Where once dispensing was the lifeblood that kept the heart of the business pumping, for many pharmacies this alone no longer provides adequate sustenance.

At the same time, more people are becoming aware of the services provided by community pharmacies and pharmacists are recognised as the first point of contact for many patients seeking out advice about a health issue. Coupled with the fact that pharmacists and their pharmacies are easily accessible, this presents an opportunity to demonstrate clinical expertise, help provide positive health outcomes for patients and contribute to that all important bottom line.

A no brainer … or not?

So with both demand and opportunity, it would seem to be a ‘no brainer’ for many independents to expand. But is the time right for you? Before expanding in any way (physical space, new services, acquiring additional premises, etc) you need to be clear on what you are trying to achieve.

We recommend periodic business reviews for every pharmacy, and certainly if you are thinking of expanding it’s essential that you look at your business from every aspect: your financials, your pharmacy team, your pharmacy environment, your customers, your current offering and opportunities, and how you market your business to your local community. Undertaking a basic SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis can be a good starting point.

In many cases, expansion can lead to economies of scale. For instance, ordering stock for three pharmacies can be little more work than for one and you may be able to negotiate better rates on some goods and services if you are purchasing more.

Expansion may allow you to automate some processes, for instance by introducing a robot. Costs have come down and they are within the reach of some single-outlet busy pharmacies. An additional consultation room could bring you extra income from new services or perhaps could be rented out to another healthcare professional who could attract new customers to your pharmacy.

However, if you invest in new premises, a refit or a robot, the investment can be significant and you may not recoup the benefit for several years. Do your sums and get plenty of advice; perhaps talk to your peers too.

Something to bear in mind is that change can be unsettling for staff and the smooth running of the business. It’s hard for you to keep focus on the day-to-day business while planning expansion at the same time. Your team will be invaluable in ensuring continuity, so involve them in the process and assign responsibilities to make the best use of everyone’s skills.

On becoming a chain

There are many advantages, but also some downsides, if you choose to grow your pharmacy business even further to become a chain. First, the downsides. Once you own more than one pharmacy, your mindset has to change in that you have to accept you will have one or more pharmacies that are not totally under your control. This means having effective managers, delegation and assurance that head office controls and compliance are being adhered to.

While buying and controls can be set centrally, you are relying on pharmacist managers and staff to execute them to the standards you have set. Therefore, your role changes from being an owner to becoming a coach or mentor and in ensuring your standards are being followed. You may also need to look at a different way of incentivising your teams so that there is a real drive to continuing performance improvements.

With all the regulatory pressures and constraints, it is also imperative that you have a standard set of SOPs, guidance and processes across all your pharmacies, because if you are the superintendent, you in effect will be responsible for patient safety across them all.

One of the many positives of owning more than one pharmacy is you can establish a brand of your own vision and choice that you would like across all your pharmacies. You can choose what you would like your business to stand for, your mission and how you want patients treated in every pharmacy you own.

So, is expansion for you? It’s hard for independents to go it alone. You should draw on the support of your professional advisers and other stakeholders. Numark can provide the insight and professional and commercial support essential to making the most of the opportunities that exist. 

Copy Link copy link button

Finance

Share: