December 11, 2018
Inside: A business plan lays out the path to your pharmacy’s success. Follow these guidelines to get started.
You have a plan for your independent pharmacy business, but do you have a business plan for your independent pharmacy?
Putting your ideas and intentions onto paper is an important step to success.
“A good business plan guides you through each stage of starting and managing your business,” according to the Small Business Administration (SBA). “You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.”
Writing a business plan from scratch can feel intimidating for those without a business background. Learn these basics and you’ll be able to pen your plan on your own.
The most obvious use of a business plan is when you’re building a new business from scratch. But there are other situations where constructing a written plan can benefit you and your pharmacy.
The Small Business Administration describes two types of business plans: traditional and lean startup. Traditional plans contain detailed explanations and plans, often amounting to dozens of pages. If you’re seeking funding through a bank, a traditional formal plan is probably your best bet.
Lean startup business plans are simpler, hitting just the highlights. They’re typically a single page. If you’re looking to more quickly outline your business goals, or if you intend to revisit and change your business plan often, a lean startup plan might be right for you.
Other types of business plans include internal, strategic, feasibility, operations, and growth business plans. Their audience and scope will vary, but they take the same form as a traditional or lean startup plan.
The meat of your business plan will come from an assessment of your pharmacy’s purpose and plans in the marketplace. Nail down this information and you’ll be set to create a written plan that propels you to success.
Write a vision statement describing why your business exists. Don’t be afraid to think big here. This is aspirational, and often projects five or ten years into the future.
The American Pharmacists Association’s (APhA) vision statement says:
“The American Pharmacists Association inspires, innovates, and creates opportunities for members and pharmacists worldwide to optimize medication use and health for all.”
To write your own vision statement, ask yourself some key questions:
Now it’s time to write a mission statement. It’s easy to confuse vision statements with mission statements, but there’s a key difference: the vision statement is about what you want to be; the mission statement is about the actions you’ll take.
The APhA’s mission statement says:
“As the voice of pharmacy, the American Pharmacists Association leads the profession and equips members for their role as the medication expert in team-based, patient-centered care.
APhA achieves our Mission by:
To create your own mission statement, ask yourself questions like:
With a vision and a mission in hand, you can spell out your specific goals. Determine what you can measurably and realistically accomplish in a specific time frame.
Objectives like “Provide excellent customer service” are nice, but something like “Become the top-rated independent pharmacy on Google Reviews” is better because it can be quantified.
Here are some sample objectives:
Success looks a little different for every pharmacy. Some common metrics to measure pharmacy success include:
You know where you want to go, but how will you get there?
Next you’ll need to determine how you’ll achieve your objectives. This is about your business model. Determine the overall methodology and structure of your pharmacy that will shape how you’ll run the various aspects of your business.
How do you know your idea will work? Because the data supports it. Market research and competitive analysis provide evidence that your business plan is viable. This can include a wide variety of relevant information:
Who lives in your community? The pharmacy needs of a college town could vary greatly from the needs of a popular retirement location or a small town surrounding a military base.
Take a look at factors like unemployment rates and loans granted in your community to get an idea of how your market’s economy is faring right now.
Will you be serving primarily Medicaid patients or selling high-end supplements on your end caps? Income statistics can give you a feel for the wants and needs of your potential customers.
Production and sales statistics
Consumer behavior is an important consideration. Look for statistics that suggest consumers are interested in paying for the products you sell, particularly the front-end products that are more likely to be discretionary purchases.
The SBA has free resources to help your research.
If you’re seeking funding from investors or a bank loan, you’ll need to include financial projections. Typically, banks who loan to pharmacies want to know about three things:
Include these in your financials section and be prepared to provide additional financial information once you’re working with a specific bank. Choose a loan officer you trust to guide you through the process and lay out exactly what your business plan should include.
An executive summary typically appears on the first page of your business plan but it’s the last step in writing it. It gives a high-level look at your plan and serves as your elevator pitch. It should touch all the topics mentioned above.
For a business plan template that shows you how to structure all this information on paper, visit the Small Business Administration. Successful business owners have already done this time and time again, so there’s no need to reinvent the wheel.
Chart the future of your independent community pharmacy with a written business plan.
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