How to increase profits

[gstrong]

Anyone put a step-by-step plan into place aimed at how to increase profit? e.g a marketing plan or such like aimed at increasing customer spend in the pharmacy. If you did, can I ask what did you do and how effective it was? Thanks.

[johnep]

Just go to any multiple and see how they arrange things. They have hordes of people whose job is to do just this.
johnep

[drpepper3k]

Just go to any multiple and see how they arrange things. They have hordes of people whose job is to do just this.
johnep

unfortunately my manager thinks this should be my responsibility as her pharmacist i am beginning to really really hate retail pharmacy.

[Pharmanaut]

unfortunately my manager thinks this should be my responsibility as her pharmacist i am beginning to really really hate retail pharmacy.

So what does this manager do?

[gstrong]

I'd follow-up with that questions and ask - what does the owner do? Does the owner take responsibility for the business and making a profit or leaves it up to the manager?

[Pharmanaut]

I'd follow-up with that questions and ask - what does the owner do? Does the owner take responsibility for the business and making a profit or leaves it up to the manager?

Its not a problem growing the business as a manager if there is a robust bonus system in place for the manager and staff.
Get the staff at all levels incentivised brings up the right attitude to business and customer services.
One place I know has one of the dispensers on a bonus for generic buying.

[minisini]

This is the beginning of an article I wrote for www.pharmacycpa.com, they have a new free business section which is super helpful.

How to increase profits:

Well first, it is best to identify where pharmacies make their money. The main, most reliable source of income comes from the practice payments. These payments are fixed, in all you need about 2,000 prescriptions a month which gets you about £20K. Achieving this is difficult if you are not already at this threshold.

Below are a set of points addressing profit maximization in community pharmacy:

1) Minimize costs - people are always the greatest cost of pretty much any business. Review pays by finding out how much your staff should be getting paid, look in the PJ or search online to get a ball park figure. Wages should be stringently related to two factors: experience and qualifications. For example, a technician with NVQ level 3 who has had two years experience would be of similar pay to a pharmacy assistant who has been working for 10 years without any qualifications. You can never precisely put a price on a persons ability, these decisions are very much subjective and are usually embroiled in staff politics.

2) Increase revenue - this is often very site specific. Some pharmacies have a small prescription count but huge OTC and peripheral sales, conversely some have a low peripheral sale volume but a high Rx count. Identify which type of pharmacy you are and play to your strengths.

3) Enhanced Services - most revenue comes from the NHS for contractual services. A good way to maximize this is find out what you are doing minus what is available in that area. Call your local PCT and check whether they have the following services:

Minor ailments
Smoking Cessation
PGD EHC - can you get it for under 16''s?
Supervised methadone
Cardio Vascular Checks - a relatively new service

4) Essential services, these include:

Blister packs and MDS payments
MUR's

4) Endorse correctly - the NPA has an excellent CPD module for members about endorsing correctly. For example did you know that if a doctor prescribes two bottles of amoxicillin suspension for a patient to take over 2 weeks, if you write LS on the prescription you get an additional payment. These are little gems of knowledge which you could collect and amass. Remember, in pharmacy every penny saved can aggregate into a fortune as you are doing hundreds of micropayments everyday!

5) Purchasing - this should be the core of what you do. The old saying "buy cheap, sell high" is not lost here, although you cannot sell high (unless it is a private Rx). Pursue buying groups, special offers and anything that says PI on it .

6) Additional sources of income - pharmacy is a lucky profession, in that there is almost an infinite amount of possibilities when talking about new streams of income. At its most basic, think: what can pharmacy do that others cannot? The answer? Lots of things, possibilities include: import / export of drugs - profitable when there is a weak pound, hire out consultation rooms, pharmacy nostrums, weight loss programs

[Chavet]

The PJ Business Insight is another resource which can be tapped into.

Business insight | PJ Online

[Pharmanaut]

6) Additional sources of income - pharmacy is a lucky profession, in that there is almost an infinite amount of possibilities when talking about new streams of income. At its most basic, think: what can pharmacy do that others cannot?

We need to take this to heart and ditch the stuff we compete on with other local outlets.
A while ago I thought 'Why can't one of us with good industry connections and know how set up some OTC brands'.

Only only pharmacy staff invited to be shareholders. Sell the stuff at a reasonable price, reasonable return and so every time we sell something we all benefit? That way we can be highly Ethical and still make a living.
Might also work with some popular generic prescription lines.

[johnep]

Tried before when price cutting was endemic in the 30s. The Chemists Federation promoted a number of chemist only products. Unfortunately, now regarded by OFT as a 'restriction on trade'.
johnep