Building a business plan is not difficult. Yes, it does take a little time, and yes, it is a useful process.

The process can be brought down to just three clear steps:

  1. where are you NOW?
  2. WHERE are you headed?
  3. HOW will you get there?

By working through these three steps, you will easily build a plan, and one that should be relevant and focused.

WHERE ARE YOU NOW? – TAKE A HEALTH CHECK

You should take stock of your current position by answering two questions:

  1. what is your current financial position and business performance?
  2. what is your business environment?

And then answer these questions by looking at five areas:

  1. current profitability
  2. current cash flow
  3. current capital position
  4. your competition
  5. your general business environment

Areas one, two and three can be assessed pretty quickly. We have been conducting health checks by looking at two to three years’ financial data and trends in customers, scripts and items sold and can quickly assess the state of some core KPIs, your business cash flow and your capital adequacy. It is important that you know if there are some bushfires that should be put out before you head off into a new plan for your business. It is also important to know what capacity you have to raise more resources in order to fund any great ideas you have in taking your business forward.

WHERE ARE YOU HEADED?

Just what sort of pharmacy do you want to operate? Are you simply ‘going for a Sunday drive’ or are you really headed somewhere in particular? By clearly enunciating the ‘dream’, the type of pharmacy you want to be operating , you will give the team the ‘why’ of some of the changes you are about to implement. Just as importantly, we can now measure the gap between where you are and where you are headed to assess just what needs to be done to ‘make it happen’. Building the ‘dream’ is a key process and is one you are encouraged to do together with the team. You should talk about the type of customers you have, the people in your area, what you are good at, what you are NOT good at, your competition, and look to get close to WHY customers come to your pharmacy, who does not yet come and why it is they will come. This part of the process is not about how you are going to do that, this comes next, it is about what you really want the pharmacy to look like if it is running the way you want it to.

It may look something like this:

  • we will be the first point of reference for community health issues for both customers and health care professionals
  • customers will see us as an integral part of their family health care plan
  • pharmacists and pharmacy assistants will want to work here
  • ownership and location rules will not matter to me because I will have loyal customers
  • financial rewards for me and my staff will reflect our contribution to our community

If your business gets to look like this, you can identify the financial performance you will be expecting at that time. What will your profit be? What professional services will you be offering? Will your debt be reduced or paid off? Remember, at this stage, the question is not how, but where you are headed.

HOW WILL YOU GET THERE?

This is where most business owners want to start — action! But take it from me, in my experience, the action is far more coordinated and planned if know where you are now, where you are headed and the gaps first.

This helps in three ways:

  • the priorities pick themselves
  • you know what you are going to do and should be focused on it
  • you know what you should not be doing and getting distracted by it

Let me give you some examples of how actions can be better directed through planning:

  • if you do your health check and you can see that average retail sale is very poor, this immediately flags that stronger focus, training and better merchandising is needed
  • by identifying what sort of pharmacy you want to have, this will help you in setting your store offer, choosing your merchandise and working out what training is then needed to go with all that
  • this in turn identifies what you might need to invest in to change the store layout or brand, to increase stock levels, to train staff
  • an action plan just falls out from this - it is directed at a predetermined outcome and everyone knows why you are doing it
  • you have a couple of KPIs you can track to see how you are going: average retail sale, items per customer, GMROI, GMROS

Similar action plans present themselves as you work through the current state of health of your pharmacy and set out to achieve your ‘dream’ pharmacy or more simply, where you want it to be. I favour an action planning process around setting goals, strategies and actions that can ensure your actions are cohesive, focused and prioritised.

So, put aside some time to do your planning. It does take a little time, but in my view it is the most valuable time you can spend in improving your pharmacy. Get some help along the way and ensure that you produce a practical guide for your pharmacy of where you are now, where you are headed and how you are going to get there.