Earlier this year, I wrote an article predicting 2022 would be the Year of the Independent and, eleven months on, it hasn’t failed to disappoint. This year has seen record numbers of pharmacies, previously owned by large chains, transferring to independent ownership. The Titan stand at the Pharmacy Show was inundated by prospective owners asking for advice for buying a pharmacy and how Titan PMR can help.
Of course it’s great to see independent pharmacists taking a greater share of the community pharmacy market and the opportunity to provide a more personalised service will benefit the community as a whole. But before we get too excited, we have to remember the reason why the multiples were selling their branches in the first place.
In recent years, the sector has been under immense pressure due to increased workloads and reduced remuneration from dispensing. More recently, staff shortages, labour costs, property costs, energy costs, record inflation have made it difficult for many businesses, not just pharmacies, to survive in this climate. Meanwhile, the government has been ratcheting up services from pharmacies adding even more pressure to workload. It’s no wonder large chains looking at their estate are selling up.
These market challenges have not gone away and will face new first time buyers just as much as the companies who offloaded their stores. Although independents may be able to mitigate some of the issues, a clear strategy will be necessary to capitalise on the opportunity, so here are my 5 top tips on a possible approach.
1. Your Plan
Why are you buying a pharmacy? How are you going to make it successful? What are you going to do differently to the previous owners who clearly sold it for a reason? How will you achieve your growth and reduce your costs? How will you market your services? What does success look like and how will you measure this?
These are questions only you can answer, but need to answer nevertheless. Just buying a pharmacy and hoping for the best is not an option. You will need to have a strategy for volume growth and for launching new services . Even if you are satisfied with the business volumes, you will still need to have a plan for ensuring efficiencies to retain your profit, retain your staff and retain your customers so you at least don’t lose business you paid for.
2. Your PMR
Your choice of PMR matters. Your PMR is the operating platform and determines the workflow of the pharmacy. Traditional PMRs leave you to process everything manually and most likely carry on doing things the way the previous owners did. The right PMR will form the basis of your pharmacy strategy. Given the length of PMR contracts, if you get this wrong, you may be stuck for a long time before you can do anything about it.
In my previous pharmacy businesses, technology enabled me to implement and enforce my chosen model of practice. Technology allowed me to establish the process I wanted everyone to follow and the data I received from the systems enabled me to see what everyone was doing and how the business was performing. Today, Titan PMR, enables every pharmacy business to operate in this way as well as helping free up pharmacist time to focus on clinical services whilst ensuring everything that leaves the pharmacy is safe using a barcode driven process. Titan PMR can also future proof your business, allowing you to integrate with other technologies as your business grows and become data driven and help ensure you are on track across all your measures.
3. Your People
The next most important thing is staff. If you are acquiring a pharmacy, chances are existing staff will be transferred under TUPE. Change of ownership is a stressful time not only for new owners but also for existing staff. Engaging staff in your vision is critical if you want to retain them and their support in your endeavour. If you are planning changes to your operations and the workflow, you need to explain why this change is necessary and how it will benefit them.
4. Your Layout
You may not be planning a refit on day one, but the physical organisation and layout of your pharmacy will have a profound impact on your business. You can have the best IT system and the best staff, but if your pharmacy is not physically organised well, then things will unravel further down the line. You won’t be able to find where things are, stock will be all over the place, staff will take longer to do stuff. This will impact your service as well as operating margin. Careful layout of the dispensary in line with the PMR workflow can make all the difference to an efficient operation.
5. Your Leadership
Leadership is perhaps the single most important ingredient to success. Change is hard, often met with resistance, and new ownership is perhaps the biggest change for any business. Effective leadership requires an ability to set out a vision and coherently articulate this to your team so everyone pulls together to achieve this common goal. Successful leaders are those who get personally involved and support their team throughout the change journey. Personal involvement also means you can quell any discontent, identify issues and adjust your strategy quickly if things aren’t going as planned.
So as new pharmacy business owners visualise a bright future, careful navigation of the course will be necessary and there are a number of key decisions you need to get right. Like anything you embark on in life, what you do at the beginning matters. Laying the right foundations and setting out a plan will ensure you build on your investment and realise your dream pharmacy.