It’s that time of the year again, time to give your pharmacy a health check. As communities battle the onset of the traditional flu season, community pharmacies are battling the implications of the most recent round of price reductions on PBS medicines; and the broader financial impacts of the ongoing sector reforms.
With the 1st April reductions now in place and with the end of financial year looming, now is the perfect time to give your pharmacy a health check – as well as managing the price reductions, this is an opportunity to refresh and enhance your business and improve everyday performance.
Consider the following:
Monitor the impact that price cuts have on profitability and consider making adjustments in a timely manner, for example, varying PAYG instalments for the June 2015 quarter in anticipation of reduced profitability so as to avoid unnecessary cash flow being tied up. Consider this option if the price reductions are likely to result in a material decrease in profit for your pharmacy, however, bear in mind that there are penalties applied by the tax office if the anticipated profit reduction is not reasonably estimated.
- Redefine the roles of your employees. It is critical to explain and communicate the business’s response to the sector changes, and how this is important for the future of the pharmacy to your employees. Ensure that your pharmacists are out of the dispensary to “meet and greet” customers and create a health destination environment in the store by using their professional expertise to enable people to get the most from their medicines. Upskill and broaden the traditional role of your pharmacy assistants. Have your pharmacy assistants specialise in retail maximisation to increase front of shop sales and offset the dispensary price cuts. This will provide the opportunity for both pharmacists and pharmacy assistants to create the best possible outcome for each customer which will lead to increased customer loyalty and increased average basket size.
- What is your stores’ overall image and are you aware of the profitability of the product categories that are on your shelves? Customers are likely to spend more time and money if the store is inviting and appealing, offer them a health and wellbeing based shopping experience rather than just a place to fill their prescriptions. Window displays that reflect the store’s style and personality can be a key aspect of attracting customers. Review category reports to assist in determining how to best utilise shelf displays to feature and promote your products. Group similar products together to encourage add-on sales or group different but related stock to facilitate companion sales. Ensure the displays are fully stocked and clearly signed with well-priced offers.
- Review your marketing strategies and consider broadening the use of online campaigns, promotions, and most importantly, the value of social media marketing. While offering a website is important, websites generally only attract users who are familiar with your brand. By leveraging social media as part of your marketing plan, you can effectively increase the flow of traffic to your website and ultimately, into your store. Sharing content on social media is critical to this strategy, however, both the content you share and the reaction it generates underpin the reputation of your business so having relevant content that aligns with your brand and the interests of your audience on social media is essential.
Call us today to prepare a budget and forecast to better understand the impacts on your pharmacy’s profitability and discuss ways to improve your day-to-day business performance and long-term future development. Complete this health check on your business to ensure that your pharmacy is fit and firing to take on the winter season and the new financial year.
Felicity Crimston – Manager JR Pharmacy