Embracing your pharmacy as a business

In the heart of the healthcare system lies a vital yet often understated player: the community pharmacy. Often perceived as mere dispensaries where labels simply get stuck on boxes, these institutions are, in reality, complex businesses requiring nuanced understanding far beyond the scope of clinical training.

Because while the journey of the team members in a pharmacy is often rooted in a passion for healthcare and a commitment to patient welfare, the reality is that they are under-equipped to navigate the business of pharmacy.

And the reason for this is simple.

The business of pharmacy is something that isn’t taught in traditional educational institutions. Furthermore, it’s seldom taught once we enter the world of community pharmacy. As a result, this educational gap leaves many professionals unprepared for the realities of navigating the diverse requirements of a pharmacy in the real world.

In the Australian context, where community pharmacies are not just healthcare providers but also retail and service entities, the need for robust business skills is even more pronounced. Pharmacists are expected to be adept not only at dispensing medication but also at navigating the complexities of financial management, marketing, human resources, and customer service— all integral components of a successful pharmacy business.

In this article, we delve into the unspoken reality of pharmacy beyond prescriptions, navigate the challenges and controversies of operating a health business, and highlight the essential business skills needed for pharmacists and their teams.

It is our aim that by the end of this article, you are empowered with the knowledge and tools to embrace pharmacy as a business and thrive in the Australian community pharmacy landscape.

The Unspoken Reality

In the ever-evolving healthcare landscape, community pharmacies in Australia are now stepping up to play a more significant role thanks to expanding scopes of practice.

As such, what was once known as a place to simply get a prescription, community pharmacies are evolving into comprehensive healthcare hubs.

This evolution is not just a response to changing healthcare needs, but to ensure the continued viability of the industry as a whole. No longer confined to the traditional role of dispensing medications, pharmacies are becoming holistic health solution providers.

This means that the role of the pharmacist and their teams is becoming increasingly multifaceted, involving not only a need to understand health and medicines, but also business strategies, financial metrics, customer engagement, and market dynamics. The ability to navigate these realms is no longer a luxury but a necessity for success and sustainability.

Put simply, a pharmacist in Australia today needs to be as proficient in business management as they are in patient care, balancing the two to create a thriving, patient-centric business.

They also need to embrace the diverse departments beyond the dispensary that a community pharmacy typically has. These include natural medicines, beauty, baby, skincare, travel care, vaccinations, and acute ailment management such as urinary tract infection management, first aid, and wound care, to name a few.

It’s vital to note though that it’s not about using these departments to simply make sales, but to embrace them to create holistic solutions for the patients you serve. For example, travel care can encompass a variety of departments to ensure preventative treatment and care is at the forefront (because who wants to be unwell in the first place, particularly when travelling), to acute care and management if something happens as well.

As such, broadening the role pharmacists and their teams play beyond the dispensary ensures these departments, when properly utilised with a keen business sense and a deep understanding of customer needs, do more than just add to the pharmacy’s revenue; they enhance the overall health and wellbeing of the community.

This is the new reality of pharmacy in Australia – a harmonious blend of healthcare and business, where each aspect supports and enhances the other.

Navigating the Debate of Profits Over Patients

Now reading this, you might be thinking that this is just a spin on putting profit before patient. Because like other stakeholders might say, aren’t you just a snake oil salesperson?

But let’s think about that for a moment.

While you might “sell” a physical product that you can touch and feel to help a patient solve a problem, that product is no different from another healthcare professional “selling” a service.

Let’s explain this with an example.

I went to the dentist recently and found out that I’m grinding my teeth when I sleep. The dentist recommended I invest in a custom mouth guard to retrain this action and to avoid any long-term or permanent damage to my teeth. So, by making a recommendation for a product, my dentist helped me to ensure that I was given a solution that would prevent me from much bigger problems down the track.

Did I feel “sold” to? Well, of course not.

Did I feel that he was selling me something I didn’t actually need? Well, no, as he showed me photos of what he was referring to. In other words, he backed up his suggestions with evidence for why I needed it.

So instead of viewing this interaction as a sale, I viewed it as a solution to my problem.

The reality, though, is that you need to have a profitable business to provide the platform to do this.

And so, as the growing trend of “retailisation” of pharmacies occurs, the lines between healthcare provision and retail can blur, potentially leading pharmacy teams to prioritise sales over patient care. The lines further blur if you are seen to embody the practices of a snake oil salesperson—selling products that offer no benefit to the patient.

It’s important to recognise that navigating these challenges and controversies requires not just business acumen, but also a deep understanding of the ethical guidelines, regulatory environment, and market dynamics of the Australian community pharmacy industry.

By always finding a balance between profitability and patient care, and reaffirming your values to provide the best solutions possible at all times for your patients, you won’t be seen as controversial, but rather someone that truly embodies what it means to be a healthcare practitioner.

It’s a complex task, but with the right skills and knowledge, it’s a challenge that can be met head-on.

This is the same with all health professionals.

Just because they’re not selling you a physical product doesn’t mean you’re not being “sold” something. Whether it’s a surgery, a treatment plan, or another course of action, just because you might not be able to open a box, or touch and feel the solution, doesn’t mean that a solution hasn’t been given.

The reason I’m diving into this is that controversies are not uncommon in the pharmacy business.

From debates over the pricing of medications to discussions about the role of pharmacies in providing healthcare services, these controversies often spark intense discussions. In Australia, these debates are further complicated by the unique regulatory and funding models of the community pharmacy industry.

These controversies often result in fears and inaction towards business success, because it requires pharmacists and their teams to navigate the delicate balance between commercial success and ethical patient care.

Remember, your primary commitment is to the health and well-being of your patients.

The reality though is that you need to have a profitable business to provide the platform to do this.

And so, as the growing trend of “retailisation” of pharmacies occurs, the lines between healthcare provision and retail can blur, potentially leading pharmacy teams to prioritise sales over patient care. The lines further blur if you are seen to embody the practices of a snake oil salesperson – selling products that offer no benefit to the patient.

It’s important to recognise that navigating these challenges and controversies requires not just business acumen, but also a deep understanding of the ethical guidelines, regulatory environment, and market dynamics of the Australian community pharmacy industry.

By always finding a balance between profitability and patient care, and reaffirming your values to provide the best solutions possible at all times for your patients, you won’t be seen as controversial, but rather someone that truly embodies what it means to be a healthcare practitioner.

It’s a complex task, but with the right skills and knowledge, it’s a challenge that can be met head-on.

The Essential Skills for Business Mastery

So what are the essential business skills that pharmacists and their teams must develop a level of mastery around in order to truly appreciate and understand the business of pharmacy?

Financial Management

In the world of community pharmacy, financial management is a critical skill. It’s not just about keeping the lights on; it’s about ensuring the sustainability and growth of the business.

Budgeting is the cornerstone of financial management. It involves planning your finances so that your expenses do not exceed your income. In a pharmacy, this could mean budgeting for inventory, salaries, utilities, and other operational costs. It’s about making informed decisions on where to allocate resources and when to make investments.

Effective financial management also involves understanding and analysing financial statements. This includes the balance sheet, income statement, and cash flow statement. These documents provide a snapshot of the pharmacy’s financial health and can guide decision-making.

And lastly, profit maximisation. This doesn’t just mean increasing sales; it also involves reducing costs and improving efficiency. For instance, implementing an effective inventory management system can reduce costs associated with overstocking or understocking. However, it is vital that ethics aren’t compromised in the pursuit of a dollar. Because don’t take my word for it. Research shows that if your motivations are purely driven by money, then you are 8-11 times more likely to act in deceitful conduct to obtain it. Instead, view financial success as a by-product of the amazing things you do with your business.

As so, with that, here are some tips to get you started to effectively navigate financial management:

• Regularly review financial statements to understand the health of the business.
  
  
• Utilize technology for accurate and efficient financial tracking.
  
  
• Train the team in basic financial literacy to ensure everyone understands the impact of their roles on the pharmacy’s financial performance.
  
  
• Establish clear financial goals, share them with your team, explain why they matter, and regularly assess progress towards these goals.

As so, with that, here are some tips to get you started to effectively navigate financial management:

• Regularly review financial statements to understand the health of the business.
  
  
• Utilize technology for accurate and efficient financial tracking.
  
  
• Train the team in basic financial literacy to ensure everyone understands the impact of their roles on the pharmacy’s financial performance.
  
  
• Establish clear financial goals, share them with your team, explain why they matter, and regularly assess progress towards these goals.
  
  

YOU AND YOUR TEAM

In the realm of community pharmacy, human resources management is as vital as any other business skill. The success of a pharmacy is not just determined by the products on the shelves but also by the people behind and beyond the counter.

Engaging talent is the first step in building a successful team. This involves not just hiring the right people but also nurturing their growth and development. In a pharmacy, this could mean providing opportunities for continuous learning, fostering a positive work environment, and recognizing and rewarding good performance.

Leadership skills are also crucial in managing a pharmacy team. A good leader inspires and motivates the team, sets clear expectations, and leads by example. They understand that every team member, from the pharmacist to the retail assistant, plays a crucial role in the success of the pharmacy.

Consider, for instance, a community pharmacy in Melbourne. The pharmacy owner places a strong emphasis on team development and regularly invests in training programs for their team. They also foster a culture of open communication, where team members are encouraged to share ideas and feedback, thus creating psychological safety in their environment. As a result, the pharmacy enjoys a high level of staff engagement and customer satisfaction, and the rewards of such efforts ultimately come in the form of financial success.

Ultimately, leading yourself and your team comes down to your ability to effectively balance the demands of the business with the needs of the team, encouraging growth and innovation while maintaining a focus on patient care. You must be adept at conflict resolution, communication, and decision-making.

EXPANDING YOUR REACH

In the distinctive landscape of the Australian community pharmacy industry, the role of marketing cannot be overstated. Traditionally, pharmacies have operated under the assumption that patients will come to them as a matter of course—a presumption fostered by the industry’s unique market protections. However, as the healthcare sector becomes increasingly competitive, this passive approach to customer acquisition is no longer sufficient. Active and strategic marketing has become essential to attract and retain customers.

But unlike what most believe and actually do, it’s not just about promoting products; it’s about building relationships with customers and the wider community.

The first step in effective marketing is to shift the mindset from expecting patients to walk in, to actively drawing them in. This involves understanding the needs and preferences of the local community and tailoring services and products accordingly.

It’s about creating a truly unique value proposition (saying that you offer “good service” is not unique!) that distinguishes your pharmacy from others.

Secondly, extend your presence beyond the physical confines of your four walls. Engaging with the community through health workshops, participating in local events, and offering educational sessions on health and wellness can position the pharmacy as a trusted health resource.

Personal branding is also crucial. The pharmacist and the pharmacy team should be seen as approachable and knowledgeable figures in the community. This can be achieved through active social media presence, local media appearances, and involvement in community initiatives.

And lastly, networking not only enhances the pharmacy’s visibility but also establishes it as an integral part of the healthcare system. Do this by building and nurturing relationships with other healthcare providers, local businesses, and suppliers. Collaborations can take many forms, from joint health campaigns to referral programs. But ultimately, it’s about leveraging these connections for mutual benefits, including increased patient referrals and collaborative health initiatives.

SALES

What type of article would this be about the business of pharmacy if I didn’t mention the S word?

Now it puzzles me why, for so many, this is seen as a taboo subject.

You. Are. In. A. Business.

And as such, sales are a necessary part of that. It’s as simple as that.

I know we touched on this earlier with the dentist example, and so to add to that, sales go beyond a transaction. It’s about developing a deep understanding of customer needs, paired with excellent communication skills and a problem-solving mindset.

This means understanding the broader health needs of our customers and offering comprehensive solutions that encompass medications, lifestyle advice, and supplementary health services.

Problem-solving is another crucial aspect of sales. Customers often come to the pharmacy with a health concern, and they are looking for a solution. This could be a medication to treat a condition, a product to manage symptoms, or advice on lifestyle changes.

By focusing on solving the customer’s problem, and through active listening to understand their needs and empathetic engagement, personalised solutions can be developed for that customer.

By adopting this problem-solving approach, pharmacists can build stronger relationships with customers, leading to loyalty and trust. This moves away from the typical misnomer that pharmacies are unique because they simply provide “good service”.

In today’s competitive market, good service is a given, not a differentiator. What sets a pharmacy apart is its ability to provide positively memorable experiences for customers—experiences that not only create loyalty but raving fans who advocate for all of the amazing things you do.

As a result, rather than making sales, make solutions. The rewards are far greater when you do this.

FINDING A BETTER WAY

While all of this sounds good, none of it matters unless you create a need, want, and burning desire to always be searching for, finding, and implementing better ways to do things. This essential skill is the key to unlocking all the opportunities your business of pharmacy has for today and for tomorrow.

To do this, you must focus on two key things: operational excellence and continuous learning.

Operational excellence in community pharmacies involves more than just fine-tuning processes; it’s about creating a synergy between efficient workflows, innovative technology, and a team-driven approach. For example, implementing a comprehensive pharmacy management system, as seen in some Brisbane pharmacies, can streamline dispensing, inventory, and customer relationship management. This leads to more efficient operations and deeper insights into customer needs and business performance. Such technology not only optimizes efficiency but also enriches the customer experience—reducing wait times and offering more personalized care.

Achieving and maintaining operational excellence in this fast-evolving industry requires an unwavering commitment to continuous learning and adaptation. Pharmacies need to stay abreast of the latest developments—from changes in the Pharmaceutical Benefits Scheme (PBS), expanding scopes of practice, to emerging healthcare trends.

This journey of continuous improvement also necessitates empowering the entire team, fostering a culture where learning and innovation are part of the everyday ethos. It’s about embracing changes, whether in regulations, market dynamics, or customer expectations, and viewing them as opportunities for growth and improvement.

Ultimately, it comes down to your willingness to invest in your team to grow, to find better ways, and to implement the changes required to grow a thriving pharmacy business. Upskilling, therefore, becomes crucial in this context. More importantly, developing a skillset that understands the importance of the business of pharmacy is now more vital than ever.

Through the development of these essential skills and embracing these principles, pharmacists and their teams not only excel in their current operations but also pave the way for future advancements.

You Choose – Success or Failure

As we wrap up, it’s clear that the journey of a community pharmacy in Australia is much more than putting labels on a box. It’s a business venture. And with that comes the need to develop a level of mastery around the essential skills we’ve discussed already.

But more so, it is your commitment to continuous growth, learning, and adaptation in the pursuit of healthcare excellence that will define how good your business of pharmacy truly is.

So, wherever you are on your journey in your pharmacy career, having a thorough understanding of the business of pharmacy is no longer a nice-to-have. It is mandatory. The quicker you find someone that can give you the owner’s manual, the quicker you will succeed.

So, what’s the next step for you?

It’s simple: Embrace the challenges to come as opportunities to grow. Do the work, be persistent, and be resilient to make sure it is done. And don’t do it alone. Do it with others that are going to support, guide, and coach you as you navigate this new world.