Pharmacy owners, do you know your numbers?

The demand for pharmacy ownership is currently outstripping supply, and the result is a rise in pharmacy prices. With limited supply and the ‘price to play’ increasing, how do you get the most out of your pharmacy? As an investor, how do you maximise your return?

The answer? Know your numbers.

Four years ago, the NSW Government in partnership with pharmacies put out a call to the public to “know their numbers” in a scheme aimed to reduce the risk of cardiovascular disease and type two diabetes. The result? 46% high risk detection rate.

Could engaging with the right adviser and delving into your data, give you a similar result? Find out by contacting PKF.

Know your numbers

Which numbers? We are not just talking dollars and cents, we are talking about your customer numbers, the % split of your sales between dispensary and front of shop, your inventory days, your break-even turnover, the list goes on – we are talking about the things that you can measure and the things that you can change.

Once you can measure it, you can manage it.

Measure

Where do you start and what do you need to know? With so many things that can be measured and so many numbers floating around, what is important to you and your business? What will have an impact?

1. Keep it simple – Choose between three and five key measures. Less is more! Less distractions, less noise and less complication. Report on these monthly.
2. Understand what you’re looking at – Numbers and measurements that you don’t understand as an owner can’t help your business. Ask your adviser, use your network, or as a last resort, Google it. Know what it is that the numbers are telling you.
3. Plan and hypothesise – Test scenarios by plugging different figures into the formula and see how it works – ie What happens if my stock value goes up but my sales stay the same? How does this change the result? What happens if my daily sales remain steady despite my customer numbers increasing?

Manage it

This is the starting point for ‘making the business work for you’.

1. Implement initiatives and strategies within your business and measure the impact (good or bad).
2. Analyse the results. What did you observe? Were there any trends? Are you able to connect certain behaviours with certain outcomes? Take the time to understand what is driving your results.
3. Challenge the result. Ask questions – did this yield the result I was hoping for? Does it require more time? Was it more/less effective than I first thought? Do I need to change things?

Knowing your numbers will empower you as a business owner and investor. You have the power to change things. Make it your business to know your numbers.

PKF can get you started. Get in touch with our specialist pharmacy team today.