Ask The Expert - Complementary Session

October is National Pharmacy Month

SHB Consultants' Michael Busch is available to answer your pharmacy questions at absolutely no cost to you. Whether you are having cash flow problems or seeking advice on how to exit your business.........Michael is available to you.

Michael is the founder of Medicine Shoppe International, developed Cardinal Health's Profit Leader program and authored the Entrepreneur's Handbook.

You can schedule an appointment to talk with Michael by calling (800) 603-2519. Telephone sessions are limited to 30 minutes.

To learn more about SHB Consultants, visit www.SHBConsultants.com

NCPA Launches Student Ambassador Program

The National Community Pharmacists Association (NCPA) has launched its Student Ambassador Program, which recruits independent community pharmacy owners to visit pharmacy students to discuss the benefits of ownership and offer advice on how to navigate the process.

“The next generation of pharmacy owners are today’s pharmacy students,” said Holly Whitcomb Henry, RPh, NCPA President and pharmacy owner in Seattle. “NCPA has many tools to help students become successful owners. The NCPA Student Ambassador Program brings our current and future community pharmacy owners together, educating students about why community pharmacy is their best career option.”

Already, over 200 community pharmacists have signed up to become NCPA Student Ambassadors. They will visit pharmacy schools in their area, including the 80 pharmacy schools that have NCPA Student Chapters, as well as schools without chapters. The goal is to have the Ambassadors conduct at least one visit during the 2009–2010 school year.

To learn more about this program, please click here

Is it time to Rethink Your Exit Strategy?

Exit Strategies is a topic we have discussed before but it is an important one to revisit.

An exit strategy is defined as a plan to maximize the return on your investment if and when you decide to leave the business!

The return on your investment (ROI) can come from different actions. Before you started your business, you formulated the various ways in which you can achieve this ROI. Now is a good time to revisit your Exit Strategy.

In an ideal world, you would have established your "exit strategy" on the front end. However, often that gets missed or things have changed drastically since you began your business.

As a Pharmacy Owner, there are an array of options to choose from.

Opportunities for an Exit:

• Family Member Buyout - even if one of your children is taking over the store the business must be valued. There are tax implications that must be considered. In addition, your other children come into play with regards to your estate planning.

• Junior Partner Buyout - You may want to sell to one of your Pharmacists. Determining the right structure for the deal is critical to maximizing the benefits from the sale.

• Independent Buyer - One caution . . . your books and records need to be in order to maximize the value.

• Chain - could be local, regional, or national. This buyer will likely produce the highest dollar return to you. However, do not attempt to negotiate with a chain on your own. The experts will deliver the best deal.

It is important to remember that what worked for your colleague in another town, may not be in your best interest.

Every business is different, but they all require an exit strategy. Years ago, it was quite common to believe that the real advantage to being in business for yourself was that you were your own boss and didn’t have to answer to anyone. Wrong!!! We all have to answer to someone: the bank, investors, spouses, etc. The only good reason to become a business owner is to generate acceptable returns. Careful planning increases the odds of your success, and exit strategies are part of that planning.

Cardinal Health Names Recipient of Ken Wurster Community Leadership Award

Cardinal Health names independent pharmacist Harold Harmon recipient of inaugural Ken Wurster community leadership award

WEBWIRE – Wednesday, August 05, 2009

Company to donate $10,000 to Auburn University Harrison School of Pharmacy

WASHINGTON, D.C.— At its annual Retail Business Conference in Washington, D.C., Cardinal Health today named Harold Harmon, owner of H&M Drug of Wedowee, Ala., as the inaugural recipient of its Ken Wurster Community Leadership Award.

The award, which recognizes an independent pharmacist for outstanding contributions to his or her community, was created in honor of Tampa, Fla., independent pharmacist Ken Wurster, who passed away in 2008.

“Ken Wurster was a shining example of everything that independent pharmacy means to our country,” said Steve Lawrence, senior vice president, retail sales and marketing for Cardinal Health. “He was committed to serving his customers and his community with an unfaltering sense of responsibility. It’s our honor to create this award in Ken’s memory – with the goal of recognizing others who exemplify his commitment to family, business, customers and the broader community.”

Community pharmacists and Cardinal Health employees were encouraged to submit nominations for this award, and all nominees were judged on a variety of criteria, including:

· community leadership and involvement;
· their ability to inspire others; and
· their willingness to go above and beyond the day-to-day operations of a retail independent pharmacy to make their community a better place to live.

Most notable among Harmon’s contributions includes establishing an annual fund that awards scholarships to graduating seniors at local high schools in his county. Harmon has also completed several medical mission trips to provide much-needed medical care to needy children and families in impoverished nations. Harmon’s nominators also emphasized his outstanding commitment to patients – offering to be ‘on call’ to address his customers’ questions and needs at any time.

“Harold Harmon is an outstanding pharmacist and has consistently demonstrated an unwavering commitment to not only his immediate community, but to meeting the medical needs of the less fortunate around the world,” said Lawrence. “We feel fortunate to work with and know Harold, as he truly embodies the spirit of community pharmacy and this award.”

Each year, Cardinal Health will donate $10,000 in the name of the winner to the pharmacy school or pharmacy association of his or her choice. Harmon selected his alma mater, Auburn University’s Harrison School of Pharmacy.

Additional finalists for the 2009 Ken Wurster Community Leadership Award included:

· Darlene Able – Able Care Pharmacy & Medical Supplies in Enfield, Conn.;
· Henry Ager – Medical Discount Pharmacy in Livingston, Texas;
· Steve Simenson – Goodrich Pharmacy in Anoka, Minn.; and
· Theresa Stickler – Melrose Pharmacy in Phoenix, Ariz.

Nominations for the 2010 Ken Wurster Community Leadership Award will be accepted between Aug. 1, 2009 and March 1, 2010. Learn more about the award on cardinalhealth.com.

The above information came directly from www.Webwire.com

What is the Friendly Factor of Your Pharmacy?

While this question may sound silly to some, this is actually important information you need to know about your pharmacy. As a business owner, you should continue to assess how your store is performing.

Picture these 2 scenario’s:

Situation #1 - You are going to a store where you are a regular customer. There is no parking near the door because the employees have taken all of the spaces. You reach the door where an employee jumps in front of you only to close the door behind them. Once in the store, you are looking for the items you want when an employee walks in front of you to get something they need. Now that you have your items, you are ready to check out. At this point, you are met by a surly cashier who is having a bad day / month / year / life. Overall, how would you rate your experience? Let’s give this store a friendly factor rating of minus 3.

Situation #2 - You are also a regular customer at this store as well. There is plenty of parking up front because the employees park away from the front of the building. You reach the door and an employee opens the door for you and greats you by name. Once in the store, you are looking for the items you want when an employee makes you aware that they have moved their displays around recently. However, they offer to help you find the items you are needing. Now it is time for checkout. At this point, you are met by a friendly cashier who asks you about your children or grandchildren. They remember from the last time you came in that you showed them a picture. Overall, you give this business a friendly factor of 10.

Now we realize both are extremes and this probably won’t all happen in one visit. However, how would you prefer to be treated? Which store are you most likely to continue giving repeat business to and refer your friends to? Which one will you hesitate to go to again and possibly tell the world to boycott the business?

The old adage, “Treat others as you would like to be treated” still holds true especially in todays business world. Let’s face it. Our economy is in the pits and you need repeat business.

We challenge you to shop in other stores (not necessarily a pharmacy), record what you like and dislike about your shopping experience. Ask your employees for their points of view. They are going to point out things that you missed. Plus, you get better buy-in from the employees if they are engaged in this exercise. With your employees, define how you want your customers to be treated from this point forward.

On Monday mornings before your pharmacy opens, have a 15 minute training session. Review your customer objectives with your people. Ask your employees to share success stories on how they have implemented this new store personality. Discuss ways to improve your service.

Periodically, ask a friend come shop your pharmacy to see how your employees are performing. They should give you insight on what you are doing right and areas where you can improve.

We end with this question . . . currently, when your customers leave your store, are they more likely to experience Situation #1 or Situation #2?

Is Your Website Helping Your Business?

If we take a good look at all marketing and advertising venues, we need

to make sure that each thing we do has one common thread: a call to action.

We must ask the viewer to do something. If your business is going to have a

website, then all other mediums that you use should emphatically direct the

viewer or reader to your website. Why? Because it’s more affordable and

accessible than other mediums, you can tell your story much better on your

website than anywhere else. This is why a classified ad that simply directs

someone to your website may yield surprisingly high dividends.

Most websites are not as effective as they could be. There are

many do’s and don’t’s associated with successful web marketing.

If you want to attract visitors to your site and convert them to

customers, here are some important tips.

• Call to action - Every page of your site must direct the visitor to take

action, even if that action is directing the person to go to another page.

If you are selling something, it’s important to ask for the order in several

places on your site. At the very least, you want to direct the visitor to a

response form where they supply you with name, address, email

address, etc. The more information you can get, the better. One way

to obtain this is to provide something free in exchange for their contact

info. Every visitor is an important lead, so you must be able to reach

him!

• Site Structure – All pages should contain navigation links to every

page in your site. These links should appear on the top and bottom of

each page. Most sites typically include the following pages:

1. Home – Welcome prospective customers and give them an overview of your business. It should also direct visitors to take a specific action

2. About us – Information on your company

3. Testimonials – Gives your business credibility.

4. Contact us – Address, email, telephone, contact name

5. News and Events – Latest information about your

business, such as new products/services or awards, special events.

6. Order Now – Enables visitors to order your product or service at

any time.

7. Links or Affiliate Sites – This is a form of cross-marketing, where

other sites with which you have agreed to “trade links” are

available to give your site visitors direct access to related

products.

Drag Out the Old Business Plan

When you first started your pharmacy business, the bank required you to have a business plan. Is that correct? So let me ask you, when was the last time you looked at it? A month ago? A year ago? 5 Years ago? Haven’t seen it since the bank gave you the loan? Regardless of the time frame take it out now. Once a quarter you should take out your plan to modify and adjust what is going on with your business and the pharmacy industry at the time.

A good business plan is a working document that will enable you to focus on desired outcomes and will serve as a road map for you to follow. Your plan must be compatible with your hopes and expectations. Great ideas fail due to lack of execution. In this case you are not only the visionary but the operator as well. Further, today’s pharmacy industry is in a constant state of flux. By incorporating changes affecting the continuing performance of your pharmacy, you should accomplish several key things. First, by reducing evolutionary changes to writing you become better equipped to change strategies to effectively address these changes. Remember, the best performers are the ones who find opportunity out of every situation.

To begin with keep your plan reasonably short. We all have short attention span, and most of us do not read too much detail. Here is an example of a basic outline.

Executive Summary

Introduction

Value Added Proposition

Capital Requirements

Use of Proceeds

Revenue Sources

Three years of projected revenues

Competition

The Market

Target Audience

Size of Market

Marketing Plan

Management

Financial Plan

Operating Plan

Risk Analysis

Competition . . . Not Necessarily a Bad Thing

Knowing and studying your competitors is an ongoing project. Competition may well dictate much of your operating strategy. The depth and breadth of your competitors will dictate how aggressive your operating plan should be. It is very important to think through the consequences of your operating and marketing strategies so that you can anticipate competitor reaction. Never operate blindly. You should not be obsessed with your competition, but should always be well versed in how they operate their businesses. Expand upon what they do right and learn from what they do wrong.

Another thing to remember: Good competition benefits your business, while bad competition hurts you. No competition at all tells us that the new business venture is likely to be ahead of its time. There are advantages and disadvantages to be first in the marketplace. The main advantage is that as long as you remain creative, the other players have to play “catch up”. Conversely, being first typically requires longer staying power because you are paving new ground. Also, you may open the door for the competitor with more resources, making it more expensive for you to stay in the game.

A great example of being ahead of your time is Netscape. According to Tom Friedman’s “The World is Flat”, Netscape drove Internet communications to a whole different level and likely was the greatest influence on where we are today. But, lo and behold, along came Microsoft. Because of the impact of its operating system technology, Microsoft was able to give away that for which Netscape had to continue to charge. Don’t you think this adversely impacted Netscape’s value? But, we wouldn’t cry too much for John Barksdale, one of Netscape’s founders and leader. He literally changed the world for the better and achieved what most of us only dream of.

Building Patient / Customer Loyalty

As a pharmacy owner, your business thrives on repeat business.

Picture this, a customer walks into your pharmacy and hands you a new prescription. If on a maintenance drug, you hope they come back next month for the refill. Keep in mind the chains offer money to transfer prescriptions to their stores. So, you have that to consider. Besides hoping they will come back isn’t a good idea if you want to be a successful business owner. You need to be more proactive than that. If they are on a one time medication such as an antibiotic or pain medicine, you may never see them again.

Regardless of the prescription type, the action you take next is very important. One thing you can do is look at the Rx’s you filled from the day before. Print out a list of the patients with new prescriptions. During slow times, have your employees make a few calls.

Here is a sample of a simple script:

Pharmacy Employee - Hello Mrs. Smith. This is Tom from Pharmacy R Us. Yesterday you came in with a new prescription and I wanted to follow-up to see if you have any questions.

Mrs. Smith - So nice of you to call. No one has ever called me from a pharmacy before and I have tried all of the chains. (See you have already impressed Mrs. Smith).

Pharmacy Employee - So, how is the new medicine? Do you have any questions or concerns that our Pharmacist can answer for you? I will be happy to put the pharmacist on the phone if you need to talk to him/her.

Mrs. Smith - No, I really don’t have any questions yet. Can I call you if anything changes?

Pharmacy Employee - yes, please do. We don’t think any question is too silly. So, please call us if anything (regardless of how small it may seem) concerns you. Our goal is to build a long-term relationship with you. What concern you, concerns us. We look forward to seeing you next month.

Mrs. Smith - Wonderful! Thank you!

Do you see how simple and painless that call can be? The best part is it doesn’t cost you a dime. Your employees have slow times of the day and can make these calls easily.

Now, Mrs. Smith may or may never call with a question or 2. If she calls, be sure to take care of her with enthusiasm. She has friends who would love to have that kind of experience with their pharmacist as well. Thus, this not only builds customer loyalty but can help bring in new customers too.

You don’t need to try to compete with the chains by throwing money out there. You can if you want. However, doesn’t it make more sense to provide your patients with the best customer service possible?

Is it time to revisit your business formation?

As your pharmacy business grows and changes, you may find that you need to change the legal entity in which you operate. Please note we are not accountants or attorneys. Thus, we strongly recommend that you seek professional advice before deciding if and when you need a change. The following are simple definitions to get you started.

Proprietorship

By definition, a proprietorship is individual ownership d/b/a (doing business as). A proprietorship requires the least legal assistance in formation and is the least expensive structure to maintain. There is one drawback. Any liability associated with your business becomes your personal liability.

C-Corporation

A C-Corporation is the most common legal entity for fairly substantial size corporations (multiple stockholders). It provides insulation from personal liability except in cases where the principal owner has provided personal guarantees. The corporation files income taxes and is taxed on company profits. All employees, including the principal owner, must be salaried in order to take money from the company. Otherwise, all revenue going to management and shareholders would be considered dividend income subject to double taxation (first to the company and then to the individuals receiving dividend income).

S-Corporation

An S-Corporation has the same corporate characteristics, regarding liability issues, as the C-Corporation. But it functions like a proprietorship, where income distribution is concerned. The "S-Corp" is required to file a corporate tax return; however, income (or losses) flow directly through to the shareholders, on a pro-rated basis, as personal income (or loss). Thus, the

corporation itself is not taxed.

Limited Liability Corporation or LLC

Instead of stockholders, the LLC has members. Its characteristics are similar to that of a partnership; however, it may have a bit more insulation from individual liabilities for its manager.

Partnership

A Partnership is similar to an LLC, in that it has a general partner (active in the business) and may contain passive investors.

There is some flexibility in your business structure selection. For example, you can go from operating as a proprietorship to operating as a corporation. There are also mechanisms that will allow you to elect to change from a C-Corporation to an S-Corporation, or the reverse. Generally, you can only change your mind one time. Once again, we encourage you to seek

professional help in determining which option is best for you.

Getting your Pharmacy in the News

We are all quite familiar with what is going on right now with the unfortunate death of Michael Jackson. What does this have to do with getting your pharmacy some news coverage? Great question! Check out this video from Jeff Crilley to get your answer.

CLICK HERE FOR VIDEO

For more advice on getting in the news, check out www.RealNewsPR.com

NCPA launches www.Fight4Rx.org

The National Community Pharmacy Association (NCPA) knows it would have more fighting power if it had an army of independent pharmacists and their customers behind it.

So NCPA recently launched Fight4Rx.org, a web based organization it hopes will recruit 1,000 independent pharmacies and their customers.  The site includes briefs on pharmacy patient issues, Medicare and healthcare news updates, and a video blog.  The information will be used to keep patients informed about legal issues and news affecting independent pharmacies.

For more information on this Drug Topics article, please CLICK HERE