Pharmacy Management 101

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There are 3 fundamental economic realities about pharmacy. They are:

1. There is no such thing as an average pharmacy — all pharmacies are different and a number of unique business and operating models are obvious in the Australian pharmacy landscape;
2. Gross margins are in decline; and
3. Increasing reliance on prescriptions and professional services.

Over the next two weeks, I will focus on items 2 and 3. This week I would like to discuss item 1 in detail.

Many focus on the mythical average pharmacy as being representative of pharmacy. However, even on something as simple as average turnover (annual sales), the average is not representative.

Of greater concern is that the government, banks, and often accountants continue to focus on averages without recognising the unique characteristics of each pharmacy. Average Annual Turnover (Sales) is highly skewed with a small number of pharmacies with very high levels of sales pushing the average up. Approximately 65% of pharmacies have annual sales below the Australian average. Hardly representative.

I believe there are a number of specific pharmacy models with related operational and financial characteristics which make each unique.

• What makes your pharmacy unique?
• How does that uniqueness strengthen your business or make a unique offer to your community?