So you want to buy a pharmacy?
I speak to many young pharmacists that are keen to buy a pharmacy for the first time. I help them with their structuring, valuations, due diligence, advice, mentoring and getting them in touch with the right lawyers and bank managers. It is a stressful and anxious time, as it should be. They are about to borrow ALOT of money.
We all know that the giant supermarket chains spend millions of dollars on researching consumer behaviour. Nothing they do in the store is an accident. From the position of displays to the direction you walk around the store everything is planned to get you to buy more.
As a small retailer, you can learn from the big boys and use similar strategies to give your customers a good shopping experience encouraging them to buy more and, more importantly, come back. These 7 tips from marketing experts.
Ok, I know you're pressed for time, but vibrant window displays are vital.
Linda Cahan of Cahan & Co states that "many small retailers don't do window displays, letting customers simply look straight into the shop, and that's a mistake. As your eyes are the windows of your soul, store windows are the eyes of the shop." Each window should tell a story."
She suggests that small retailers create an appealing display
a. Use a single color theme to grab attention and communicate your store's image b. Avoid clutter because in retailing, space equals luxury. Items crammed together look cheap.
Slow your customers down with an eye-catching colourful display
Allow you the customer to see your shop. Notice how in Target you can see from one side of the store to the other. Shelves that customers can see over provides an unrestricted view of your store.
Avoid the mistake of many smaller retailers. Large shelving units near the front of the shop can block the view. If you have lower shelving units with short hooks and narrow shelves, then the store looks full with less stock. And that's a money saving strategy.
Brian Dyches, chief experience officer of retail branding firm Ikonic Tonic in Los Angeles, reports that studies have shown that most people naturally look first left, then right as they enter a store and that shoppers usually then prefer to move right and walk counter-clockwise around the store. Via 7 Layout Secrets of the Big Retail Chains
Do you have an isle that ends in a back wall? If you have, turn the wall into a compelling display and draw shoppers deeper into your store.
It may more efficient use of space to have the shelving units parallel to the shops exterior walls, but, if its possible angle the shelves to a central isle forming an arrow layout.
Only do this if you can keep the isles wide enough for your customers to get around easily.
What's their secret? Here are seven layout tips from experts who have worked with many major retailers.
Up to 20 percent of the store's merchandise is skipped over because long, uninterrupted isles don't get people's attention. So, if possible, create breaks and use them to grab people's attention.
People are attracted to round and U-shapes, Dyches says. To get shoppers to stop at a display, try hanging a circular sign from the ceiling or placing a U-shaped background, such as a low wall with small sides extending forward, behind it. These make people want to stop and enter the space, which resembles a person extending their arms for a hug. Nordstrom makes great use of this technique in apparel displays, putting U-shaped partial walls behind mannequins on some displays, Dyches says. Source
2. Create a questionnaire and ask your employees and customers to give you feedback. 2. Hire a student from a local university to use your store as part of their research project 3. Find 2nd hand shop fittings to create displays in your store 4. Change displays regularly to maintain interest. Via 7 Layout Secrets of the Big Retail Chains
Now for 5 Habits of Success from Forbes.
Retailers are busy folks, with those not in the industry often misjudging just how much is on their to-do-lists. If you own a pharmacy, you already know that your list of tasks exceeds most other retail ventures.
With this in mind, successful retailers recognize the value in scheduling what is necessary to do and eliminating what is not. This also means recognizing that while some responsibilities are more enjoyable than others, all responsibilities must be prioritized to effectively run a successful retail business. Scheduling time limits and deadlines – even as your own boss – can help make retailers stay focused and on schedule, eliminating extra time spent where it shouldn’t be.
With a lot on a retailer’s to-do-list, who has time to dwell on the past? Sure, it’s easy to fall into this habit when mistakes are made, or opportunities are missed.
Retailers are bound to make poor inventory investments or have a slow month; however successful retailers analyze these situations as opportunities to learn from versus beat themselves up over.
One of the best ways to do this is lean on data... This often includes incorporating a point of sale (POS) system, using social media monitoring software and tracking customer loyalty. The more retailers know through hard data, the better they are in supporting their customers.
Stores spend a lot of money to open their doors and keep them open, which is why it always surprises me when a sales associate has no idea how to support the customers in their store.
The people of any business are the faces of that brand… whether they want to accept that role or not. As employers, it’s important to understand this reality and train associates to best represent their stores. Retailers who successfully run their businesses recognize the value in their associates and not only train them, but train them often.
The key is to invest time and dollars into your employees to reap the rewards of strong associates and as a result, healthy sales.
Know your competitors. Whether it’s your big box competitors or your local Main Street stores, successful merchants know who their competition is. And while it would be easy to simply read about their competition, savvy retailers take the time to actually visit the stores that compete with their business.
The following 7 points are a few of the main points savvy retailers analyse
1. What is their product assortment like? 2. What is the customer experience like? 3. What are their displays like? Can you learn from them? 4. Are they taking advantage of online shopping opportunities? 5. Do they have special events? 6. What is their dress code? 7. What is their customer service like?
Often, this type of routine analysis allows retailers to recognize new industry trends, missed opportunities, new strategies to compete for sales and other ways to stay afloat in the competitive retail marketplace.
Merchants who have become successful and more importantly, stayed successful, are willing to shift their inventory plans to accommodate their customers versus themselves.
When merchants listen to their customers, react to consumer trends, work with their vendors and respond to what their customers want, they can more efficiently buy inventory for their stores. Click to read the full article
Because Peak Strategies specialise in the Pharmacy and Medical Industries we are uniquely placed to provide you with accurate industry specific data to help you grow your business.
Email or call John Thornett on 9315 3117 to find out how we can help you grow your pharmacuy business. for an appraisal of your pharmacy and how you can expand and improve sales.
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It should never be underestimated how important good financial reporting systems are. It has a huge impact on a whole raft of business issues. Yet somehow for many it is largely neglected. Often it’s cast aside because it’s too hard, can't be bothered doing it late at night, takes up too much time etc. The whole function for many small businesses is down played as not important enough. From my perspective seeing many businesses, both successes and failures, the best decisions are based on the best data. It's unfortunate but I have seen it more than enough times of decisions being made on poor financial data which more often than not ends in trouble. Think about the potential list of issues you have to deal with that this data relies on.
Simple ATO compliance with Business Activity Statements, GST, PAYG Withholding, year-end income tax returns and the cost in meeting your obligations.
Finance applications whether it be for equipment finance, refinancing loans, buying another business, home loans etc.
Bank reporting covenants.
Determining Trading Performance, cash flow monitoring etc
Business valuations and sale of your business together with the associated due diligence scrutiny.
The list goes on and on. It's a fact the critical element common in most businesses that struggle financially is poor financial records. I see it time and time again. Of course that combined with gross ignorance and inept management. As I say "garbage in, garbage out." How can you make important financial decisions if you have no reliable information on which to base your decision on? Sadly it happens all too often.
But really it's not all that hard. The financial processes are relatively simple. And your accountant, who should know this stuff back to front, are only too happy to help and give you some direction. They don't want to trawl through your rubbish. It's not only extremely costly for you in terms of accounting costs, but you end up becoming unprofitable for them too. Subsequently, if you don't make the changes required your account becomes more difficult to handle and cost pressures start building. So be smart, be humble, and ask for help. Although I must point out the failings of today's technology and education systems is that most recently graduated accountants do not fully understand basic bookkeeping systems. Sad as it is, young accountants have to learn this stuff from scratch after they graduate.
So for business owners, here are some tips for how to improve your financial systems.
Be humble and be honest with yourself. We aren't good at everything. We have different skill sets and sometimes bookkeeping isn't one of them. Don't kid yourself. Call your accountant and ask for a referral to a good bookkeeper. Note here, go for quality, don't skimp by going for someone who used to do some bookkeeping for a mate as a favour. Again it will cost you buckets. Get a proper bookkeeper who knows their stuff. Yes it will cost more, but don't think of it that way. Think about how much it will save you in accounting compliance costs. Think about the benefits of having accurate data. Think about all the other areas you could focussing on that would have greater benefit to the business. Think about what else you could be doing with your time than doing book work at 10 o'clock at night. Be smart, not ignorant.
Use technology to your advantage. Don't be afraid of it. This is coming from an IT challenged person too. Technological development in software systems is just amazing at the moment. Especially cloud based software such as Xero and MYOB. Personally I find MYOB Accountright Plus more in line with pharmacy needs, but this is a personal thing. I'm sure others will disagree. There are many efficiency gains to be had with most recent features such as direct bank feeds, and cloud software. Simply allowing you, your accountant and/or bookkeeper to view the same data file at the same time has huge benefits. And the direct bank feeds really speeds up processing time. It's very achievable to have a $5m turnover pharmacy having its bank reconciled monthly from go to woe in less than an hour if done correctly.
Use a checklist every month to know you have done everything. It's easy to become complacent, and we all forget things. Get help from your accountant to put together a comprehensive month end checklist.
Get yourself a good scanner, and set up a document file structure. Again there is good technology around, use it. For our bookkeeping clients, we got ourselves a ripping $1,400 scanner, and save all their documents monthly using some file sharing facility. Dropbox works fine for us. There are other facilities around too. The important issue here is no paper, all paper documents get scanned, stored and shredded. Save your bank statements, customer debtors, Script analysis reports, GST reports, credit card statements, stock value reports, departmental sales reports.....whatever you like. No paper. And note, have the world’s best backup systems.
Never assume. Don't just post random transactions somewhere and think "that'll do, close enough, the accountant will pick it up". Never assume we will. What's wrong with popping your queries on an email and asking? Most decent accountants won't charge for email. Why put a barrier on you communicating with us? Problems aren't created when you ask first. Problems are created when you ask questions after you have stuffed something up.
Account for PBS debtors correctly. You must record outstanding PBS Claims at the end of each month. Also don't forget the little GST amounts on some PBS Payments.
Insist on recording the movements in the monthly value of stock on hand. Now for something so relatively simple you'll be surprised at the complexity of this. Stock value reports per your Point of Sale system are notorious for being wrong. As a lot of distortion can come from simple things like timing issues and the accuracy of the data being entered in. The true test of stock value is a physical count. But doing this every month is costly and just not practical. Choosing to use the stock value report is the most practical, but be careful of the error margins. One option is reconciling your stock to a GP margin. But that can be fraught with danger too.
Insist on separating dispensary from retail sales. And if you also have a post office or newsagency, separate that as well.
Lastly, work diligently on making your Point of Sale data as accurate as possible. There is a whole wealth of information that can be extracted from, and used extensively, for information trading performance.
I could go on and on, and there is so much more I could talk about. But make the effort to get it right and you and your business will be rewarded. Good decisions come from good data. Be humble and realise we aren't good at everything, just ask my wife. But when there's something we don't know much about, go find someone who knows about it more than you. Then learn and learn well. For that is what life is all about.....learning.
Smile and have fun John
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