New Owner’s Advice: Find the Experts & Expertise You Need
Best practices and lessons learned by new pharmacy owners.
Invest to create a pharmacy on the cutting edge
As a pharmacist in charge at a Medicine Chest Pharmacy (an 18-unit chain in Texas), Laura Temple had thought, “I ought to do this for myself.” When that pharmacy sold to a larger chain in 2012, she decided to go for it.
In August 2013, Temple opened Laura’s Health Mart Pharmacy in Azle, Texas, the only independent pharmacy in town. By August 2014 she was selling about 5,000 scripts a month. Temple shared advice based on her experience starting a pharmacy.
What worked well:
- Attending NCPA’s Pharmacy Ownership Workshop. Sponsored by RxOwnership®, this conference provided step-by-step instructions for writing a business plan and put Temple in touch with experts to tap for financing, accounting and legal advice. Through the conference she was directed to Ron Davidson from McKesson, which became her wholesaler. He in turn introduced her to a larger team of experts, including McKesson’s retail design manager Chrys Owens, who helped build her pharmacy.
- Paying for expertise. When friends told Temple that some services she was using were too expensive, she explained the importance of paying for experts who know what they are doing. This included her attorney, who was able to resolve issues with the state Department of Public Safety about her controlled substances license, and her accountant, who set up systems for bill paying and payroll that made those chores easier.
- Deciding where to invest. Temple chose to invest in a pharmacy-management system that could grow with her business, while a friend who opted for a less expensive alternative is on his third system in two years. “Build the business you want to have,” Temple said, and don’t settle for less-expensive options that will leave you dissatisfied.
- Marketing smart. Temple handed out business cards, pens and magnets; advertised in the local paper; and had a grand opening. After the grand opening, she sent a mailer to people in targeted ZIP codes who may not have seen her pharmacy. She used marketing programs available through her franchise and buying group so that she didn’t have to start from scratch. Plus, she applied matching marketing funds available to her as a member of Health Mart®, reducing her overall investment. Temple scheduled a stop on the Health Mart Healthy Living Tour, which drew attention to the pharmacy with free mobile health screenings.
- Reaching out to prescribers. Before Temple opened, she used her background in communications and marketing to create packets for local medical offices describing how her pharmacy would be different from existing pharmacies in the area, such as its compounding service. Referrals from doctors are the best source of new customers. “We make sure to treat doctors right,” such as talking with them when they call, which in turn makes the doctors and their staff happy to talk with our staff when we call, she explained. Because physician assistants change frequently, Temple knows she needs to stay in touch to continuously tell them what her pharmacy offers and what is new. McKesson offers a Physician Outreach Program with customizable marketing templates, prescriber data and analytics to help pharmacy owners target local prescribers and build stronger relationships.
- Not skimping on the sign. “I want people to see my sign from the Walmart parking lot across the highway,” Temple said.
- Filling the front end. The store’s front end is an often-overlooked source of revenue, but it is important to offer customers convenience. If they are picking up an antibiotic, for example, they don’t want to stop somewhere else for an OTC painkiller. A well-stocked, organized and clean front end shows you are serious about the business. “If you have only a few OTC products, it looks like you’re not going to be in business for long,” she said.
- Focusing on customers. “If you help people feel better, they tell people about it,” Temple noted. After counseling from the pharmacist, one patient was able to stop taking six prescriptions, but that didn’t lead to lost revenue. That patient referred a friend, who transferred 20 prescriptions to the pharmacy.
- Hiring great people and paying them well. Many of Temple’s employees had worked with her at another pharmacy and worked other jobs until she was able to hire them. Temple has heard other owners brag about hiring “cheap technicians,” but she wants to hire the best people, wants them to be happy and stay, and is willing to pay for them.
- Being involved in the community. Temple helps a hospital provide medications to indigent patients, and her pharmacy’s name is on the jerseys for a youth sports team she supports. The year she opened, the Azle Area Chamber of Commerce gave Laura’s Pharmacy its New Business of the Year award.
- Being flexible and adapting. When insurance contracts asked whether Laura’s Pharmacy would provide various services, such as 90-day refills and vaccinations at workplaces, she eagerly answered, “Yes.” Within three months she visited area businesses and gave more than 400 flu vaccinations.
What she’d do differently:
- Hire a third-party reconciliation company from the start. In her first year, Temple fell eight months behind reconciling claims. Now with RelayHealth®, in 30 minutes she completes reconciliation work that previously took hours, improving cash flow.
- Resolve insurance contracts early. Laura’s Pharmacy was open and had customers wanting to transfer prescriptions before the pharmacy could accept their insurance. Temple had difficulties completing the various forms and communicating with the insurance companies. Her advice is to focus on and resolve these issues early so they don’t prevent you from gaining revenue.
“You’ve got to go all-out,” Temple said. Independent pharmacy owners need to stay on the cutting edge to serve customers better. Temple’s goal is to attract customers and serve them well so they won’t have a reason to go anywhere else. She is providing customers unique reasons to come to her store by joining the Professional Compounding Centers of America and working toward certification to offer durable medical equipment, and is planning to provide medication synchronization and enter the specialty pharmaceutical business.
Starting a pharmacy is a learning process. If Temple opens a second location, she will definitely apply the lessons she has learned.
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Note: The information provided here is for reference use only and does not constitute the rendering of legal or other professional advice by McKesson. Readers should consult appropriate professionals for advice and assistance prior to making important decisions regarding their business. McKesson is not advocating any particular program or approach herein. McKesson is not responsible for, nor will it bear any liability for, the content provided herein.