Ways to increase revenue for your small business for pharmaceutical

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Lisa Faast: Over the years have I've talked to hundreds if not thousands, of pharmacies about profitability, a certain pattern started to emerge. And I now call these the six pillars of pharmacy profitability. These are really the six main categories. So the overarching strategies that you need to focus on if you want to improve the profitability of your pharmacy, so let's review them. One is cash based revenue. Two is non PBM. Revenue. Three is PBM. Revenue. Four is KPI optimization, five is marketing, and six is team development. That's it. Those are the six areas. Now granted, there are many, many, many tactics under each one of those strategies that you can focus on. But at least it starts to help you to categorize which ones you might be drawn to, or which ones you need to focus on the most. In order to get the biggest bang for your buck in terms of time and focus. To improve your bottom line. I don't think having a thriving profitable pharmacy is reserved only for a select few. I think every pharmacy owner can and should have a thriving profitable pharmacy, you just need the right health resources and tools to make it happen. And that's really what these six pillars of pharmacy, profitability, profitability are all about. So let's just dive in a little bit, I want to kind of tell you how I define these. And really everything that you can do to improve your profitability fits into one of these, sometimes even multiple categories. But if you happen to find something that can improve your profitability that doesn't fit into one of these pillars, please call me right away. So when it comes to cash based revenue, I look as cash based revenue, as there's no third party involved, no PBM, no billing of any kind, you hand a product to somebody and they give you cash. And therefore you get to turn that inventory into revenue, immediately. There's no waiting on your money, there's no you might have to wait for a credit card The next day, but that is the extent of it. And so this is typically like your over the counter products where you sell somebody something you can you get to create your own demand, you get to create your own education and draw people in they purchase from you, and they leave a happy customer and you leave a happy pharmacy owner with more money in your bank account. Now non PBM revenue, there can be confusion or conflation with with cash revenue, because cash revenue technically is a type of non PBM revenue, if you're not building a PBM. If it's cash, however, I categorize non PBM revenue a little differently to exclude cash, because non PBM revenue still means you're billing somebody or you're waiting on your money from someone. So a lot of clinical services will fall into non PBM revenue, direct billing for workers compensation will fall into non PBM revenue billing. So while you're may not be billing a PBM, you are still having to wait on your money, there still is a consideration for cash flow in there. However, so it's not as impactful to your immediate cash flow as cash based revenue. So I like to make a distinction between those two. Just because I think it's important in terms of all the other metrics of your business of how growing any one of those areas is going to impact your cash flow, your profitability, and all those other financial factors. Now number three is PBM revenue. As much as we don't like PBMs, most of us still build a majority of our revenue through PBM. If you're the typical pharmacy, that means more than 90% of your revenue comes from a PBM you cannot ignore that big bucket of revenue. You need to optimize it and make it as profitable as possible if you want to make your overall business as profitable. Now I'm all for decreasing that reliance on PBMs. Again, by upping that non PBM revenue and upping that cash based revenue, but you have got to tackle the strategies in order to improve the profitability of that PBM based revenue. Now the next one is KPI optimization, which, if you've been following me for any time, you know I'm a data nerd. So I love KPIs. Now KPI stands for key performance indicator, which is really just a fancy word of saying business metrics. There's a whole host of business metrics for pharmacies specific for pharmacy, and there's even different benchmarks or what you should be comparing yourself to so retail pharmacy has certain benchmarks. compounding pharmacy will have different benchmarks. Long term care will have even different benchmarks from there. I love KPIs and I have created a master list of KPIs. Now I do think that there's some very critical ones that you should be tackling first, and the ones that you need to get to green first. Sometimes those aren't the most sexiest But man, they're the most important for getting you to your profit goal. So you must optimize your KPIs and understand your data metrics, if you want to have a thriving successful pharmacy. Next up is marketing. You have got to be a marketer these days, when you own a pharmacy, you can no longer just be open and hope that one customers walk in. And two, that those customers are profitable, you have to go after the business that you want, you have to attract those people to your pharmacy. And you have to keep them there at your pharmacy. And so marketing is a key pillar to pharmacy profitability once you know what's profitable, or once you know the revenue strategy that you want to go after, you need to create a marketing strategy to go with it to attract that specific target audience. And last, but not least, owning a pharmacy is not a solo adventure, you need a team and you need a team at high performing, that loves the pharmacy and as passionate as pharmacy almost as much as you are, let's face it, you're never gonna find somebody that is tied in your pharmacy as much as you are. But you can get people that really consider their own and love and really work for that pharmacy. Because they're passionate about it. And so team development is a key pillar your team can make or break you. If you think about all of the thousands of decisions that are made every day in your business. If your employees make profitable decisions, think of how that's going to impact your pharmacy, if they make unprofitable decisions every single day. Think of how that impacts your pharmacy. So your team basically is a multiplier, and the culture that you create, and the training that you give them. And the education and understanding that you give them are really going to impact your overall pharmacy because you're not the only one making decisions every single day or interacting with your patients every single day. So that's it. Those are the six pillars of pharmacy profitability. I absolutely love talking about these, obviously, all of the content we create is under each one of these. But if you were a pharmacy owner, and you're curious about how to go about improving your pharmacy, start thinking about it in terms of these different categories. Where can you focus on where do you want to grow? Where do you need to optimize? Because these are, these are the six pillars. And so there's many strategies underneath each one of these pillars, and follow us learn more about the different strategies, see what you're drawn to. You understand your demographics the best, you might need to cut expenses, you might need to grow your revenue, you might need to fire an employee, there's a lot of different first steps that a pharmacy owner might need to take. And so really being able to look at all the different options but narrowed down in these six categories has been very helpful for pharmacy owners to really get that game plan. So get your game plan, figure out which pillar you want to focus on first, and let's get started and get to work to make your pharmacy more profitable.