BANK OF IRELAND UK
funding business growth - Is it time to grow your pharmacy business?
lIKE manY traDItIonal bUSInESSES, pharmacIES arE opEratIng In a challEngIng EnVIronmEnt, WIth Strong compEtItIon from largE pharmacIES anD DIScoUnt chaInS, thE EmErgEncE of IncrEaSED cUStomEr ExpEctatIonS anD ImpactS of tEchnologY. So StanDIng StIll IS not an optIon aS compEtItorS plan anD ImplEmEnt thEIr groWth StratEgIES.
t
here are a couple of approaches in how growth can be achieved by pharmacy
businesses mainly considering: • organic growth • acquisition growth
plannIng YoUr StratEgY If your balance sheet is healthy, and your cash flow situation is positive, then you are in an ideal position to formulate your strategic plan for future growth.
Implementing a growth strategy in any business requires taking risks, but with planning, early engagement and support from professional advisors (including your bank), this will help mitigate and manage the risks.
organIc groWth focusing on meeting the needs of the community is at the very heart of a pharmacy business and these needs are changing all the time. Expanding or modernising your retail space may be worth considering as it could dramatically increase the appeal and visual impact of your business to your customer, which, in turn, can improve the bottom line of your business.
responses to these questions below may be the key in understanding if your pharmacy business would benefit from investment in a refit or expansion.
1. Do you feel your product or service offering is restricted due to space limitation or store layout? If so, what are the products or services that your pharmacy is unable to provide to your customers?
2. What tasks are your staff involved in and how are they spending their time? are there staffing or dispensing inefficiencies that are impacting on the services you provide to your customers?
3. how long has it been since you reviewed the operational and customer user experience of the shop? When did the pharmacy business last undergo a shop refit?
many pharmacies that have undergone a modernisation or refit have realised significant increases in turnover as it has enabled them to: • Improve their customer experience overall
• Improve working conditions and staff morale
• reduce the time taken to dispense medicines
• re-design and reallocate retail space based on the gross profit contribution of each product
• Introduce new products and services
acQUISItIon groWth If your business is running efficiently and profitably, then it could be time to consider expanding externally through purchasing an existing pharmacy business. the benefits of buying an existing pharmacy business can include:
• already established goodwill of the business
• Existing turnover so that it is not a case of building it from zero
• the pharmacy has immediate access to customers
• Synergies can be achieved across pharmacy businesses, eg, staff rosters, insurance, supplier discounts, creditors’ terms etc.
often the growth of your pharmacy business through acquisition requires a business development plan. You should seek professional advice to maximise realisable value and to structure both your personal and business affairs in the most efficient manner.
It is essential for all pharmacy owners to engage the services of a chartered accountant, who specialises in the retail pharmacy sector.
this expertise can provide invaluable advice on the preparation of your business development plan, review the financial performance of your pharmacy and help you plan for your future growth.
You could consider financing a refit or expansion of your pharmacy business using company cash reserves.
additionally, it may be beneficial to invest some of the expenditure personally as there may be tax reliefs, and, along with your professional advisors, we will work together to help you implement your growth plan.
at bank of Ireland UK we are actively lending to the pharmacy sector. there are a number of potential funding options which can be tailored and developed into an innovative and flexible funding package to suit the circumstances and nature of the individual transaction.
If you are considering investing for growth and looking to understand the funding options, please contact mark cunningham, regional business Development manager, bank of Ireland UK via email
marka.cunningham@
boi.com
pharmacY In focUS - 45
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