Inside: Business goals done wrong can do more harm than good. Discover how one proven approach can improve your pharmacy business goals.
How well are your pharmacy goals working?
In an industry that gets fiercer each day, with margins rapidly shrinking behind-the-counter, pharmacies operate on a tightrope. Effective pharmacy goal setting can give your business the balance it needs to keep moving forward.
But many small business owners don’t understand the importance of business goals. A Staples Small Business Survey revealed that more than 80 percent of small business owners don’t keep track of their business goals.
And even when they understand the importance of goals, theirs fall short. Multiple studies show that for many businesses, goals can do more harm than good.
Whether you’re slacking on creating goals, or not creating goals that work, there’s one goal-setting technique proven to help businesses like yours.
So you can create goals that drive changes.
The technique is called SMART. It breaks down the essential elements needed for every business goal.
The acronym stands for:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
Using SMART to set the pharmacy business goals to help your business thrive.
Step 1: Create specific goals
Start by casting a broad vision or creating a mission statement to guide your business decisions.
Vision statements summarize the overall purpose and values of your business.
But SMART goals detail specific accomplishments for the business to achieve.
After your vision, your goals need to go from grand to grainy. Instead of the forest, focus on the trees.
Specific goals give you something to grab onto month-to-month, week-to-week, day-to-day.
The more specific you make them, the easier and more effectively you can align tasks to them. When you do that, you maximize every activity for the good of your business.
Here’s how to create specific business goals:
Sharpen your pharmacy business goals by making them more specific. Start with a general goal and chisel your way down.
For example, say your goal is to “gain more patients.” That’s a good goal. But it’s too vague to help you implement processes and strategies to achieve it.
Go a step further. For example, to “gain 10 percent more patients each quarter.”
That’s more specific. Now we’re getting there.
But you can go even further. What patients are you talking about?
You want to tailor your goals to your market (in other words, make them achievable). So, if you’re in a college town with primarily college students, you can get more specific about who you need to reach.
“Gain 20 percent more college-aged patients and 5 percent more 65-and-older patients each quarter.”
The specificity of these goals now affects every single business decision you make. Use your goals to adjust your marketing, your services, your technology, and your front end.
For example, now when you need to decide if you want to redesign your website, you can use your goals to make a more informed decision for your business. Because college-aged patients will likely find your business online, you should probably make the investment.
Step 2: Make your goals measurable
If you can’t measure a goal, how do you know how to reach it or when you’ve achieved it?
Making pharmacy business goals measurable keeps you on track. You’ll know if you need to ramp up to reach your goal, if you’ve found the right groove, or if you’re biting off more than you can chew.
So, every goal you create should include metrics that allow you to measure results.
The metrics will change depending on the goal.
For example, if you want to increase profit by 5 percent in two years, the percentage of profit will work for your metric. If you want to implement two new services every year, you’ll need a different metric.
But how do you make something intangible measurable, such as increasing customer satisfaction?
Make the goal more specific and create a measurement for it.
So, instead of “increase customer satisfaction,” you’d make it, “receive no more than five customer complaints per quarter.” Or, “receive 20 five-star reviews from customers per quarter.”
Then, you’ll have a specific and measurable pharmacy business goal.
Step 3: Make your goals achievable
When it comes to day-to-day decision making, grandiose goals aren’t as effective as small goals.
Keep the ambitious goals in sight but keep the achievable goals under your nose.
Think of a flashlight. If you only shine the light on your final destination, you’ll stumble over or what’s right in front of you.
But how can a business know what’s achievable and what’s not?
Well, when Jeff Bezos first founded his small online bookstore, he probably didn’t think becoming the most successful retailer in the U.S. was realistic.
Consider how much these areas have grown in the last three years to help shed light on what’s attainable for your pharmacy:
- Profit
- Number of staff
- Revenue
- Operating costs
- Cash flow
- Local population
Another way to know what’s achievable is to study and talk to other successful independent pharmacies. How long did it take them to grow? Network with other pharmacy owners and attended conferences to gain even more insights.
Step 4: Keep your goals relevant
Make your pharmacy business goals relevant to your vision or mission.
Sometimes irrelevant goals sneak in because of a lack of focus or a lack of big picture goals.
For example, take one of the goals above. “Add two new services every year.” Did you notice that while it was specific, it wasn’t necessarily relevant?
The goal is measurable and specific. But it still gives you room to add a service that doesn’t address your pharmacy’s mission. You could throw in a face painting service and check it off your list.
You need to add more detail to make your goal relevant. For example, “Add two new services every year that address the latest patient demands and industry trends.”
With that goal, you can only implement relevant services.
Step 5: Create time-bound goals
Successful pharmacy business goals require a time limit.
The truth is, human beings need external pressure to push them forward.
One of the most effective external motivations is urgency.
Look around and you’ll notice how effective urgent time limits are:
- Shoppers rush to one-day sales
- A story’s suspense skyrockets with a ticking bomb
- Deadlines at work keep employees on task
So, stamp an end date on your goals to get the best results.
For example, “increase profit by 5 percent in three years” or “dispense 30 prescriptions every hour.”
How to Put SMART Pharmacy Business Goals Together
Now you have all the pieces. Let’s see what they look like together.
Pharmacy business goals won’t be the same across the board. Different pharmacies create different vision statements and different business goals.
But most independent pharmacies want goals to fall under at least four categories:
1. Profit
2. Growth
3. Customer service
4. Community
Let’s try creating a SMART business goal for profit.
Example Goal: Increase profit margins on prescription inventory by 6 percent in two years.
Specific: Increasing margins focuses on a specific part of the business.
Measurable: Six percent provides easy-to-measure results.
Achievable: Other pharmacies have achieved a 6 percent margin increase with an improved primary wholesaler contract. (Learn more about how ProfitGuard, a primary wholesaler contract negotiation and management service from PBA Health, can get you there.)
Relevant: Every business’s mission needs to increase profit.
Time-bound: Two years creates a tight enough deadline to spur you on without discouraging you.
That’s a good start. But now you’ll need to create smaller goals to help you reach that goal. There’s almost no limit to how small your goals can get.
What SMART goals can you create that’ll improve your pharmacy this year?
Don’t let your goals fall short. Create SMART pharmacy business goals to build a thriving business.
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
