Weekly Comment – 27 June 16 : “Negotiate your lease carefully”
June 27, 2016
THE two biggest expenses in any
retail business are rent and wages
and in pharmacy it is no different.
With the reductions in margins
through the cuts to the PBS,
managing expenses to maximise
the bottom line is a must.
Strict wages and salaries budgets
need to be set and adhered to.
Rent is a more difficult problem
because it is tied to your lease and
annual increases apply irrespective
of how your business is traveling.
Many pharmacies are struggling
financially because of leases that
were entered into in better times,
and the annual increases have
now taken the rent to levels that
are simply unsustainable against
falling profitability.
Many landlords are realising
that the ‘golden days’, where they
could charge pharmacy ridiculous
rents, are over. Unfortunately
however, some pharmacists have
made it worse for themselves by
outbidding other pharmacists for
a site.
If you are at the end of your lease,
or getting close to it, you need to
get the right advice and negotiate
carefully with your landlord. This
can be a very daunting prospect
for a pharmacist up against a
leasing agent playing hard ball. Get
good advice and do your financial
projections for the period of the
next lease.
For lease advice, contact me on
john@pharmacysolutions.com.au
or 0414 719 212.
CONTRIBUTOR: John Neilson, Director, Pharmacy Solutions Australia.
The above article was sent to subscribers in Pharmacy Daily's issue from 27 Jun 16To see the full newsletter, see the embedded issue below or CLICK HERE to download Pharmacy Daily from 27 Jun 16
