Looking at yourself in the mirror
May 24, 2010
The process of benchmarking
yourself is something that should
not be daunting. The comparison
of your pharmacy’s results
compared to some form of like
pharmacy gives you a point of
relativity: how did I go, why did I
get that result and how and why
would I change?
You can benchmark many things
in pharmacy but the measures
must be easily calculated and
relevant. As a retail business you
need to consider retail oriented key
performance indicators (KPI’s).
These can be broken down into five
main categories: Sales; Gross
Profit; Overheads; Net profit;
Liquidity; and Productivity.
Sophisticated retailers are
reviewing this information
constantly within their own
organisations. However, without
looking at their competitors the
results are meaningless.
When going through the process
of benchmark comparison, it is
important to compare to like stores
(i.e. not a total industry average).
There is little point as a medical
centre pharmacy comparing your
results to a shopping centre
pharmacy. The sales, GP,
overheads and net profit results
will be completely different.
The data to put the KPI’s together
must include quantitative data
such as size of pharmacy, trading
hours and number of full time
equivalent staff to name a few.
The KPI report must be accurate,
automated and be available in a
very short time after the end of a
reporting period. The competitive
landscape in which we all operate
means we must be aware of the
results, what influences them and
what to change almost instantly.
Norman Thurecht is an
expert in pharmacy
finances, having been
with JR Accountants’
Pharmacy Division
since 2003. More info
nthurecht@jr.com.au.
This week’s contributor is Norman
Thurecht from JR Pharmacy Services.
The above article was sent to subscribers in Pharmacy Daily's issue from 24 May 10To see the full newsletter, see the embedded issue below or CLICK HERE to download Pharmacy Daily from 24 May 10
