So now you're the boss

Running your own business means juggling a variety of roles - an independent pharmacy does not have the luxury of a full back-up team consisting of managing director, sales and marketing director, financial director and personnel director.

Now you have decided to own a business, the first questions you need to ask are:

• What do I want to achieve?
• What do I want to be remembered for?
• What is my primary motivation and aim?

By deciding your end result we can then set smaller, realistic goals to achieve your aim. You need to write down on paper your vision in a clear, concise and forward looking manner so that you can identify your long-term goal from which you can form short-term goals and structure your business plan. For example:

• What business do you want to major in - pharmacy or retail?
• Which of the following roles managing director, sales and marketing director, financial director and personnel director are more important to you and can you fulfill them as well as your role as pharmacist?
• Once you answer these questions to your own satisfaction and have formulated your vision, it is time to begin work on your business plan.

Business Plan

In most cases you will be buying an existing business, so you will have historical data from which you can make a good assessment of the income you can expect from prescriptions and retail. However, you should not accept the figures you have at face value - investigate!

You need to assess your pharmacy and conduct a SWOT analysis (strengths, weaknesses, opportunities and threats to the business) - ask yourself questions such as:

• What is the location like? (If it is a tourist location can you take advantage of the seasonal opportunity? What is the transport network like? Is there parking outside/near the pharmacy?)
• What are the community needs? (Can your pharmacy fill a niche? What is your competition? What medical practices are nearby?)
• What is your market? (Will your customers be mainly the elderly and young parents, or if you are near to offices can you expect good lunch-time trade from business people?)

You also need to consider potential threats - for example what impact will the opening of a supermarket pharmacy have on your shop? If the council paints double yellow lines outside your shop will it discourage passing trade?

Listing the businesses strengths and weaknesses, and identifying the external opportunities and threats provides you with a direction for your business. It raises questions only you can answer:

• Do I need to relocate?
• How can I clarify my offer?
• Can I improve the layout/look of the shop and how much will this cost?
• How would my business benefit by joining schemes such as Vantage Refresh?

Now you can make confident financial projections as you will know:

• How the business has fared financially in the past
• What opportunities there are for you to expand the business/service offering
• What needs to be done, if anything, to the shop to meet your objectives

It may seem a daunting task, but it is not - you just need to approach it in a measured way. Help is available in the form of your bank manager, accountant and/or loans manager. At Statim Finance our loan applications take you step by step through the process to formulate a clear business plan.

The plan needs to be well-presented in order to be convincing to the financial institution you are approaching - be it the bank, loan company or family investors. Other sources of finance to be considered include an overdraft facility and leasing arrangements for fixtures and fittings. In general, however, it is more appropriate to source the bulk of financing from one source to help you manage your finances better in the long run.

Now you have your finance.

Now you have your plan and finance, the serious work of maintaining the business commences. You need to keep track of the business against your original objectives and be prepared to take action quickly if you need to change course. For example, is your income level as predicted? If not, why not? How can you raise more income?

What is your cashflow situation - more businesses close because of lack of cashflow than lack of promised income. Management accounts are essential at least once a quarter, to ensure your business is on track as per your projections - this should include a monthly cashflow projection updated against what actually happened the previous month. It will keep you on track!

Finally, if despite all your planning the outlook is bad - the best action to take is to inform your investors as soon as possible to ensure you receive maximum support and advice. There is absolutely no point in burying your head in the sand - by using the advice and help on offer you will be able to access qualified support to help your business survive and develop.