NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every Friday.

Forget Mom's Advice: In Pharmacy, It Pays to Compare | NCPA Executive Update | May 19, 2017

by NCPA | May 18, 2017

Dear Colleague,

Doug Hoey

My tweener aged daughter just had a birthday. We had the usual celebration—cake, a few presents, and a sleepover. (Eight tweener girls all in an enclosed space for an extended period. I'm hoping my headache is gone by the NCPA Annual Convention!) As soon as the last girl was picked up, interrogation of our parental skills began. "Emma's parents let her do this. Sophie's parents let her do that." To which we replied, "Sorry, kiddo. Emma's and Sophie's parents are not your parents."

Clearly, some comparisons aren't always welcomed. But in the right context—your pharmacy business, say—comparison can accelerate how well your pharmacy performs.

For pharmacy small business owners, benchmarking is an essential tool for assessing everything from the efficiency of your staffing to the health of your margins. Having a point of reference is essential for pharmacy owners to make better decisions affecting the success of their business.

Thankfully, for 85 years now, NCPA has provided our members the perfect resource for assessing how your business measures up against similar businesses—thus providing you clues as to where you are excelling and where you need to work and improve and grow. That tool is the NCPA Digest, sponsored by Cardinal Health.

Since 1933, (then called The Lilly Digest) the Digest has provided aggregated financial data that is used as the industry standard by current and future pharmacy owners, pharmacy schools, and just about everyone who does business with independent pharmacies.

In the early 1990s, NCPA took over the production of the Digest and added additional reference points to the financial information as pharmacies began to offer a variety of niche services such as patient screenings, compounding, and LTC services, just to name a few.

The 2016 Digest also contained many other valuable statistics, some of which might lead you to think "I'm glad I'm not alone" or "I should try that." Social media? Facebook was used by 87% of community pharmacies and 62% offered a mobile app. Workflow technology? Some 84% used point-of-sale systems and 51% used automated dispensing counters. Pharmacy technicians? The average was 3.2 among the 9.4 full-time equivalent employees including a working owner.

Of course, the Digest wouldn't exist without your input.
The Digest is all about you and your business. It's your story. We are in the process of producing this year's edition, and we encourage you to complete our 2017 financial survey for the Digest by the extended deadline of May 26. Without your survey responses, there is no Digest ...and without the Digest, it would be tough for you to assess your pharmacy business.

We've made the survey more brief for your (and perhaps your accountant's) convenience. What's more, we're offering a customized analysis of your business to every owner/manager who completely fills out the survey. More than 30 benchmarks are provided, comparing your pharmacy's gross and net profit, return on investment, and inventory turnover to the average and top performing pharmacies. This personalized information is invaluable and can help guide your business this year and beyond.

When it comes to pharmacy ownership, it pays to compare.
My daughter may be scarred forever that her parents don't stack up to Emma's or Sophie's but with the Digest's help, you can see how you stack up against your peers. We know you're uniquely you—now is your chance to find out just how unique your pharmacy business is: Take the survey.

Best,
Doug Hoey

P.S. Support your fellow community pharmacy colleagues by sharing the ideas and tips that helped you excel. Maybe you've found a good way to save money, time, or sanity in your pharmacy. Email your ideas to alexander.tu@ncpanet.org and it could appear in the July "Ideas Issue" of America's Pharmacist.