UBC Phar400-business planning-21sept2012
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UBC – Phar400 | Pharmacy Management retailSOS.ca | Gerry Spitzner
September 21, 2012
Get my attention if you have a question or comment
Or text me if that works... @ 604.985.4425
There are no “out of bounds” questions
When I reference...
◦ Patients are customers - - customers are patients
◦ System refers to delivering the promise of your product or service
◦ Product or service; they are the same
◦ Organization, firm, company; all these = Pharmacy
◦ “You”; I am referring to your clinical service idea and business plan.
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Planning In Its Larger Context
The Business Plan
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To guide and inspire your clinical service Business
Plan project and presentation.
◦ Help you with a strategic framework to create and document
your clinical service Business Plan.
◦ First we’ll look at a high level approach to planning with
◦ Then take these ideas to share a simple 3 step presentation
strategy of your Business Plan at “The Pharmacy Moguls Den”
to communicate and implement a new clinical service that
produces strong financial results.
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Why does it matter?
Why should the business come to you rather than
What are you known for? What are you a solution for?
Doesn’t make sense to dream up ideas without
speaking with customers.
A need alone does not necessarily mean there is a
Differentiate, differentiate, differentiate
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Understanding the overall context
for planning can greatly help you to
design and carry out the planning
process in almost any planning
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Simply put, planning is setting the direction for
something -- some system -- and then working to
ensure the system follows that direction.
Systems have inputs, processes, outputs and
◦ Inputs to the system include resources such as raw materials,
money, technologies and people.
◦ Inputs go through a process where they're aligned, moved
along and carefully coordinated, ultimately to achieve the
goals set for the system.
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Outputs are tangible results produced by processes in
the system, such as products or services for
Another kind of result is outcomes, for the business or
the benefits for consumers
◦ i.e. jobs for workers or enhanced quality of life for patients
Systems can be the entire organization, or its
departments, groups, or processes.
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Work Backwards Through Any "System“
◦ Whether the system is an organization, department, business,
project, etc., the process of planning includes planners
working backwards through the system.
◦ They start from the results (outcomes and outputs) they prefer
and work backwards through the system to identify the
processes needed to produce the results.
◦ Then they identify what inputs (or resources) are needed to
carry out the processes.
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Planning includes use of the following basic terms...
◦ Goals are specific accomplishments that must be accomplished
in total, or in some combination, in order to achieve some larger,
overall result preferred from the system, for example, the
mission of an organization. (goals are outputs from the system.)
Strategies or Activities
◦ These are the methods or processes required in total, or in some
combination, to achieve the goals. (strategies are processes in
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◦ Objectives are specific accomplishments that must be accomplished in total, or in some combination, to achieve the goals in the plan. Objectives are usually "milestones" along the way when implementing the strategies.
◦ Particularly in small organizations, people are assigned various tasks required to implement the plan. If the scope of the plan is very small, tasks and activities are often essentially the same.
Resources (and Budgets)
◦ Resources include the people, materials, technologies, money, etc., required to implement the strategies or processes. The costs of these resources are often depicted in the form of a budget. (resources are inputs to the system)
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Reference Some Overall Singular Purpose Such As The
Mission or Desired Result from System
◦ During planning, planners have in mind some overall purpose
or result that the plan is to achieve. It's critical to reference
the mission, or overall purpose, of the organization.
Take Stock Outside and Inside the System
◦ This "taking stock" is always done to some extent. For
example, it's important to conduct an environmental scan.
This scan usually involves considering various driving forces,
or major influences, that might effect the organization.
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Analyze the Situation
◦ For example, conduct a "SWOT analysis". (SWOT is an acronym
for considering the organization's strengths, weaknesses,
opportunities and threats faced by the organization.)
◦ Based on the analysis and alignment to the overall mission of
the system, establish a set of goals that build on strengths to
take advantage of opportunities, while building up
weaknesses and warding off threats.
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Establish Strategies to Reach Goals
◦ The particular strategies (or methods to reach the goals)
chosen depend on matters of affordability, practicality and
Establish Objectives Along the Way to Achieving Goals
◦ Objectives are selected to be timely and indicative of
progress toward goals.
◦ They are “signposts” to ensure implementation results are
cycled back so that adjustments can be made to stay on track.
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Assign Responsibilities and Time Lines With Each
◦ Responsibilities are assigned, including for implementation
of the plan, and for achieving various goals and objectives.
◦ Ideally, deadlines are set for meeting each responsibility.
Write and Communicate a Plan Document
◦ The above information is organized and written in a document
which is distributed around the system or company.
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Ideas can come from many different sources...
◦ Complaints and feedback from customers.
◦ Requests for proposals (RFP’s) from large businesses,
government agencies (BC Bid), or LTC facilities.
◦ Modifications to current products ( i.e. diabetic meters).
◦ Suggestions from employees, doctors, inter-professional
healthcare, wholesalers and suppliers.
◦ Healthcare publications, magazines, media (Dr. Art)
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You need more than a good idea to verify and fund your
proposed product or service.
◦ Just because it seems like a great idea doesn't mean that it
can become a product or service.
◦ A viable product/service needs to be profitable and
sustainable, including being “producible” and marketable.
◦ Also, the product/service should be related to the purpose, or
mission, of your business.
◦ Businesses can go bankrupt by trying to be too many things to
too many customers, rather than doing a few things very well.
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At this point, you will benefit from understanding the
basics of marketing, particularly how to conduct
market research and a competitive analysis.
If your idea still seems like a good one, then it's
important to know how you will position and identify
your new product/service to the market.
You'll certainly want to know how much you might
charge for it (that is, its price to the customer).
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It is extremely difficult to develop and provide a high-quality product or service without conducting at least some basic market research.
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Market research has a variety of purposes and a
variety of data collection methods might be used for
The data collection method that you use during your
market research depends very much on the
information that you are seeking to understand.
Businesses can learn a great deal about customers,
their needs, how to meet those needs and how the
business is doing to meet those needs.
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Market research usually involves doing a periodic
study of some sort.
Market research generally probes a few topics;
however by itself doesn’t yield a deep understanding
of the customer.
The periodic nature merely offers a snapshot of
customers at a moment in time.
Adopt a customer learning approach to find out who
your customers are and what they want.
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As opposed to periodic studies, customer learning is a
continuous process of probing customers.
◦ It’s a process that fundamentally incorporates the fact that
every customer is truly unique and that their needs, wants and
expectations are never static.
◦ They change with the life forces affecting the individual or the
business and the environment in which they exist.
Who is your ideal audience, where do they do
business, and why?
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Identify opportunities to serve various groups of
patients/customers (your ideal customers).
◦ Verify and understand the unmet needs of a certain group (or
market) of customers. What do they say that they want? What
do they say that they need?
Examine the size of the market – how many people
have the unmet need. (your ideal audience)
◦ Identify various subgroups, or market segments, in that
overall market along with each of their unique features and
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Determine the best methods to meet the unmet needs
of your ideal audience (the target markets).
◦ How can you develop a product with the features and benefits
to meet that unmet need? How can you ensure that you have
the capacity to continue to meet the demand?
Investigate the competition.
◦ Examine their products, services, marketing techniques,
pricing, location, etc. One of the best ways to understand your
competitors is to use their services.
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Clarify your unique value proposition.
◦ Your proposition describes why customers should use your organization and not the competition’s.
Conclude if the product is effectively meeting the needs of your ideal customers.
◦ One of the best ways to make this conclusion is to conduct an
evaluation. An evaluation often includes the use of various data
collection methods, usually several of them.
◦ I.e. observing clients, interviewing them, administrating
questionnaires with them, developing some case studies, and,
ideally, conducting a product field test, or pilot.
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Who are your competitors?
◦ What customer needs and preferences are you competing to
◦ What are the similarities and differences between their
products/services and yours?
◦ What are the strengths and weaknesses of each of their
products and services?
◦ How do their prices compare to yours?
◦ How are they doing overall?
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How do you plan to compete?
◦ Offer better quality services? (value)
◦ Lower prices?
◦ More support?
◦ Easier access to services?
◦ How are you uniquely suited to compete with them?
It is all about gathering competitive intelligence from
as many sources as possible.
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Initial considerations to address about your idea for a new product or service and preparation to document the business plan.
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If you'll need funding to start your new product or
clinical service, investors or funders are much more
likely to provide money to you if they see that you've
done some planning.
What will the return on investment (ROI) be?
How long will it take to break even and make money?
What are the barriers to entry for us and our
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You’ll need to answer these questions...
◦ Is there really a need for the product or service and is there a
◦ What type of new product or service will you be starting?
◦ What Are Your Initial Plans?
◦ What Planning and Financial Skills Do You Need?
◦ What Human Resources Will You Need?
◦ What Facilities and Equipment Will You Need?
◦ How Much Money Will You Need?
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What is the nature of your new product or service?
◦ Whether you're starting a new product or service, there needs
to be a strong market for it.
How do you know there is a need?
◦ You'll have to have enough evidence to convince an investor
or funder -- and yourself.
Who are your competitors?
◦ What makes your new product/service any different or more
needed by customers? Conduct a competitive analysis.
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What is the basic purpose of your product or service?
◦ This is your mission statement, or your value proposition.
◦ Basically, the mission statement describes the overall
purpose of the product or service.
◦ When wording the mission statement/value proposition,
consider the product or services’; markets, values, concern
for public image, and maybe priorities of activities for
◦ Use the value proposition worksheet provided in pre-reads.
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How will you manage your finances?
How will you monitor and record your income and
◦ What system will you use for bookkeeping and accounting?
◦ What system will you use to document patient counselling?
◦ How will you adjudicate with Pharmacare?
◦ How will you bill the patient? (if it’s not a covered benefit)
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What are the major goals for your product or service
over the next 24 to 36 months?
What do you need to do to reach those goals?
What objectives do you need to reach along the way to each goal?
How will you know that the organization is efficiently
pursuing its goals?
◦ Knowledge of these goals will help you a great deal when
thinking about what resources/skills you will need right away.
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What skills (and people) are needed by your
organization to deliver the product or service?
How will you attract and retain the best people?
How will you organize your staff?
◦ Workforce planning, Specifying Jobs and Roles and Selecting
Your Organizational Design (who will work for whom, etc.)
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What equipment needs will you have?
◦ These needs depend very much on the resources needed to
develop, distribute and support your product/service.
◦ Facilities Management includes, cleaning, floor washing,
ventilation (HVAC), lighting, receiving dock, delivery van etc.
What computer equipment will you need?
◦ Hardware, Laptops, iPad’s, mobile phones, printers, Wi-Fi etc.
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What is the Cost of Needed Resources?
◦ Consider the costs to obtain the necessary skills, facilities
and equipment identified from addressing the questions from
all the previous.
What are your start up costs?
◦ How much money will you need to get started before
generating any revenue?
◦ Consider wages, licenses & fees, advertising, marketing &
promotion, leasehold improvements etc.
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◦ Describes the organization, business venture or product
(service), summarizing its purpose, management, operations,
marketing and finances.
◦ Concisely describes what unmet need it will (or does) fill, presents evidence that this need is genuine, and that the patients or customers will pay for the costs to meet this need.
◦ Describes credible market research on target customers (including perceived benefits and willingness to pay), competitors and pricing.
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◦ Arguably the most important part of the plan, it describes who
will be responsible for developing, marketing and operating
this venture, and why their backgrounds and skills make them
the right people to make this successful.
◦ This section is also where you should include your advisors
(board of advisors) and other healthcare professionals such
as doctors, NP’s, nurses, LTC administrators etc.
◦ Also consider others you may need to make the plan a
success; suppliers, corporate sponsor, associations, advisors
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◦ This is the how-to of the plan, where the action steps are
clearly described, usually in four areas: start-up, marketing,
operations and financial.
◦ Marketing builds on market research presented, include your
competitive niche. How will you be better than your
competitors in ways that matter to your ideal customers ?
◦ Financial plan includes, costs to launch, operate, market and
finance, along with conservative estimates of revenue,
typically for 2 to 3 years; a break-even analysis is often
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◦ Outline the most likely things that could go wrong with
implementing this plan, and how management is prepared to
respond to those problems if they emerge.
◦ What will your recovery plan be when (not if) something goes
◦ It’s not so much about trying to identify and avoid the things
that can take you off track or go wrong; it’s usually more about
how you will recover.
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You have 5 minutes to communicate
your product/service strategy that must
result in action; so, keep it simple and
get to the core issues quickly.
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Prepare and answer just three questions and you have
your presentation strategy...
HOW BIG do we want to be? ◦ Money, sales/cash flow
WHO do we want to SERVE? ◦ Ideal audience and Customer awareness
HOW will we COMPETE and WIN? ◦ Competitive advantage and Customer experience.
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HOW BIG do we want to be?
◦ Means the Financial plan for your Business Plan and product
or service idea.
◦ What are the financial goals to satisfy the owners of the
Financial goals determine the character of your strategy.
Morph from a strategy-drives-financials paradigm to a
Don’t try to squeeze better numbers out of a given strategy.
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WHO do we want to SERVE?
◦ Means the Marketing Plan of your Business Plan.
◦ Who are the ideal customers to whom you intend allocating
scarce resources because you believe they represent the
best economic opportunity?
◦ There is no such thing as a bad customer; it’s just that some
are better than others.
◦ If a customer segment (audience) can’t deliver your financial
goals why would you bother with it?
◦ Consider the Lifetime Value (LTV) of a customer as a way of
making a choice of who to serve.
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HOW will we COMPETE and WIN?
◦ Means your daily Operations Plan and how you will “deliver
the promise” in all the other parts of the Business Plan.
◦ How do you intend to compete with other companies available
to your ideal customers and win?
◦ The most critical aspect; as it puts words to why someone
should do business with you instead of with your competition.
◦ Too many objectives paralyzes progress; define the critical
few and outline them.
◦ Find the three things that will achieve 80% of the strategy.
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Step by step approach to create HOW to WIN...
◦ Select the customer needs and expectations you intend to
satisfy from the segment you have chosen to serve.
◦ Examine the internal opportunities; look broadly at the
competencies your organization currently has to deliver.
◦ Evaluate exactly where the competition is focusing their
efforts; Which segments? Their value proposition? Market
success? Vulnerabilities? (use the SWOT results)
◦ Decide on what basis you intend to compete/win and create a
unique value proposition to say how you will do it.
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Here’s an example of a value proposition...
“Our basic competitive approach will be to develop
intimate one-to-one relationships with our diabetic
patients (customers) and be the only Pharmacy in our
community that delivers disease management,
healthy living and nutrition offers to match each one’s
unique needs and preferences.”
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HOW BIG? WHO SERVE? HOW WIN? Once the answer to
each of these questions is clear the Strategic Game
Plan Statement needs to be created.
It’s developed from the answers to the 3 questions
above and looks something like this...
“We intend to (HOW BIG) by [desired time frame] by
focusing our scarce resources on (WHO to SERVE). We
will compete by (HOW to WIN).”
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We intend to grow Pharmacy revenue from the rapidly
increasing diabetic market segment from 500K to 750K by
the end of 2013. We will focus our resources on working with
our local 1st Nations Bands with a view to expand into other
Lower Mainland bands in the 1st Quarter of 2014.
We will COMPETE and WIN by...
◦ Leveraging the intimate understanding we have of the patient and
their current situation with disease management.
◦ Providing personalized holistic health & wellness based solutions
combined with nutritional solutions to improve daily living.
◦ Matching our CDE Pharmacists specifically with each patient, and
delivering knock your socks off service to our customers.
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retailSOS.ca is a Vancouver-based retail consultancy guiding
Pharmacy owners to create, engage and retain great customers
by doing the right thing extraordinarily well.
Gerry Spitzner works as a management consultant supporting
community Pharmacy owners to achieve results by aligning
their vision and implementing marketing strategy with
Drawing on 35+ years experience in drug store multi-site retail
operations, Pharmacy ownership and Pharmaceutical
wholesale supply-chain; Gerry brings the leadership, knowledge
and market awareness of ownership and business development
to Pharmacy owners to achieve growth objectives.
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