Community pharmacies and other small to medium healthcare businesses face considerable pressure on a number of different fronts to remain profitable in the current Australian industry.
While 2017 is bound to bring its share of ups and downs, the year is ripe with opportunity for pharmacy owners looking to grab the bull by its horns, according to DBS Accountants founder and CPA Rajeev Dixit. Those looking to capitalise on what sets their business apart are sure to see themselves sailing through with ease.
Current challenges in the pharmacy industry
As a community pharmacy owner, you can be forgiven for feeling a little squeezed in. It’s no news that community pharmacies are facing considerable pricing competition from big chain companies. On top of this, the government is also putting revenue pressure on certain medications which is also hurting profitability, according to Mr Dixit.
The solution? Diversify.
“To stay profitable, pharmacy businesses have to be more focused on what is it that they can distinguish themselves in other than price,” says Mr Dixit.
By offering a wider variety of services beyond the simple ‘medicine shop’ such as baby weighing or blood testing or blood pressure tracking services, you engage with your community on a more meaningful level, recommends Mr Dixit.
“To stay profitable, pharmacy businesses have to be more focused on what is it that they can distinguish themselves in other than price.”
Don’t put the cart before the horse
Even if you’ve already specialised, there’s no time to rest on your laurels. With interest rates low, and remaining so for the near future, savvy business owners will be using this as a chance to offload some of their debt.
“By taking advantage of these low rates and using the surplus cash flow to reduce your debt, people who use this opportunity to reacpitalise themselves will be well placed when things turn around,” says Mr Dixit.
It’s the people who are taking things easy, cautions Mr Dixit, who are at most risk of being caught out when things eventually turn around.
“It is very important for each business owner, whether they’re health professionals or otherwise, to not only look at their current cost structure but also look at future and forecasting business planning. What we say to people is that if you focus too much on tax, sometimes you forget to focus on the bottom line which is far more important. That’s what we think our strength is – that we always focus on business first,” says Mr Dixit.
To find out more about how our specialised financial services can let you get back to what makes your business unique, get in touch with the team at DBS Accountants today.