UBC Phar400-Business Plan Essentials 1.5 6Feb2015

UBC – Phar400 | Pharmacy Management
pharmacySOS.ca | Gerry Spitzner
February 6, 2015

 Universal terms used. And acronyms.
 When I refer to product or service = the same thing.
 When I refer to patients, consumers, customers or
clients; all are the same person. The end user.
 When I refer to “you” or “your”…it’s a generic term
respectfully referring to you as the Pharmacist,
Pharmacy Mgr, Owner or the Pharmacy itself.
 When I refer to patient services… it’s your clinical
services project.
pharmacySOS.ca | Gerry Spitzner 2

 Overall Objective: Tools and strategic planning
framework to create and document key elements of
your Business Plan and presentation.
 Learning Objectives
◦ Steps and tools to create inputs to the business plan
◦ Identify your business model/concept
◦ Create a value proposition
◦ Identifyingyour market
◦ Presentation strategy

 Thoughtstarters/important insights
 Planning in its Larger Context
 The Business Model Canvas
 Value Proposition
 SWOT
 Presentation Strategy

Nearly every company, organization,
product or service starts the same
way: with an idea.

 Do you really need a business plan?
◦ What is a business plan? Why do I need a business plan?
◦ Helps you allocate resources properly, like people and
money; handle unforeseen complications, and make the
right decisions to achieve the ultimate goal.
◦ Spot potential weaknesses, opportunities, and threats
 “Planning is about preparing for the inevitable, pre-empting the
undesirable and controlling the controllable.” -- Henry Mintzberg

 The business plan is the blueprint for your business.
◦ Planning is knowing what to do when we get there. Panic is
getting there and not knowing what to do.
◦ It sets out in detail exactly what, how and why you will run your
business; and includes everything from how you will promote it
to how you plan to fund it and who your customers will be.
◦ The real value of creating a business plan is not in having the
finished product in hand… Rather, the value of a business plan
lies in the process of researching and thinking about your
patient service in a systematic way.
◦ It’s about discovery and checking your assumptions; about the
customer path to purchase; their journey and experience.

 "It doesn't matter how or what you do; it matters WHY
you do it." - Simon Sinek
◦ A start with WHY approach will help you create the foundation
for a strong flexible business model and value proposition.
◦ WHY does not come from looking ahead at what you want to
achieve and figuringout an appropriate strategy to get there.
◦ Finding WHY is a process of discovery, not invention.
◦ Money is a perfectly legitimate measurement of goods sold or
services rendered. But it is no calculation of value.
◦ Value is a feeling, not a calculation. It is perception.

When we have a clear sense of our
destination, we can be flexible in the
route we take to reach it.

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 & outcomes
◦ Inputs to the system include resources such as raw materials,
equipment, 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.
◦ Outputs are tangible results produced by processes in the system,
such as products or services for consumers (patients/customers).
◦ Systems can be the entire organization, or its departments, groups,
or processes. Or your project.
◦ Another kind of result is outcomes, goals for the business or the
benefits for consumers.

 Work Backwards Through Any "System“; always begin with
the end in mind.
◦ Look down from as high as possible. Look ahead as far as we can
see. Then decide what to do.
◦ Whether the system is an organization, department, business,
project, etc., the process of planning always includes planners
working backwards through the system.
◦ They start from the outcomes they want 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.

The Business Model Canvas is a way
to think about the business, a
product or service in a visual and
intuitive way.

 The business model describes the logic behind how your
business functions. It refers to the story of how your
patient service will create and deliver value.
 There's no right or wrong way to create your business
model. But there are a few rules to keep in mind:
◦ Focus on the business model -- not just the product or service.
◦ Don't fall in love with your first models. The best models are built
from clever, creative elements. That comes from less obvious
versions.
◦ Iterate rapidly and test your models early -- in the real world.
◦ Study successful and innovative business models in other
industries.

Product/Service Market

1. Key Partners ( who must you collaborate with )
2. Key Activities ( what you do to give the customer value )
3. Key Resources ( what you need to deliver your service )
4. Value Proposition ( what customer actually gets )
5. Customer Relationships ( how will you create, engage
and keep customers )
6. Channels ( how do you reach the customers )
7. Customer Segments ( who are your customers )
8. Cost structure ( what are your costs and how much you
need to charge )
9. Revenue Streams ( in what ways you make money )

A value proposition is where your
product or service offer intersects
with your customer’s desires.
It’s the magic fit between what your
patient service does and why
people buy it.
The value we provide most to others
is the same value we appreciate
most from others.

 It’s a clear and specific statement about the tangible
benefits of an offering and should be stated in terms
understood and accepted by the customer.
◦ It’s for real people to read and understand. Use right language;
avoid hype, industry or advertising jargon.
◦ Explains how your product or service solves customers’
problems or improves their situation (relevancy),
◦ Delivers specific benefits (quantified value),
◦ Tells ideal customers why they should buy from you and not
from the competition (unique differentiation).

 Usually a block of text (a headline, sub-headline and
one paragraph of text) with a visual (photo, graphics).
 Can be read and understood in 20-30 seconds or less.
 Build it around one element of your dominant strength;
where you are the best; better than anyone else.
 The key thing to remember is that you don’t need to be
unique in the whole world, just in the customer’s mind.
 The closing of a sale takes place in a customer’s mind,
not out in the marketplace among the competition.

 First Sentence(s):
◦ Because we have… (skills, experience, knowledge or other attribute)
◦ We are able to…(provide service, reach more people or other deliverable)
◦ This means… (benefits the client will value)
◦ For… (the client, your ideal customer or prospect)
 Second (optional) Sentence(s):
◦ Unlike… (primary competitive alternative),
◦ Our service… (statement of primary differentiation).

A method of identifyingall of the
positive and negative elements that
may affect any new proposed
actions for a product or service.

Favourable Unfavourable

Too many objectives paralyzes
progress; define the critical few
and outline them.
Find the three things that will
achieve 80% of your patient
service strategy and present them.

 At the beginning, it’s most important to make sure you
say what your service is and why it matters.

 Then prepare and answer just three questions and you
have the core of your presentation ( “pitch” ) strategy...
 HOW BIG do we want to be?
◦ The Financial plan. Sales/margins/profit/expenses/cash flow
 WHO do we want to SERVE?
◦ The Marketing plan. Ideal audience and customer awareness
 HOW will we COMPETE and WIN?
◦ Operations plan. Competitive advantage & customer experience

 HOW BIG is a question about your financial growth
aspirations, sales, and margins.
 Present this first; after what it is and why it matters.
 Here are some examples…
◦ We will grow top line revenue (sales) by 20% each year for the
next 3 years while maintaining gross margins.
◦ We intend to grow our Pharmacy revenue in the diabetic
market segment from 500K to 750K by the end of 2015.

 Means the Marketing Plan of your Business Plan.
 Present this part second.
 Who are the ideal customers to whom you intend
allocating your scarce resources because you believe
they represent the best economic opportunity?
 How will you create awareness?
 Where will you find customers?

 Means your daily Operations Plan and how you will
“deliver the promise” of the Business Plan and UVP.
 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
someone else (your competition).
 Your competitive advantage.
 Present this part last.

 “If I had an hour to solve a problem and my life
depended on the solution, I would spend the first 55
minutes determining the proper question to ask, for
once I know the proper question, I could solve the
problem in less than five minutes.”
◦ Albert Einstein (1879 - 1955) Physicist & Nobel Laureate

 Purpose does not
need to involve
calculations or
numbers.
 Purpose is about the
quality of life.
 Purpose is human,
not economic.
 Applied benefits are
a result.

 Getting started on your patient service business
plan is actually the hardest part.
 But once you get going the road opens up.
 Got questions? Get answers…
◦ Email me; gerry@pharmacySOS.ca

 Follow Twitter: @passion4retail
 Connect LinkedIn: Gerry Spitzner
 Web: pharmacySOS.ca
 Blog: gerryspitzner.com
 Email: gerry@pharmacySOS.ca
 Online Biz Card: gerryspitzner.tel
 You Tube Channel: Gerry Spitzner

 Gerry Spitzner is an optimist with a curiosity for improving life and business results.
Optimism is the ability to focus on where we're going; not where we're coming from and
Gerry is passionate about making the public aware of the great things Pharmacists do. He
believes in a bright future and our ability to build it together.
 Drawing on 40+ years in regional multi-site retail Pharmacy operations and drug store
ownership with SDM, plus business development with K&F in the Pharmaceutical wholesale
supply-chain; Gerry has the unique advantage of having worked in several different
business models within the retail Pharmacy industry.
 Fascinated with a lifelong curiosity for why customers buy, trends and a passion for retail he
is dedicated to sharing his thinking with strategies to create, engage and keep great
customers by delivering the promise of an extraordinary customer experience that increases
sales and profit.
 pharmacySOS.ca is a Vancouver, BC based business management consultancy providing
Strategic Operations Services focused on drug stores and Pharmacies. Specializing in
consumer trends and strategic business development for independent and banner
pharmacies helping Pharmacists to market their patient care services beyond dispensing.

Overall, you’ll need to consider and
answer questions in your business
plan presentation and business
case.
Here are some key questions to help
you get started.

 If you'll need funding to start your new clinical service,
investors or funders are much more likely to provide
money if they see that you've done some planning.
◦ How much money will you need?
◦ 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? Us and our competition?
◦ What are your assumptions?
◦ What is the product or service being sold?

 You’ll also need to answer these questions...
◦ Is there a need for the service and is there a market?
◦ What type of new product or service will you be starting?
◦ What are your initial plans?
◦ How will you manage your finances?
◦ What human resources will you need?
◦ What facilities and equipment will you need?
◦ How much money will you need?

 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 or the
consumer of your clinical service.

 What is it?
 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 do more than "sense that there is a need" or
claim that "it's common sense that there is a need".
 Who are your competitors?
◦ Go visit them; ask to use the service.

 What is the basic purpose of your product or service?
◦ This is your mission statement and 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 priorities of activities for survival.
◦ Focus your efforts on applied benefits and why it matters.
◦ Use the value proposition worksheet provided in pre-reads.

 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.

 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 the business.
◦ Businesses can go bankrupt by trying to be too many things to
too many customers, rather than doing a few things very well.

 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. technology and diabetic meters
◦ Suggestions from employees, doctors, inter-professional
healthcare, wholesalers and suppliers.
◦ Healthcare publications, magazines, media.
◦ Competition

UBC Phar400-Business Plan Essentials 1.5 6Feb2015

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UBC Phar400-Business Plan Essentials 1.5 6Feb2015