ubc phar400-business plan essentials 1.5 6feb2015

Business Plan EssentialsPatient Services Project & Presentation

UBC – Phar400 | Pharmacy ManagementpharmacySOS.ca | Gerry Spitzner

February 6, 2015

pharmacySOS.ca | Gerry Spitzner 2

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.

Before we begin…


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◦ Identifying your market◦ Presentation strategy

Objectives


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

Roadmap


Strategy is the compassthat guides planning.


Thoughtstarters and Important Insights

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

Thoughtstarters


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.

Important Insights


Change Management


"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 figuring out 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.

Thoughtstarter…Start with Why


Important insight | Develop your patient service strategy from the inside out.


What is the purpose ofyour patient service?


Planning in its Larger Context

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.

Planning in its Larger Context


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.

Begin with the end


The Business Model Canvas

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.

Business ModelDefined


Business Model Canvas

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 )

Canvas consists of 9 Key Elements


Value PropositionA 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).

What exactly is a value proposition?


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.

What makes a good value proposition


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).

Value Proposition Structure


S.W.O.T.A method of identifying all of the positive and negative elements that may affect any new proposed actions for a product or service.


SWOT Analysis Template

Favourable Unfavourable


How to use a SWOT Analysis


Your PresentationThe “Pitch”

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.

First things first


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

Simple Approach to Presentation


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.

HOW BIG do we want to be?


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?

WHO do we want to SERVE?


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.

HOW will we COMPETE and WIN?


Ask the right question

“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


Important insight

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; [email protected]

Thanks

Follow Twitter: @passion4retail Connect LinkedIn:Gerry Spitzner Web: pharmacySOS.ca Blog: gerryspitzner.com Email:[email protected]

Online Biz Card: gerryspitzner.tel You Tube Channel: Gerry Spitzner


Find me

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.


About pharmacySOS.ca | Strategic Operations Services helps Pharmacy business plan for the future by anticipating it. More than just information; it’s about innovation and implementation.


Appendix 1 | Initial Considerations to

AddressOverall, 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?

Initial Considerations to Address


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?

Initial Considerations to Address


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.

Verifying Your Idea


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.

Is There Need for the Product or 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 Type of New Product or Service Will You Be Starting?


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.

What Are Your Initial Plans?


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.

Can Your Idea Become Viable?


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

Ideas for New Product or Service