ubc phar400 business plan essentials-20sept2013

Business Plan EssentialsYour Clinical Service Project &

Presentation

UBC – Phar400 | Pharmacy ManagementpharmacySOS.ca | Gerry Spitzner

September 20, 2013

pharmacySOS.ca | Gerry Spitzner 2

The hardest part is starting. Once we get that out of the way, you’ll find the rest of the journey much easier.

Steps to creating a business plan Define business concept and unique value

proposition Establishing goals Identifying your market Determine sales strategies Management systems Develop financials

Learning Objectives


To guide and inspire a strategic process for your clinical service Business Plan and presentation.

◦ Help you with tools and a strategic framework to create and document the key elements of your Business Plan.

◦ Share an approach to planning with proven concepts.

◦ Take these ideas to share a simple 3 step presentation strategy at “The Pharmacy Moguls Den” in 5 minutes (or less) to communicate a new clinical service that produces strong financial results.

My Goal for you today


Thoughtstarters/important insights Planning in its Larger Context The Business Model Canvas Initial Considerations to Address Market Research Financial Plan The Business Plan Your Presentation

Roadmap


Why should I do business with you?

Or… Why should the business come to you... rather than someone else?


Why do you do what you do? Why does it matter? Why should a patient care about your clinical

service?

◦ Your clinical service is not about selling something; rather it is to fulfill an intention.

◦ Fulfilling a customers intention is a motivator to buying.

◦ Value is in the applied benefit of the benefit.

◦ Never about what you can get; always about what you can give.

What is the why of a business?


What problem does my professional service solve? What is the purpose?

What are you known for? What are you a solution for?

◦ Doesn’t make sense to dream up ideas without speaking with patients/customers. What do they need and want?

◦ A need alone does not necessarily mean there is a market

◦ Differentiate, differentiate, differentiate

◦ Develop your unique value proposition

What is your BIG idea? | Vision


Profit isn't a purpose, it's a result. To have purpose means the things we do are of real value to others.

Value is not determined by the people who set the price, it is determined by those who choose to pay the price.

Value is the bundle of perceived benefits offered at a given price.

Important Insights


Lets share what makes us different because everyone can already see what makes us the same.

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

Achievement happens when we pursue and attain what we want. Success comes when we are in clear pursuit of WHY we want it.

Important Insights


Planning in its Larger Context

Understanding the overall context for planning can help you to design and carry out the planning process in almost any planning application.


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 outcomes. ◦ 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.



Outputs are tangible results produced by processes in the system, such as products or services for consumers (patients/customers).

Another kind of result is outcomes, goals for the business or the benefits for consumers.◦ i.e. jobs for workers or enhanced quality of life for

patients and customers.

Systems can be the entire organization, or its departments, groups, or processes. Or your project.



Work Backwards Through Any "System“; always begin with the end in mind.

◦ 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.



The Business Model Canvas

Business model Canvas is a way to think about the business in a visual and intuitive way.


1. Problem (customer painpoints)2. Solution (your magic sauce)3. Key Activities (what you do to give the customer

value)4. Unique Value Proposition (what customer actually

gets)5. Competitive Advantage (secret sauce to protect

yourselves from competition)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)

9 Key Elements


The Business Model Canvas


Here’s what it ends up looking like


How to use the Business Model Canvas…

◦ Go to the DocStoc video series

◦ The link is in the doc titled UBC Phar400-Business Plan-resource videos 20Sept2013

◦ Look for the #5 video titled “The Lean Canvas Business Model - Creating The Killer Business Plan”

◦ It will give you a prioritized step by step process to fill in your canvas for maximum effectiveness and flexibility.

The Business Canvas Model


Go to Google search

Search for *business model canvas template*

Helpful resources you can use for creating a canvas

Recommend using the Google Docs template also available on Google Drive for online collaboration.

Or go to; www.leancanvas.com and download

Download the Canvas here…


Initial Considerations to Address

Overall, you’ll need to consider and answer these questions in your business plan presentation and business case.


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 & 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?

◦ 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?



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. diabetic meters

◦ Suggestions from employees, doctors, inter-professional healthcare, wholesalers and suppliers.

◦ Healthcare publications, magazines, media; i.e. Dr. Art Hister

◦ Competition

Ideas for New Product or Service


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 , its price to the customer/consumer).

Verifying Your Idea


Market ResearchIt is extremely difficult to develop and provide a high-quality product or service without conducting at least some basic market research.

Capture behavior, not just data.


The results of quantitative research will generally be a numerical form of data collection and analysis

Key data points to consider are…◦ Overall market size◦ Growth◦ Target market or market segment◦ Ideal customer segment

Sources Summarize using graphics; pie charts, bar

graphs etc.

Quantitative Market Research


Market research usually involves doing a periodic study of some sort.

Quantitative market research generally probes a few topics; 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, what they want, how and why.

Qualitative Market Research


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?

Work your clinical service backwards from them.

Who is your ideal customer?


Who are your competitors?◦ What customer needs and preferences are you

competing to meet?

◦ 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?

Competitor Analysis


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?

Gather competitive intelligence from as many sources as possible; include your data, ideal customers and competition. Then do a S.W.O.T. analysis.

Competitor Analysis


SWOT template


Go to Google search

Search for *swot analysis template*

All the resources you need for your creating a SWOT

Recommend using the Google Docs template; use Google Drive for online team collaboration.

Go to Google Docs; search for *google docs swot analysis template*; for a selection of templates

Download the SWOT template here…


Financial PlanFocus on the vision and the numbers will thrive. Focus on the numbers and the vision will struggle (and so will the numbers).


The financial section is not the same as accounting

Forecast best guess based on past results or on market research

Forecasting is a forward-looking view, starting today and going forward into the future

Also, allow for some small percentage of financial flexibility in your financial planning. Contingencies.

Financial Plan | What and How?


A financial business plan for a start-up is based on realistic projections◦ Finish conducting market research first

◦ Describe your products, services and marketing strategy

◦ Set your organization's operating principles

◦ Identify all items that pertain to your service as an expense

◦ Determine fixed costs and variable costs

◦ Zero based budgeting

◦ Always use the principle of best guess from research

Financial Plan | Where do I start?


Recommend using the template provided Estimate your one time start-up costs Estimate your regular expenses Forecast your sales Cash flow projection will auto-populate A financial forecast isn't necessarily

compiled in sequence. It's typical to start in one place and jump back and forth.

Financial Plan | Step by Step


The Business PlanA business plan is your documented blue print and road map to implement your idea.


1. Business summary

◦ Describes the organization, business venture or product (service), summarizing its purpose, management, operations, marketing and finances.

2. Market opportunity ◦ Concisely describes what unmet need it will fill,

presents evidence that this need is genuine, and that 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.

Summary | Content of Business Plan


3. People◦ 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



4. Implementation ◦ 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 included.



5. Contingencies◦ 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 wrong.

◦ It’s not so much about trying to identify and avoid all the things that can take you off track or go wrong; it’s usually more about how you will recover.

◦ Always plan for the fact that no plan ever goes according to plan.



Your Presentation for The Pharmacy

Moguls DenYou 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.


Prepare and answer just three questions and you have your presentation strategy...

HOW BIG do we want to be?◦ The Financial plan. Sales/expenses/cash flow

WHO do we want to SERVE?◦ The Marketing plan. Ideal audience and Customer

awareness

HOW will we COMPETE and WIN?◦ The Operations plan. Competitive advantage

&Customer experience

Simple Approach to Presentation


Means the Financial plan for your Business Plan and product or service idea.

What are the financial goals to satisfy the owners of the business?

◦ Financial goals determine the character of your strategy.

◦ Morph from a strategy-drives-financials paradigm to a financials-drive-strategy one.

◦ Don’t try to squeeze better numbers out of a given strategy.

HOW BIG do we want to be?


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.

WHO do we want to SERVE?


Means your daily Operations Plan and how you will “deliver the promise” of all 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.

HOW will we COMPETE and WIN?


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 HOW to WIN position statement to say how you will do it.

Create a HOW to WIN Position Statement


Here’s an example...

“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 counselling offers to match each

one’s unique needs and preferences.”

How Win Positioning Statement


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).”

Strategic Game Plan Statement


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.

Strategic Game Plan Statement


We will COMPETE and WIN by...◦ Leveraging the intimate understanding we have

of the patient and their current situation with disease management and medication adherence.

◦ Providing personalized holistic health & wellness based solutions combined with nutritional solutions to improve daily living and promote healthy outcomes.

◦ Matching our 4 CDE Pharmacists specifically with each patient, and delivering the services to our patients and customers onsite in their community.

Strategic Game Plan Statement Cont.


Overall, we help First Nations diabetic patients improve their quality of life and manage their disease by combining nutrition counselling with medication review and adherence.

Specifically, we want to develop strategies to identify at risk women in their child bearing years and educate them about healthy lifestyles resulting in improved health outcomes for patients and infants.

The Value Proposition


Want an electronic copy of this presentation?

◦Email me; [email protected]

To your business and professional success, thank you for your attention.

Questions?

Thanks

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

Online Biz Card: gerryspitzner.tel


Find me

Gerry Spitzner is an optimist with a natural "kid-like“ curiosity for improving life and business results. He believes

in a bright future and our ability to build it together and is passionate about making the public aware of the great

things Pharmacists do.

Drawing on 35+ years experience in multi-site retail Pharmacy operations, drug store ownership and the

Pharmaceutical wholesale supply-chain; Gerry brings the leadership, knowledge and market awareness of

business development to retail Pharmacy owners helping them achieve growth objectives. He teaches and

inspires Pharmacists to achieve results by aligning their vision with marketing strategy and operational execution.

Fascinated with a lifelong curiosity for why customers buy and a passion for retail Pharmacy; Gerry guides leaders

and organizations to create, engage and keep great customers by delivering the promise of an extraordinary

customer experience. He has devoted his life to sharing his thinking with other Pharmacy leaders to manage

market analysis and build business plans that increase profitability and create competitive advantage with systems

to implement.

His company is pharmacySOS.ca, a Vancouver-based business management consultancy with a suite of business

services focused on supporting Pharmacy owners starting, buying or strategically realigning their practice. With a

clear understanding of the business of Pharmacy he uses a solution oriented focus with ideas and alternatives that

clients can use to address the changing practice issues they face right now. Gerry understands who they are,

what they need, and where to find it; helping them market and strategically realign their professional and clinical

services to integrate the business activities of optimal drug therapy outcomes through patient centered care.


About |pharmacySOS.ca is about implementation; not just

information.