UBC Phar400-Business Plan Essentials 3Oct2014

UBC – Phar400 | Pharmacy ManagementpharmacySOS.ca | Gerry Spitzner

October 3, 2014

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 a business plan

◦ Identify your business model/concept

◦ Create a value proposition

◦ Identifying your market

◦ Develop financials

◦ Presentation strategy

pharmacySOS.ca | Gerry Spitzner 2

Thoughtstarters/important insights

Planning in its Larger Context

The Business Model Canvas

Value Proposition

Market Research

The Financial Plan

The Business Plan

Your Presentation


Nearly every company or

organization 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?

◦ “Planning is about preparing for the inevitable, pre-empting the

undesirable and controlling the controllable.” -- Henry Mintzberg

◦ I'm not planning to borrow any money. Do I still need a business

plan?

◦ Behind every successful professional service is a business plan.

The most successful Pharmacy businesses tend to offer the best

patient care.


The business plan is the blueprint for your business.

◦ It sets out in detail exactly 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 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; the journey and experience.


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.

◦ 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.



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. Unique 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 )


Use link in resources doc or go to google search…

Search *business model canvas template google docs*

◦ Should be first in organic search

◦ Other helpful resources you can use for creating a canvas

Google Docs template also available on Google Drive

for online collaboration between your team.

Or you can simply draw it out on a white board or flip

chart and use sticky notes for team collaboration.


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.


"It doesn't matter how or what you do; it matters WHY you do it." - Simon Sinek

◦ People don't buy what you do...they buy why you do it.

◦ A start with WHY approach will help you create the foundation for a strong flexible business case and a UVP.

◦ 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.


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 the right language and avoid 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).


It’s easy to understand. Always strive for clarity first.

Usually a block of text (a headline, sub-headline and

one paragraph of text) with a visual (photo, graphics).

Build it around one element of your dominant strength;

where you are the best; better than anyone else.

The closing of a sale takes place in a customer’s mind,

not out in the marketplace among the competition.

Can be read and understood in 20-30 seconds or less.


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).


As the medication expert on the health care team, all our pharmacists

are able to provide anticoagulation management to patients on

warfarin therapy, which allow patients to visit the pharmacy at any

time during our extended business hours for anticoagulation

management. For many of the patients who are already visiting the

pharmacy to pick up a prescription or OTC item, the location of the

anticoagulation clinic is convenient and highly accessible. The

pharmacy has 2 individual counseling rooms where patients can meet

privately with a pharmacist for testing and counseling during their

visit.

Through collaboration with health care providers throughout the

community, the pharmacists at Buford Road Pharmacy have made a

wide range of patient care services more accessible to thousands of

patients.


It 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.


Quantitative market research generally probes a few topics; however by itself doesn’t yield a deep understanding of the customer.

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

◦ The periodic nature merely offers a snapshot of customers at a moment in time.

Qualitative research aims to gather an in-depth understanding of human behavior and the reasons for that behavior.

◦ Adopt a customer learning approach to find out who your customers are, what they want, how they want it and why.


As opposed to periodic studies, customer learning is a

continuous process of probing customers.

◦ It’s a focused 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, get info and heathcare support and why?

◦ Go to where they go, observe them and ask them what they

need and want. How they want it and why.


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?


How do you plan to compete and win?

◦ 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 sourcesas possible; include your data, ideal customers andcompetition.

Then do a S.W.O.T. analysis.



Favourable Unfavourable

Use the link in the resources doc

Or go to Google search and search using the key words

*swot analysis template*

Many resources you need for your creating a SWOT

Recommend using the Google Docs template and use

Google Drive for online team collaboration.

Go to Google Docs; search for *google docs swot

analysis template*; for a selection of templates


Focus 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

Forecasting is a forward-looking view, starting today

and going forward into the future

Forecast best guess based on past results and on

market research

Allow for some small percentage of financial flexibility

in your financial planning. Contingencies and “wiggle

room”.


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


Use a template

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.


A 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. Include your UVP here.

2. Market opportunity

◦ Concisely describes what unmet need it will fill, presentsevidence that this need is genuine, and that patients orcustomers will pay for the costs to meet this need.

◦ Describes credible market research on ideal customers(including perceived benefits and willingness to pay),competitors and pricing.


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 your clinical service 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, physio’s etc.

◦ Also consider others you may need to make the plan a

success; inter-professional collaborators, suppliers, joint

ventures, corporate sponsor, associations etc.


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 24 to 36 months; 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 more about

how you will recover.

◦ Always plan for… that no plan ever goes according to plan.


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.


Prepare and answer just three questions and you have 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?◦ The daily Operations plan. Competitive advantage & customer

experience


HOW BIG is a question about your financial growth

aspirations, sales, and margins.

Present this part first.

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?


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

Getting started on your patient service business

plan is actually the hardest part.

But once you get going the road opens up.

To your business and professional success, thank

you for your attention.

Got questions? Get answers…

◦ Email me; [email protected]


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


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 helping Pharmacists implement business development, branding and marketing. 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.


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 toeach 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 3Oct2014

Leadership & Management

Transcript of UBC Phar400-Business Plan Essentials 3Oct2014