ubc phar400-18jan2013 business-planning-long

Strategic Business PlanningYour Clinical Service Project

UBC – Phar400 | Pharmacy ManagementretailSOS.ca | Gerry Spitzner

January 18, 2013

retailSOS.ca | Gerry Spitzner 2

ThoughtstarterPlanning In Its Larger ContextMarket ResearchThe Business PlanYour Presentation

Roadmap


To guide and inspire a strategic process for your clinical service Business Plan and presentation.◦ Help you with a strategic framework to create and

document your clinical service Business Plan.◦ First, a high level approach to planning with proven

concepts. ◦ Then take these ideas to share a simple 3 step

presentation strategy of your Business Plan at “The Pharmacy Moguls Den” to communicate and implement a new clinical service that produces strong financial results.

My Goal for you today


Why does it matter? Why should the business come to you rather

than someone else? What are you known for? What are you a

solution for?◦ Doesn’t make sense to dream up ideas without

speaking with customers.◦ A need alone does not necessarily mean there is a

market.◦ Differentiate, differentiate, differentiate

What is your BIG idea?


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


Planning in its Larger Context

Understanding the overall context for planning can greatly 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, 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. Your project.



Work Backwards Through Any "System“; 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.



Planning includes use of the following basic terms... Goals

◦ Goals are specific accomplishments that must be accomplished in total, or in some combination, in order to achieve some larger, overall result preferred from the system, for example, the mission of an organization. (goals are outputs from the system.)

Strategies or Activities◦ These are the methods or processes required in total, or in

some combination, to achieve the goals. (strategies are processes in the system.)

Quick Look at Some Basic Terms


Objectives◦ Objectives are specific accomplishments that must be

accomplished in total, or in some combination, to achieve the goals in the plan. Objectives are usually "milestones" along the way when implementing the strategies.

Tasks◦ Particularly in small organizations, people are assigned various

tasks required to implement the plan. If the scope of the plan is very small, tasks and activities are often essentially the same.

Resources (and Budgets)◦ Resources include the people, materials, technologies, money,

etc., required to implement the strategies or processes. The costs of these resources are often depicted in the form of a budget. (resources are inputs to the system)

Quick Look at Some Basic Terms


Reference Some Overall Singular Purpose Such As The Mission or Desired Result from System◦ During planning, planners have in mind some overall

purpose or result that the plan is to achieve. It's critical to reference the mission, or overall purpose, of the organization.

Take Stock Outside and Inside the System◦ This "taking stock" is always done to some extent. For

example, it's important to conduct an environmental scan. This scan usually involves considering various driving forces, or major influences, that might effect the organization.

Overview of Typical Phases in Planning


Analyze the Situation◦ For example, conduct a "SWOT analysis". (SWOT is

an acronym for considering the organization's strengths, weaknesses, opportunities and threats faced by the organization.)

Establish Goals◦ Based on the analysis and alignment to the overall

mission of the system, establish a set of goals that build on strengths to take advantage of opportunities, while building up weaknesses and warding off threats.



Establish Strategies to Reach Goals◦ The particular strategies (or methods to reach the

goals) chosen depend on matters of affordability, practicality and efficiency.

Establish Objectives Along the Way to Achieving Goals◦ Objectives are selected to be timely and indicative of

progress toward goals.◦ They are “signposts” to ensure implementation

results are cycled back so that adjustments can be made to stay on track.



Assign Responsibilities and Time Lines With Each Objective◦ Responsibilities are assigned, including for

implementation of the plan, and for achieving various goals and objectives.

◦ Ideally, deadlines are set for meeting each responsibility.

Write and Communicate a Plan Document◦ The above information is organized and written in a

document which is distributed around the system or company.



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?


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.


Market research has a variety of purposes and a variety of data collection methods might be used for each purpose.

The data collection method that you use during your market research depends very much on the information that you are seeking to understand.

Businesses can learn a great deal about customers, their needs, how to meet those needs and how the business is doing to meet those needs.

Critical Role of Market Research


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

Market research generally probes a few topics; however 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 and what they want.

Customer Learning


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?


Identify opportunities to serve various groups of patients/customers (your ideal customers). ◦ Verify and understand the unmet needs of a certain

group (or market) of customers. What do they say that they want? What do they say that they need?

Examine the size of the market – how many people have the unmet need. (your ideal audience)◦ Identify various subgroups, or market segments, in

that overall market along with each of their unique features and preferences.

Customer Market Research Method


Determine the best methods to meet the unmet needs of your ideal audience. ◦ How can you develop a product or service with the

features and benefits to meet that unmet need? How can you ensure that you have the capacity to continue to meet the demand?

Investigate the competition.◦ Examine their products, services, marketing

techniques, pricing, location, etc. One of the best ways to understand your competitors is to use their services.



Clarify your unique value proposition.◦ Your proposition describes why customers should use your

organization and not the competition’s. Conclude if the product is effectively meeting the

needs of your ideal customers. ◦ One of the best ways to make this conclusion is to conduct an

evaluation. An evaluation often includes the use of various data collection methods, usually several of them.

◦ I.e. observing clients, interviewing them, administrating questionnaires with them, developing some case studies, and, ideally, conducting a product field test, or pilot.



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. Then do a SWOT analysis.

Competitor Analysis


The Business PlanInitial considerations to address about your idea for a new product or service and preparation to document the business plan.


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?◦ Be clear about what you are selling.

Initial Considerations to Address


You’ll 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?

Business Plan Preparation


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 have enough evidence to convince an investor or funder -- and yourself.

Who are your competitors? ◦ What makes your new product/service any different or

more needed by customers? Conduct a competitive analysis.

Is There Need for the Product or Service ?


What is the basic purpose of your product or service?◦ This is your mission statement, or 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.

◦ 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?


How will you manage your finances? How will you monitor and record your income

and expenses? ◦ What system will you use for bookkeeping and

accounting?◦ What system will you use to document patient

counselling?◦ How will you adjudicate with Pharmacare?◦ How will you bill the patient? (if it’s not a covered

benefit)

What Planning and Financial Skills Do You Need?


What skills (and people) are needed by your organization to deliver the product or service?

How will you attract and retain the best people?

How will you organize your staff?◦ Workforce planning, Specifying Jobs and Roles and

Selecting Your Organizational Design (who will work for whom, etc.)

What Human Resources Will You Need?


What equipment needs will you have?◦ These needs depend very much on the resources

needed to develop, distribute and support your product/service.

◦ Facilities Management includes, cleaning, floor washing, ventilation (HVAC), lighting, receiving dock, delivery van etc.

What computer equipment will you need?◦ Hardware, Laptops, iPad’s, mobile phones,

printers, Wi-Fi etc.

What Facilities and Equipment Will You Need?


What is the Cost of Needed Resources?◦ Consider the costs to obtain the necessary skills,

facilities and equipment identified from addressing the questions from all the previous.

What are your start up costs?◦ How much money will you need to get started

before generating any revenue?◦ Consider wages, licenses & fees, advertising,

marketing & promotion, leasehold improvements etc.

How Much Money Will You Need?


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 (or does) fill,

presents evidence that this need is genuine, and that the 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 the things that can take you off track or go wrong; it’s usually more about how you will recover.



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?◦ Money, sales/cash flow

WHO do we want to SERVE?◦ Ideal audience and Customer awareness

HOW will we COMPETE and WIN?◦ Competitive advantage and Customer experience.

Simple Approach to Presentation


HOW BIG do we want to be?◦ 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.

Simple Strategic Approach to Presentation


WHO do we want to SERVE?◦ 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.



HOW will we COMPETE and WIN?◦ Means your daily Operations Plan and how you will “deliver

the promise” in all the other 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.



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 CDE Pharmacists specifically with each patient, and delivering the services to our patients and customers 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 combing 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.

The Value Proposition

retailSOS.ca 52

Want a copy an electronic copy of this of this presentation with bonus slides?◦Email me; [email protected]

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

Questions?

Thanks

Gerry Spitzner

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Find me

retailSOS.ca is a Vancouver-based retail consultancy guiding and supporting Pharmacy owners to create, engage and keep great customers by doing the right thing extraordinarily well.

Gerry Spitzner works as a management consultant with community Pharmacy owners to achieve results by aligning their vision and implementing marketing strategy with operational execution.

Drawing on 35+ years experience in drug store multi-site retail operations, Pharmacy ownership and the Pharmaceutical wholesale supply-chain; Gerry brings the leadership, knowledge and market awareness of ownership and business development to Pharmacy owners to achieve growth objectives.


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