Pharmacies being forced out of business by 'severe' cashflow problems

Its obviously worrying to hear this trend . It brings back alot of memories of the the long hard struggle with cash-flow which has been the thorn in thecsudecof many a great business .
At A1 Pharmaceuticals in our first year we turned over only £30,000 in a year we had little to no capital and customers took on average 17 weeks to pay us .
Today we are in the finals at the national business awards for growth strategy of the year inspire of the fact that our debtor days are 52 & our credit days only 14 .
I would be happy to advise any pharmacists on how inspite of this adversity
Survival can be achieved .


My email Gary@a1plc.co.uk
Gary Lewis
Founder & Managing director
A1 Pharmaceuticals plc


One of my favourite business maxims :

Turnover is vanity Profit is sanity cash-flow is king

It is always sad to hear a Business has to go into administration.We have seen more Pharmacy Contractors having cash flow problems than at any time in the last twenty years.The current financial climate is hurting everyone.Stock is an area that needs particular attention when cash is tight adopting strict purchasing methods and workable SOP's can help cash flow considerably.If you are having problems speak to someone and seek advice as soon as possible most problems are solvable if dealt with in the early stages.

M Wallace
Wallace Business Sales Ltd

Profit per item from PSNC's figures for August 11 show average GP at £2.09 per item - add on say 60p for profit on purchasing giving around £2.70 profit.

Then look at the CSI which shows cost of providing the service at over £3 per item.

So little wonder pharmacies are feeling the squeeze.

I suspect the economies of scale and buying power shelter the multiples to a degree - hence the reason there has been less fuss about this than might otherwise have been the case.

Martin

Martin as always sees things as they are because he has developed the skills to read the contract and the monthly statement. Most pharmacists I have come across have little understanding of the system of payment and drivers behind the system. The system being complex is the most often quoted reason. But, them are pharmacists not science graduates with at least a GCSE in maths? Others say that the subject is boring. But, you do not have to spend every second of the day learning the way the system works.

I know that there are hardships. In fact there would be more problems if independents did not reduce their take home pay and retained capital in the business.

The current contract is unsustainable but, also, lack of business skills which are not taught at schools of pharmacy need to either improve or be aquired.

I think we are in the middle of a significant movement of the tectonic plates in the government policy, healthcare management, and repositioning of healthcare professionals taking place. There will be more tremors for some time.

But, this does not help the individuals who are suffering and we need to take action to minimise the impact. In the short term there is unfortunately little that can be done. In the medium term we need to take action at the strategic and operational level that will see pharmacy re-positioned as a worthwhile resource in the communities that needs to be developed and supported.