TAKE CONTROL OF YOUR FINANCES How to Optimize Costs and Maximize Pharmacy Savings
A dollar saved is a dollar earned, and nothing more true can be said about running a pharmacy. You have to fork over endless expenses just to keep your pharmacy up and running, but are these expenses the lowest they can be? While you might think costs are mostly fixed, you need to start reviewing your spending and pinpoint the places that can be tightened. This is where your expense ratio KPI comes into play. Your pharmacy’s expense ratio is how much you spend compared to how much revenue you make. To find your expense ratio percentage, divide your operating expenses by your total revenue, then multiply this number by 100 to get your percentage. Total Operating Expenses ÷ Total Revenue x 100 = Operating Expense Ratio Operating expenses can range from rent and utilities to payroll and carpet cleaning. If you can decrease your total operating expenses, you can lower your expense ratio and boost your entire bottom line. For struggling pharmacies, cutting costs should be one of the first moves you make. Expenses can get bloated over time without you realizing it, especially if you don’t regularly review them.
Just like how we spend money in our personal lives, it can become incredibly easy to get used to spending too much money. Many of us are even afraid to look at our account balance, and this can apply to pharmacy expenses, too! When you don’t look at your financials, costs can snowball quicker than you might think.. Find the weak spots and start cutting! To get started, simply go through and question everything! Ask yourself: • Do I need this? • Can I get this cheaper? • Can I negotiate a lower price? • What can I eliminate? Go through your expenses and cut the fat. You can save yourself hundreds, if not thousands, of dollars just by trimming the excess from your expenses on a regular basis. We recommend you start with an initial deep dive into all your expenses. Then twice a year check in on them and ensure they haven’t gotten out of line. Not sure where to start?That’s why we offer a course for our Essentials and Unlimited members. We’ll point you in the right direction and provide examples of everything you can cut in your pharmacy’s overall expenses. Scan the QR code to start the course today. We want to see your pharmacy grow, and the key to doing so is getting your foundation KPIs in check!
Scan the QR code to learn how to take control of your expenses!
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