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NOW UPDATED FOR 2006!
The most recent benchmarking data for Pharmacies is now available, both in print and in downloadable PDF format, with your purchase of the Pharmacies Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Pharmacies for the financial years up to June 30, 2004. The survey was based on 100 businesses.
As an age-old industry, pharmacies offer a variety of product ranges. The best pharmacies are different in several ways:
- They have both the dispensary side of the business and the over-the-counter sales working well
- This shows up in better overall use of space, leading to higher returns per square metre and relatively less area being patrolled by each staff member, so that sales aren't missed
- They trade for more hours each week
- They have better personnel productivity, by rostering staff according to the customer flow
- They promote the business more actively too.
In addition, their ownership and staffing arrangements are a key part of their ability to earn higher profits. These factors all fall under the control of the owners, so management pays dividends in pharmacies!
Survey Results
These are the results of a survey of pharmacies. These results should not be considered to be representative of all pharmacies in Australia. However, they will allow business owners to identify strengths and weaknesses in the ability of their business to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of business performance and comparing them with benchmark performance levels currently being achieved by the sample of businesses in this survey.
Most of the pharmacies participating in the survey were from the eastern states of Australia. New South Wales was the most heavily represented area, while there were no firms located in the Northern Territory in our sample.
Businesses from larger regional cities and towns (population over 20,000) and rural areas (population under 20,000) represented 53% of the entire group. The rest were city-based businesses.
Around 95% of the participating businesses rented their premises and approximately 63% of those that rented were located in premises with street frontage.
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 7th highest and 7th lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
| Indicator | Average | Low | High |
|---|
| Total Income (thousands) | $2,249.3 | $851.0 | $4,198.7 | | Gross Profit | 33.69% | 29.24% | 38.62% | | Wages & Salaries (staff only, not
owners) | 10.72% | 6.57% | 13.96% | | Rent of Premises# | 3.25% | 1.22% | 5.23% | | Net Profit (bos*) | 10.74% | 5.00% | 16.93% | | Stock Turnover Rate | 7.2 | 4.9 | 9.9 | | Dispensary Sales as a Percentage of Total Sales | 60% | 41% | 78% | | Trading Hours per Week | 60 | 48 | 78 | | Sales Area per Sales Assistance (sq mtrs) | 30 | 15 | 49 | | Dispensary Sales per Script | $26.67 | $19.79 | $30.91 | | Over The Counter Sales per square metre of
Sales Area | $5,122 | $2,247 | $7,868 |
# calculation excludes
any firm in freehold premises (bps) before principals' salaries
and benefits
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your business falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however, some businesses reported some larger results for such items as:
- Advertising and Promotion including Franchise/Group Fees of up to 3.04%;
- Interest, Bank Charges etc of up to 9.11%;
- Other Depreciation, Lease and Hire Purchase of up to 3.35%;
- Staff On Costs of up to 3.15%.
To summarise this, larger businesses had:
- Higher profits per principal and per principal work-hour;
- More employees per principal, where those employees permitted the principals to work slightly fewer hours per year.
The more profitable businesses:
- Were larger, on average;
- Had better productivity per person;
- Had a personnel mix with much higher numbers of employees per principal;
- Had more productive apos;dispensaryapos; and also better performances in the OTC areas, resulting in a much better usage of floor space;
- Had better stock management and this flowed into better overall asset management too;
- Traded for more hours per week, on average.
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