by Shirin Haklar – BPharm, GradDip Accounting
I heard last week through the grapevine that a well known Brisbane pharmacy operator was placed in receivership. Being part of a firm of Pharmacy Accountants Brisbane, my first reaction beyond sympathy for all those directly affected was: “wow – I didn’t see that coming”. This fellow was an industry doyen – a high profile operator with tremendous experience and a very good long-term track record.
If it could happen to him… just exactly how tough is that retail pharmacy market?
We can obviously speculate as to the root cause of the challenges he was facing. The more pertinent question for me: “how aware was he, that his business was in serious trouble?”
It’s one thing being aware and not acting with sufficient haste, it’s another altogether not knowing. Experience tells me it is more likely to be the latter – the high profile pharmacist probably didn’t have in place the appropriate systems and processes to provide clarity around his day to day, week to week, month to month financial position.
As any successful small business operator would tell you, cash flow is king. Turnover/ sales revenue? profit, growth etc…. can all be trending in the right direction but if there’s insufficient cash pumping through the business, you can be left at the mercy of…..payment terms of suppliers… etc etc
That’s why clarity around cash flow/budgeting is so well focused on by Pharmacy Accountants Brisbane.
Given the obvious toughness of the current marketplace, it is disturbing that so many small business operators overlook these fundamentals.
Drawing some parallels with a long car journey, you would hardly set off without have some idea of the direction of your destination, nor the knowledge of costs you were likely to incur along the way.
With a little more clarity on how he was traveling, the poor unfortunate pharmacist may well have been able to alter his course and avoid veering down that road to nowhere.