These are challenging times for business – and pharmacy is no exception. Wayne Harrison, Numark pharmacy development manager, says pressures on the market have resulted in "widespread change" to business models.

"The combined impact of reduced wholesalers with [increasing] direct-to-pharmacy models and quotas are not only leading to difficulties in getting hold of products, but also reducing pharmacy margin," Mr Harrison explains. "In an environment characterised by ‘more for less', a pharmacy faces a daunting task in charting its way through a very challenging [area]."

"Charting" is the key word here. Factors outside your control will always affect your business, but you should be steering it through those choppy waters with your eye on the destination – your defined business goals – rather than allowing your business to drift. And that's where a business plan comes in.

1. Understand what you need from a business plan

In simple terms, a business plan is a document that describes the status of your business. It should take into account your objectives, strategies, and sales, marketing and financial forecasts. It helps you hone in on the purpose of your business, define your market, set future goals, spot pitfalls and problems, and measure your progress. In addition, if you want to raise any investment or bank loans, then you'll need a business plan to help convince lenders that you are a safe proposition that will deliver them a return on their investment.

"Your business plan is essential to allow you to achieve a competitive edge," says Mr Harrison. "It will help you diagnose and recognise opportunities and threats within your environment, choose the right action to maximise opportunities and reduce the impact of threats on time and cost. By regularly evaluating your plan, you can share successes and lessons learnt within your team, and collectively improve your business."

2. Identify where you are

To work out how best to develop your business, you need to know where it stands financially and identify strengths, weaknesses, opportunities and threats. "Your business review should help you to identify five core areas of focus," says Mr Harrison. These are:

● your mission (your goals for your business) ● your internal environment (things within your control) ● your external environment (things that are less controllable) ● a SWOT analysis (strengths, weaknesses, opportunities, threats) ● evaluation (what you know now, and what you need to do to defend and develop your business).

3. Plot your goals

Once you know where you are, you need to work out where you're going. Areas to think about include: ● what your competitors are doing, and how you can match them ● what you want to achieve over the next year ● any legal obligations you have, such as professional fees, licences and so on, that have to be kept up to date ● what you know about your market, and how it might be evolving ● a marketing plan, including a budget for advertising, and what you hope to achieve from your promotions ● fixed costs, and estimates of any additional finance you might need ● business risks, including bad weather planning and forthcoming legislation that might have an impact on your trading.

4. Consider your costs

There are other business costs that can have an impact on your bottom line, Mr Harrison explains. "For example, are you maximising your purchasing potential?" he asks. "If you can manage your costs and the profit you make on your purchases is good, you shouldn't be wasting time chasing every wholesaler to save a few pennies per product."

This time is better spent on developing your team to provide more services. "Most of the services you earn money for will affect your profit and loss positively, as it will go straight onto the bottom line," Mr Harrison says.

Then there are staff wages, which can be one of your largest costs outside of medicines. "As a rule of thumb, wages should be 11 to 14 per cent of your turnover," says Mr Harrison. "Staff members should be an effective and efficient part of your business – use them appropriately and efficiently."

Other costs to keep an eye on include insurance premiums, utilities and telephone bills, which should all be renegotiated when contracts are up for renewal.

5. Review and refresh

A bit like cleaning, business planning is a never-ending process. Your business will change daily, monthly and yearly, and you will need to keep on top of it. "Once you have identified and implemented your plans, it is time to start the process again," Mr Harrison explains. "Continue to review your business at least once a year and use your team to help you to do so."

How to sail through a business plan

● Don't think you're too small to need a business plan. Every business needs one, no matter what size ● Do focus on the purpose of your business and carefully define your customer base ● Don't ignore pitfalls and problems. They will still be there, even if you pretend you can't see them ● Do pay close attention to your business plan if you want to raise an investment or bank loan ● Don't cut wages or headcount to reduce expenses. Use your team more effectively to increase your turnover and profit ● Do revisit your plan on a monthly and yearly basis so that you can pinpoint where it is failing, as well as working, and adjust it accordingly.