Understanding What Your Business Really Offers (How to Become a Self-Employed Pharmacist – Part 4)

by Marvin on November 30, 2009

in Coaching Series

Understanding what your business really offers

Before we take the next step in part four of this coaching series, make sure you’re all caught up by reading:

  • Part 2 – The Mindset of an Entrepreneur – Where we talk about how crucial the correct mindset is if you want to start this venture and what traits to keep in mind.

This weeks’ lesson is an important one so pay attention! But it’s also much shorter so you have absolutely no excuse to skip it.

This lesson as is titled “Understanding What Your Business Really Offers”.  It’s time to start thinking about how your services and benefit your clients.

Last week, I talked about setting a foundation for your business.

  • I hope you’ve thought of a name for your business even if the name is going to be your own.
  • I hope you have your stationary ready with your letterheads.  It’s important your correspondence gives the impression that you are a business.
  • And I hope you opened a business account because soon you’re going to need a place for your earnings in this venture.

Your Clients Challenges
To understand how your business can help a pharmacy.  Let’s look at some of the challenges your clients face from a business point of view.

Besides trying to stay afloat a business must worry about “Fully Loaded Costs”, which are the actual costs an employer pays for an employee.

An employers extra expenses for hiring an employee

  1. FICA tax ( employer 1.45% Medicare + 6.2% social security = 7.65% total
  2. FUTA (Federal Unemployment)
  3. State Unemployment Tax
  4. Worker’s compensation coverage
  5. Retirement or fringe benefit plans (such as medical insurance).

In short a business pays thousands of dollars on top of what they’re already paying for their W2 employees.

Being an independent contractor these extra expenses do NOT apply to you.  So by just changing this status you can save a business thousands of dollars right off the bat!

Which brings us to…

Advantages to a Pharmacy Contracting Your Services Out

The benefits you bring to the table by contracting yourself out is

  • Reduced Overhead: One of the main perks of hiring an independent contractor are the reduced costs in: expenses, payroll, benefits, and other overhead. Lower overhead means a better profit margin for you client.  (You profit more also as you’ll see in the next lesson)
  • Less Need to Manage: Contractors know that repeat business will depend on their performance.  So there is incentive for you to do a good job for you client.  Business owners are usually aware of this and know they don’t have to worry too much about managing you.
  • Freedom: Most pharmacies can’t afford all the overhead expenses involved with hiring an employee.  This usually forces the pharmacy owners to work in their own pharmacies leaving them unable to leave.  When a business hires a contractor their expenses are more easily determined and budgeted.
  • Administrative Advantages: There are also substantial savings on the burden of administrative tax reporting basis.  Independent contractors are far easier for businesses to deal with than employees
  1. No quarterly payroll tax returns, 941’s 1120’s, 1017’s, 940’s
  2. No yearly W-2 forms that are required to be filed

Also, be aware that your biggest competitors will be relief agencies.  So keep in mind…

The Disadvantages to a Pharmacy going with a relief agency

  • Uncertainty: A pharmacy owner does not always know who is coming in an emergency situation.
  • Expensive: The amount a pharmacy owner typically pays the relief agency is much much higher what you would charge that same owner for your services.  In my line of work, in cases where I had to go through an agency.  My client was charged sometimes more than double what I was making.
  • Inflexible: Even if a pharmacy owner likes you they cannot call you directly and they cannot hire you without a ‘finders’ fee.

You might be asking yourself, “With all these advantages why aren’t more pharmacies contracting out pharmacists?”.  Two reasons:

  • Pharmacy owners don’t know that pharmacists can contract themselves out
  • Pharmacists don’t know how to contract themselves out

You should also keep in mind that each of us brings our own unique experiences and talents that benefit the client.

So, your assignment this week is to be mindful of these benefits and be able to articulate them should any ask you, well why would I do that?  Knowing these benefits inside and out will help you when you are ready market your services.

Next Week’s Lesson – Understand How You Profit From This Business

We dug into the benefits to your potential clients when you contract yourself out.  With this knowledge you can convince a prospective client to contract your services.  I really advise all of you to think about anything else you bring to the table.

Next week, we’ll be covering how YOU profit from this venture and why it is to your advantage to contract your services out.  It will be a motivating section so don’t miss it. I hope you enjoy it.

This concludes this week’s lesson.  Keep these advantages for your client in mind when you start to market your services out.  I’ll cover that in an upcoming lesson.

If you liked this article why not take advantage of your time now and leave us a comment or better yet sign up for our newsletter it’s 100% free and you can get our articles and announcements by email!

Photo by: DraconianRain

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Twitted by PharmacistOLoan
December 2, 2009 at 10:58 pm
How You Profit from Being a Contract Pharmacist (How to become a self-employed Pharmacist – Part 5)
December 7, 2009 at 6:05 am

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