It’s a new year with lots of resolution-making, creating our vision board, planning, and thinking about how to improve our lives and businesses to get to that next level. Just before you conclude on your plans for the year, I would like to share an idea with you.
Do you know most community pharmacy owners unintentionally put a cap on the growth of their Pharmacy?
Let me show you how.
The average pharmacy owner believes the only way they can grow their business is by selling more to their immediate community and opening more stores.
This worked for decades, and lots of Pharmacy owners used this to expand their frontiers, serve more people and make some wealth for themselves.
However, I will attempt to show you something better, using the terms Local and Global maxima as an analogy.
Local maxima and Global maxima as a concept for Pharmacies.
An average pharmacy in a good location with astute owners would probably start with average revenue of 100,000Naira a day.
With great staff, amazing customer service, optimal drug availability, this pharmacy can grow to 500,000 daily revenues. Then the pharmacy owners realize that growth/sales stalls after a certain point.
This might mean the pharmacy has reached the Maxima. The Local maxima.
So what is Local maxima?
In English, A local maximum is the largest value of the function(function is revenue), respectively, within a given range (where the given range is your immediate community).
A global maximum is the largest value of the function, respectively, on the entire domain (the entire domain is the pharmacy value chain).
The biggest remarkable difference between Local and Global maxima is that there is a high value attached to the Local maxima, whereas the Global maxima are infinite.
Back to the pharmacy, after getting to 500,000Naira (Put in a figure based on location), no matter what the pharmacy does, they will keep hovering around that figure.
To increase the business, The business will need to invest in opening another store and the cycle continues.
However, by opening new stores, the business incurs fresh startup costs, same startup risks, to get to the maxima. Those are just hitting a series of local maxima.
The Good news, the ability to serve customers right, scale the business shows a great understanding of business fundamentals.
The Bad news is, local maxima always make sure gains are capped at a certain level.
To go from local to Global maxima requires a change of thinking about business models, business processes, and fundamentals.
You will need to invest in Global maxima games. These are games with unlimited upside, and *potentially* unbounded revenue.
How do we start the journey to global maxima?
Ask these questions. How can my store at Ikeja serve Enugu, Africa? What can you provide for a patient in Accra, that they will pay you for?
In fact, the brand Apetamin used a mixed strategy of Instagram, Facebook Ads to create demand, and sell millions of Naira worth of products Nationwide before introducing it to Pharmacies.
A few friends and I made millions of Naira selling COVID-19 kits, without seeing a single face shield. All we had was a website, a phone, and dispatch riders.
To play the global maxima games, start thinking about tools, skills, knowledge, and techniques that will allow you to serve people all over Africa.
These tools, business models are remarkably different from what is used to serve your local environment.
Some examples of global maxima games,
- Adding a personal product line to your business, e.g Pharmacies producing antiseptic and selling them all over Nigeria.
- Community Pharmacies coming together to move into the importation and distribution of medicines.
And for more recent and scalable examples,
- Alto Pharmacy in the US, Providing white-labeled insurance for their customers, same-day delivery, and online consultation. (Nobody said we can’t have Pharmacy-centric insurance).
- A Pharmacist selling Supplements through Instagram and Jiji.
- Partner with healthcare influencers like Pharmradio, to build a following on IG, Facebook and provide paid consultation.
Understanding Social media, SEOs, Logistics, and Payment infrastructure are some of the toolbox needed to play Global maxima games.
These wouldn’t have been possible like 15,20 years ago, but Logistics services (Gokada, Uber), Payment services (Paystack), and free online e-commerce sites like Shopify.
Install shopify, Gokada, and Paystack here.
And guess what? You can start this today and for free.
A mentor once said, Play games with limited downsides and unlimited upsides, Global maxima games are one of those.
2021 will be a great year!
Jeremiah Babasanmi is a Pharmacist but currently works as a Head of Product at a fintech startup, while taking courses in Blockchain development.