Minimising the risk of unexpected events in your business
Life happens when you are making other plans. We all have examples of events that blindside us while we are making other plans. An example is the recent Federal Government announcement regarding 60 day dispensing.
These events create chaos and distract us from what it is that we want to be doing. But it doesn’t have to be that way. You can take steps to minimise the impact and risk of unexpected events affecting your business and those around you.
Third party announcements
The announcement of 60 day dispensing has undoubtedly rocked the pharmacy industry and created a high degree of uncertainty, angst and stress. Whilst the Federal Government’s decision may not change and as hard as it is to get past the decision, pharmacy owners are encouraged to treat the challenge as an opportunity to think about how they can do business differently to ensure viability and success. If patients are not presenting in store as often or having their health monitored as regularly, what can the pharmacy do to get to the patient directly? What other services can be offered in the business to counter the potential loss of revenue? Don’t be afraid to think outside the box.
Departure of a key employee
The departure of a key employee can have detrimental impacts on the business, cause business disruption, communication issues and a dip in team morale. To manage this event, communicate with your team regularly and ensure that all systems and processes are documented rather than living in an employee’s brain. In addition, ensure you have excellent employment contracts in place which deal with regular reviews, appropriate notice periods, handover processes and enables you to direct an employee to take leave so that you are not left with a huge leave liability if and when an employee decides to leave. You cannot hold on to employees forever but you can take steps to minimise the impact of their departure on the business.
If a partnership dispute arises, a partnership can suffer financial loss, relationship breakdown and general business disruption. The dispute often also affects the employees in the business and can cause a general sense of angst. If you are entering into an existing partnership, do a thorough due diligence and ensure you are a proper fit for the partnership. Further, regardless of whether you are entering a partnership or already in a partnership, you must ensure there is a partnership agreement in place, that all scenarios are covered and agreed, and that overall, the terms of the agreement are appropriate for your circumstances. A well drafted partnership agreement will provide you with protection and certainty in times of distress and uncertainty.
Illness or death of a partner
Regardless of whether a partner becomes ill or passes away, the impacts of their loss are the same – financial loss, emotional harm, distraction and uncertainty. Unless you have appropriate insurances, estate planning documents and a well drafted partnership agreement in place, these events can cause significant issues. Don’t leave it until it is too late. Determine what will happen if a partner becomes ill or dies whilst they are alive and well!
Death of a sole owner
Pharmacy owners are not immune from death. The impact of the unexpected death of a sole pharmacy owner can be immense on many people including the owner’s family, employees and community. So what do you do to reduce the impact of this risk? Put an estate plan in place and communicate your business processes and procedures to your team. Know who will step into the business on your passing and ensure that person knows how to run the business and the steps to be taken immediately, such as advising the State regulator and the Department of Health and Aged Care of your death. Importantly, your interest in the pharmacy business must be disposed of within 12 months of your death. Those you may be left behind must be aware of that or your estate may be exposed to penalties.
The will to succeed in business is important but what is more important is the will to prepare. Do something today to minimise the impact and risk of an unexpected event on your business.
This article originally featured in the June 2023 edition of Retail Pharmacy Magazine. This article is intended to be for general information only. It does not constitute legal advice nor does it establish a relationship of client and lawyer. Specific circumstances or changes in law may vary the accuracy or applicability of the information published. We recommend seeking specific legal advice particular to your circumstances before taking any action, or refraining from taking any action, on any issue dealt with in this article.
Sarah Stoddart is the director of Vitality Law Australia, an award winning commercial and property law firm specialising in the pharmacy and broader healthcare industry. Sarah prides herself on being approachable and helping clients resolve their legal issues in a practical and timely manner.
If you require assistance with your business matters, please contact Sarah Stoddart on 07 2140 0522 or email@example.com
This article is intended to be for general information only. It does not constitute legal advice nor does it establish a relationship of client and lawyer. Specific circumstances or changes in law may vary the accuracy or applicability of the information published. We recommend seeking specific legal advice particular to your circumstances before taking any action, or refraining from taking any action, on any issue dealt with in this article.