Introducing pharmacist and specialist retail entrepreneur Hugh Cunningham:

Hugh Cunningham is as passionate about customer service and product assortment as he is about medicine. As the co-owner of The Local Choice Pharmacy Harmelia, Hugh focuses on business management, while his wife and co-founder Yolandi ensures the dispensary runs smoothly. 

On episode 4 of The Finance Ghost Plugged in with Capitec, Hugh shares excellent insights on specialist retail and how pharmacies really work.

Episode 4 covers:

• Why separation of duties and having a clear decision-maker is critical
• The importance of doing proper financial analytics in any business
• How pharmacies make money and the differences between independent and corporate pharmacy models
• The benefits of being part of a franchise network
• The future of the pharmacy industry and how independent pharmacies can stay competitive  

The Finance Ghost plugged in with Capitec is made possible by the support of Capitec Business. All the entrepreneurs featured on this podcast are clients of Capitec. Capitec is an authorised Financial Services Provider, FSP number 46669.

Listen to the podcast here:

Read the transcript:

Intro: From side hustles to success stories, this is The Finance Ghost plugged in with Capitec, where we explore what it really takes to build a business in South Africa. This podcast features specialist retail insights from Hugh Cunningham, co-owner of The Local Choice Harmelia pharmacy.

The Finance Ghost: Welcome to this episode of The Finance Ghost plugged in with Capitec. This is a wonderful podcast series in which I get to speak to some really interesting entrepreneurs. I get to dig into their backstory. I get to understand more about what they’ve built and why they are still build

The Finance Ghost: Welcome to this episode of the Finance Ghost plugged in with Capitec. I’ve been having a great time on this podcast season, talking to some really interesting entrepreneurs. This is episode four, which means there are three other episodes you should go and check out, covering everything from selling brownies at a market through to building a cosmetics business online and then doing property development and really touching every part of the property value chain. That’s episode three, so go and check it out. Huge variety. And we are adding to the variety on episode four here today because I am speaking to Hugh Cunningham. He is the co-owner of The Local Choice Pharmacy Harmelia.

So if you’ve ever wondered how the business of a pharmacy works, then you will find this to be a particularly interesting podcast. Hugh, thank you for coming onto the show and doing this with me. Powered of course, by Capitec and Capitec Business. I’m looking forward to chatting to you.

Hugh Cunningham: Thank you, Ghost. I welcome the opportunity to share some of my experience and insights at The Local Choice Pharmacy.

The Finance Ghost: Yeah, absolutely. So let’s get into it. And I think in line with the conversation I’ve had with others on this podcast series, it’s always good to just understand the backstory, a little bit of what brought you to this point, whether you were always interested in the space, I guess, from a pharmacy perspective. And then I think what is an interesting additional nuance is that The Local Choice Pharmacy Harmelia is actually a family business. It’s you and your wife, which of course brings all kinds of interesting dynamics to that as well.

So let’s, I think, start with just your background, how you got to this point, what got you into the industry, what is the backstory of you, essentially?

Hugh Cunningham: Sure. Thanks, Ghost. My background starts many years ago. In 1983, I qualified as a pharmacist. 1984, I spent a year in hospital pharmacy, then I went into production pharmacy. And while I was in production pharmacy, I opened my first pharmacy in Bedfordview, which I ran from 1985 to 1991. I then got married to my wife in 1991 and sold the pharmacy the same year. I then spent a fair amount of time in the pharmaceutical industry, in production, in regulatory affairs / medical information, then as a rep, then as a product manager, then as a GM.  Moved across to general management in the medical devices industry from where I moved into private equity, both with Anglo American Industrial Corporation and with ABSA Private Bank or ABSA Business Bank.

And then I moved into the recruitment industry, then back into the pharmaceutical industry as a sales director and then joined my wife in the pharmacy about three, three-and-a-half years ago. During all that time I also did an MBA degree in entrepreneurship with an Australian university and I did a postgraduate diploma in financial planning a year-and-a-half ago. Enjoying all of that but all the time – during that time I was also doing a lot of analysis for my wife, coming in the afternoons after work just to do the cash-ups and add value where I could to the business and I’m fortunate enough now to be with my wife and running the business together.

The Finance Ghost: Yeah, that’s fantastic and it’s a nice broad experience set, right, which I think is really valuable when you’re running a business because as many entrepreneurs have learned, either the easy way or the hard way, it almost doesn’t matter what you are selling. There are just key business principles that you need to get right. And I imagine that the prior experience that you’ve brought into this has probably made quite a difference.

Hugh Cunningham: Yeah, Ghost, I think it has made a big difference to the business. I think a lot of retail pharmacists probably don’t analyse their businesses well enough. So I think one of the skills that I’ve brought to the pharmacy is the analysis of sales.  I look at gross profit generally every single day. I make sure that systems are in place to manage the staff. I try and make the staff as happy as possible, but I think we really try and make sure that we’re doing the right things at the right time. And it’s quite nice because we try not to talk about business at home, but we do discuss business while we’re at work.

The Finance Ghost: So, Hugh, you’ve touched on a couple of really interesting points there. One is definitely around – and it’s a point I agree with, by the way, the fact that many especially smaller business owners do not really do the kind of analytics that you would expect to see in larger organizations, and it is to their detriment. I’ve actually worked with clients before, years ago, often they will leave their jobs to start some kind of small retail business and I would help them out on the side – just to help them understand margins, basic stuff like that, where if you haven’t actually studied something finance related, it’s not necessarily a guarantee that you’ll understand the shape of an income statement and the stuff you need to look at and the trends and the product level details and the category margins and all the stuff that makes retail incredibly interesting.

So that’s an important role that you play there with your wife, Yolandi. And I understand from you that she’s a pharmacist and you’ve been married, as I understood in the prep for this podcast, for a few decades now. So congratulations for that. That’s always a great achievement and you want to stay married, no doubt. So that means that you have to manage the business very carefully in terms of your personal life. What do you think has been the trick in actually making it work? I mean, you’ve kind of touched on already there, you know, not bringing work home, that kind of stuff. Would you say that that’s been the core trick to making it work as a husband and wife team, or is there something else that you think might be a valuable insight for anyone else listening to this who’s in a similar position?

Hugh Cunningham: Ghost, I think that the most important aspect of it is we share the pharmacy, but we have separate responsibilities within the pharmacy. We also sit on opposite sides of the pharmacy. I sit on one side and my wife sits in the dispensary and she takes more control of the dispensary side of things and I take care much more of the more business side of things. I do the staff management, the analytics, checking on stock receiving, etc. So yeah, separation of roles.

And because my wife has been in the pharmacy longer than I have, she’s been running the pharmacy since 2009 when we took it over and we became a The Local Choice in 2015. But she’s been running the pharmacy without me. I’ve been assisting until I joined the pharmacy full time and during that time she’s been the boss.  So I really try and allow her to make the decisions. If anyone asks me, I will say, well, she’s the boss ask her.  Being able to literally say, well, you know, it’s her pharmacy in the sense of she makes the decisions – I think that solves a lot of the problems up front. I think the problems would occur where we would try and say, well, it’s my pharmacy, it’s your pharmacy and then there’s a discrepancy. No one knows who’s really “the boss”.

The Finance Ghost: Yeah, I think there’s a good insight there and it’s true for actually all business partners. There are far too many who I think don’t have a proper separation of duties. So that’s the one point that you’ve raised there I think quite correctly. It doesn’t really help if two people go into a business with exactly the same skill set and they basically just fall over each other. That is generally unhelpful. So actually agreeing exactly who’s doing what is really valuable stuff and as you say, just also having someone who is going to make the final call. There’s almost nothing worse than a co-CEO environment where you’re at loggerheads and there’s the ability for a decision to not be made – someone has to have that kind of breaking vote.

So yeah, I think it’s a good dynamic and there’s a lot of reasons why it sounds like it’s worked. It was already operating before you joined. It wasn’t like the two of you sat down one night and said, well, let’s just roll the dice on this business and then we’ll see what happens. We’ll figure out what we each do and everything. That can be quite dangerous. So some really nice advice in there that I think is as applicable to any partners, business partners, etc. as romantic partners, husband and wife, married, take your pick, whatever you want to call it. I think there’s some great advice in there. So thank you.

I think let’s then tap into some of that business knowledge that you bring to it, because that of course is why we’re doing the podcast with you specifically, I think is because you bring that layer of the analytical business side and a lot of that sort of experience to this.  And obviously something that’s really interesting in the pharmacy game is big chains have become part of the landscape in a huge way in the last couple of decades and there are still a lot of independent pharmacies out there. People don’t necessarily realize how many independent pharmacies there are. I’ve done some analytics and work in that space before in a previous life, which was very interesting and I know the pharmacy licenses can play quite a role in that. It’s just interesting to see how these independents survive. The Local Choice is essentially part of the broader Dis-Chem Group. It’s a franchise that is serviced, to my understanding, at least, by Dis-Chem’s wholesaler, etc. and I’m keen to understand that properly from you.

But I guess let’s just start with understanding from you, your view I guess, on how independent pharmacies survive, why you went the route of the local choice. Just some of the business landscape stuff in this space?

Hugh Cunningham: Absolutely Ghost.  I think that for a number of years from 2009 till 2015, we ran essentially as an independent pharmacy with our own branding. We had our own colours, we had our own logo, and we ran and we had a lot of loyalty from our customers and were able to grow the business.  I think that when we got to 2015, we were one of the first The Local Choice pharmacies. I think we were in the second year of The Local Choice franchise starting up and we really gained a lot in terms of the broader franchise route, because The Local Choice pharmacies are a successful brand and people recognise The Local Choice.

In terms of how we work with the Dis-Chem Group, Christopher Williams, who is the owner of CJ Distribution in Delmas, eventually became the main distributor for Dis-Chem as well. So Dis-Chem Distribution is now CJ Distribution as well. So Christopher has managed to expand the wholesale side of it, so some of the smaller wholesalers have all become part of that whole Dis-Chem brand.  The difference between us and a Dis-Chem, is Dis-Chem is a franchise. Most of the businesses have Dis-Chem as a partner. So Dis-Chem has a larger say in the Dis-Chem franchises, whereas The Local Choice pharmacies are essentially privately owned.

How do we as a private pharmacy succeed in a market? I think there are a couple of things that really benefit us. One is we’re not in shopping centres. I think sick patients don’t really want to go to a shopping centre and sit in the shopping centre. They’re not feeling well, for starters, and they then have to go and get their medicine there. So easy access, parking just outside the pharmacy, I think that plays a role.

I think the major role, though, is service – when you come in, one of my absolute aims is to try and have as short a queue as possible in the pharmacy. People do not like queuing.  So if we can make it that there’s no more than one or two people in a queue at any time, that is what we aim for. And then the next is personal service and I must tell you that people come into our pharmacy and say, I want to deal with X or I want to deal with Y and if they want to do that, we’re more than happy to let them ask for that particular person to dispense their medication. I think the group pharmacies, the big corporates, you don’t get that opportunity. You may deal with a different person every single time.

So I think that makes a difference and then very personal service, trying to look after people – as I walk through the pharmacy on a daily basis, I greet – I don’t know – two, three, four people at any time. They all know my name, I know most of their names and certainly the staff that dispense them know them personally. And I think that makes a huge difference.

And then we also try and compete price-wise with Clicks and Dis-Chem. We don’t make huge profits, but my wife particularly will look at prices and she will say, hey, what’s Dis-Chem selling it for? What’s Clicks selling it for? Okay, we’ll sell it for slightly less. And it might not be R100 less, it might be R5 or R10 less. But we try to be price competitive.

So really, private pharmacy is a volume game. You need to get as many people in as you can and you need to provide a really, really, really first-class personal service.

The Finance Ghost: You touched on a lot of great points there. And it is actually something that is fascinating about retail is the location really is everything and as you’ve pointed out there, it’s those open-air malls where you can park right outside versus parking at a big shopping centre. It’s actually just a completely different experience and it lends itself to different kinds of shops. So thank you, that is interesting and you certainly confirmed something that I’ve always understood about retail.

I wanted to ask you one thing before I touch on some of the other points – are you required to procure everything from the Dis-Chem wholesaler or is it more of a SPAR model where you can actually technically buy from whoever you want, but you get preferred terms if you buy from Dis-Chem’s wholesaler?

Hugh Cunningham: Ghost, we can buy from any wholesaler that we would like to, but it’s to our advantage to keep as much as possible within CJ Distribution group.  So we can buy from CJ Delmas or we can buy from the major distribution group which is the one that does most of the distribution to Dis-Chem. But our preferred wholesaler is Delmas.

The Finance Ghost: Okay, fantastic. Thank you. That is very interesting and you’ve also touched on a number of the points I guess I was going to ask you anyway, which is around the service and when you look from the outside in, you kind of think “a pharmacy is a pharmacy” especially if you’re used to going to the big chains. A lot of that sort of faceless, nameless service that you’ve referenced there. I’ve personally not really ever had a sort of little village pharmacy, for want of a better description, where people know who I am and I know who they are. But I can see why that would be appealing from a community perspective.

If I think back to my childhood, we definitely had that. I think my mom used to go to the pharmacy just to honestly chat to them as much as anything else. But the world has changed a bit since then and it’s nice to see that businesses like yours still play a role and do that whole community thing and that you can actually make it work.

It’s obviously very important and like you say, it’s a volumes game. I mean, the one thing that I understand about pharmacy economics is that the dispensary is not where the money is made really. Obviously you can make money there and you have to make money there, but it’s difficult. The margins are not amazing on medication, pharmacists are highly paid people, so the economics of the dispensary itself are not so straightforward and that’s why people always talk about the front shop in the context of pharmacies, which is, as the name suggests, basically everything that isn’t behind the counter.

What has been your strategy around front shop and actually just making that work? I mean, I’ll give the example – Clicks is well-known for their small appliances. That’s because it’s a really nice way for them to juice up the margins of their stores as opposed to relying on dispensary. What has been your experience with that front shop versus dispensary balance?

Hugh Cunningham: Ghost, I think you’re exactly right and I think that corporate pharmacy is such that they’re really not worried about whether they make money in the dispensary or not, because they want the feet in there just so that they can make the margins on the front shop product.  In our case, about 78% of our business is from the dispensary and only about 22% is actually from the front shop. We don’t keep the full range of stuff that a Dis-Chem or a Clicks – the big corporate pharmacies – would keep. We try to keep the stuff that people buy on a regular basis. So our vitamins is a very big area. Then we keep a nice range of soaps and stuff like that. And my wife is excellent at choosing gifts, so we’re a very popular destination to buy gifts, particularly gifts for women, but gifts overall.

And then every now and then, we look at how we can remodel a business or what we can do to renew the business.  We’re now looking at another option that we could go for which would just expand the role. We’re looking at things like wheelchairs, walkers, that sort of thing, which are available in most of the corporate pharmacies but we’re now going to try and compete with them because we can give a personal service and we will also hire those out as opposed to selling them. So I think we try to renew the business on an ongoing basis.

The Finance Ghost: Yeah, that’s really interesting. I think you’ve touched on just how entrepreneurial it actually is to have a pharmacy, because at the end of the day, you’ve got the dispensary to drive footfall, which is the lifeblood of any retailer, and then you can kind of do almost anything you want from there in terms of the front shop. I mean, there’s obviously some categories that are not going to make any sense.

Actually, is there any kind of regulatory ruling or framework around what you absolutely cannot have in the front shop? Is there something that says, I don’t know, you can’t sell food or – well that doesn’t work actually, because Dis-Chem does that all the time, so it can’t be that.

Hugh Cunningham: Ghost, we’re not allowed to sell fireworks, we’re not allowed to sell firearms, we’re not allowed to sell ammunition, we’re not allowed to sell, sho there’s quite a long list of stuff that we’re not allowed to sell. Just trying to think of the others offhand, because we don’t sell them! Cigarettes, any nicotine products, we can give you stuff to try and stop smoking. No vaping equipment, no vapes, nothing like that.

So, yeah, there are very strict regulations about what we cannot keep. We’ve been in business here since 2009 and really we’ve stayed away from all those things. It’s just not worth going down that route at all.

The Finance Ghost: It sounds like a common sense kind of list for a pharmacy. You sometimes wonder about how the regulator sits around and comes up with this stuff, but yeah, that all sounds pretty sensible. And it means that you do then have a lot of flexibility for what you do with the front shop. Like you said, the gifts that Yolandi chooses to stock there and again, it just comes down to understanding the customer, right? Like any business, if you understand your customer, you can do well and if you don’t understand your customer, then you are at risk.

And I think there is risk of disruption to this space and that is something I wanted to ask you about, so I may as well do it now, which is a lot of what I read, especially overseas – I look at the likes of Amazon and what they’re doing. But there is some of it starting to happen here as well, is the concept of ordering your meds online and getting it delivered, basically just completely disintermediating going to a physical pharmacy. Obviously for you, that’s a core business risk, I guess? Is that something that you think about or do you think that actually medication is the kind of thing where people are still going to primarily want it in-store?

Hugh Cunningham: Ghost, I think that’s something that always occupies my mind. I’m thinking a few steps ahead of that even. But let’s look at it in terms of ordering online.  We have our website, we have a WhatsApp telephone dedicated to the dispensary, we have online ordering through email. So we’ve tried to address those options and we have two motorbikes going out and we have one little Suzuki which is fully branded so that anyone in the Edenvale area will see our little Suzuki driving around. Looks very much like the Checkers ones, except that it’s our colours and branding. So we try to advertise in that way. We also have an online advertisement that goes out to all the schools on a regular basis, and we get a lot of exposure that way.

But thinking further down the line, robotic dispensaries are becoming, I wouldn’t say common, but they’re becoming something that is happening. We can receive scripts directly from the doctor if a patient says, I’d like you to send it to XYZ pharmacy, we can dispense it from that point of view. So we’re trying to keep abreast of that.

In terms of the future and this is a concern of mine, is literally a doctor could write a prescription or type of prescription, send it to a robotic machine. The robotic machine could dispense the medication and there could be literally one pharmacist running five, six, seven robotic machines so that if a person needed to talk to the pharmacist, they could press a button and talk to the pharmacist. I don’t think that’s going to come in the next 5, 10 years, but in the next 20, 25 years, AI is going to take a very big chunk of every business, of every profession. And that’s my concern about retail pharmacy.

At the moment, I think people still like the personal relationship that they have with retail pharmacy, privately owned particularly, so I think we score there and we try and really make sure that we do those deliveries.

We also do a lot of blister packaging for retirement villages so that people get compliance with taking their medication on a daily basis. And that is doing very well for us in terms of the retirement villages in our area.

The Finance Ghost:  Again, a lot of really good general business points coming through – stuff like route to market, understanding the customer verticals that you can jump into, things like the schools, the retirement villages, etc. it’s all very clever – and there’s a lot of business experience coming through in your comments about, I think the robotics.

So typically, what people do is they overestimate the rate of change and they underestimate the extent of change. They think stuff will happen quickly and they don’t think about just how much it can change over the long-term. As you’ve described it there, I think is exactly right, which is the other way around, which is to say, well, it might not happen very soon, but long-term all bets are off – we don’t know. And I think that’s a very mature approach to disruption. I think that is typically what ends up happening and it will certainly be interesting to see what happens in this space.

I guess so much of it comes down to just maybe phase of life, what people need the meds for. I’m in my mid-30s  and I have to get medication every month that essentially keeps me alive, which is not great, but that’s what happens when you work too hard and you get a bit of burnout and you end up with something wrong with you that’s not so fantastic. But again, it’s – I know what it is, it happens every month. I get it, it’s done, whatever. There’s not really an advisory piece to it. Whereas I guess for people later in life, do you find that the customers who value the personal service, are they generally older and they’re looking for more advice around the meds they’re taking? It’s not really that they’re coming to buy basic flu medication and then they’re desperate for personal service? Or do you find that it’s not as cut-and-dry as that based on demographics?

Hugh Cunningham: Ghost, I don’t think it’s completely cut-and-dried. I think people really enjoy the personal service and I think what makes you stand out as a privately owned pharmacy, is making sure that people get good advice on their medication, when to take it, what could it interact with, how should I be taking it? We do have a fair proportion of our customers as slightly older people, but I think that that’s a factor that aged people generally are more sick than young people.  So, people in their 30s generally don’t have very strong medical aids. And elder people, they’re on the better options generally, unless they can’t afford them.

The Finance Ghost: Yeah, absolutely. That actually brings me to something I wanted to ask you, which is around medical aids and working capital and the strain this potentially puts on pharmacies. Because I’ve always wondered what happens in the background. Someone gets their meds, it goes through medical aid – I have a sneaky suspicion that the medical aids don’t do an EFT that afternoon into your bank account. So what does that look like in the back-end in terms of working capital strain on a business like yours? It’s obviously something all retailers have to think about, but in your case I suspect you end up with a situation where your customers effectively owe you, they just don’t realise they do because you’re waiting for their medical aid to settle!

Hugh Cunningham: That’s a very interesting question, Ghost. I think that at least there is a rule from the Council of Medical Schemes, that medical schemes have to pay us within 30 days.  They don’t always do it but most of the time we get our money back within 30 days.

Unfortunately, the entire medical industry seems to be run more by the medical schemes than by any other player in the market. There’s constantly a look at retail pharmacy in terms of, yeah, but that’s where most of the money goes – when in fact only about 13% if I remember the facts correctly goes to retail pharmacy. The rest goes to hospital specialists and doctors. So really, retail pharmacy isn’t a huge proportion of the medical budget.

There is of course the substitution of generic medications for originals that we’re compelled to offer to patients. The biggest problem there is that the medical aids are dictating pricing simply across the board.  So if a Discovery or a large medical scheme says, we’ll pay you the SEP (SEP being Single Exit Price) – so we don’t make a markup specifically on medicine.  Up until a value of about R150 we make 36%. Over and above that, we make a maximum depending on the medical aid scheme of R59 per item or R29 if it’s a lower medical scheme. So the margins are really not there in medication anymore because the medical aids dictate and because one large medical aid says this, then all the medical aids say that. We’re entitled to charge a significantly higher professional fee but in reality that really doesn’t happen in the cities because we need to compete with the Dis-Chems and the Clicks and the corporate pharmacies.

The Finance Ghost: Yeah, and hence the importance of that front shop model because it’s not just the additional sales and the additional margins but it’s also from a working capital perspective, someone pays you as they leave the shop, you’re not waiting 30 days to get paid. So these are all the joys of running a retailer. At the end of the day, it’s a tough business and I think retail pharmacy is a particularly tough business. But I guess that’s all part of why you went the franchise route at the end of the day. You mentioned it at the beginning, stuff like brand recognition, it just feels like it’s hard and if you go the franchise route, it takes away some of the difficulties, just one or two of them. The fact that someone says, oh, I’ve seen that brand before is now a trust thing, they at least say, well, I feel like I can trust this pharmacy. So I guess that’s part of it, right? It’s just de-risking the overall business. If you go the franchise route, you’re just taking some of the risk away, right?

Hugh Cunningham: Ghost, Absolutely. I can count on my colleagues within The Local Choice brand, no matter where they are, whether it be in Cape Town or Pofadder or Upington or wherever, to at least be giving a similar kind of level of service to what we give. And I think that’s what makes The Local Choice brand stand out is although we’re privately owned, I think because we’re privately owned, we all try and really give the kind of service that will keep people returning with an expectation of that level of service.

The Finance Ghost: Yep, that makes a lot of sense.  I think as we bring this discussion to a close – and I’ve really enjoyed actually understanding a little bit more about this segment of retail, I luckily do understand a little bit about it, I had some background knowledge coming in – but I remember when I first learned the things I learned about how independent pharmacies are managing to survive and how pharmacy licence access is a big part of that. Or actually, let’s touch on that quickly and then I’ll ask you the last question because we haven’t spoken about that. How hard is it to get a new pharmacy licence? Because my understanding is that a big part of how independents are surviving, is that there is actually a practical limit on how many pharmacy licences are given out to avoid a scenario where there’s destructive competition and pharmacies are failing because there are too many of them for the level of demand.

Hugh Cunningham: Ghost, I think that, yeah, the biggest problem is justifying how many feet or how many people would access that pharmacy in an area and trying to get a feel for that.  I think there’s a major problem in terms of shopping centres having two or even three corporate pharmacies within the shopping centre. That seems to be okay for corporates, but not so okay for private pharmacy.

The process of getting a licence is lengthy. It can take a year or more to actually get a licence approved and you have to submit plans.  They have to be architect-drawn plans to scale of the internals of the pharmacy. If you change the internals of the pharmacy, you have to re-apply, not for a licence, but you have to get the plans approved by Pharmacy Council. So any changes internally, you need to do a fair amount of work.

Fortunately, The Local Choice brand helps us in terms of those plans and submitting them to the Pharmacy Council. And they have a little bit of clout in terms of trying to get things ushered through a little bit quicker than normally would happen.

The Finance Ghost: Yeah, that makes sense. So now I can ask you the last question that I wanted to ask you, now that we’ve ticked that box off, which is just around your – and I ask all of my guests this question, I know it’s very cliche, but something interesting always comes out of it – which is just around your biggest mistake and thus learning along the way of this business.  What would you say that would be?

Hugh Cunningham: Yeah, difficult one. I think the big learning is to make sure that your staff are always happy and that they’re always abiding by the rules of pharmacy. And we have legislation probably second only to the finance industry in terms of what you can and can’t do. You’ve got to keep very strict control of what your staff is doing. You need to know what they’re doing so that they don’t make any mistakes.

And of course, mistakes are always made. It doesn’t matter what business you’re in. The only people who don’t make mistakes are those who don’t do any work! But you do need to try and pick those up as quickly as possible.  And if you do pick them up, address them with the patient as quickly as you can.

The Finance Ghost: Hugh, thanks. I think you’ve given us a lot of really good insights into the business, what it’s like to run essentially community specialist retail, which is a whole animal unto itself, really, and a very fascinating way to actually get up in the morning and run a business.  As a franchise as well, interesting realities of that and just tapping into that brand recognition and support and a network at the end of the day.

So thank you very much for your time on this podcast and hopefully listeners, next time they go to the pharmacy will maybe see their favourite pharmacy through new eyes. Look around you at what’s in the front shop. Think about how the business makes money. The fact that the dispensary is all the way at the back is not a mistake. It’s so that you walk past everything, I think, on your route to the dispensary and back again to the till so that you can hopefully shop in the front shop.

Because it’s a tough business – it’s actually quite a tough business and it’s an absolute necessity that we have pharmacies, so put something in your basket from the front shop of an independent pharmacy, go buy your gifts there, go buy what you can there, because it definitely helps to keep those businesses in your community.

Hugh Cunningham: Ghost, thank you very much for the opportunity. I would like to, just before the end, give a shout out to Capitec Bank, Capitec Business Bank, where we bank. We approached our previous bank for capital to grow. We had had an overdraft since 2009 and we asked for a little bit of an increase in the overdraft to grow and that was about two, three years ago. And they were so slow coming forward.

Capitec Business Bank came to the rescue. We’ve changed our account to Capitec Business Bank and we’ve been able to grow significantly since their contribution. So I’d like to make a shout out to Capitec Bank as well. The personal service there has been incredible. Thanks to you for this opportunity just to share a little bit of the background of retail pharmacy. I appreciate this time with you and you’ve asked some penetrating and interesting questions. Thank you so much.

The Finance Ghost: Thank you, Hugh. And it’s always nice to hear genuinely the Capitec clients just – it comes through so naturally, that you’re very happy with the service. I never have to say: “Oh, please tell us now all the lovely things about Capitec” – it’s actually a very sincere “Hey, these guys have really helped my business”. It came through 100% on the previous podcasts as well and it’s just lovely to see. I think it says a lot about the product that they are offering out there as well.

So well done, Capitec. Well done Hugh, good luck to you with your business journey.

Hugh Cunningham: Thank you so much. Appreciate that.

Real stories and real people. Yours could be next plugged in with Capitec. Capitec is an authorised financial services provider, FSP4 669.