If you’re looking for a medical-focused retail store, starting a pharmacy might be a good idea for you. Pharmacies sell medicines, so they’re a necessity for everyone.
Before starting any kind of Pharmacy, you need to do thorough research and plan properly.
With the increasing demand for healthcare services, there is an increase in the number of people who visit pharmacists for various reasons. Pharmacists provide medication advice and treatment plans to patients.
They also help them manage their health conditions effectively. In order to cater to the needs of customers, pharmacists offer a wide range of products and services including prescription drugs, OTC medications, and vitamins.
Is Pharmacy Business Profitable?
Pharmacies are certainly profitable. You can even offer them at a discount and still make a good profit. And, they’re expected to grow in the future.
Spending on medicine has also been growing at an increasing rate. According to a recent study conducted by Statista, the total spending on medications has risen by nearly $200 billion between 2012 and 2019.
These factors indicate the high profitability of the business of running a drugstore.
Can Pharmacy Business be started from Scratch?
Yes, of course. You can start your pharmacy business from a scratch. And with proper planning and the right investments as well as management, you are sure to make a good profit. There are different stages one after another.
Starting from scratch means finding locations, funding, getting licenses, and opening pharmacies. It’s an extensive and lengthy process, but you can always begin again.
Pharmacy Business Plan Checklist for Beginners
Below are 14 easy ways to start a successful pharmacy shop business.
1. Find a Good Location
Location plays an important role in the successful operation of your pharmacy business. It is essential to collect different types of data and facts about the locations where you plan to open pharmacies. For instance, you need to know if there are any zoning restrictions for opening a pharmacy in your city.
- If there are pharmacies nearby, then check out their prices; if not, then don’t worry too much about it.
- Make sure there are nearby clinics or hospitals so that people can easily access them.
- Does the place offer good customer service
- The profile and affordability
These are some of the things you need to consider when planning for opening your pharmacy. You can also look into opening your pharmacy in a shopping mall, where there are a lot of people visiting each day.
2. Make a Pharmacy Business Plan
To start up a successful pharmacy, you need to create a detailed plan. Consult an expert who has experience in running a pharmacy, such as a pharmacist, a finance expert, a legal expert, and if possible, someone who owns a pharmacy. They will help you develop a good plan.
Create an extensive list of the things that you need to include in your pharmacy startup, including:
- Investment Required
- Target Customers
- Pricing Plan
- Source of Funds
- Stocks & Inventory
- Fixed and Variable Costs
- Marketing and Publicity Plans
The harder you work on writing down everything you know about your company, the better organized and structured your company will become.
3. Name your Business
After the Business Plan (which is almost done), it’s important to decide upon a good brand identity. Brainstorm about the different options, get opinions from people around you, and then finally come up with a unique and meaningful brand.
Remember, the pharmacy business has a specific mission and vision. So, make sure that the chosen brand reflects these values. Also, don’t spend too much on choosing the brand.
To learn more about naming your business, check out these guidelines.
Once you’ve got the name, you’ll need to find a suitable host to place your site on. You can either go with an existing hosting service provider or set up your own server. Either way, make sure you choose one that offers enough space and bandwidth to handle your pharmacy’s needs.
Start your business by launching a pharmacy site along with an eCommerce platform. Enable online ordering, home delivery, and secure payments.
Make sure that you get the trademark for your pharmacy’s name. Also, make sure that you create a nice-looking brand identity for your business.
4. Legalize your Pharmacy Shop
Next, give legal status to the pharmacy business. Each state has its own type of business structure depending upon requirements.
If you’re an American citizen, one of the most common types of businesses is limited liability companies (LLCs). They protect your personal assets from any legal claims by your company. Additionally, they allow you to pay less taxes than sole proprietorships.
You will also need an employer identification number (EIN) for your business.
5. Get the Necessary License and Permits
This is another step in the process of legalizing marijuana. You will need several state and federal licensing requirements before you can open up shop.
- Drug Enforcement Agency Number
- Pharmacy License
- NADP/NCPDP Number
You must obtain these licenses before starting your pharmacy business. If you don’t, you could face serious penalties and even lose your license.
6. Get Business Insurance
To ensure that your pharmacy is protected against natural disasters or accidents, you must insure it.
You must obtain Workers’ Compensation insurance for your employees. Furthermore, you might want to consider obtaining commercial property insurance, product liability insurance, and professional liability insurance, too.
You can get legal advice from an expert lawyer.
7. Open a Business Bank Account
You need to open an account at a bank in the business’ own name. You may want to get a business credit card to use for purchases.
If you hire an accountant who knows his job well, he/she will be able to maintain the books of account regularly and meticulously. You may also need to use accounting tools to help keep track of financial transactions.
8. How Much Money is Needed to Start your Pharmacy Business
The pharmacy industry is one of the highest investment industries. However, the return on investment (ROI) is also extremely high. Starting a pharmacy costs between $2-$3 million dollars.
9. How Will You Get the Fund
Since the Pharmacy business requires high investment, you might not have the whole amount. You can try for an investor. With a well-written project report with good projects and a high return on investment, you can get an investor.
Banks or other financial institutions will give you 75-80 percent of the money needed. You have to arrange for the remaining 20-25%.
10. What are the Expenses Heads to Open a Pharmacy Shop
There are several types of expenses. These include rental or leasing of the shop, inventory of medicines and supplies, employee paychecks, taxes, licensing fees, etc.
Remember that the pharmacy makes money after some time, so you need to plan for that. Make sure your budget is big enough to sustain through the first few months when there won’t be any profits.
11. Your Prospective Customers
Anybody who requires medicine is your client. You may also provide medicine to nearby healthcare facilities or hospitals. Additionally, maintain an inventory of medications so that you can deliver them to clients at their homes.
12. How Much Profit can you Make in Pharmacy Business?
As discussed, your pharmacy business is quite profitable if it has a good location, and it can generate up to 30 percent of generic medicine sales.
13. What Kinds of Medicines you should Keep
Stocking essential medicine, allied products, and retail products is the most important thing when starting up a pharmacist business. Apart from prescription medicines and herbal/natural medicines, you can stock some retail products like cosmetics, baby supplies, and foods.
14. How to Earn More Profit
To achieve success, you must plan well and hire a competent team. Here are some of the things that can help you increase your sales:
- Build Your Brand
Before your Pharmacy opens for business, advertise its name by distributing flyers and leaflets. This will help get the word out about your new pharmacy.
- Organize a Grand Opening
Open your pharmacy with a great celebration. If possible, invite a local celebrity to open your store. They may be a celebrity, renowned physicians, or social workers. Invite important people from the area for the ceremony.
- Create an Online Presence
Use your website for promotion. Launch the website just before the opening of the shop. Make the website useful by offering medicines and giving special discounts on online payments.
- Social Media
Create pages in the names of your pharmacy business on different social networking services like Instagram, Facebook, Twitter, etc. Share the links to your website there. Do not forget to update the pages frequently. This will help spread the word about your pharmacy among the users.
Try advertising in newspapers, TV, and radio, and use colorful billboards and hoardings at prominent locations in your neighborhood.
- Make Cold Calls
If you want to get ahead in business, visit the nearby pharmacies, health care providers, medical centers, and assisted-living facilities, and tell them about your pharmacy. You may also want to make personal visits to different homes in the surrounding neighborhoods. Your sole purpose is to let people know about your pharmacy.
- Maintain Good Customer Relations
This is extremely important – you must keep a good client base if you wish to continue trading successfully. In addition, good client relationships will help you attract new customers, who may refer friends and family members to your business. Your pharmacy should also offer special offers to existing clients, so they can encourage others to visit your shop.
Be nice to the doctors of the community because they’re usually helpful.
Here are some tips to help you get started in your new career. With proper planning and hard work, you’re sure to succeed!
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