There’s a lot of work involved when starting a pharmacy business. However, it might pay off in the long run as the projected growth of the pharmacy industry is set to reach $861.67 billion by 2028. In addition, pharmacists have to work hard to stand out from the crowd due to the competitive market, if they want their business to succeed.
Although there are a lot of components to creating a good pharmacy business, you should always start with a solid business plan. So, if you are looking for a guide that will ensure that you will start your business correctly, read on as we explore everything you need to do from scratch.
Create your business plan
For entrepreneurs to succeed, a clear and concise business plan is a must. Although you might think that a business plan won’t be necessary as you have everything mapped out in your head, you will be grateful in the long run if you take care of it now.
A pharmacy business plan can help you obtain funds more easily and act as a manual for the growth of your business. Furthermore, a business plan will help you to map out your business details and uncover some hidden opportunities.
Business startup costs
It’s no secret that starting any business can be expensive. You might need around $2 million for a successful first year, as well as $10 million for your first 5 years of business operation.
Furthermore, every business needs staff in order to operate effectively. You will have to obtain the right insurance for your employees and offer them a proper salary. In addition to that, it’s worth mentioning that you should only look for employees with prior experience so that your business start-up phase is a success.
Who is the target market of a pharmacy?
As a pharmacy owner, you commit to a line of work that strives to help every member of the community. Your target customers will range and you will have to serve different age groups with different medications and products. You can ask help for a pharmaceutical out-licensing to identify your target market efficiently.
Although some prescriptions might have a greater profit margin, you should consider the life and health of your customers paramount.
Stock up the inventory
Speaking of customers, you will need to have a stacked inventory in order to fill prescriptions as soon as they arrive. Wholesalers that supply large quantities of drugs to pharmacies are usually more feasible, and you are more likely to land a better deal with them.
However, many independent pharmacies don’t have the inventory capacity and funds to order from wholesalers until they reach a certain level of success.
Obtain the right licenses
Every new business requires paperwork. To register your pharmacy as a business entity in your state you will need to request a Federal Employer ID Number (FEIN ) and open a business bank account.
Once you have completed the basics of your business registration, make sure to check for any state or federal pharmacy operating license requirements and permits. Of course, the permits will vary depending on where you live.
These are the most common requirements:
- State pharmacy permit or license;
- Registration for regulated substances;
- National Council for Prescription Drug Programs number;
- Drug Enforcement Agency (DEA) number;
- National Provider Identifier (NPI) number.
Select a location
The location you choose is important for the future of your business. So, make sure you do your research. It might not be easy to find a suitable location for your pharmacy but you can employ different tactics to achieve your goals. You can see whether other pharmacies are operating in the area that’s on your shortlist, and see whether they are doing well or they are underperforming.
Another indicator of whether a certain area is the right one for you is to see if a pharmacy business recently closed down and pinpoint the cause for its failure. You can learn a lot from successful businesses, but you can also learn from businesses that failed as you will have a picture of what not to do as a business owner.
In addition, utilities, internet connectivity, and clean drinking water are all important factors in deciding where your pharmacy will be located.
Opening a business doesn’t have to be difficult, especially when you have the right tactics outlined for you. If you’re looking for a rewarding venture that offers you independence as well as the chance to build something of your own, then opening a pharmacy is the right option for you.
If you follow the steps we outlined in this article, you will ensure that your pharmacy has a successful start-up and a bright future.