Deciding to open any kind of business requires more effort than you’ve ever imagined. Aside from the initial costs, the risks it brings forth, and all the necessary tasks and requirements, it could feel overwhelming but exciting at the same time. If you’re planning to open your own pharmacy business soon, it’s only best that you start preparing early and be familiar with the necessary steps to take.
Because medicines are one of the human essentials, it’s enough reason to say that a pharmacy business has a profitable potential. After all, you could see lots of small to large pharmacy chain stores and sole proprietor businesses successfully operating over the years. Joining this industry requires a fierce and determined mindset.
With the following tips and pointers, you can launch your pharmacy business soon. Read on to learn more.
1. Be Familiar With The Pharmaceutical Industry
Every country’s pharmaceutical industry operates differently than others, which you need to research beforehand. You need to equip yourself with the right information about the medical and pharmaceutical industry details in your country, city, and locality as this will determine the steps you need to undertake during the planning process.
Furthermore, you also need to learn more about the products that you will be selling. Some medicines are developed, produced, and marketed by global pharmaceutical companies. Some are also made by local companies. You need to familiarize yourself with the different medicine brands, official distributors, and manufacturers. Gather some information through some additional reading about drug products’ shelf life so you can decide on the types of products you will be selling.
Just like in any type of business, you need to have a better understanding of what medicines will be released into the market so you can stay ahead of the game. Your competitors are always looking for advanced medicines to help treat and attract customers. You should do the same.
Research and development play a vital role in the pharmaceutical sector. If feasible, you can check which companies are pioneering any research on a specific ailment. By knowing all this information, you can better serve your clients’ needs.
2. Decide To Franchise Or Open Your Own Business Brand
It can be challenging to start a pharmacy from scratch, but it is not impossible. But another initial step to make is to determine whether to buy a franchise or create your own business brand.
If you decide to build your brand, you will have to establish new relationships with vendors, set up accounts with drug wholesalers, design and build your own retail spaces. If you’re not ready for those tasks and challenges that come with them, it could be ideal to go for a franchise instead. To guide you better in this decision-making, learn the pros and cons of buying a franchise.
One benefit of franchising a pharmacy is that the franchisor can provide all the skeleton foundations that make up your pharmacy business. Your location, processes, systems, tools, and vendors will all be supplied according to an agreement. You can also operate independently under a well-known brand. But they could come with a heftier initial investment, so consider this when deciding which business model to choose.
On the flip side, starting your own brand and company gives you freedom in terms of decision-making in all facets of the business.
3. Create A Business Plan
After you have done your research and decided whether to go for a franchise or set up your own company, you will need to come up with a business plan. For a franchise, you may not need to start a business plan from scratch. On the other hand, there are business plan templates available online that you can use for independent business owners.
Needless to say, entrepreneurs need a clear plan to succeed. Your business will be mapped out, and some unknowns will be revealed. Here are some of the essential elements in your plan:
Anticipate The Cost
A storefront will need to be leased or purchased, staff will need to be hired, software and technology for operations, and you will need to invest in your initial product order. Calculate all estimated costs for each variable, and you’ll come up with your initial investment.
Come Up With A Marketing Strategy
There are different concepts of marketing as well as strategies that are best suited for pharmacy businesses. Before you can come up with these, you must start by knowing who your competition is and devise a marketing mix that is different from them. You should establish specific marketing strategies to get your brand advertised efficiently to the audience you want to serve in the market.
Know Who To Target
Compared to other types of businesses, you may end up with various target customers. Every demographic may be represented in your neighborhood.
To make it easier, you can determine factors like age, family size, budget, medical needs, and lifestyle to narrow it down. Although determining target customers might be time-consuming and laborious, this will be beneficial in the long run as it will streamline your business operations and define the product lines you will need to carry in your store.
Devise A Pricing Strategy
Pricing prescriptions leaves little room for negotiation, but most of these costs are determined by insurance and pharmaceutical companies. Over-the-counter and generic medicines cost a few dollars, but rare drugs for chronic illnesses can cost thousands. For your business to remain competitive, you must constantly monitor market and industry pricing.
Aside from this, you will also need to take into consideration the purchasing power of your target customers to ensure the viability of your business in the long term.
4. Decide On Your Location
Deciding on the location goes hand-in-hand with knowing your target customers. You will be better able to determine the services and medications most needed by your patients when you know more about their demographics. It would help to understand the average age of the people living in your neighborhood or city. Research about the ailments and health conditions they have as well as their average income. You may also check with the local health unit and inquire if there are any prevalent sickness or health issues in the population of the area that you’re putting up your pharmacy in.
In choosing a location, consider its accessibility and safety. Do note that rent will also depend on the location of your chosen retail space. So, you have to be careful in assessing and choosing one.
5. Take Care Of Your Licenses To Operate
Any new business indeed needs paperwork. Because pharmacies are heavily regulated, you may need to apply for more permits and licenses compared to other types of business.
Establish your business entity by registering with your state. You will need to acquire your own employer identification number and check all the state and local pharmacy operating licenses and requirements. They do vary depending on your store’s location. So, ensure that you handle all the necessary documents so your pharmacy can run smoothly. After that, also take care of your business bank accounts and financial registrations.
6. Get Business Insurance
Similar to licenses and permits, insurance is also necessary for your business to function legally and safely. Your business’s financial health is protected by business insurance. Businesses with varying risks need different types of insurance policies.
You may need General Liability Insurance if you aren’t sure what risks your business may face. As small businesses need this coverage the most, it’s an excellent place to start for your company.
You can speak with a mentor or financial advisor regarding what insurance policy would best suit your business. Workers’ Compensation Insurance is another essential insurance policy for businesses. Most states require employers to carry workers’ compensation insurance if they have employees.
You can enjoy an exciting, rewarding experience when you own and operate your own pharmacy. While getting up and running takes a lot of work, plenty of resources are available to you. And the things you need to know, like the ones mentioned in this article, are some of the most necessary aspects you need to launch your pharmacy business successfully.