As an entrepreneur, you are in business for yourself, not by yourself. It is important to talk to industry professionals and seek wisdom from those who have already started their own pharmacy.
Adequate research and a detailed plan are necessary to start your own business. Unfortunately, there is no crystal ball to tell you whether your investment will pay off. It is your responsibility to ensure that your pharmacy will be profitable and beneficial to your community.
In order to serve your customers, you have to know who they are and where to find them. Conducting market research uncovers several consumer insights including demographics, psychographics, traffic patterns, and more. When looking at potential neighborhoods, consider the healthcare needs of the residents. Are you servicing an older community?
Or perhaps one with an abundance of new families and children? Differentiate your store by specializing in your community’s needs, whether it be geriatrics, pediatrics, pregnancy, sports health, active lifestyle, etc.Remember, big chains already sell to everyone. How can you serve your community?
Market research will help you determine your best location options.
Revenues, expenses, and free cash flow projections are the first glimpse into your pharmacy’s financial health. If you do not have a solid background in accounting, we highly recommend consulting an accountant for these projections.
Keep in mind that it may take several months after opening your doors to begin generating profit. Liquidity is key in your first year of business to ensure you do not run into any cash flow problems.
Your business plan should include enough detail for readers to capture the entire scope of your business, but concise enough to read in one sitting. Refer to the U.S. Small Business Administration for more guidance in writing your business plan.
Choosing the type of business structure you want for your pharmacy depends on the amount of legal liability you desire, tax liability, and how much you are willing to spend on ongoing costs of formation and administration, according to Entrepreneur. There are four common types of companies you can classify your pharmacy as:
Legal requirements will vary by state and by business structure, but the following are general guidelines to ensure smooth operations. For more information, visit Harbor Compliance Pharmacy Licensing or search requirements from your state’s Board of Pharmacy.
Before you begin operations, contact your federal, state, and local taxing authorities to set up the following accounts:
Insurance protects your pharmacy from liability in the event of a lawsuit. It is also necessary in order to engage in most contracts and practice agreements. Contact your local insurance broker to create a policy that is best for your pharmacy.
Mark BonDurant of Independent Rx Consulting has coached dozens of independent pharmacies through this process, and he notes a few realities of the financial aspect of ownership:
Once you have made your decision, it is now time to make the financial transaction and officially call the store your own. Make sure that you have all of the proper licenses and insurance required for owning or leasing property.
Designing the inside of your store is almost as important as selecting the physical location. Depending on the location you choose, you may have a lot of input or you may have no freedom to make design changes.
Starting your own pharmacy is just like buying your first home – once you purchase it, you need to get everything that goes inside. This can seem overwhelming, but connecting with the right partners and resources will make your life easier and provide you with the best options for your pharmacy.
Sometimes it may be necessary for a pharmacy to rely on multiple wholesalers. This could be due to price changes or availability of items. With PioneerRx, the software is equipped to automatically compare providers and manage inventory orders based on the current information available.
Every small business budget, no matter how limited, needs a line for marketing. Loyal customers are formed through trust, and how can customers trust you if they don’t know you exist? Your marketing effort will slowly build over time, but there are a few key areas to start thinking about from the start:
When you are trying to find out more about a business, where do you usually start? Most people immediately look online to find a website with more information. In today’s market, having a website is crucial for becoming a key contender in the competition. Again, this can start off very simple and progressively expand alongside your growing business. You may also consider utilizing social media platforms such as Facebook, Twitter, and Instagram. Getting the word out there and creating a brand image will establish your pharmacy’s credibility and outreach potential. Make sure that your branding is easily recognizable and cohesive across all platforms.
As an independent pharmacy, you already have the potential for a niche value that can set you apart from the typical chain pharmacies. However, this value is worthless if people do not know about it. Many patients are simply unaware of the unique services that a community pharmacy can offer them. From the start, you need to assess your local competition and differentiate your pharmacy’s services from the others in your area. Then make those services known- don’t be afraid to be proud of your work! Make it a point to also strengthen your personal touch. Build meaningful relationships with your customers that will foster loyalty and allow you to better serve them.
Paid advertising is important, but community engagement is key to starting an independent pharmacy. Talk to other independent businesses in your area and build relationships with healthcare providers and professionals. Forming a strong network will tie you into what is going on in your community and give insights on how to best operate your business. Find opportunities to participate in local events and get to know potential customers. You should also consider getting involved in local government boards or joining pharmacy organizations.
Once you have proved your value to potential customers, incentives are a good way to transform them into long-term customers. Offering discounts, having a referral rewards program, and providing free routine health screenings are all ways your pharmacy can show customers you care while still growing your business. Referrals will expand your customer reach and boost credibility, and free screenings can guide participants to fill any resulting prescriptions at your store. This is your chance to impress them! Every store’s marketing strategy will be unique – so use these tips as a guideline to creating the best plan for your pharmacy.
Opening your pharmacy’s doors for business is an exciting day for you and your staff. Make it an exciting day for your new customers, as well!Host fun events for your entire community to see what your new business is all about.
Do anything that you can to attract your target market and show your community that you have arrived.
A first impression is a lasting impression, and this is your pharmacy’s first chance to spark lasting relationships within your community.
In its beginning years, LinkedIn used to be known as just a platform for finding a job. As it has grown, however, it has evolved into much more than...
For most people, it’s a quick Google search to look at reviews and store hours. This scenario applies to any local business – hair salons, grocery...
There is a reason why Research and Planning is the longest step in the process. It is so incredibly important because it is the foundation of successfully setting up your business. You won’t get to where you want to be if you don’t know where you’re going.
You will never be able to sell to everyone like the big chains do, so you need a different approach. You need to fully understand and meet the needs of your niche to grow your customer base.
Liquidity is essential when opening a pharmacy because a financial routine has yet to be established. With high start-up costs and delayed profits, having cash in the bank allows you to pay your bills and operate comfortably. There is nothing you want less than your pharmacy to fail in its infancy because you did not budget properly (again, this is why planning is so important!).
Planning! Can we say it enough? Give yourself enough time to get everything ready far in advance. Inevitably, there will be a process that takes longer than expected, an office closed for holidays, or some other unforeseen event that pushes your to-do list back. Plan for these occurrences from the start so that you aren’t scrambling or delaying your open date.
Customers cannot fall in love with your pharmacy if they do not know who you are, where you are, and how you can help them. Make it easy for them.
A good business owner acknowledges that he/she does not know everything. There is an abundance of consultants and mentors with a wealth of knowledge. Take advantage of your resources and ask for help when you need it.