To start pharmacy business from scratch is the best way. Starting a profitable pharmacy from scratch is typically faster and less expensive as compared to buying an existing pharmacy.
The world is very competitive in terms of business; therefore, starting a profitable business from scratch can be very difficult and challenging.
It needs a variety of criteria to be weighted.
Pharmacy business is one of the best businesses to run. However, it requires determination and patience.
This article provides you with the best tips on how to start pharmacy business from scratch and make a huge profit in this competitive market.
However, before introducing the tips, there are a few things we need to look into and that is the cost of starting pharmacy business and necessary license and permit requirements.
How many funds to start pharmacy
This is a very important aspect to consider.
The cost of starting a profitable pharmacy business varies based on location, product cost, and staffing cost.
However, you may need approximately a total of $300-$800 amount to start pharmacy.
Furthermore, you need a financial advisor to help you budget and to make pharmacy business plan.
License and permit required to start pharmacy business
You need to have the following license and permits to start pharmacy business from scratch.
- Employer Identification Number (EIN)
- Pharmacy license
- Association of Boards of Pharmacy/National Council for Prescription Drug Programs (NABP/NCPDP) number
- Drug Enforcement Agency (DEA) number
- National Provider Identifier (NPI) number
However, these legal requirements may depend in the country you are living.
9 Steps to start your own pharmacy business from scratch
The first step of any project is doing thorough research. Therefore, do thorough research before starting a pharmacy business from scratch.
Doing serious assessment on the market place, consultations from experts and from the surrounding community is essential.
To start a profitable pharmacy you need to collect data.
Take a trip to the field it might be town or city and talk to current pharmacy owners and community around that place.
After collecting various relevant data, you now need to analyze the data you collected.
For a profitable pharmacy business, you need to identify the strength and the weakness of the project. The analysis will help you carry out this activity.
You should also be aware of future threats and opportunities that might arise.
Weighing various criteria to determine the suitable location, the expert, fund, mentors, legal counsel, and even professional resources like a financial advisor is key factor.
It will help you to plan and know how much you need to spend to run the pharmacy business.
Find a suitable location
Location is the most important aspect of business.
It determines the performance of your pharmacy business. When not chosen appropriately, it can lead to low profit and closure of the pharmacy business.
Therefore, before starting a pharmacy business consider the following factors to identify a suitable location for a profitable pharmacy business.
How to determine a suitable location for pharmacy
Factors to consider as you start pharmacy business from scratch in a given region is crucial, therefore, determine the following factors:
Check the market competition around your location
Keenly check on the number of pharmacies around where you what to locate your pharmacy.
Identify their strength and weakness. How they operate, where they get most of their customers. Know how they interact with their customers and is it good or bad?
Now turn their weakness to profit. This will enable you to create a better profitable pharmacy business. Failure to consider market factors can lead to a big loss to your business.
Identify the Traffic or threshold
Determine the demographic location of your potential customers before start pharmacy business.
How many customers can visit your pharmacy? Check where they frequently visit in case they get sick. Is there a community health center, public hospitals, or private hospital?
The population matters a lot when you what to locate the pharmacy business. Consider distance coverage.
Note: do not choose blindly without considering the demographic population of the area.
What are the potential medical resources from your location? Identify where you will get support in case there is an emergency.
For instance, can you get a doctor near your location or can you get drugs on time?
Also, consider the business activity that is going around your location that may provide consistent customers before start pharmacy business.
Is there a factory, company, institution, commercial business around the site? For instance, a medical clinic near your pharmacy can give you ready access to customers as they leave a doctor’s office.
Another key area to consider is how to reach your pharmacy by customers, and any other. The accessibility to your pharmacy location is very crucial.
Consider factors such as parking space. Are you located near tarmac road? Do you have enough rooms? How is the entrance, and exit?
Note: to get profit, locate your pharmacy near very accessible roads where people can easily reach you.
Size for future expansion
Consider the space where you what to locate your pharmacy. Can it allow expansion or can it grow in that location in the future.
Getting enough space can enable you to expand your pharmacy.
Come with a business plan
You need to draft a business plan that will enable you to run the business effectively and efficiently.
It will also enable you to tackle the potential threat and opportunities together with the necessary actions to undertake.
Note that a business plan will secure funding from investors or other financial institutions.
By planning, you will know the cost of running the entire pharmacy business.
It will tackle the cost of construction or rental, the amount needed to purchase the products, and any other professional resources like hiring appropriate licensed staff.
Seek advice from Attorney or lawyer, financial advisors and other partners while making business plan in order to make a complete realistic pharmacy business plan.
The main reasons why you need a lawyer is to guide you through the legal rights and to support you in any future challenges regarding regulations. This is very important as you start pharmacy business.
Identify Your product base
After coming up with a plan, now you need to know pharmaceutical companies that will source you with the products.
You also need to design how you will stock your product.
What is the viewpoint of the pharmacy to the customer? The product and services you offer should be of high quality to attract more customers.
The cartographic view should be aesthetically pleasing to the eye of customers.
Note that pharmaceutical companies are very important when starting pharmacy from scratch.
Therefore, consider quantities, needs, and how fast you can access a product that you don’t regularly stock.
Now with your business plan and everything set to go. It is the right time you grab your finance for the pharmacy.
Choose the best financial option that will not give you a headache.
This is where it is important to have a professional financial advisor when making your business plan. He will help you on how to get a loan from banks, retailers groups and any other financial institutions that will be enough to run the whole process.
Consider including a clear statement on your business plan to help you get loans. For example, make sure you have statements of:
- The build-out capital
- opening inventory finance
- working capital
Remember what can make your pharmacy business to fail is cash flow. Therefore, consider the statements have mentioned above.
Visit the attorney and get the pharmacy license, a DEA number, a National Association of Boards of Pharmacy number, and a number for the NPI.
These documents are very important as they give you legal rights to own a pharmacy and to protect your customers. However, let this not scare you.
Run a test for the New pharmacy
With everything in place, before you officially open the pharmacy, do the following test.
- Check through scenarios of patients by having a test run with your staffs.
- Ask feedback from friends, and mentors on different inventory set-ups.
- Announce your business to the community.
- You can come up with an event that targets your customer. For instance, offering pampers to babies.
- Collaborate with the community and other partners for effective operation.
Launch your pharmacy
On the launching day, ensure you give some small presents if possible to win the community and get more customers.
Remember your first impression is key to a successful and profitable business. The customers will spread the good service you deliver and will share to the rest.