Opening a Successful New Pharmacy Business – What You Need To Know

New Pharmacy ConsultationStarting up and opening a new pharmacy business is really not that much different from starting up any other type of retail operation or business enterprise. Aside from the regulations and laws inherently involved in a new pharmacy startup being planned, built and opened, the basic business startup principles still all apply. Having opened up hundreds of new pharmacies here at Healthcare Consultants, let’s discuss some of the general retail business guidelines that any entrepreneur MUST consider to be the very basics for your investment to become both a successful and profitable endeavor.

On average the owner of an independent retail community pharmacy makes an estimated two-hundred and fifty thousand dollars annually (~ $247,000). Keeping in mind that the independent community pharmacies still hold roughly a thirty percent (30%) share of the overall retail prescription market, one can easily see why so many new drugstores are constantly being opened up. Yet the entrepreneur must also take into consideration the most recent reports from the National Community Pharmacists Association (NCPA). The NCPA reported that there’s actually been approximately a ten percent (10%) decline since 2001 in the total number of independent pharmacies that are operating in the United States. According to the NCPA statistics released, there are currently an estimated 22,000 independent community pharmacies versus the 25,000 retail independents operating nationally in 2001. The point is, that while starting up a new pharmacy business can be very rewarding financially, like any other retail business it must be properly planned and executed correctly to wind up as a profitable business investment and venture in the end.

Start With a Written Business Plan

Any successful entrepreneur will tell you that a written business plan is the key to success when starting up a new business of any kind. Basically, your business plan should contain your business goals, the reasons that they are achievable and a detailed plan for reaching them within a certain time-frame. Most entrepreneurs look at a business as they would a map. Would you set out driving a long distance without a map or knowing the fastest and safest route to get to your ultimate destination? Of course not. The same is true for starting up a new pharmacy – outline the fastest and safest route to achieving a profitable,stable and well run pharmacy operation. Keep in mind that, like the example of the map we used, your business plan must be flexible and allow for changes and contingencies. As with driving, the roads may be under construction or blocked, so sometimes even the best laid plan needs some ongoing adjustments or modifications made to it. The same holds true with a new pharmacy start-up. Being flexible and prepared to make business adjustments or changes when certain conditions call for them is the key to achieving a profitable venture in the end. I think that most can agree on the fact that no businesses change as fast and as consistently as is seen in the pharmacy profession. Additionally, a solid business plan can greatly assist you in obtaining the support and funding from banks and other lenders that may be required to meet your goals and objectives.

Is a Pharmacy’s Location a Critical Consideration?

As with any retail business, the three most important factors that will need your consideration are: location, location and location! It is imperative that you first determine who your target market and audience is, and then select a location where they frequently shop for goods and services. Your new pharmacy startup may offer customers the very best of everything – great service, low prices, excellent product selection – but if your target market doesn’t frequent the location that you’ve chosen,  you will likely not be open for very long.

Most entrepreneurs view choosing their business’s retail location as they would fishing. To be successful while fishing you must throw your line and bait where the fish are. There’s no use fishing where the type of fish you’re trying to catch don’t swim and eat! The best fishermen put in the time and energy to research the best fishing spots. The same holds true for determining where to start your new pharmacy. Intensive research should be performed before choosing your pharmacy’s location. Economic data such as average family income in a specific zip-code or neighborhood is readily available these days. You may want to consider hiring a professional market research firm to provide you accurate data before you select a location. Additionally, look for retail outlets that are already thriving with business and shoppers. You may have to pay a higher rent, but the rewards and results will be worth it.

Design – Both the Outside and the Inside

Design of both the inside and outside of your new pharmacy can be a major key in the business becoming a successful venture. In order to determine what would be the best possible presentation and appeal for prospective customers, think about forming what the large advertising agencies and marketing companies refer to as “marketing focus groups” before making up your mind. Try and remember that you are not your own target audience and that it’s extremely hard to be objective about your own business. Consider hiring a professional store designer and then enlisting a sampling of people that represent your ideal customer base. You may be shocked to find out that what you had in mind may not be in alignment with the feedback you may receive. So be open minded and remember that becoming a profitable business is your goal, not satisfying your ego!

How Much Money Does It Take To Start a Pharmacy?

Your answer to this “dangerous” question will become much clearer after your business plan is written and finalized. Obviously, you will need to include all of the potential and possible initial startup costs, plus take into consideration such ongoing costs as staffing (if necessary) and marketing. Additionally, a brand new pharmacy takes time to start generating any profit, so a realistic operating budget is a must. Acquiring a credit line and researching how best to obtain additional funding should you need it are both highly suggested steps to execute at the very beginning of the start-up process.

Should Your Marketing Begin Before You’re Open For Business?

Don’t make the mistake of waiting until your pharmacy is ready to open up to initiate your marketing! Have your website and Google Business Listing already completed and fine tuned before you actually fill your first prescription. Explore the use of direct mail and social media prior to the “Grand Opening” to create a buzz. Additionally, consider some form of an initial promotion to get those curious shoppers to stop by and hopefully become customers of your business. We have seen some owners of new pharmacies experimenting and trying various different offers, but the “time tested” promotion that often times is seen to work the best is to offer a major incentive for each prescription that is transferred into your pharmacy by your customers.

Enlist the Experts!

You may have already talked with an attorney or accountant, BUT the most important expert of all is a seasoned Pharmacy Consultant on your team. Healthcare Consultants is known as the leader in helping pharmacy owners plan, purchase, setup and staff their pharmacies nationwide. Having opened hundreds of new pharmacies and pharmacy startups, HCC will ensure that all aspects of the business are covered and done right the first time.

If you are truly considering starting up a new pharmacy business, we strongly urge you to get in touch with us today for a free consultation. We offer you the support of an experienced staff who have been through the process numerous times and know the business inside and out!  With over 30+ years of experience, Healthcare Consultants Pharmacy Staffing has helped hundreds of business owners (both pharmacists and non-pharmacists alike) establish successful businesses over the years.  Contact us now online or call us today at (800) 642-1652 to discuss how we can help you.

 


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New Pharmacies and Ownership

New Pharmacy ConsultationNew pharmacy startups and the opening of brand-new pharmacy operations are occurring at a faster rate this year than ever before seen. Just reviewing the first two weeks of November this year reveals a staggering number of new retail community pharmacy businesses being opened and successfully established all across the entire fifty United States. Considering the 2018 “explosion” of new drug stores, plus the recent national economic growth and positive forecasts for 2019, one can only conclude that the number of new pharmacy start-ups will continue and even, probably, accelerate at a rate never before seen.

Examples of Recent Pharmacy Startups

Just as examples of the startup trend, consider the following recently opened retail community pharmacies that have been in the news in just the past few weeks.

  1. In Clarksville, Tennessee – Hilltop Supermarket is adding a brand new pharmacy department. Owner of the supermarket (Cody Jackson) said that he will actually not own the pharmacy, but will partner with a local RPh. who has vast experience running retail community pharmacies in the area. For Hilltop Supermarket, having a pharmacy as an addition to his grocery store will be “breaking new ground”. “I know about the grocery business, but I don’t know a lot about running a pharmacy,” Jackson said. “The pharmacy will occupy space in our store, but it will be run and managed by someone else who has been successful with other pharmacies in the area.”
  2. In Ellensburg, Washington – Whole Health Pharmacy was recently opened by two local pharmacists who saw a tremendous opportunity after the local Downtown Pharmacy closed their doors this past October. Both of the new pharmacy’s owners had previously worked at the now defunct Downtown Pharmacy and knew that this was the “chance of a lifetime” to both help their community and open up a successful retail community drugstore.
  3. In Dayton, Ohio – Wright-Patt’s Kittyhawk Pharmacy opened its doors for business (although the official “ribbon cutting” will actually take place on December 12th). The new $10 million facility was actually upgraded with a modernized drive through lane, plus new dispensing apparatus that will enhance  both dispensing safety and double the prescription processing space. While focusing on diabetic supplies, the owners are hoping that the increased efficiency alone will pay for the upgrades over time (plus increase their local market share of customers).

    Changes in Ownership Also Rapidly Increasing in Pharmacy

    In addition to the rapid pace of new pharmacy practices being recently started and established, there is also an increasing frequency of established pharmacies being sold, bought and reorganized under new ownership and management. Once again, simply scanning the past several weeks reveals numerous examples to consider.

    1. In Cleveland, Ohio – Dave’s Mercado Pharmacy (owned by Dave’s Supermarket Inc.) was sold to Neighborhood Family Practice. The new owners have announced that they will be expanding the pharmacy’s business hours, plus adding several new services. Currently the pharmacy is undergoing an extensive remodeling, but will reopen in January of 2019 under the new name of the Neighborhood Family Practice Pharmacy. Interestingly, the store was originally founded all the way back in 1930 and renamed Dave’s Mercado in an effort to attract the Hispanic population in the area as customers.

    2. In Bull Shoals, Arkansas – Lake Side Pharmacy was purchased from previous owner Steve Thomas (who owned the drugstore for approximately thirty years) Thomas sold the pharmacy in order to retire, and the new owner (Layne Hawkins) has a PharmD degree and vast previous experience as an independent pharmacist.

    Starting a Drugstore or Buying an Existing Pharmacy

    If you are considering a pharmacy startup or the purchase of an existing drugstore in 2019, then consider asking yourself several basic questions. Your answers may make the difference between your pharmacy becoming a successful business venture versus it being a disappointing failure and a loss of money.
    1. How much money and funding will I need and where will it come from?
    Your answer should include all of the possible initial startup or acquirement costs, plus take into consideration such ongoing costs as staffing (if necessary) and marketing. If this is your first business venture, are there additional costs that you may not have thought of? How much debt or equity are realistic? How best to obtain funding should you need it?
    2. Do I need a written pharmacy business plan?
    The answer is YES! Whether starting up a pharmacy business or purchasing an existing drugstore, every successful entrepreneur knows that in order to become successful one must write a solid business plan. In addition to being a “road map to success”, a solid business plan can help you get the funding from lenders that may be required.
    2. What experts will I need?
    You may have already considered an accountant and an attorney, BUT the most important expert of all is a seasoned Pharmacy Consultant on your team. HCC is known for being a national leader in helping pharmacy owners plan, purchase, setup and staff their pharmacies nationwide. Having helped open hundreds of new pharmacies and pharmacy startups, HCC ensures that all aspects of the business are covered and done right.

    Pharmacy Startup Experts

    There are many factors to consider in the planning, execution and the long-term success of starting up or purchasing an existing pharmacy business. Planning and execution are the keys to a drugstore being opened and becoming a successful business. Some of the considerations and tasks that Healthcare Consultants Pharmacy Staffing can provide include:

    – Creation and review of a business plan
    – Evaluation of proposed business location
    – Design recommendations
    – Obtaining financing
    – Assistance and guidance in the application process
    – Provide a Pharmacy Manger for both the application process and inspection
    – Provide a list of equipment and supplies (both for the Board of Pharmacy inspection and the actual Pharmacy operations)
    – Make arrangements for the final inspection of the facility (including a mock-inspection)
    – Suggestions for vendors
    – Provide legal support
    – Provide staffing

    If you are considering starting up or purchasing a pharmacy in 2019, we strongly urge you to get in touch with us today for a free consultation. We offer you the support of an experienced staff who have been through the process numerous times and know the business inside and out!  With over 29 years of experience, Healthcare Consultants Pharmacy Staffing has helped hundreds of business owners (both pharmacists and non-pharmacists alike) establish successful businesses over the years.  Contact us now online or call us today at (800) 642-1652  to discuss how we can help you.


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