Things You Need to Know When Opening A Pharmacy Business: Starting a pharmacy can be a good business decision provided you have properly studied the market potential. Since people will always need medicines, a pharmacy will give you a stable source of income even when the economic condition is not so good. However, you need to consider various things like funding, pharmacist equipment financing, marketing tactics etc. when opening a pharmacy.
Things You Need to Know When Opening A Pharmacy Business
New Vs Existing Pharmacy
The first thing you need to decide is whether you will be buying an existing pharmacy or build one. Both have their own set of pros and cons you need to consider before taking a decision. When buying an existing pharmacy, you not only get the store but an entire customer base. Plus, all employees who work at the pharmacy can also be retained. However, this is an expensive process compared to building a new pharmacy. The only problem with the second option is that you have to build a new customer base from the ground up. But if you are confident about your marketing skills, then it is better to opt to build a new pharmacy as it is a far cheaper option.
Before you set up the pharmacy, it is very important that proper market research is done. Interact with the locals of the area where you plan on opening the pharmacy and understand their healthcare needs. This will give you a good idea about the potential size of the market, allowing you to roughly estimate the revenues and profits you can expect to earn over the next few years. Assess the predominant age group of the locality. If a large section of the population is comprised of senior citizens, it is a good indication that demand would be high. If the locality is a low income one, you will need to price your drugs at a lesser price in order to sell more. Check out the number of pharmacies located in the region and determine whether you will be able to rake in profits with such competition.
You now need to decide on the funds required to set up the pharmacy. The first option is to invest all the money yourself, which obviously is not possible for everyone. And even if you do have the money required to fully fund the business, it is better to look for other ways that do not involve completely depleting your personal funds. Check out whether you can get a loan from the bank. With a loan, you can easily fund most of your initial investment. You will only have to pay a monthly amount as repayment. This amount can come from your monthly business revenues. Plus, if you take the funding in the name of your business, it is possible to limit any liability to just the business assets alone. If you are not able to get funds from a bank, the other option to seek out partners. Enquire with your family members or friends whether they would like to become an investing partner in your venture.
One of the biggest areas of initial investment will be in the equipment needed in the pharmacy. You will need furniture, computers, security system, and so on in your store. All these are very expensive investments. But instead of taking a loan, you can resort to pharmacist equipment financing to fund their purchase. Unlike a general loan, pharmacist financing is tailored specially for the industry. You can even get reduced down payment and interest rates if you negotiate properly with the lender.
License and Permits
Every pharmacy will require proper licenses, certifications, and permits in order to legally operate. Without these, not only can your store be shut down by authorities, but you can also be slapped with charges. Meet up with a lawyer who is familiar with the laws of the industry and you should be able to complete all the legal formalities. Opening a pharmacy in the US will require a state license and a Drug Enforcement Agency number. You will also need to take insurance for the pharmacy. Some policies will cover thefts and accidents like fire. However, you must also take policies like professional liability insurance so as to protect yourself against any unwanted claims. Talk with an insurance company about the matter and they will be able to recommend a policy suitable for the pharmacy.
Hiring the right employees at the pharmacy is critical for its success. After all, customers will only be interacting with your employees once they enter the pharmacy. If the employees are not polite and unable to resolve their queries, customers will stop visiting the pharmacy and your business will suffer. As simple as that. Before you hire any employee, make sure that you do a full investigation of their background. Ensure that they have excellent communication skills and can deal with any high-pressure situation with composure. Write up an employee manual detailing the ideal behavior of workers and make sure your staff reads it. Whether it be pharmacists, pharmacy technicians, stock workers, cashiers, or managers, you should ideally hire only those who have the necessary expertise and proper experience. A highly qualified accountant has to be hired to keep accurate track of the finances. You can either hire a personal accountant for the business or outsource it to an accounting service. You may also need to hire security staff in case the location is prone to robberies.
Once you open the store and hire the right employees, you have to market the pharmacy properly. Put up advertisements in the local papers announcing the opening of the pharmacy. Offer some initial discounts to get customer attention. Enter into partnerships with local doctors. If they see that your pharmacy takes good care of the customers, the doctors won’t mind referring their patients to you. Make sure that you remain an active participant in community events and functions. The more you make the pharmacy a part of the local community, the more the people will be interested in doing business with you.