If you’re looking to open an independent local pharmacy, establishing one from scratch is quicker and less expensive than franchising from a big name—making it a lucrative business venture. You can transition from signing a lease to cutting the ribbon in as short as six months.
That said, here are five things to consider before setting up a local pharmacy for a smoother process.
Provide Extensive Services
At any pharmacy, prescribing or giving over the counter (OTC) medications like iron supplements and vitamins to your customers isn’t enough. It’s crucial to build long-lasting relationships and friendships with them, helping ensure long-term growth and success. Besides looking after customers’ health, pharmacies need to have management and education sessions with consumers to spread the word about their condition, helping them manage these medical conditions independently. For instance, providing therapy for diabetes, hypertension, and medication is a great start.
Know the Population
Analyzing the population is crucial, so studying the demographics of the people and prescribers in your area is ideal. See if there are enough people to support your pharmacy and enough prescribers for additional services you plan to offer. You can start by understanding your customers’ needs and asking them what they want and what qualities of present pharmacies in the area need improvement.
For any pharmacy, a crucial success factor is the location. So, make sure to think about where you plan on establishing your pharmacy carefully. You can choose the perfect place for your pharmacy by considering several factors. These include foot traffic (are people regularly traveling in this area?), opportunity (see if there are nearby businesses, such as medical offices), visibility (can people see your brick-and-mortar store?), accessibility, and size.
Known retailers like Starbucks and McDonald’s often conduct extensive research on their locations, so having one of these massive enterprises nearby can be a good start. A local and independent pharmacy may also thrive near big chain pharmacies if you set yours apart by providing better-quality products and services.
Although people are gradually seeking local or community pharmacies, marketing is still crucial to consider, especially if you have a ‘big box’ pharmacy in your area. So, make sure to plan from the beginning and see what will set your pharmacy apart and how you’re going to get people in your store. A great way to do this is to connect with the community, meet with HR managers of local businesses, and offer free immunizations for employees or provide brown-bag lunch lectures on healthy eating at schools.
Like any other business, you’ll need to consider the costs of establishing a local pharmacy and the funding. Understanding the business’s financial needs will help you determine the best way to fund your business. You’ll need to consider the build-out capital (including the construction of the physical store, renovations, and fixtures), opening inventory financing (initial products to stock your store), and working capital (daily operations).
Additionally, keep in mind that one of the biggest reasons local pharmacies fail is undercapitalization. It’s a unique business since when you fill in prescriptions, the customer will only pay a portion of the costs, leaving you to wait 30 to 45 days to receive the rest of the payments. That’s why you also need to plan for that delay in cash flow.
Just a couple of years ago, big box stores were taking over the pharmacy industry. However, recently, we’re seeing a trend of individual businesses taking back. People are getting tired of chain pharmacies and seeking something more personal. A local pharmacy is a great start—and taking those mentioned into consideration can help you achieve success in no time.