By Princess Essang
Figuring out how to start up a pharmacy is a daunting task. Gone are the days when a pharmacy was like a buffet – you open your doors and people flock in, eager to wolf down what you’re serving up.
With stiff competition and an already saturated industry, it’s now a game of cat and mouse, and you’re doing to chasing.
Setting up a pharmacy will take work, but it isn’t impossible. Here’s a simple guide to help you.
Curate a team of expert advisers
A profitable pharmacy is like a luxury car – elegant with a lavish interior. But you don’t buy a car because it looks nice. You pay top dollar for high performance, which comes about because of a symphony of parts working together.
Similarly, you can’t set up a pharmacy on your own. You need a team of expert advisers and consultants, which include:
● An accountant
● An insurance agent
● A real estate agent
● A pharmacy designer
● A lawyer
Choose a business structure
You can’t open a pharmacy without choosing the legal liability and business structure that is most suited to your needs.
The business structure you choose influences everything, from day-to-day operations to taxes and how much of your personal assets are at risk. You should choose a business structure that gives you the right balance of legal protections and benefits.
Be it a sole proprietorship, partnership, limited liability corporation, C corporation, or S corporation, consult with a lawyer to understand which business structure works for you.
Carry out market research
You’re in the business of service. You’re also in the business of profit. A successful pharmacy finds the point where these overlap and makes that its unique selling point.
For this to happen, you need to carry out due diligence. Otherwise, you’re setting your pharmacy up for failure before it’s taken root.
Analyse the population. Who makes up the community – geriatrics or new families? What lifestyle have they adopted – equestrian or neo-traditional? What are their healthcare needs? Is there a disease outbreak? What is their financial strength?
These questions will help you understand and meet the needs of your target market.
Secure startup capital
It’s common to see new retail pharmacies spring up like weeds, and fizzle out just as quickly. Most of them make the mistake of under-capitalizing their business by not having enough money to ride the tide until there is positive cash flow.
Starting up a pharmacy is a massive financial undertaking that comes with equally massive risk. This, of course, varies with the scale of your pharmacy.
Note the financial needs of your retail pharmacy and use that information to determine who you are lending from and the size of the loan.
Choose a location
Case study: XYZ Pharmacy is a retail pharmacy that provides professional pharma services, including dispensing of medicines and allied health accessories and consultancy. They have been a cornerstone in Surulere for decades.
How were they able to survive despite changing policies and recessions? Location.
XYZ Pharmacy is on one of the busiest streets in the city of Lagos and in one of the most saturated local governments. There is a constant stream of both foot and vehicular traffic.
Lesson: Open your pharmacy in a location that is frequently travelled by your target customers.
Sharing a border with XYZ Pharmacy is ABC Hospital and Maternity, Lagos. Patients from the hospital can easily refill or pick up prescriptions at the pharmacy.
Lesson: When scouting a location for your pharmacy, look out for hospitals, clinics, or diagnostic centres, which will bring business.
XYZ is right at the centre of a constantly congested intersection. You can’t miss its large, nostalgic, blue signboard. The pharmacy is so visible, it’s used as a landmark.
Lesson: Why spend money setting up a pharmacy that no one can see? Be visible. Be so conspicuous that your brand becomes ingrained in the minds of your target customers.
Access and Size
Walk-ins and motorists can access XYZ Pharmacy with ease. The one-storey building also leaves room for any future expansion.
Lesson: It should be easy for customers to enter and exit your pharmacy. You also want to choose a location that has room for growth.
Sort out procurement and inventory management
For your pharmacy to gain and keep credibility while functioning at its optimum, you need:
- Swift access to a wide range of health commodities
- To procure health commodities at an affordable rate, and
- A supply chain model which gives zero room for infiltration by drug counterfeits.
Matrix-36 Marketplace offers coordinated and easy access to medication procurement. It also allows you to make bulk procurements to restock your pharmacy inventory with great discounts, bit-sized procurements at wholesale prices with no minimum order value required and free same-day delivery.
Test the waters
About a month or two before you’re ready to welcome the community into your pharmacy, have a soft opening. Use this as an opportunity to work out the kinks, smoothen bumps that may hinder efficiency, and engage in marketing strategies, such as community outreach.
The Grand Opening
You’ve done it! You’ve opened your pharmacy at last!
Get your community as excited as you are. Make a display of your opening – you’ve earned it. You can get the press and community leaders involved.
Offer free treats and goodies and entice the community with giveaways or free health screenings.
This is a chance to shape the first impression the community will have of your pharmacy. Make it count.