Pharmacy is a form of business that is profitable for the owner, as well as making a positive contribution to society. Even so, the process of opening a pharmacy is not an easy one. You have to do market research, make financial agreements, take care of licensing, find employees, and much more. Therefore, before opening a pharmacy, it's a good idea to study the process further.
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Part 1 of 5: Doing Market Research
Step 1. Decide whether you will open a new pharmacy or buy an existing one
If you want to open your own pharmacy, you have two choices, namely building a new pharmacy or buying an existing one. Which one is better is very different for each person because each does have advantages and disadvantages that must be considered carefully before you make a decision.
- Purchase an existing pharmacy. If you take this option, you will have an established pharmacy with customers. You may also be able to retain some of the employees who have worked there before. That way, you can save time looking for new employees. However, you may have to pay more to buy an existing pharmacy. So you have to look for bigger loans, more investors, and wait longer before starting to make profits.
- Build a new pharmacy. This option is often cheaper than buying an existing pharmacy, and with lesser financial needs, you can open a pharmacy more quickly. Even so, you have to find customers from scratch. So you may take longer to make a profit. You should also advertise the pharmacy more broadly, preferably before it even opens in order to be able to invite enough customers to keep the business going. You may have to wait quite a while until you have enough customers and are consistently profitable.
Step 2. Pay attention to the surrounding community
This step lets you know what services can be offered to differentiate your pharmacy from others. Take time to discuss with the local community about their health care needs. That way, you will find out if the surrounding community has certain needs that the pharmacy can provide. Tailoring pharmacy services to the needs of the community will help your pharmacy compete with network pharmacies that do not offer specialized services. The business department or chamber of commerce can usually provide this kind of information.
- Determine demographic information that may affect your business. For example, if there are many seniors living in the neighborhood of the pharmacy, you may want to consider providing geriatric services.
- Pay attention to the economic conditions of the surrounding community. If you open a pharmacy in a lower-middle-income economy, for example, try to keep the prices of the items you sell down to attract customers. The economic conditions of the community can also help you determine the cost of opening a business in the area. If you start your business in an upper-middle-class economy, you may be able to take on a larger profit margin, although you may have to pay more for rent, taxes, and other fees.
- Look closely for any recently closed pharmacies in the area. If you can, find out why the pharmacy is closed. If you know the pharmacy owner's mistakes, you can avoid the same mistakes, or even avoid opening a business in the same area.
Step 3. Determine the location of the pharmacy
One of the most important aspects of business success is location. There are a number of things that you should consider when determining the location of your business.
- How is the competition in the region? If there are several chain pharmacies within a few meters of there, you will have a hard time establishing a business. Although that doesn't mean it's impossible. Independent pharmacies can compete with network pharmacies if they are able to offer better service or a higher level of expertise than their competitors. However, you will have to work a lot harder to build a successful pharmacy if it is located close to a chain pharmacy.
- Is the location easily visible? Will people walking or driving see your pharmacy? This is very important when starting a business. So, choose an area that is visible to the people around.
- Pay attention to the surrounding business. The office buildings and shops in the area not only have the potential to bring in customers, they are also a sign that the area is doing well. Big chain restaurants like McDonald's usually do in-depth research to determine the location before opening their outlets. So, if there are other businesses nearby, it means that the location is considered profitable.
- Consider access to your pharmacy. We recommend that you leave a place for parking, or look for a location that provides ample parking space on the side of the road. Since some of your customers may be seniors, you should also choose a location that doesn't have stairs or requires customers to walk too far. In addition, pay attention to access for persons with disabilities.
Step 4. Talk to other independent entrepreneurs and pharmacists
Running a small business is not easy. Talking to those who have been through the same thing can be very helpful and reassuring to you. So, meet with other employers or pharmacists and ask them for advice. Although the independent pharmacist in your area may not be willing to give away their business secrets, you can join a national organization and seek helpful advice from other employers who are not in competition with you. For example, you can join the Association of Indonesian Pharmacists and Pharmacists.
Part 2 of 5: Seeking Funding
Step 1. Seek the help of an accountant
A competent accountant is critical to the success of a small business. Finding funding to start a business and manage it is not easy. So, find an experienced accountant to help you. An accountant can not only help you calculate taxes and prepare a balance sheet, but can also be a financial advisor who can provide helpful advice in making business decisions. Therefore, find an accountant you can trust. Keep the following in mind when looking for an accountant:
- Personal recommendations are usually the best way to find a reliable accountant. Ask for recommendations for accountants whose jobs are satisfactory from other small entrepreneurs around you. You can also come to chamber of commerce member meetings to find out which accountants have been recommended by other small business owners in attendance.
- Schedule a meeting with a potential accountant. Most accountants will not charge a fee for the first meeting with a potential client. While you are compiling a list of prospective accountants, meet them and ask about their experience and qualifications. That way, you can find out if they are a good fit for your business.
- Find out if the candidate accountant has experience working with small businesses in the medical field. Small businesses and pharmacies have special needs. So you should find someone who has worked with small businesses, pharmacies, or other medical establishments and understands how it works.
Step 2. Create a business plan
Before looking for a loan or investor, you should create a business plan. This plan will then be presented to potential investors to seek venture capital. With the help of accountants and other financial/legal advisors, create a business opening and growth plan. A good business plan should at least be able to convey the following.
- Description of the services you offer. What makes your pharmacy different from other pharmacies? Do you cater to a specific niche? From this description, investors should be able to determine whether your business offers a profitable service.
- Business profit projection. What is the projected annual income of your business? How long will it take for you to start making profits? Where will your business be in the next few years? Long-term calculations are very important to show investors that they will benefit if they decide to invest in you.
- Full details of costs. How much capital do you actually need to open a pharmacy? Include the costs of renting, licensing, advertising, remodeling, and everything else needed to open a pharmacy. Include also the costs required to operate every day. For example, the insurance company will usually only pay the drug bill in a few days. So, you need another source of funds to meet these costs until this bill is paid off.
- Money that you already have or you will enter as personal capital. Investors and banks usually want to know how much money you put into your personal capital. This amount varies quite a bit, but is usually around 20%.
Step 3. Apply for a loan to the bank
Depending on the type, bank loans can be used as a source of pharmacy financing for several months to several years. Present your business plan to the bank when applying for a loan. A good business plan will show the bank that your pharmacy is a good investment and worthy of a loan. Also, keep in mind that the bank may ask questions other than those in the business plan. So, be prepared to explain your finances and business thoroughly.
Step 4. Find independent investors
In addition to bank loans, you can also look for private investors to finance the opening and operations of pharmacies. These investors can be friends or family, or other business owners who are interested in adding to their investment portfolio. Present your business plan to potential investors to show that your pharmacy will be profitable.
In any agreement with investors, be sure to clearly state your relationship with them. Do they only provide loans that will be repaid with interest, or are they really involved in your business? Make sure you and the investor clearly understand this cooperative relationship in order to avoid problems in the future. It's a good idea to make a cooperation contract that is ratified by a notary so that it has legal force
Step 5. Insure your pharmacy
Just like any other type of business, you also need to insure the pharmacy to avoid losses. Several types of insurance such as fire or theft insurance are commonly used by small businesses. Meanwhile, other insurances such as liability insurance tend to be relatively more specialized. Be sure to consult with accountants, insurance agents, and even lawyers to determine what insurance your business requires.
Part 3 of 5: Looking for Employees
Step 1. Make a manual for pharmacy employees
Running a small business is often unpredictable. Therefore, guidance for employees is needed to help them respond appropriately to various issues that may be encountered. Ask all new employees to read this manual as part of their training to ensure they understand pharmacy policies and procedures.
- Include guidelines on how to properly interact with customers. Customer satisfaction is very important when opening a new business. For that, make sure all your employees are friendly and can help customers.
- Also include inappropriate behavior. List clearly any activities that could result in an employee being warned and terminated. That way, if you have to fire someone, you can convey that it's clearly stated in the manual.
Step 2. Investigate potential employees before hiring
Even though you can do several jobs at once, you still need reliable employees at the pharmacy to be successful in business. However, be careful about recruiting employees, whether it's a pharmacist or a cashier. Check their background, conduct interviews, and make sure they are up to the task. Even one bad employee can damage a pharmacy's reputation and hurt your business.
Step 3. Recruit pharmacists
All pharmacies require a licensed pharmacist who practices during their opening hours. If you want to open a pharmacy and you are also a pharmacist who will work there, you should find a pharmacist who can replace you when you are sick or on holiday. In addition, as a business owner, you also have to concentrate on the success of the business. Sometimes this means that you have to move from a patient care job to managing the business in general.
Step 4. Recruit pharmacist assistants
Pharmacist assistants can help pharmacists calculate medications, contact doctors, and prepare prescriptions. In general, pharmacies have two pharmacist assistants who work every time the pharmacy is open. However, if your pharmacy is quite crowded, you may need to hire more pharmacist assistants.
Step 5. Recruit cashiers
Usually in pharmacies there are also household products that are sold on the front. If you open a pharmacy like this, you may need two cashiers, one pharmacy-only cashier, and one cashier at the front. That way, customers don't have to wait in long queues and everything can run smoothly.
Step 6. Recruit inventory staff
They will make sure the medicine shelves are always clean and tidy. Inventory staff plays a very important role because a messy pharmacy will discourage customers from coming. If your pharmacy is small, you may want to hire one supply staff. However, for large pharmacies, you may need several supply staff to tidy things up.
Step 7. Hire a manager
If your pharmacy is small, you may be able to manage it yourself. However, for large pharmacies, you may have to delegate tasks. The pharmacy manager will help monitor employees and their activities. In addition, managers can also help take care of insurance, bills, financial records, and other office work. If your pharmacy is large, you may even need two managers, one to oversee the front, and another to oversee the pharmacy. In this way, they can provide you with comprehensive pharmacy progress reports and information.
Step 8. Recruit security personnel if necessary
Unfortunately, pharmacies can also be targets of robbery for storing drugs. Therefore, it may be a good idea to hire a security guard who can help prevent robberies and keep the pharmacy safe.
Part 4 of 5: Preparing to Open a Pharmacy
Step 1. Prepare all the equipment needed
At the very least, you will need the following equipment to open a pharmacy. This list is just a suggestion, and you may also need other tools.
- Computer and required software.
- cash machine.
- Telephone and telephone network.
- Quality seats to wait on. Make sure you choose a chair that has armrests so that elderly or disabled patients can get up from sitting easily.
- Equipment for the store front, such as wipes, over-the-counter medications, food, cleaning agents, or other products you want to sell.
- Vials and bottles of tablets for pharmacies.
Step 2. Organize the pharmacy effectively
The arrangement of the pharmacy is very important for customers who come. A messy pharmacy with poor arrangement will discourage customers from visiting, thus threatening the continuity of your business. Keep the following guidelines in mind as you design your pharmacy setup.
- Place a cash register near the front door so customers can pay and exit the pharmacy easily.
- Carry out pharmacy activities in the back room of the pharmacy. Besides being important for safety, this also allows pharmacy staff to work efficiently.
- Make the aisle wide enough so that wheelchairs can pass and easy for people with disabilities to pass.
- Prepare an area for consultation. Pharmacies should have a private area that allows pharmacists to provide consulting services for their patients. In some locations, this is even required. Ideally, this area should be behind the pharmacy so that the pharmacist does not have to walk too far from his desk to provide consulting services.
- Organize shelves by product and place a marker above each shelf containing product information in that section. Such an arrangement will help customers find what they need quickly so that they feel happy when they are done shopping.
Step 3. Set up the security system
All types of businesses need security devices to protect their employees and their financial investments. You may need to install CCTV cameras, alarms, metal bars for windows, and storage boxes to help avoid robbery.
Step 4. Prepare all necessary permits and certifications for opening
Permits required may vary by pharmacy location. So check with your local health department to make sure you have all the necessary permits. It may also be a good idea to contact an experienced attorney in the industry to make sure you get all the necessary permits.
- For example, for the DKI Jakarta area, in addition to a pharmacist's license to practice, you also need an AMDAL document, neighbor approval, and a notarial deed of cooperation agreement between pharmacists and pharmacy facility owners.
- You must also include a pharmacy technical proposal containing a map of the location and building plans, the organizational structure of the pharmacy, a pharmacy opening schedule plan, a list of drug compounding equipment, etc.
Step 5. Start opening the pharmacy before the opening event
There will be a number of problems that any business (including pharmacies) will have to face once it opens. For that, it's a good idea to open a pharmacy before the official opening date so that you can overcome this problem.
- If at the time of the first opening many customers arrive and you face a problem, you and the pharmacy staff will be very easily overwhelmed. As a result, pharmacy services will be disrupted and your pharmacy has a bad reputation from the start.
- To avoid major problems, open your pharmacy a month or two before the premiere. That way, you can solve problems in the system when you only need to serve a few customers so you can make sure everything runs smoothly on the first launch.
Part 5 of 5: Marketing the Pharmacy
Step 1. Start marketing the pharmacy before it opens
Make sure that on the opening day of the pharmacy everyone around is aware of it. There are many ways you can advertise your pharmacy before it opens.
- Put up an "Opening Soon" banner outside the pharmacy so passersby know there's a new pharmacy opening soon. In addition, place the same ad in the local paper.
- Send flyers by post or manually. Make leaflets containing information on the business and services you offer. It's also a good idea to give a special discount for opening a pharmacy to attract customers.
- Use social media. Create social media accounts for your pharmacy. Share this account via personal accounts and ask friends, family and pharmacy staff to do the same. If enough is shared, you can advertise the pharmacy for free.
Step 2. Make a big celebration when you open a pharmacy
After everything is ready and you have fixed all the problems in the system, announce the opening of the pharmacy to the surrounding community. Call the local news agency and find out if they want to cover this event. In addition, find out if there are local politicians such as the lurah or the sub-district head who would like to participate in the ribbon-cutting event. That way, you can attract more journalists and public attention. With a large-scale event, you can be sure that the entire community will know about the opening of your pharmacy.
Step 3. Join a local organization
Pharmacists and other small business owners are often actively involved in the community. This is useful to introduce themselves and their business to the community as well as to develop profits. Find out if there are events at schools, parks, mosques or churches, and local community gatherings. Being actively involved in the community will help promote your business.
Step 4. Collaborate with other medical practitioners nearby
A doctor's recommendation can be a powerful way to expand customers. If there is a practicing doctor near you, visit the clinic and introduce yourself. Ask if you can put flyers or business cards at the clinic. If you can make a good impression and show concern for the patient, the doctor may recommend that the patient redeem the drug at your pharmacy.
Tips
- Join professional organizations and associations to keep up with the latest developments in the industry.
- Consider contacting a job search agency if you are having trouble finding employees.
Warning
- One of the reasons pharmaceutical businesses fail is lack of capital. So, make sure to estimate well the daily operational costs when applying for a loan. Or, your business may not last long and go bankrupt.
- Never open a pharmacy without insuring it.
