A pharmacy business is one of the most fulfilling businesses you may ever consider entering. Not only does it enable people to lead healthy lifestyles but also yields quite high returns in terms of profitability. Here is a step-by-step guide to starting a pharmacy business.
With time, the nature of the pharmacy business has changed a lot. For example, herbal and biopharmaceutical medicines in the medical industry as a whole have gained importance. Secondly, with the rise in the senior population, 24-hour access to pharmacies is now essential. Therefore, when you are planning to start your pharmacy business, you have to keep in mind all these factors.
Why Start a Pharmacy Business?
Pharmacies are essential. People need medicine, health products, and advice from a pharmacist all year round. The demand for pharmacies is rising, with the rise in health awareness among common people. As per this report, the U.S. pharmacy market size was revealed at USD 630 billion in 2024 and is projected to be worth around USD 950 billion by 2034
Additionally, the healthcare industry is considered recession-proof. So investing in the pharmacy business is a safe investment.
13 Steps to Open a Pharmacy Shop Business
1. Find a Good Location
You have to keep in mind that location is a key factor in the success of your Pharmacy Business. Collect different data and facts about the location of your Pharmacy. You have to find out:
- Whether there are Pharmacies in the neighborhood or not to get an idea of the competition
- Check if there are clinics or hospitals nearby to ensure a good flow of customers
- Is the place located in a convenient location
- The profile and affordability of the people
These factors will give you an idea of business opportunities as well as threat factors. You can also plan to open your Pharmacy at a shopping mall, which a large number of people visit every day.
2. Make a Pharmacy Business Plan
Making a detailed business plan for your pharmacy business is necessary. For this, consult the experts like a Pharmacist, a Finance Expert, a Legal Expert, and if possible the owner of another pharmacy. They will be able to give you effective inputs.
Make a detailed business plan for your pharmacy business which should cover the points like:
- Investment Required
- Target Customers
- Pricing Plan
- Source of Funds
- Stocks & Inventory
- Fixed and Variable Costs
- Marketing and Publicity Plans
The harder you work on your business plan, your pharmacy business will be better organized and structured.
3. Name your Business
After the Business Plan, it’s time to choose the name of your pharmacy. Brainstorm the different ideas, take the opinions of others, and then finalize the name. Furthermore, remember the pharmacy business has a certain mission and vision. Therefore, choose a suitable and thoughtful name. Don’t take too long to choose the name.
After you finalize the name, get the domain name for your website in the name of your Pharmacy. This is essential because you cannot do without a website. This is because the online purchase of medicines is very common now. In that case, people will need your website to order medicines as well as check availability.
Learn More: How to Name Your Business
4. Legalize your Pharmacy Shop
In the next step, give legal status to your Pharmacy Business. Every country and state offers different types of business structures as per requirement.
In the United States, among the different forms of business organizations, LLC is a popular option as it protects personal assets from business ones. Furthermore, register your business for taxes also.
You will also need the EIN or Employer Identification Number for your business.
5. Get the Necessary License and Permits
This is another part of the legalization process. You will need several licenses and permits for your Pharmacy Business both at the federal as well as State Levels. Some of the important licenses are:
- Drug Enforcement Agency Number
- Pharmacy License
- NADP/NCPDP Number
- National Provider Identifier Number or NPI
These are mandatory for your Pharmacy Business. Therefore you have to get them at the earliest. Otherwise, you may get into trouble and pay heavy fines.
6. Get Business Insurance
You will need insurance to protect your Pharmacy from any incidents of natural calamity or accidents. General Liability Insurance will cover it.
In the case of your Employees, you need Worker’s Compensation Insurance. Additionally, you may also need Commercial Property Insurance, Product Liability Insurance, Professional Liability Insurance, etc.
You can consult your Legal Expert regarding the types of insurance you need.
7. Open a Business Bank Account
You need to open a Bank Account in the name of your Pharmacy Business. Also, get a Business Credit Card for credit and other facilities.
Hire an efficient and experienced Accountant to maintain the books of accounts regularly as well as meticulously. Also, use the required software for maintaining accounts.
8. How Will You Get the Fund
Since the Pharmacy Business needs high investment, you may not have the whole fund. You can try for a bank loan. With a well-drafted Project Report with good projections and a high return on investments, you can get a loan. Bank or other financial institutions will provide you with 75-80% of the investment required. You have to arrange the rest.
9. What are the Expenses Heads to Open a Pharmacy Shop
There are different heads of expense. They include rent or lease of the store, inventory of medicines and other products, salaries and wages, taxes, license fees, etc.
Keep in mind one thing the Pharmacy starts making a profit after some time, at least 5-6 months. Therefore, you have to make your budget accordingly to sustain during this phase.
10. Build Relationships with Suppliers
You’ll need a steady supply of medicines and health products. Partner with reliable suppliers and wholesalers to get quality products at competitive prices.
Products to Stock:
- Prescription medicines
- Over-the-counter drugs
- Health supplements
- Personal care items
- Baby care products
Tip: Negotiate discounts and bulk purchase deals with your suppliers to increase your profit margins.
11. Hire Qualified Staff
Your staff is the face of your pharmacy. Hire qualified pharmacists and assistants who are knowledgeable and customer-friendly.
Roles to Fill:
- Pharmacist: Must be licensed and experienced.
- Sales Assistants: Help customers find products.
- Cashiers: Handle billing and payments.
12. But Business Tools
Technology can make your pharmacy more efficient and customer-friendly.
Essential Tools:
- Billing Software: For accurate billing and inventory management.
- Online Ordering System: Allow customers to order medicines online.
- POS Systems: For smooth transactions.
13. How to Earn More Profit
You have to adopt certain marketing strategies to get more profits. You need good planning and an efficient marketing team for that. Here are the different activities that can bring in more profit:
Build Your Brand
Advertise the name of your Pharmacy before it opens. Distribute Flyers and Leaflets announcing the opening of your Pharmacy. This will spread the name of your Pharmacy among more people.
Organize a Grand Opening
Open your Pharmacy with great celebrations. If possible, bring a locally famous person to open your store. He/she may be a celebrity, eminent doctor, or social worker. Invite important persons from the area for the opening ceremony.
Create an Online Presence
Use your website for publicity. Launch the website a little before the opening of the store. Make the website resourceful with the availability of medicines and offer special discounts on online payment.
Social Media
Create pages in the name of your Pharmacy Business on different Social Networking sites like Instagram, Facebook, Twitter, etc. Share the link to your website there. Don’t forget to update the pages regularly. This will spread the news of your Pharmacy among the users.
Advertise
Give ads in newspapers, TV, and Radio. Also, put colorful banners and hoardings at prominent places in the neighborhood.
Make Cold Calls
Visit the nearby hospitals, clinics, medical centers, and assisted living facilities of the adjoining areas and tell them about your Pharmacy. Also, make personal visits to different households in the neighborhood. The sole aim is to spread the name of your Pharmacy.
Maintain Good Customer Relations
This is extremely important. You have to maintain a very good customer relationship for the sake of the goodwill of your Pharmacy. Apart from that, good customer relations will bring them back to your store. You will also get a referral to clients.
Keep good relations with the doctors of the neighborhood for their support.
These are the points of encouragement for you to start your pharmacy business. With good planning and homework, you are sure to succeed in your business.
Frequently Asked Questions
How much does it cost to start a pharmacy business?
Investment will depend on the location and store size of your pharmacy. The average cost to open a small pharmacy is in the range of $50,000 to $200,000.
How much profit can you make in pharmacy business?
As mentioned, your Pharmacy Business is quite a lucrative one, provided it has a good location and a steady flow of customers. You can earn a profit from 15% to as high as 30% on prescription drugs. Generic medicines give better profits.
Do I need to be a pharmacist to open a pharmacy?
No, but you have to hire a licensed pharmacist to operate the store.
Is a pharmacy business profitable?
Yes, pharmacies are very lucrative businesses, especially in places with high demand for healthcare products.
Do I open a pharmacy without a drug license?
No, to sell medicine legally, a drug license is a must.
How do I get more customers into my pharmacy?
Provide good customer service, lower prices, and services like home delivery and health consultations.
Editorial Team at 99BusinessIdeas is a team of experts led by Rupak Chakrabarty with over 25 years of experience in starting and running small businesses. Started in 2010, 99BusinessIdeas is now one of the largest free small business resources in the industry.