What to look for when starting a pharmacy.
There is a lot to consider when starting a pharmacy but what I want to focus on today is the preliminary search. We find it best to look at starting a pharmacy as a big puzzle and each puzzle piece is one section of the start-up process. If you try to do everything at once you will make mistakes. Focus on what needs to be done first, do what you can for that step and then move on. The first step in our process is determining if there is opportunity in the target area. Below I have outlined some key areas to focus on when trying to find the best opportunity.
1. Determine if there are enough scripts being written in the target area to support a new pharmacy. You can do this in several ways, go into the pharmacies find out how many scripts they are filling per week or hire a consultant like us and we will do that analysis for you. You may also know this because a chain buys a busy independent but it is always good to do the research.
2. Is there a good location available? Just because there is enough business to go around does not mean they will come to you. You need to have a location that is near the â€œrooftopsâ€ or the traffic patterns of those â€œrooftopsâ€. It also needs to be visible so people know you are there. Lastly the space needs to be affordable because you cannot afford to have all of your profits to a lease.
3. Is there a chain in the area? This is good for a number of reasons; they usually do a poor job so you can steal some of their business. Secondly, if your start-up does not do well you may be able to sell your files and inventory to the chain and recover most of your capital.
4. Find out what the competition is like? Just because there are several competitors in the area does not mean they are run well. Visit each location find out how busy they are, is the store clean, etc. Find out if the community feels there is a need for a well-run pharmacy by talking to other businesses and the chamber of commerce.
In the end we find it is best to determine where and if there is a need for a pharmacy prior to going through building a business plan and speaking to potential investors.
Independent Rx Consulting is a consulting firm specializing in start-up pharmacies and buy/sell agreements. Visit our website at www.independentrxconsulting.com.