Considerations When Starting a New Pharmacy
Starting a new pharmacy can seem like a daunting task, and it certainly is one. However, the road to opening a pharmacy that runs successfully from day one means making the right decisions long before the doors are opened. This article is meant to help independent pharmacists navigate the process of establishing a new pharmacy more easily and successfully.
Create a Business Plan
There’s a well-known adage (often attributed to Benjamin Franklin, though there seems to be no evidence that he ever actually said it) that goes, “If you fail to plan, you are planning to fail.” When starting a new pharmacy, this is especially true. Therefore, the first thing to do is write out a business plan that includes the following items:
Find the Perfect Location
Any retail business, including a pharmacy, often thrives or fails depending on its location. Getting this right starts by choosing a general area and researching where potentially competing pharmacies are already located. This is also the time to decide what kind of locale you are looking for—rural town, large town, or city/urban. Once a location is narrowed down with some initial research, use the following list to help determine which potential sites are best:
Do the Paperwork
While it’s probably the least fun part of starting a new pharmacy, getting licenses and legal paperwork complete is something that must be done. This includes acquiring such items as follows:
- Register as a business with your state and the U.S. Small Business Administration (SBA)
- Obtain a unique tax ID number
- Open a checking account in the name of your registered business
Next you should obtain all the necessary permits and licenses:
- National Council for Prescription Drug Programs (NABP/NCPDP) number
- Drug Enforcement Agency (DEA) number
- National Provider Identifier (NPI) number
- Prescription Drug Monitoring Program (PDMP) account
- Controlled substance registration
- State permit or license
“You must spend money to make money.” We’ve all heard that before—because it’s true. Any new business, including a pharmacy, will need an appropriate amount of funding to start and maintain operations until it generates enough revenue to stand alone. There are several different ways to go about doing this. Start by hiring a financial advisor who can help you more quickly figure out how much and what kind of funding best suits your needs.
No matter who provides funding (private investors, a bank loan, or the SBA), you’ll need to have the following before any of them are going to consider investment or a loan:
- An upfront owner investment (how much of your own money are you willing to put up?)
- A good credit score (somewhere between 670-739) or better
- A plan to generate enough working capital (money on hand to meet your current to short-term obligations)
Assemble Your Staff
Begin by listing out each role to be filled. Write out a description of these roles as well as what the duties and responsibilities will be for each. This will help identify which candidates are the best selections when conducting interviews. Also write out what the values, goals, and policies will be and ensure that candidates are informed of these during interviews.
Get the Right Software
Choosing the wrong software can lead to inefficiency, process bottlenecks, delays, lost revenue, and other headaches. Your pharmacy needs a comprehensive solution with the following abilities, functions, and features:
- Scalability – Solution can be scaled up or down as your pharmacy grows and its needs change.
- Integrated POS – A point-of-sale (POS) system that streamlines revenue by being integrated with your pharmacy management software.
- Analytics & Business Intelligence – Make cost-effective and well-informed business decisions with an analytics or business intelligence (BI) solution that turns data into action.
- Customer Engagement Tools – Tools that allow client outreach with information about new sales or reminders about annual/seasonal treatments such as flu shots and vaccine boosters.
Be sure to start out on the right foot with your new pharmacy by following the guidance in this article. For more information on the TDS product suite please visit https://www.tdsclinical.com/