Pharmacy Business Plan Template

Pharmacy Business Plan & Example

If you want to start a pharmacy or expand your current pharmacy business, you need a business plan.

The following pharmacy business plan template gives you the key elements to include in a winning pharmacy business plan.

You can download our pharmacy plan template (including a full, customizable financial model) to your computer here.

 

Sample Pharmacy Business Plan

Below is a pharmacy business plan example with each of the key sections to help you write a pharmacy business plan for your own company.

I. Executive Summary

Business Overview

[Company Name] is a pharmacy in the [location] area. It provides a wide range of branded and generic medicines, medical devices, personal care products and other basic everyday needs. It aims to be a pharmacy that offers supreme service and easy access to the local residents. In order to meet its customers’ needs, [Company name] is open 24/7.

[Company Name] is the brainchild of [Founder’s name], a pharmacist, working at a local drug store in [location]. Through her 5 years of experience in the medical field, [Founder] saw the need for an accessible pharmacy that stocks all major medicines and medical devices and offers them at an affordable rate.

Products Served

Here are the products as well as services that [Company name] will offer to our consumers:

• Generic over the counter drugs
• Generic prescription drugs
• Branded over the counter drugs
• Branded prescription drugs
• Basic medical equipment
• Medicine delivery and pick-up services
• Health and wellness products
• Selfcare products

Customer Focus

[Company Name] will primarily serve the residents who live within a 5-mile radius from our pharmacy. The demographics of these customers are as follows:

• 62,237 residents
• 4,500 workers (who do not live the neighborhood)
• Average income of $57,300
• 49% married
• 42% in Management/Professional occupations
• Median age: 39 years

Management Team

[Founder’s Name] is a pharmacist at a local drug store. Her experience in the medical field gives her a great advantage in building a pharmaceutical business. Before pursuing a career in the medical field, she attended [University Name], where she earned a degree in Business Management, which means she is not only capable of saving lives, but also managing a business.

[Company name]’s management team will also include registered pharmacists and highly skilled and trained employees that will contribute greatly to its success.

Success Factors

[Company Name] is uniquely qualified to succeed for the following reasons:

• The area is in need of a pharmacy.
• Our location is in a high-volume population and business district and will thus be highly convenient to significant numbers of passersby each day.
• The management team has a track record of success in business.
• The pharmacy business has a positive track and has succeeded in communities throughout the United States

Financial Highlights

[Company Name] is seeking total funding of $260,000 of debt capital to launch. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.

Specifically, these funds will be used as follows:

• Store design/build: $150,000
• Inventory: $50,000
• Working capital: $60,000 to pay for marketing, salaries, and lease costs until [Company Name] is cash-flow positive

 

II. Company Overview

Who is [Company Name]?

[Company Name] is a pharmacy in the [location] area. It is a trusted health and wellness partner that provides a wide range of branded and generic medicines, medical devices, personal care products and other basic everyday needs. It aims to be a pharmacy that offers supreme service and easy access to the local residents. In order to meet its customers’ needs, [Company name] is open 24/7.

[Company Name]’s History

[Company Name] is the brainchild of [Founder’s name], a pharmacist working at a local drug store in [location]. Through her 5 years of experience in the medical field, [Founder] saw the need for an accessible pharmacy that stocks all major medicines and medical devices and offers them at an affordable rate.

With a few of her colleagues, she conceptualized and planned to start her own pharmacy. She was able to raise funding from her own pocket, as well as from friends and local residents’ investments since they also knew that [Founder]’s idea of building a pharmacy in the area would be very helpful to the community.

In [Month, Year], [Company Name] was legally formed. [Founder’s Name] incorporated [Company Name] and was able to achieve the following milestones since then:

• Determined the final list of medicines, vitamins, supplements and items to sell
• Determined equipment and inventory requirements
• Developed the company’s name, logo and website located at www…
• Began recruiting key employees with experience in pharmacology, business and medical field

[Company Name]’s Products/Services

Here are the products as well as services that [Company name] will offer to our consumers:

• Generic over the counter drugs
• Generic prescription drugs
• Branded over the counter drugs
• Branded prescription drugs
• Basic medical equipment
• Medicine delivery and pick-up services
• Health and wellness products
• Selfcare products

 

III. Industry Analysis

The Pharmacy industry experienced steady revenue gains, as the number of people with private health insurance increased, resulting in more prescription medications being filled. Moreover, the burgeoning elderly population boosted industry growth, as this consumer bracket generally requires medication to address chronic ailments, resulting in steady revenue streams. As a result, industry revenue is expected to increase an annualized 1.6% over the next five years.

This anticipated growth will follow many operators expanding their stores’ services to include preventive care options and additional front-end offerings. Additionally, as the number of insured individuals is expected to remain high, individuals will continue to experience low out-of-pocket costs and easier access to prescription medications. As conditions for the industry continue to improve, average industry profit is expected to stabilize and rise marginally.

Competition within the industry largely comes from online pharmacies and big-box retailers. In response to the growing external threats, many larger players started offering online and mail prescription services to combat growing competition from outside the industry. Additionally, many large players are adding general health services to their establishments, in hopes of making their stores closer to a one-stop health shop. These stores include more niche and specialized equipment, such as sleep apnea machines, and are expected to offer ancillary health services, such as screenings and a significant number of immunization shots. This is causing operators to diversify and expand their offerings.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the residents and the people working in [company location] and its surrounding areas.

The area we serve is very diverse. The precise demographics of the town in which our location resides is as follows:

Customer Segmentation

We will primarily target the following four customer segments:

• Families: the town has a large population of families who need medications and everyday vitamin intake.
• Clinics and Patients: The pharmacy is near some clinics. This will help people have easy access to the drugs their doctors prescribed them.
• Nursing Homes: There are a number of nursing home facilities in the area that will be ideal targets to form strategic partnerships for all of their pharmaceutical needs.
• Local office workers: approximately 10,000 individuals work in offices within half a mile of our location, and we expect a fair portion of these individuals to frequent us during the morning and lunch hours.

 

V. Competitive Analysis

Direct & Indirect Competitors

MP Pharmacy
MP Pharmacy operates about 180 community pharmacies in some 35 US states. The drugstore chain franchises independent community pharmacies under the MP Pharmacy name. The company provides its franchisees with managed care expertise and to secure prescription contracts, among other services. MP Pharmacy feature drive-thru prescription pickup windows and its newer locations have private patient consultation rooms.

Founded in 1971 in Des Moines, Iowa, the company offers franchisees a business proposition that enables them to control their own hours, select their own location(s) and receive the financial and personal benefits of owning their own business.

Darren Family Pharmacy
Darren Family Pharmacy is an independent pharmacy offering a variety of services, including daily delivery (free to local residents), compounding, drive up windows and special ordering. The store has been family owned and operated since 1901. In addition, the store offers a selection of gift and home decor items, as well as British candies.

The pharmacy is open from 9 am until 7 pm, Monday through Friday, and from 10 am until 3 pm on Saturdays. The store is closed on Sundays.

Pharmed
Pharmed is one of the nation’s top drugstore chains. The company operates more than 8,600 mostly freestanding stores in all 50 US states, the District of Columbia, and Puerto Rico. Prescription drugs account for about two-thirds of sales; the rest comes from general merchandise, over-the-counter medications, cosmetics, and groceries. Most stores offer drive-through pharmacies and one-hour photo processing.

The drugstore chain is looking to health care services as a significant avenue for growth. The company’s subsidiary manages worksite health and wellness centers and operates in-store care clinics at more than 700 locations. It is partnering with regional providers to expand its menu of health care services at its clinics.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Location: [Company Name]’s location is at the center of town, giving us access to commuters going and leaving the train station, local office workers, and passersby going to local shops. There are also no other pharmacies anywhere near the area.
• Great service: The store will offer home delivery and pick-up services, further extending our market reach. The staff will also be trained to attend to a customer’s need as fast and as convenient as possible.
• Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders, newspapers and other influences. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.

 

VI. Marketing Plan

You can download our pharmacy plan template (including a full, customizable financial model) to your computer here.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

• Convenient location
• Significant personal attention
• Complete variety of medical supplies and equipment
• Delivery Service
• Friendly, customer-focused environment

Promotions Strategy

[Company Name] expects its target market to be individuals working and/or living within a 5-mile radius of its location. [The Company’s] promotions strategy to reach these individuals includes:

Local Publications
[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, school publications, youth sports programs, and similar channels will be a major promotion effort.

Community Events/Organizations
[Company name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, homeowner associations, or sporting events.

Commuter Advertising
We will drive attention toward [Company name] by hiring workers to hold signs alongside [route or highway]. Advertising on heavily traveled commute routes are an opportunity to alert large numbers of working individuals with disposable income of our opening.

Customer Loyalty Programs
[Company name] will create a winning customer loyalty program to keep its best clients coming back again and again.

Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to visit the place.

Ongoing Customer Communications
[Company Name] will maintain a website and publish a weekly flyer with the latest promos and events

 

VII. Operations Plan

Functional Roles

The Company will be open 24 hours every day. The Company intends to employ [x] pharmacists, [x] cashiers, [x] delivery personnel and [x] supervisors during. [Company name] anticipates having [x] customers on a daily basis.

In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company name] anticipates using the services of X employees, divided into the following roles

Service Functions

• Pharmacists
• Stock and inventory managers
• Cashiers
• Delivery personnel
• Customer service representatives
• Maintenance personnel

Administrative Functions

• General & administrative functions including marketing, bookkeeping, etc.
• Sourcing and storing products
• Hiring and training staff

Milestones

[Company name]’s long term goal is to become the dominant pharmacy in [location]. We seek to be the standard by which other providers are judged.

The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:

 

VIII. Management Team

Management Team Members

[Founder’s Name] is a pharmacist at a local drug store. Her experience in the medical field gives her a great advantage in building a pharmaceutical business. Before pursuing a career in the medical field, she attended [University Name], where she earned a degree in Business Management, which means she is not only capable of saving lives but also managing a business.

[Company name]’s management team will also include registered pharmacists and highly skilled and trained employees that will contribute greatly to its success.

Hiring Plan

[Founder] will serve as the CEO. In order to launch our pharmacy, we need to hire the following personnel:

• Pharmacists
• Stock and inventory managers
• Cashiers
• Delivery personnel
• Maintenance personnel
• General & administrative functions including marketing, bookkeeping, etc.

 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come primarily from the prescriptions and other items sold at the pharmacy.

As with most businesses, cost of goods sold and labor expenses are the key cost drivers for pharmacies. The major cost drivers for the company’s operation will consist of:

• Cost of goods sold
• Salaries
• Lease

Ongoing marketing expenditures are also notable cost drivers for [Company Name].

Capital Requirements and Use of Funds

[Company Name] is seeking total funding of $260,000 of debt capital to launch. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.
Specifically, these funds will be used as follows:

• Store design/build: $150,000
• Inventory: $50,000
• Working capital: $60,000 to pay for marketing, salaries, and lease costs until [Company Name] is cash-flow positive

Key Assumptions

The following table reflects the key revenue and cost assumptions made in the financial model:

5 Year Annual Income Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement