If you are considering starting a business, opening a medical store would be an excellent idea since it is an area with higher profits than most others. Moreover, the medical shop business has the advantage of not being easily affected by economic crises. But it is vital to analyze this business venture thoroughly before you embark on it as the venture may not work out as planned in the absence of proper planning. You can also check the impact of medical software on healthcare industry.
But if you’re thinking of opening your own pharmacy, don’t just do it on a whim: it’s a long-term endeavor that requires a lot of hard work, perseverance, and patience.
Now that you have discovered the perfect business idea, it’s time to move forward. In order to start a business, you need to do more than register it with the state.
To help you get started with your own medical store, here are some medical store trends you need to know. We have put together this brief and simple guide. You should follow these steps to ensure that your new business is well-planned, legally compliant, and properly registered.
Looking for Medical Store Software? Check out SoftwareSuggest’s list of Best Medical Store Software solutions.
Here are the steps to follow while starting a pharmacy
Step 1: Develop your Business Plan
The key to success as an entrepreneur is in having a clear plan. Mapping a clear plan will assist you in mapping out the details of your business and identifying unknowns. There are a few important topics to consider ahead of time, such as how much will it cost to start and maintain it? Are you targeting a specific market? What pricing can you offer the customers?
As a medical shop, your largest expense would be maintaining your prescription medication supply. You must always have enough medicines on hand to meet monthly demand while ensuring that none expire before they are dispensed. Your second biggest expense would be salaries and payroll.
Step 2: Set Up a Legal Entity
There are four main business structure types: sole proprietorship, partnership, limited liability company (LLC), and corporation. When you establish a legal business entity, such as an LLC or corporation, you are protected from being held personally responsible for your pharmacy. Therefore, it is possible to establish an LLC independently with only minimal state fees or choose an LLC service for an additional fee.
An LLC formation package usually includes one year of free registered agent services. After that, a registered agent can be hired, or you can act on your own behalf.
Step 3: Register For Taxes
Before you can open for business, you’ll have to register for state and federal taxes. Tax registration requires an EIN, so you’ll need to apply for one. You can do it for free, and it’s really easy! You might have to pay specific state taxes, so it is recommended that you have a clear idea about the same from your accountant.
Step 4: Open a business bank account & get a credit card
For the protection of personal assets, having separate business and credit accounts is essential. It separates your personal assets from those of your company. This also makes accounting and tax filing easier. Credit cards and other financings should be in your business’ name (instead of your own). In this way, you would receive better interest rates, higher credit lines, and more, which would be much more convenient. Procuring a business credit card which also builds your company’s credit history, which is useful for raising money and getting investments later on.
Step 5: Invest in a Medical Store Software
Pharmacy Software also referred to as Pharmacy Billing Software, is a program that stores information and organizes ways of keeping the administration of pharmaceuticals at pharmacies in order.
Hospital Pharmacy management software is one of the most common tools that is generally used in most medical stores. This system is generally used to oversee drug store-related activities such as therapeutic stock, record keeping, and dealings with executives and track the medication stock and terminating prescriptions. Reasons, why you should invest in Pharmacy Management Software, are:
- Overall efficiency and results are improved.
- The system is flexible, so it can be adapted to your particular business needs.
- As it is integrated with a Barcode software, it is able to record customer and purchase details quickly, thus accelerating the sale process.
- A good medical store software runs online and offline, on all operating systems software, and across devices.
Step 6: Establish an accounting system
It is essential to keep track of your various expenses and sources of income to understand your business’s financial health. In addition to making tax filing easier, keeping accurate and detailed accounts is also important. You may consider hiring a personal and dedicated accountant for the business, which would enable you to concentrate on other critical activities.
Step 7: Acquire necessary permits and licenses
Permits and licenses are crucial to the success of your business, and failure to acquire them can result in heavy fines or even shutting down your business. Check on Federal Business Licensing Requirements and State & Local Business Licensing Requirements.
Consult your town, city, or county clerk for information about local licenses and permits. Local communities also offer resources to help small business owners. Check out the directory of local communities offered by US Small Business Associations.
The basic licensing requirements include Pharmacy license, Association of Boards of Pharmacy/National Council for Prescription Drug Programs (NABP/NCPDP) number, Drug Enforcement Agency (DEA) number, Employer Identification Number (EIN), and Employer Identification Number (EIN).
Step 8: Obtain a business insurance policy
You can secure the financial wellbeing of your company by purchasing Business Insurance.
There are a few kinds of insurance policies created for different business types with different risks. Starting with General Liability insurance is a good idea if you’re not sure what types of risks you may face as a business owner. In general, small businesses need this coverage, so starting with this is a good idea.
Workers’ Compensation Insurance is another insurance policy that many businesses need. Workers’ Compensation Coverage is likely to be required if your business will have employees.
Step 9: Define Your Brand
Branding refers to what your company stands for as well as how people perceive your business. Your business will stand out from the competition if it has a strong brand. The guaranteed ways to build a strong brand are:
Focus on aesthetics: choose color templates and design elements of your store that should remain the same across all your stores or merchandise like carry-bags.
Have an online presence: Post on social media regularly, go live with insightful content on health and wellbeing. Attend negative and positive reviews posted online.
Offer great customer experience: This is the most effective way to stay in people’s mind for the longest period of time.
Other Few Points to Note
- Drug stores typically profit from prescription medications between 10-30% once insurance companies reimburse them. When your location is doing well, the business owner may be able to see an income of approximately $300,000 per year, depending on various factors.
- The pharmaceutical and insurance companies are responsible for most of the costs of your prescriptions, but there is some flexibility. Customers can expect to pay a few dollars for a common medicine, while for rare drugs used to treat chronic illnesses, they may have to pay thousands. Staying relevant in your neighborhood will require you to monitor the competition constantly.
- Low prices and convenience draw your first customers to your store. A growing number of drug stores have drive-thru windows for easy and fast prescription pickup. For your first six months, you can offer very low prices on common prescriptions to generate considerate foot traffic.
- Choosing the right location for your Medical Store is crucial. It is advisable to consider factors such as traffic, visibility, the availability of parking, and whether the pharmacy can grow in this area when deciding on where to open.
- It is wise to open your doors one to two months before your grand opening. You would have a chance to hammer out any kinks in your operation this way. Make an announcement that your business will be opening soon. Talk to workplaces, long-term care facilities, prisons, and more in your area that might find your services useful.
- You should always assemble a team of advisors, including a lawyer who can assist you in navigating the many rules and regulations of starting a business, an accountant, financial planner, insurance agent, and a franchisee representative (if needed). This would enable you to run your operations smoothly.
What A Typical Day Looks Like At A Medical Store?
- Receiving and fulfilling prescriptions for patients with a variety of medical conditions in compliance with FDA regulations
- Maintain a stock of medications and place orders when needed
- Display products in attractive and easy-to-use ways in the over-the-counter displays
- Assist customers with their medications safely and appropriately by providing medical advice
- Provide doctors’ offices with prescription refills or other prescriptions that an insurance provider supports
- Obtain reimbursements from insurance companies by submitting scripts
- Maintain the store’s front by hiring clerks and staff
- Employ technicians capable of supporting the required PharmD behind the counter
- Maintain and manage the physical store
- Keeping your books in order, processing payroll, and dealing with vendors
What are the skills and experiences you need to build a successful pharmacy?
Every successful pharmacy should have an individual who:
- Holds a Doctor of Pharmacy degree
- Knows the procedures for reimbursement of prescription medicines by insurance companies
- Grasped a complete understanding of FDA regulations concerning controlled substances and how to issue prescriptions
- Possesses knowledge of inventory management system, ordering, and accounts receivable/payable
- Pays attention to payroll procedures
- Recruit qualified pharmacy technicians to assist the pharmacist
- Has the ability to explain dosage, use, side effects, and risks of all medications with compassion and understanding.
Will your pharmacy grow and expand?
Pharmaceuticals, along with food and alcohol, are booming industries that are absolutely recession-proof.
The pharmaceutical industry is estimated to reach USD 2,151.1 Billion by 2027 with Exhibiting a CAGR of 7%.
Now, does this mean all pharmacists flourish into millionaires? Not necessarily.
There are various things as a medical store owner you can do to be successful and have leverage over your customers:
- Showcase your pharmacy credentials in your store for everyone to see
- Offer online payments and pay later options.
- Use modern technologies in your operations like a medical store management software, a POS system, a mobile app, and a website for medical billing process.
- Offer home delivery
- Be soft-spoken, make customers feel good while at your store.
- Reward repeat customers
- Offer insights to customers on generic drugs as a replacement to the costly branded ones.
Mistakes To Avoid While Running A Pharmacy
- Lack of Arrangements for Sufficient Capital: Until a pharmacy generates positive cash flow, undercapitalizing the business is a bad idea. Thus it is wise to have working capital that should be three to five times your initial inventory cost.
- Plan for Marketing: Having a strategy, resources, and investment for marketing your pharmacy is essential.
- Don’t Try to Establish Your Medical Shop Alone: Establishing your own pharmacy can be challenging, so don’t refrain from asking people who already have their own medical stores for their guidance.
Pharmacy ownership is not a one-size-fits-all endeavor. You may have dreamed of one day running your own pharmacy business. Perhaps, pharmacy ownership runs in your family. On the other hand, perhaps you haven’t been able to find a pharmacist job in your town, or perhaps you recently graduated and are looking for work. It doesn’t matter how you ended up here. If you’re driven enough, you can turn your career around and become a pharmacy owner. To achieve your goals, you will just need a solid plan, as well as thorough knowledge. Good luck!