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December 13, 2019

Mark Youssef Explains How to Launch a Successful Pharmacy Business



Launching a pharmacy business or chain is hard work, but it is also lucrative. There are many things to consider before undergoing this process.

Mark Youssef, a small business owner in Vero Beach, Florida, shares a pharmacy startup guide to help aspiring entrepreneurs build a strong foundation before launching their own business.



Entity Establishment

Just like any small business, owners should think carefully about which entity is best for their them. Most pharmacies will choose either an LLC or an S Corp. For the best choice, Mark Youssef strongly suggests consulting with both an accountant and small business attorney.

In fact, many pharmacies keep both an attorney and accountant on retainer. When working with medical supplies and prescription drugs, a host of things could go wrong. A pharmacy could be sued for patient irresponsibility, or a staff member could make a mistake. Either way, having these professionals on hand can protect a young pharmacy from liability or poor business decisions.

On that note, all pharmacies need to carry the proper insurance. Business owners should talk to a handful of insurance companies to receive quotes on both liability and malpractice insurance.

Location

One’s pharmacy should ideally be located in a shopping center or large medical complex. Pharmacies located in high-income areas also tend to do much better than their peers.

Aspiring pharmacy owners should do their research on region demographics, as well as performance data on certain retail areas in that region. Choosing a location carelessly can lead to low sales and business closure.

Funding

Without a doubt, every entrepreneur in every industry finds funding to be their number one problem. Usually this occurs because the entrepreneur fails to anticipate their funding needs.

Pharmacy startups usually cost between $250,000-$500,000 to cover inventory, store buildout, marketing, payroll, and more, says Mark Youssef. As such, the best funding source for pharmacies is an SBA loan or investors. Banks do not lend to startups unless they are backed by the SBA.

One of the strongest benefits to working with the SBA or an investor is that the entrepreneur must work hard to build a strong business plan. The process of building a business plan is difficult, but it helps the entrepreneur perform exhaustive due diligence – the kind of preparation that only the best-performing pharmacies receive.

A critical component to any funding or business plan are the company financials. These usually include pro forma statements; that is, financial projections through a statement of cashflows, income statement, and balance sheet. Working with an accountant can help the entrepreneur build their pro forma statements properly.

Store Layout

One should think carefully about proper pharmacy store layout. Most customers are likely older, which means that many of them will be using a walker or wheel chair. As such, there should be plenty of room for customers to move about.

Product placement is a critical factor for retail stores. Entrepreneurs should consult with veteran pharmacy owners or store managers in order to set up the store correctly.

DEA Inspections & Licensing

There are strict federal and state guidelines associated with launching a pharmacy. As a general rule, entrepreneurs should consult their attorney carefully to make sure that the store is legally allowed to operate.

The minimum requirements for pharmacies are gathering an EIN (employer identification number – this is usually acquired when establishing the business entity), DEA number (after inspection), National Provider Identifier, and a NABP/NCPDP number.

Pharmacies should further refer to state and county requirements to see if any other inspections and/or licenses are required.

Staff Members

Staff members should be qualified pharmacists, says Mark Youssef. Each role typically requires a minimum amount of education and training. There are counter assistants, locums, pharmacy technicians, and managers. Most pharmacy staff members must have at least a bachelor’s and master’s degree from an accredited pharmacy school.

Marketing

Pharmacy entrepreneurs must know their audience. What’s more, they must be ready to reach out to potential customers in order to help their new store get traction.

Networking is critical for pharmacy business owners. Those that are inexperienced at networking should seriously consider joining networking groups such as a local BNI chapter. These kinds of groups can help business owners develop strong networking skills, as well as build strong relationships in the community.

A new pharmacy needs a website, as well as a presence on all the major online business listing directories. This will ensure that customers can find the business online, not to mention directories such as Google (News - Alert) Maps, Foursquare, Yelp, and more. Many pharmacies are investing in online ordering and search engine optimization, says Mark Youssef. Entrepreneurs should work with web professionals to build a strong online presence where many new customers are likely to find them.

After creating a strong online presence, strategic paid advertising online can nurture interest and sales in the pharmacy’s area. Pay per click experts are able to target specific people with strong headlines and offers to attract them to the new pharmacy.

Even the traditional marketing mediums, like print, local TV, and radio advertising, can create local buzz for the new pharmacy in town. Direct mail is one way that many business owners reach the older population effectively. At the end of the day, each business owner must find their perfect marketing mix. No one solution is likely to work best without help from others. Choosing the right advertising venues in the right amounts will enhance the effectiveness of all marketing efforts.

By far the best way to market the new pharmacy is by delighting every new customer with pleasant, prompt service. This generates word-of-mouth in the community. Pharmacies rise and fall on their reputation, to include online reviews and people in the region spreading the word to their friends and family.

Mark Youssef’s Final Thoughts

Before opening your own pharmacy, ensure you conduct appropriate research and that you have a grasp on owning and operating a business as a whole. In addition to gleaning from the information previously provided, Mark Youssef suggests consulting small business sites with specific information for pharmacies. These include The Small Business Association, Elements by PBA Health, Pharmacy Times, and more.

Mark Youssef is an experienced pharmacist and the owner of Rite Care Pharmacy, located at the NW corner of Virginia Avenue and 25th Street in Fort Pierce. His store is conveniently within walking distance of Lawnwood Hospital. He is also the president of Aghapy Properties LLC, which owns several residential and commercial rental properties across the state of Florida in Vero Beach, Orlando, Tampa, and Zephyrhills.



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