How to Open a Pharmacy - A Step-By-Step Guide | PioneerRx (2024)

• 01Consult Advisors and Mentors
• 02Research and Planning
• 03Legal and Operational Requirements
• 05Select and Design Store
• 06Hire and Train Employees
• 07Purchase Inventory and Supplies
• 08Marketing
• 09Soft Opening
• 10Grand Opening

Starting your own pharmacy is an exciting venture, but remember, you're not in this alone. Connecting with industry professionals and seeking advice from those who've been in your shoes isn't just a good idea, it's essential. Their wisdom and experience are invaluable, and reaching out to them early can make a world of difference in your journey to success.

Now is the time to consult (and possibly hire) the following professionals:

• Accountant / Financial Advisor - Essential for navigating the financial complexities of pharmacy ownership. They help you establish a solid financial foundation, ensuring you meet legal requirements while focusing on profitability and sustainability.
• Insurance Agent - Guides you in selecting appropriate insurance coverage. Their expertise is crucial in protecting your business against potential liabilities and unforeseen events, which is a key consideration in learning how to open a pharmacy.
• Legal Counsel - Assists in navigating the legal landscape of starting a pharmacy. From property leases to employment contracts, they ensure legal compliance and safeguard your interests.
• Industry Mentors & Thought Leaders - Offer real-world insights and practical advice. Engaging with them provides you with a broader perspective, innovative strategies, and valuable connections, which are instrumental in your pharmacy opening journey.
• Established Pharmacy Owners - Share their firsthand experiences, highlighting both challenges and success strategies. Their guidance is invaluable in understanding the nuances of the pharmacy business.

Initiating and nurturing these professional relationships early in your process of opening a pharmacy is crucial. This proactive approach provides you with a supportive network, comprehensive guidance, and practical solutions. Additionally, engaging with industry mentors and thought leaders extends your reach into the pharmacy community, offering diverse perspectives and experiences. These connections can be fostered by participating in industry events, joining professional organizations, and networking with fellow pharmacy entrepreneurs. By combining professional consultation with industry mentorship, you significantly enhance your prospects for success in the competitive world of pharmacy business.

Choosing the type of business structure you want for your pharmacy depends on the amount of legal liability you desire, tax liability, and how much you are willing to spend on ongoing costs of formation and administration, according to Entrepreneur. There are four common types of companies you can classify your pharmacy as:

Legal requirements will vary by state and by business structure, but the following are general guidelines to ensure smooth operations. For more information, visit Harbor Compliance Pharmacy Licensing or search requirements from your state’s Board of Pharmacy. Researching legal requirements is an important step in learning how to open a pharmacy, and you want to ensure that you have everything properly set-up before opening your business.
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Licenses

• State Board of Pharmacy Permit
• Drug Enforcement Administration (DEA) Number
• National Provider Identifier (NPI) Number
• National Association of Boards of Pharmacy (NABP) Number
• Employer Identification Number (EIN)

Taxes

Before you begin operations, contact your federal, state, and local taxing authorities to set up the following accounts:

• Federal Tax ID Number
• State Tax ID Number
• Payroll Tax Account
• Property Tax Accounts
• Sales Tax Accounts

Insurance

Insurance protects your pharmacy from liability in the event of a lawsuit. It is also necessary in order to engage in most contracts and practice agreements. Contact your local insurance broker to create a policy that is best for your pharmacy.
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Health Plan Agreements

Developing both public and private health plan agreements ensure that your pharmacy is competitive and accessible to the community. Consider joining a Professional Services Administration Organization to better negotiate the terms of these contracts.

Mark BonDurant of Independent Rx Consulting has coached dozens of independent pharmacies through this process, and he notes a few realities of the financial aspect of pharmacy ownership:

• Pharmacy ownership can be a large financial risk, so acquiring a loan from a bank may be difficult. (View PioneerRx approved financing partners)
• It typically costs $400,000 – $600,000 to open your own pharmacy.
• The average monthly operating expenses for a pharmacy total around $30,000. As a new pharmacy establishes itself, it may not be able to fill enough volume to pay the operating costs each month. This requires patience as your client base expands.

Ready to Open a Pharmacy?

Choose Your Location

Great amounts of research will go into selecting the perfect store location, whether you choose to rent, buy, or build. Visibility and accessibility of the store will be critical to ensure you get the most amount of traffic possible. You may consider setting up shop near a large chain pharmacy- take advantage of the extensive research they have done to identify the optimal locations. Also, you may have the opportunity to attract some of their customers and show what unique services you have to offer.

Once you have made your decision, it is now time to make the financial transaction and officially call the store your own. Make sure that you have all of the proper licenses and insurance required for owning or leasing property.

Design and Layout

Designing the inside of your store is almost as important as selecting the physical location. Depending on the location you choose, you may have a lot of input or you may have no freedom to make design changes.

Optimize Your Workflow

• Cut out any unnecessary steps within your pharmacy’s workflow
• Make sure that your staff can work comfortably behind the counter, yet still keep everything within easy reach
• Allocate a space for each of the stations in your workflow
• Keep in mind any additional services you may need space to incorporate, such as a drive-through window

Strengthen Your Front End

• Develop an easily navigable space and inviting atmosphere- you want your customers to feel at home
• Visit other pharmacies and take note of which front end products are grouped together, how people walk through the store (for aisle positioning), and the use of window and aisle displays
• Create a front end experience that promotes impulse purchases and welcomes patients to the pharmacy counter
• Build a layout that is ADA compliant
• Take this to the next level by creating a universal design. This is a technique that creates a space that can be used to the greatest possible extent by the most diverse amount of people. All components are chosen to be the least restrictive option and reduce the need for any special modifications. Building your store with universal design in mind will give you the most beneficial space possible, and refrain from excluding any of your customers.

Build the Right Team

Hiring the right employees is an investment in the success of your business. It is important to establish a well-thought-out hiring process from the beginning and be consistent in your search. By picking and training the best team from the start, you can prevent a high turnover rate and retain your employees.

Write an employee manual that outlines both job descriptions and your pharmacy’s values, policies, and procedures. Because you are starting from scratch, you have the exciting privilege of creating your own company culture. You want to find people who will thrive in that culture. Beyond initial qualifications, look for candidates who share your values and passion for independent pharmacy. These individuals are responsible for your store’s success by engaging the community and turning them into loyal customers.

The size of your pharmacy will determine the number of individuals you hire. At the very minimum, you need to have a Licensed Pharmacist and Technician at your store. You may decide to hire more than one of each initially or in the future.

Empower Your Team

Once you have selected your team, lead them through a detailed training process that outlines a clear task hierarchy. Make sure to touch on ongoing tasks that can be done when the main work is finished- this will increase efficiency by making sure your staff is always keeping busy. Keep in mind that training is not a “one-time” event. You should be continuously educating your staff and refreshing their skills to stay up-to-date.

Taking time for open, two-way communication about each individual’s performance will make your staff feel appreciated and also give them pointers on how to improve. Establishing trust and creating an environment where your staff is comfortable asking questions will go a long way towards empowering your team. A good tactic to consider is continuous performance management intead of the typical annual review which leaves gaps in feedback.

Motivate your employees even further by challenging and rewarding them. If they have been chosen as a part of your team, they will have the passion to actually make a difference in the community. Keeping an encouraging work environment that promotes growth will instill the right values and set your team up for success.

Starting your own pharmacy is just like buying your first home – once you purchase it, you need to get everything that goes inside. This can seem overwhelming, but connecting with the right partners and resources will make your life easier and provide you with the best options for your pharmacy.
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Medications

Your partnership with your wholesaler will directly affect your profitability. Building a strong relationship will go a long way in ensuring a stable, reliable inventory. When choosing a wholesaler, think about their proximity to your store, delivery schedules, and billing cycles. Other factors to consider are cost, customer service, products available for sale, and any discounts/incentives they may offer. If you join a PSAO, they typically provide guidance and contracting services to help you select a wholesaler that best fits your pharmacy’s needs.

Sometimes it may be necessary for a pharmacy to rely on multiple wholesalers. This could be due to price changes or availability of items. With PioneerRx, the software is equipped to automatically compare providers and manage inventory orders based on the current information available.
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Technology

PioneerRx pharmacy software is the #1 software chosen by independent pharmacists to open their new stores with. Let us show you our passion for saving and revitalizing independent pharmacy and explore our full list of pharmacy features.

To further optimize your pharmacy system, you may decide to incorporate additional technology. Our mobile apps give you the flexibility to bring your workstation with you anywhere in the pharmacy – or outside of the pharmacy! Choose from valuable additions like HIPAA-Compliant 2-Way Messaging, Mobile Refills, Patient Counseling, Mobile Delivery, Drive-Thru, and Mobile Inventory. PioneerRx also partners with around 70 technology vendors to provide products that integrate seamlessly with our software. From automation to inventory to IVR and more, we connect you with the tools you need to take your pharmacy to the next level.

Every small business budget, no matter how limited, needs a line for marketing. Loyal customers are formed through trust, and how can customers trust you if they don’t know you exist? Your marketing effort will slowly build over time, but there are a few key areas to start thinking about from the start:
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Build Your Online Presence

When you are trying to find out more about a business, where do you usually start? Most people immediately look online to find a website with more information. In today’s market, having a website is crucial for becoming a key contender in the competition. Again, this can start off very simple and progressively expand alongside your growing business. You may also consider utilizing social media platforms such as Facebook, Twitter, and Instagram. Getting the word out there and creating a brand image will establish your pharmacy’s credibility and outreach potential. Make sure that your branding is easily recognizable and cohesive across all platforms.
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Provide Value

As an independent pharmacy, you already have the potential for a niche value that can set you apart from the typical chain pharmacies. However, this value is worthless if people do not know about it. Many patients are simply unaware of the unique services that a community pharmacy can offer them. From the start, you need to assess your local competition and differentiate your pharmacy’s services from the others in your area. Then make those services known- don’t be afraid to be proud of your work! Make it a point to also strengthen your personal touch. Build meaningful relationships with your customers that will foster loyalty and allow you to better serve them.
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Get Involved

Paid advertising is important, but community engagement is key to starting an independent pharmacy. Talk to other independent businesses in your area and build relationships with healthcare providers and professionals. Forming a strong network will tie you into what is going on in your community and give insights on how to best operate your business. Find opportunities to participate in local events and get to know potential customers. You should also consider getting involved in local government boards or joining pharmacy organizations.
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Offer Incentives

Once you have proved your value to potential customers, incentives are a good way to transform them into long-term customers. Offering discounts, having a referral rewards program, and providing free routine health screenings are all ways your pharmacy can show customers you care while still growing your business. Referrals will expand your customer reach and boost credibility, and free screenings can guide participants to fill any resulting prescriptions at your store. This is your chance to impress them! Every store’s marketing strategy will be unique – so use these tips as a guideline to creating the best plan for your pharmacy.

After countless hours of planning and preparation – you are ready to open your doors!

Well, sort of.

About a month before your open date, conduct a soft opening for only a few customers. Inevitably, there will be hiccups when opening your pharmacy. Soft openings act as a grace period for staff to master their routines and to ensure that all processes are working smoothly. Soft openings allow you to tackle road bumps immediately with only a few patients, rather than delaying a lengthening line of customers. This period of time allows you to focus on details and last minute tasks so that your grand opening is polished and successful. In preparation for the big day, make sure you spread the word so people are aware of when the grand opening will be. Also, work on building relationships with other local businesses and potential customers so you have a network before opening your doors.

Remember: What makes your pharmacy unique? What do you have to offer to your community? Keep this in mind when promoting your opening.

You did it! You are about to see all of the rewards from your hard work!

Opening your pharmacy’s doors for business is an exciting day for you and your staff. Make it an exciting day for your new customers, as well!Host fun events for your entire community to see what your new business is all about.

• Invite your mayor and local media to a ribbon cutting ceremony.
• Serve treats catered by local restaurants and bakeries.
• Have performances by local bands and musical groups.
• Offer incentives such as prize giveaways or free health screenings.

Do anything that you can to attract your target market and show your community that you have arrived.
A first impression is a lasting impression, and this is your pharmacy’s first chance to spark lasting relationships within your community.