Pharmacy Business Plan Template

Over the past 20+ years, we have helped over 3,000 entrepreneurs and business owners create business plans to start and grow their pharmacies. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a pharmacy business plan template step-by-step so you can create your plan today.

 

What Is a Business Plan?

A business plan provides a snapshot of your pharmacy as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

 

Why You Need a Business Plan

If you’re looking to start a pharmacy or grow your existing pharmacy you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your pharmacy in order to improve your chances of success. Your pharmacy business plan is a living document that should be updated annually as your company grows and changes.

 

Sources of Funding for Pharmacies

With regards to funding, the main sources of funding for a pharmacy are personal savings, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a pharmacy is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

 

Pharmacy Business Plan Template

Your pharmacy business plan should include 10 sections as follows:

 

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of pharmacy business you are operating and the status; for example, are you a startup, do you have a pharmacy that you would like to grow, or are you operating a chain of pharmacies.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the pharmacy industry. Discuss the type of pharmacy you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

 

Company Analysis

In your company analysis, you will detail the type of pharmacy you are operating.

For example, you might operate one of the following types:

1. Retail pharmacy: in addition to filling prescriptions, this type of pharmacy sells a variety of over-the-counter medication, as well as a variety.
2. Home care pharmacy: this type of pharmacy typically works with medical professionals who make home visits, filling prescriptions, providing counseling, and assisting with paperwork.
3. Mail order pharmacy: this type of pharmacy prepares prescriptions for shipment, and does not typically maintain a storefront.
4. Compounding pharmacy: this type of pharmacy prepares customized formulations.

In addition to explaining the type of pharmacy you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

 

Industry Analysis

In your industry analysis, you need to provide an overview of the pharmacy business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the pharmacy industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards online / app-based service, it would be helpful to ensure your plan calls for an ample technology budget.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your pharmacy business plan:

• How big is the pharmacy business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your pharmacy. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

 

Customer Analysis

The customer analysis section of your pharmacy business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: children, Millennials, Gen-X, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of pharmacy you operate. Clearly baby boomers typically need different prescriptions and a different mix of over-the-counter choices, and would respond to different marketing promotions than teens.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most pharmacies primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

 

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other pharmacies.

Indirect competitors are other options that customers have to purchase from you that aren’t direct competitors. This includes retailers such as supermarkets and vitamin stores that may offer lower-priced OTC products. You need to mention such competition to show you understand that not everyone who needs medication uses a pharmacy for all their needs.

With regards to direct competition, you want to detail the other pharmacies with which you compete. Most likely, your direct competitors will be pharmacies located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to stand outside your competitors’ locations and ask customers as they leave what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide products that your competitors don’t offer?
• Will you make it easier or faster for customers to fill prescriptions?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

 

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a pharmacy business plan, your marketing plan should include the following:

Product: in the product section you should reiterate the type of pharmacy that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to medication, will you offer items such as personal health supplies, vitamins, cosmetics, and/or food items?

Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the product categories you offer and their price ranges.

Place: Place refers to the location of your pharmacy. Document your location and mention how the location will impact your success. For example, is your pharmacy located next to a clinic, hospital, or high-traffic retail area, etc. Discuss how your location might provide a steady stream of customers. 

Promotions: the final part of your pharmacy marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your pharmacy’s storefront extra appealing to attract passing customers
• Advertising in local papers and magazines
• Flyers
• Social media marketing
• Online advertising
• Partnerships with local organizations (e.g., local physicians, or medical groups)
• Local radio advertising
• Banner ads at local venues

 

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your pharmacy such as serving customers, procuring supplies, keeping the store clean, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 5,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

 

Management Team

To demonstrate your pharmacy’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally you and/or your team members have direct experience in the pharmacy business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in pharmacies and/or successfully running retail and small businesses.

 

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets: While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your pharmacy, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a pharmacy:

• Location build-out including design fees, construction, etc.
• Cost of equipment like applicators, dispensers, capsule machines, lab supplies, etc.
• Cost of goods and maintaining an adequate amount of supplies
• Payroll or salaries paid to staff
• Marketing expenses
• Business insurance
• Taxes and permits
• Legal expenses

 

Appendix

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

 

Pharmacy Business Plan Summary

Putting together a business plan for your pharmacy is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the pharmacy business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful pharmacy.

 

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s business plan consulting services can create your business plan for you.