Pharmacy Business Plan

People need to buy prescriptions at reduced prices. We make that possible by maintaining efficiencies in our operations. So we can target a specific segment of the market – customers who pay for their prescription medications themselves. They are poor, sick, and deserve the same care as those who can afford healthcare and full-price prescriptions.

Solution

Our mission is to provide our customers with the best prices for their prescription medications. Our convenience and services will exceed our customers’ expectations.

Market

Our target market consists of two groups: local customers or walk-ins, and mail order customers.

Competition

Competition in the pharmacy industry takes different forms: chain pharmacies, local pharmacies, mail-in pharmacies, Canadian pharmacies.

Why Us?

We have superior pricing. To maintain our position as the low-cost provider, we ensure that costs are kept low through operating efficiencies.

Expectations

Forecast

Costs will be minimized by maintaining only one pharmacist and filling the void with pharmaceutical techs. We expect to reach profitability by our third year and will generate substantial sales by year three.

Financial Highlights by Year

Financing Needed

We will need $115,000 to start, and we will be able to pay the investment back by the end of year 4.

Opportunity

Problem & Solution

People need to buy prescriptions at accessible prices. We make that possible by maintaining efficiencies in our operations. So we can target a specific segment of the market – customers who pay for their prescription medications themselves. They are poor, sick, and deserve the same care as those who can afford healthcare and full-price prescriptions.

Our Solution

Our main goal is to provide prescription medications for our customers at the lowest prices on the market. We will sell prescriptions at reduced prices by maintaining efficiencies in our operations and by targeting customers who pay for their prescription medications themselves. By focusing on this segment, we avoid disruptions in cash flow often associated with insurance payments and eliminate unnecessary services for knowledgeable, repeat customers.

The Discount Pharmacy will operate from one store serving both mail order customers and those who visit in person. We will thrive by employing friendly and knowledgeable personnel, which, along with our great prices, will drive repeat business. We expect The Discount Pharmacy to appeal more and more to customers’ sense of value and convenience as the price of medication continues to skyrocket.

Target Market

Market Size & Segments

We will seek to attract two groups of customers and will have two strategies to attract them.

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We anticipate that our largest group of customers will be those who order through the mail. These customers will be targeted through an advertising campaign in magazines and newsletters with an older (>55) audience who regularly need medication and are aware in advance of their needs.

Walk-in customers will be targeted through advertisements in the local paper, "The Oregonian," raising awareness for The Discount Pharmacy and our low prices.

Competition

Current Alternatives

Competition in the pharmacy industry takes many forms.

Chain pharmacies such as Rite-Aid offer better prices through economies of scale and personalized service. The personalized service includes a record of medication purchases and disclosed allergies.

Our Advantages

Our competitive edge is superior pricing. We maintain our position as the low-cost provider through operating efficiencies. For example, we employ only one pharmacist and use pharmaceutical technicians to fill the void. We conduct most of our business through mail order and avoid unnecessary services. We provide patients with a printout of all relevant information for consuming the medication.

Keys to Success

The keys to success are:

– Satisfy our customers so they will return again and again

– Maintain low overhead and operating costs

– Provide better prices than all our competitors

Execution

Marketing & Sales

Marketing Plan

The marketing strategy will be based on social media, mainly Facebook and Twitter, offering useful information and opinion while appealing to the customer’s sense of value. The marketing campaign’s goal will be to increase awareness of The Discount Pharmacy with the target market.

Sales Plan

The sales strategy will be based on generating long-term relationships with customers. To facilitate that, we will provide medications at superior prices, have medicines in stock for quick shipment and store-front pick-up, and provide superior customer service. All sales agents will be trained to provide friendly, knowledgeable customer service.

Milestones & Metrics

Milestones Table

Office Setup

First Key Relationship

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Key Metrics

Our key metrics are:

– The number of customers who walk into the pharmacy

– The number of customers who choose to mail in

– The number of reviews saying that people could go to our pharmacy

Facebook page views, Twitter retweets, and website shares

– Total customer traffic on the website

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– Total customer traffic in and out of the store

Company

Overview

Ownership & Structure

The Discount Pharmacy is an Oregon limited liability corporation, with John Reeleaf as the majority stockholder.

Team

Management Team

John Reeleaf has experience working with a major drug manufacturer, Eli Lilly, as a drug representative. He witnessed the profitability associated with the prescription drug industry and the inefficiencies of most companies. John has an MBA from the University of Oregon’s innovative entrepreneurship program and an undergraduate degree in chemistry.

Personnel Table

2020 2021 2022

Owner – John $48,000 $48,960 $49,939

Pharmacist (0.97) $44,000 $48,000 $51,000

Sales Technician (1.89) $50,000 $61,200 $62,424

Pharmacist Technician (1.94) $61,600 $68,544 $69,914

Counter/Phone Person (1.89) $40,000 $48,960 $49,940

Order Fulfillment (0.94) $20,000 $24,000 $26,000

Totals $263,600 $299,664 $309,217

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Financial Plan

Forecast

Key Assumptions

Our main assumption is legality as regulations affecting our business can change very fast.

– The mail-in order option for convenience

– Prescription at affordable prices

Revenue by Month

Expenses by Month

Net Profit (or Loss) by Year

Financing

Use of Funds

The Discount Pharmacy will incur start-up equipment costs, including office equipment, front counter, computer terminals, software, shipping supplies, scales, telecom system, storefront build-out, start-up inventory, rent, utilities, and insurance. These items will be used for more than one year and will be labeled long-term assets.

Startup expenses total $24,100, listed as net earnings in Dec 2017.

Telecom System – $400

Storefront Build-out – $15,000

Expensed Equipment – $4,000

Website Development – $1,000

TOTAL START-UP EXPENSES – $24,100

Sources of Funds

Seed Funding – $50,000

Friends and Family – $82,100

Statements

Projected Profit & Loss

2020 2021 2022

Revenue $646,000 $781,000 $970,000

Direct Costs $381,140 $460,790 $572,300

Gross Margin $264,860 $320,210 $397,700

Gross Margin % 41% 41% 41%

Operating Expenses

Salaries & Wages $263,600 $299,664 $309,217

Employee Related Expenses $18,400 $19,392 $20,188

Sales Expenses $8,400 $8,400 $8,400

Utilities $3,600 $3,600 $3,600

Insurance $3,600 $3,600 $3,600

Rent $24,000 $24,000 $24,000

Total Operating Expenses $321,600 $358,656 $369,005

Operating Income ($56,740) ($38,446) $28,695

Interest Incurred

Depreciation and Amortization $850 $850 $850

Gain or Loss from Sale of Assets

Income Taxes $0 $0 $0

Total Expenses $703,590 $820,296 $942,155

Net Profit ($57,590) ($39,296) $27,845

Net Profit/Sales (9%) (5%) 3%

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Projected Balance Sheet

Starting Balances

2020 2021 2022

Cash $140,500 $87,016 $45,597 $74,292

Accounts Receivable $0 $0 $0

Inventory $10,000 $76,798 $95,384 $95,383

Other Current Assets

Total Current Assets $150,500 $163,814 $140,980 $169,675

Long-Term Assets $8,500 $8,500 $8,500 $8,500

Accumulated Depreciation ($850) ($1,700) ($2,550)

Total Long-Term Assets $8,500 $7,650 $6,800 $5,950

Total Assets $159,000 $171,464 $147,780 $175,625

Accounts Payable $70,054 $85,666 $85,666

Income Taxes Payable $0 $0 $0

Sales Taxes Payable $0 $0 $0

Short-Term Debt

Prepaid Revenue

Total Current Liabilities $70,054 $85,666 $85,666

Long-Term Debt

Long-Term Liabilities

Total Liabilities $70,054 $85,666 $85,666

Paid-In Capital $183,100 $183,100 $183,100 $183,100

Retained Earnings ($24,100) ($24,100) ($81,690) ($120,986)

Earnings ($57,590) ($39,296) $27,845

Total Owner’s Equity $159,000 $101,410 $62,114 $89,959

Total Liabilities & Equity $159,000 $171,464 $147,780 $175,625

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Projected Cash Flow Statement

2020 2021 2022

Net Cash Flow from Operations

Net Profit ($57,590) ($39,296) $27,845

Depreciation & Amortization $850 $850 $850

Change in Accounts Receivable $0 $0 $0

Change in Inventory ($66,798) ($18,586) $1

Change in Accounts Payable $70,054 $15,612 $0

Change in Income Tax Payable $0 $0 $0

Change in Sales Tax Payable $0 $0 $0

Change in Prepaid Revenue

Net Cash Flow from Operations ($53,484) ($41,420) $28,695

Investing & Financing

Assets Purchased or Sold

Net Cash from Investing

Investments Received

Dividends & Distributions

Change in Short-Term Debt

Change in Long-Term Debt

Net Cash from Financing

Cash at Beginning of Period $140,500 $87,016 $45,597

Net Change in Cash ($53,484) ($41,420) $28,695

Cash at End of Period $87,016 $45,597 $74,292

We recommend using LivePlan as the easiest way to create financials for your own business plan.

Pharmacy Business Plan Example

Business Plan Outline

  • Executive Summary
  • Opportunity
  • Execution
  • Company
  • Financial Plan

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