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.
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
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.
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
– 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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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
We recommend using LivePlan as the easiest way to create financials for your own business plan.
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.
Business Plan Outline
- Executive Summary
- Opportunity
- Execution
- Company
- Financial Plan
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
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