Business Overview

Many neighborhood pharmacies also feature a convenience store that stocks health and beauty aids, food, greeting cards, and processes images. However pharmacies are also found inside hospitals, urgent care facilities, and as part of big-box chain stores.

Who is this business right for?

The right entrepreneur seeking to open their own pharmacy will have a deep commitment to supporting the health of their neighbors. The owner may or may not have a Doctorate of Pharmacy and will have a good understanding of how insurance companies and Medicare reimburse pharmacies. They will have a good background in business management.

What happens during a typical day at a pharmacy?

  • Receiving and filling prescriptions according to FDA regulations for a wide variety of patients with many different medical conditions
  • Inventory medications and place orders to maintain stock
  • Stock products in the over-the-counter displays in an easy to use and attractive manner
  • Provide medical advice to concerned customers such they are able to use their medications safely and effectively
  • Work with doctors offices to refill prescriptions or obtain a different script that is supported by an insurance plan
  • Submit scripts to insurance companies for reimbursement
  • Hire clerks and staff to maintain the front of the store
  • Hire trained technicians able to support the required PharmD behind the counter
  • Maintain the physical store
  • Balance your books, issue payroll, work with a variety of vendors

What is the target market?

In a neighborhood pharmacy, your customers come from every age and demographic. While some prescriptions may have a higher profit margin than others, your commitment is to the health of your community, not your bottom line.

How does a pharmacy make money?

Profit is gained by purchasing medications for as low a price as possible, as co-pays and insurance reimbursements are fixed and cannot be altered by your practices. Knowledge of generics and name brand medicines is useful. The most profit is found in the name brands, but government regulations often dictate that generics must be issued.

What is the growth potential for a pharmacy?

Customers often come to rely on their local pharmacist as a source of reliable information that they value beyond the price of their prescription. By providing superior service, more people will return to your store if only to purchase OTC cough medicines. When you develop an attractive store that surpasses your clients' expectations, you may be able to expand into multiple locations.