How to start your own pharmacy business

Setting up your own pharmacy may be an option for pharmacists who are trained and qualified. Throughout this helpful guide you should discover everything you need to know about the process of starting your very own business venture in the UK.

The pharmacy business is an essential part of the healthcare system. Pharmacies dispense medications to patients and provide a vital service to the community. However, running a successful pharmacy is not easy. There are many regulations that must be followed, and it is important to have a good understanding of both the law and the medical field.

In addition, pharmacies must maintain a high level of customer service in order to be successful. A pharmacy that consistently provides poor service will quickly lose business.

Therefore, it is clear that running a pharmacy requires both knowledge and dedication. However, those who are up to the challenge can find it to be a very rewarding experience.

Opening your own pharmacy in the United Kingdom

Opening a pharmacy in the United Kingdom is a significant opportunity for entrepreneurs to become part of the vibrant healthcare market of Britain. Health is an important development priority in the region and our proposed startup could make an impactful contribution towards providing better health services.

This is a great chance to create a successful business due to the range of services that can be offered, such as medication advice, practical support and other services tailored to customer needs. We believe that by using modern technology, efficient processes and high-quality products, we could successfully deliver on our promise of providing excellent healthcare services.

Handy stats to be aware of

Here are a few key pieces of information you should be aware of, relating to the number of active pharmacies in the UK. These stats are courtesy of Statista.

The United Kingdom (UK) employed and self-employed approximately 72 thousand pharmacists in 2021. Since the beginning of the provided time interval, the number of pharmacists employed in the UK has fluctuated but has increased by a net of around 20 thousand.

The number of community pharmacies in England has steadily increased since 2006. In 2017/18, there were roughly 12 thousand pharmacies, a rise from 11.5 thousand in 2013.

Approximately 1.04 billion prescription items were dispensed by pharmacies in England in 2019/20. Despite a slight decrease in prescriptions over the last three years. Approximately 6.6 thousand items were dispensed per pharmacy per month in 2019/20 by more than 2.4 thousand pharmacies.

Research your target market

Understanding your target market is inherently important when starting a pharmaceutical business venture. There are several factors to consider, including your local area’s potential customers, demand, and competition.

Estimating demand

As a first step, estimate the following two sources of income for your pharmacy business:

• What you can expect to earn from NHS work
• Your income from selling health care products, toiletries, cosmetics, photographic equipment, digital media printing, etc.

Competition

All pharmacies in your area will compete for NHS dispensing work and other NHS services. Pharmacies in retail parks, business parks, supermarkets, and the national pharmacy chains are also competitors, including the ‘one stop’ primary care centres, Boots, and the growing national chain pharmacies. As the number of mail order pharmacies and internet pharmacies increases, you may also face competition.

Near a surgery or medical centre, most patients will bring their prescriptions to you for dispensing. Besides selling medical items, you can also sell non-medical items to them.

It is almost certain that you will sell a wide variety of non-prescription medicines, health care products, cosmetics, toiletries, etc. This type of product is sold by many other outlets as well (for example, supermarkets have greatly increased their exposure to vitamins, supplements, cosmetics, toiletries, and baby products). It would likely be a wise idea to stock a range of specialist goods that are not so widely available wherever possible. Customers who are elderly or disabled may benefit from complementary therapy products or items such as incontinence products.

When you buy an existing pharmacy, the vendor will be able to let you know how many NHS prescriptions are dispensed, the NHS fees and allowances, and the retail income. It is, however, essential to do as much research as possible in order to determine whether previous performance is likely to be achievable in the future and whether you can improve on it.

Checking out your competitors is a good first step. Uncover what products and services your competitors offer.

Your customers

Additionally, you should research your local catchment area to find out who your customers are and what they want. As a result, you may be able to identify a niche in the market that is not being filled right now. You may be able to stock items of particular interest to the elderly at a newly constructed sheltered housing development and provide the New Medicine Service (NMS) for their medication management.

Many customers may seek out food supplements, support strapping, pain relief preparations, etc., at a nearby sports centre.

Establish your customer profile

By firmly understanding who your target audience is, you will gain an upper hand within your marketing efforts and the effectiveness of your business venture’s communications strategy overall. We will now dive further into the importance of this matter in relation to a pharmacy company.

Your market

Members of the public will frequently come to your shop for prescriptions and to buy items from the retail area of your pharmacy. Your services may be of interest to some, such as pregnancy tests, cholesterol tests, or flu vaccinations. There will also be customers who come in for cosmetics, toiletries, healthcare products, etc., and don’t need your dispensing services.

As part of its ‘Ask your Pharmacist’ campaign, the National Pharmacy Association encourages members of the public to consult their local pharmacist on a variety of healthcare issues. You should ensure that your pharmacy is welcoming and that your consultation area is private so that people are able to explain their symptoms without being overheard. Patients should also be provided with information on other sources of healthcare by displaying a good range of health care leaflets.

You are likely to gain many regular customers if you can build a reputation for helpful advice and for having in stock or being able to order the items customers need.

Prescriptions in England are generally charged at the time of dispensing unless the patient falls into one of the exemption categories – around 90% of prescriptions are dispensed to exempt individuals. Prescriptions are now free in the rest of the UK.

The general policy is not to offer discounts or credit to customers for non-prescription items, although occasionally certain products are discounted (for example, seasonal stock) or special promotional offers are made. A 10% discount is offered by some pharmacies to pensioners.

If there is a substantial amount involved, your customers are likely to want to pay by debit or with credit card, rather than cash, for small, inexpensive items and prescriptions.

You may also serve businesses such as nursing homes and healthcare professionals such as GPs, dentists, and veterinarians in addition to the general public.

Creating a business plan

Despite what you may think it needs to be, nobody is going to want to read a business plan if it is exceptionally long, and therefore no one probably will read it all the way through. This, of course is an issue, because when it comes to gaining funding, you need the potential loaner to know the ins and outs of your future company.

The other issue with making it overly extensive is that your business plan should ideally be a tool that you can use in the future. When you get to a point where you want to make refinements to the structure of your company, you should be able to look back over your plan and finalise some decisions from there. So, keep things short and sweet and have an easy time during the years ahead.

Use it as an idea tester for your business

Working through your business plan, and beginning with a one-page pitch, can help you test the feasibility of your business’ original concepts and ideas well before launch day rolls around.

As you work through everything from your branding and mission statement to your budget and future hopes, you are best of getting some feedback in different areas and look out for any recurring criticisms that seem to be popping up. This can be as basic as having a tutor or peer reviewing some of your ideas, or leading statistical surveying and talking straightforwardly to your potential client base.

The more you test and survey components of your plan, the more effective your plan and organisation will ultimately be. This can save you from going through days building up a strategy that simply isn’t doable.

 You should understand most people opening up small businesses in the UK year after year are not business professionals with first class degrees and a long history of success. Most new business owners are simply beginning their ventures to try new things, pursue a career in something they are passionate about and change their lives for the better.

Remember that you are in the same boat as everyone else with this and there is very little to be afraid of. Enjoy the experience while you can and get creative. If you have a strong concept for your business, there is no doubting that it has the chance to succeed.

Executive Summary 

This section should also include your mission statement and basically be the outline of what your company is and what it will try to achieve in the future. Use this section of the business plan as your elevator pitch if you like; if somebody only read this one part of the plan, they will have a clear understanding of what you are as a business and what you stand for, if you write it effectively.

It is important you get this section right, as it is the first and arguably most important part of the plan that potential lenders will read before deciding whether to award you with a business loan, so that you can get your company off the ground. The executive summary will likely be a few pages long, so don’t shy away from going into detail where you feel the need to.

Market research 

In this section you will want to include your up-to-date analysis of the market your business will going into. Look at the positions of other companies in the current market and iron out which will be your main competitors. Also, be sure to include your main strategies here in this section of the plan, so mention your potential sales forecasts, any milestones you aim to reach within your first year as an active business, advertising, and public relationships.

You should aim to provide as much market analysis as possible in order to demonstrate the vast amount of research you have conducted before thinking about starting a business of your own. Nobody should go into any sector with a blind eye and think they can be successful.

Management and personnel

This section is rather straight forward as all you really have to do is provide bios of any company executives and managers that will have active roles within the business. You could also mention how their past experience and market-expertise will help you to achieve your business’ goals/milestones.

Remember that all investors will start off as non-believers in your company and it is the role of your business plan to win them over as they read through it. Therefore, highlighting how your team has vast amounts of experience will be extremely useful when it comes to winning the lenders over. They need to know that their investments will be secure and worthwhile, so do everything you can to show them.

Financial documentation

This is the part of the business plan where you will provide the numbers that back up everything you described in your organisational and marketing sections. Include realistic projections of your profit and loss statements, a balance sheet, and your cash flow statements for the next three years. These should be future projections, not your current accounting output.

Advertising your business

Your customers should know who you are and what you offer, regardless of who they are. Pharmacy displays should be appealing, as well as the store’s interior should be smart, clean, and welcoming, and the pharmacy will serve as a good advertisement for you. Pharmacy premises must meet certain standards set by the General Pharmaceutical Council (GPhC).

You can promote your business in a number of ways:

• Local newspapers and directories are good places to advertise
• Offer a mail order service on your website. To reassure patients that they are buying medicines from a registered pharmacy, include the GPhC internet pharmacy logo on your website
• Inform people about healthcare news or holiday opening hours through social media like Facebook and Twitter
• Distribute leaflets explaining your services to local residents. Your target market might appreciate health ‘tips’
• Provide a collection and delivery service for your local surgery
• Put your logo and name on your vehicle(s)

Decide what to sell

Your pharmacy business will have two aspects:

• NHS dispensing and services
• The provision of private healthcare services and the retailing of health and beauty products

Approximately 90% of your income comes from NHS work.

In 2005, the England and Wales pharmacy contract expanded the role of community pharmacists and, in addition to providing essential services (such as dispensing and repeating prescriptions), advanced services are also available (such as flu vaccinations) and locally commissioned services (such as diabetes screenings or school services). Before you can offer advanced services, you must provide all the essential services. There are four core services in the new Scottish contract – acute medication, minor ailment, public health, and chronic medication.

Medicine sales

A medicine can be categorised into three categories by the Medicines and Healthcare Products Regulatory Agency (MHRA):

• Medications that can only be dispensed by a pharmacist are known as prescription-only medicines (POMs). Veterinarians prescribe POM-VPS medicines for animals
• Pharmaceuticals that can only be obtained from a pharmacy with a registered pharmacist present (P) without a prescription
• In addition to convenience stores and supermarkets, general sale listed medicines (GSL) are also available from a variety of other outlets

Over-the-counter (OTC) medicines are those that can be purchased without a prescription from a pharmacy.

Retail sales

Other products that you may sell in addition to P and GSL medicines include:

• Specialist healthcare items
• Hair care products, cosmetics, perfumes, toiletries
• Baby food and baby care items
• Health foods, vitamins and supplements
• Daily living aids for elderly and disabled people
• Aromatherapy and homeopathy products
• Household and pet care products
• Products such as jewellery or sunglasses
• Photographic film, cameras and accessories
• Electrical items such as shavers, hairdryers

You may also offer digital photograph printing, or other additional services.

Further to monitoring blood pressure and cholesterol, you might offer other health-related services.

Financing you pharmacy business

Financing a pharmacy business in the UK can be daunting and confusing; however, understanding the options available may help to simplify the process. Many banks offer loan packages with attractive rates, so that is often the best place to start. Business owners can also take advantage of programs like Invest Northern Ireland or the British Business Bank, each of which provides a range of competitive financing solutions.

Furthermore, venture capital funds are increasingly becoming an option for success-driven startups, allowing them to access equity investment specifically tailored to their business needs. With these myriad possibilities at hand, finding a way to finance a pharmacy business in the UK can become an achievable goal.

Buy an existing business

Instead of starting your own pharmacy business from scratch, you might decide to buy an existing one. When you buy a going concern, you may already have the products, customers, regular sales, staff, premises, and equipment in place.

When you don’t have the legal and financial expertise on your team, buying a business can be a risky, expensive process. Make sure the price you pay for the business is not too high by establishing the business’s genuine trading and financial position.

There are also the following matters to consider:

• Pharmacy premises are subject to standards set by the General Pharmaceutical Council (GPhC), the profession’s regulator. These standards must be met by pharmacies to remain on the GPhC register

Christie & Co is a business transfer agency that handles pharmacy sales throughout the country. To find pharmacy businesses for sale near you, use the Find a Pharmacy tool on Christie & Co’s website.

How to open up a community pharmacy in the UK

Conclusion

Opening a pharmacy in the UK can be challenging and will require dedication and determination. However, it is a rewarding experience that requires comprehensive knowledge of national legislation, industry standards and business strategies.

In order to open a new pharmacy, you must obtain the necessary licences from the General Pharmaceutical Council (GPhC), register with the Pharmaceutical Society of Northern Ireland or Royal Pharmaceutical Society, develop a business plan that meets local needs and obtain financing for the venture.

Once these things have been taken care of, entrepreneurs can launch their business, capitalise on their success as pharmacists and make an impact in their local area.