New Pharmacy Owner’s Advice: Become Business Smart
Best practices and lessons learned by new pharmacy owners.
Find the right business advisors to set yourself up for success
Pharmacists who have decided to open an independent pharmacy tell others it is a lot of work — and are usually quick to share what they learned along the way. Joe Jorgenson heard that advice before opening White Bear Health Mart Pharmacy in July 2011, and now says, “It’s even more than you can imagine.”
Listen to Experience
That doesn’t mean opening a pharmacy is a solitary, do-it-yourself project. Along the way Jorgenson learned how important it was to build relationships with people who have expertise he lacked. Looking back on his experience, Jorgenson suggests first talking with:
- A pharmacist in charge (PIC). Jorgenson had worked for a regional chain that was acquired by a national chain. The PIC from the regional chain was close to retirement and didn’t want to open a new pharmacy himself, but he gladly helped Jorgenson, who was just a few years out of pharmacy school. This PIC helped with the paperwork and relationships necessary to open a new location. Finding other pharmacists willing to help isn’t difficult. Jorgenson already has served as a mentor for several new pharmacy owners.
- A representative from a wholesaler. “My McKesson account rep [Janie O’Dell] helped me more than I could have imagined,” Jorgenson said, because she had experience working with many pharmacists as they opened new locations. O’Dell was there to help Jorgenson throughout the process, sharing best practices and experiences from the other pharmacies she supports. McKesson also has a team of RxOwnership® advisors who can help prospective owners secure financing, match qualified buyers with sellers, and provide guidance throughout the ownership process.
- A lender that specializes in pharmacies. “I got laughed out of several banks,” Jorgenson said, before securing financing for his new store through McKesson with the help of its RxOwnership program. Talking with a lender that doesn’t have experience with pharmacies is like speaking with someone who uses a different language. They don’t understand the business.
Become Business Smart
As soon as Jorgenson filed for his business license, he was bombarded by people wanting to sell him something. Here’s what he learned about managing money in his business:
- Run the numbers. Create a business plan that lays out financial estimates. Calculate by day, week and month. Set goals that make sense for your new pharmacy. A chain location may fill 800 scripts on a Monday, but for a new independent pharmacy a realistic goal might be closer to 120 a day.
- Think of all possible costs. “As a pharmacist, it never crossed my mind that we would have to decorate the walls,” said Jorgenson, who was surprised by the cost of even a bulletin board for the pharmacy. His store didn’t have cabinets for a year, until he found a good deal and installed them himself. McKesson’s Retail Design team can help new and current owners with store planning, interior décor and fixtures selection and installment, exterior signage, and renovations.
- Negotiate. “Every number is adjustable,” Jorgenson said. People trying to sell you something for your business start with a price that they like, not that you like. Negotiate.
- Try before you buy. Because Jorgenson had worked in several pharmacies, he had the benefit of having tried several pharmacy-management systems before picking one for his store. He was able to pick a system that met his current needs, but would also grow with his business.
- Make flexible choices. When friends ask Jorgenson why he opted to have a Health Mart® franchise, he tells them, “I get a lot more out of [Health Mart] than they get out of me,” and he cites the value of programs such as the Marketing Hub, which includes customizable templates, expert support and other tools. He noted that Health Mart gives him flexibility to add new programs and solutions based on the constantly changing needs of his pharmacy.
- Collaborate with other business owners. Instead of having a grand opening only for his store, Jorgenson partnered with other stores for an even bigger community event. The butcher shop prepared a barbecue and the liquor store set up a beer stand. The event drew more people than a pharmacy opening alone would have, and Jorgenson paid only a portion of the cost.
If Jorgenson were to start his business again, one thing he might do differently is think about buying an existing pharmacy, which he didn’t consider as an option when opening his first store. (Visit RxOwnership for information on buying or starting a pharmacy, including customized matching services for buyers and sellers.)
What advice would you give a pharmacist buying or building a store? Share your experience in the Comments section below.