How Much Does It Cost To Set Up a Pharmacy?
In the world of healthcare, pharmacies play a crucial role. As a pharmacist, owning your own pharmacy can be a dream come true. But with that dream comes a level of responsibility, and it’s essential to be prepared for the potential risks that come with ownership. That’s where pharmacist insurance comes in. With this type of insurance in place, you can focus on growing your business and providing excellent care to your patients, without worrying about the potential financial impact of any claims.
But there’s one hurdle that many struggle to overcome when they embark on this mission: cost. Certainly, money can impede your journey toward your pharmacy-ownership dream, but if you know what you’re up against, it’s a readily scalable mountain. To help you on your way, we’ve compiled a breakdown of all the major costs involved in setting up a pharmacy.
1. Building vs. Buying
Do you want to build a new pharmacy from the ground up, or buy out an existing one? That’s the first question you need to ask yourself when looking into setting up a pharmacy of your own. There are a number of differences between these two options, the most obvious being the cost involved.
Surprisingly, it can actually be quite a bit more expensive to take over an existing pharmacy than to build your own. You’ll need to set aside at least £1 million to cover your initial purchase and legal costs. This is a steep investment, but it will mean that a lot of your initial headaches will be cured right away as the cost of your premises, equipment, stock and staff all come as part of the package, along with an existing patient base and invaluable local trust and reputation. However, it comes with the downside of not necessarily being able to establish your own branding and processes from the start. There will be a period of transition, during which you’ll need to invest a lot of time and effort into retraining your staff and rebranding the business.
Alternatively, the cost of applying to set up your own pharmacy is relatively low, costing around
£1,500 for the necessary NHS contract and to register your premises. You’ll also have to register your premises under the correct use class with the Local Planning Authority and register your new business with HMRC and Companies House. You’ll also need to think about your potential patient base in the area, so you can budget correctly for how much income you’ll be able to generate. To get a good idea of this, look into acquiring the local census information and NHS prescribing data for the local GP practices.
With both options, you’ll need to bear in mind that pharmacies situated close to hospitals, doctors surgeries, and major cities will come at a premium and will be much more expensive to run due to the increased demand you’ll face. If you’re up for the challenge, though, they can also be among the most profitable.
2. Stock and equipment
The biggest start up costs you’ll face, other than your premises and licensing, will be your equipment and first stock shipment. As you’d expect, these costs will vary depending on the size of your pharmacy and the area you’re operating in. However, as a general guide, you’ll be looking at around £100,000 to get your premises to a fully operational state. Among other things, you’ll want to consider investing in:
- Furniture, such as counters, chairs for patients to wait on, cabinets to store your stock and shelves and tables to display products on the shop floor
- Measuring racks
- Tablet counters
- Tablet bottles, boxes and other packaging
- Folders and other record keeping materials
- Gloves, face masks and other protective equipment
- An IT system to keep track of stock, patient records and appointments
- A POS system to streamline your selling process
- A security and alarm system, especially as you’ll be working with potentially dangerous medications
If you decide to invest in an existing pharmacy, a lot of this equipment may already be available to you, meaning your start up costs could be lower. However, depending on the state of the business at the time, and any changes to systems and branding you want to make, you could still be facing a hefty bill.
Whatever kind of business you’re running, you’ll need a knowledgeable and reliable team behind you, and a pharmacy is no different. Where pharmacies can be slightly different, however, is the minimum staffing requirements set by the governing authority.
According to the requirements, dispensing of up to 4,999 items only requires 56 hours of work, which can be covered by one pharmacist. However, not only is this a lot of work for one person, but if you’re looking to increase your patient base and stay competitive with other pharmacies in the area, you’ll want to be dispensing at a higher level, meaning you’ll need more staff.
Ultimately, how many employees you need will depend on the size of your pharmacy and the number of patients you have.
If you bought into a pharmacy rather than starting your own, you’ll also need to be aware of the obligations from the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006. These will require you to take on any existing staff at the time of your purchase, along with their existing contracts, or go through the appropriate consultation process to reduce your staff numbers. This may be a blessing in disguise, as the existing staff may know the business and the area well. However, in the event that they’re less than reliable, it could be a long and arduous process to let them go and bring in your own team.
4. Other costs
With the main costs covered, there are a few more things to consider that could be the difference between a successful pharmacy with a loyal patient list, and a flash in the pan business which closes up shop as quickly as it opened.
Get the right insurance
Starting any business involves an element of risk, especially a pharmacy where you’ll be dealing with highly sensitive stock and giving out crucial advice. But why make life that much more stressful by taking risks unnecessarily? By investing in a comprehensive, specialist pharmacist insurance policy, you can be sure that whatever misfortune may come your way, you’ll be protected. Damage to your premises due to fire, flood or extreme weather? You’ll be covered.
Lost or damaged stock? Don’t worry about it. Someone suffers an accidental injury while in your store? You’re completely financially protected.
With that and so much more on offer, why not protect your future and compare quotes online today?
Build an online presence
The one thing customers value above all else is convenience. Whether it’s ordering products or booking appointments, the potential a website brings is unlimited. While it may involve an investment of time and resources to set up and maintain, building a website for your pharmacy could open it up to a whole new group of potential patients, while enhancing the service that your existing ones receive.
Don’t worry if you’re not super tech-savvy though, as there are numerous website building services out there that make it quick and easy. Alternatively, there’s always the option of hiring a web developer to take care of it for you.
Market your business
An online presence also opens up new marketing opportunities, allowing you to promote your pharmacy to a much wider audience. Along with your website, using social media is a great way to directly communicate with potential new customers and promote the products you have on offer.
It doesn’t all have to be digital, however. More traditional marketing techniques such as advertising in the local paper or posters and leaflets delivered to homes in your local area can be just as effective, especially if you’re looking to build a local community pharmacy. You may also consider working with a local GP surgery to get the word out, perhaps even developing a working relationship where you can offer them a collection and delivery service. At Brisco Business, we understand the unique risks faced by different industries and offer specialised business insurance solutions.
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