Business plan for a pharmaceutical store

Introduction

A pharmaceutical store is a shop for preparing, preserving, compounding, and dispensing medical drugs. Pharmaceutical shops dispense drugs according to the prescription of the doctor or without doctor’s prescriptions for over-the-counter (OTC) drugs.

This is a business plan for the setting up of a pharmaceutical store at Market Road Ughelli, Delta State, Nigeria the pharmaceutical store will be known as HEALTH-WISE PHARMACEUTICALS. Our mission is to operate set up a pharmaceutical store in the above-stated location to professionally and efficiently. For our business to be successful, we should design our operation in a way that is customer focus by creating programmes that will train our staff to be adequately ready to attend to our customers irrespective of their status and educational level. This will involved the training of staff to relate with customers in their local languages.

Registration of the business

Before we begin operation, we shall ensure that our pharmaceutical store is duly registered with the Corporate Affairs Commission (CAC). We shall use the name “HEALTH-WISE PHARMACEUTICALS”.

 Aim and Objective

HEALTH-WISE PHARMACEUTICALS aim and objective will be to provide quality service to all of our customers irrespective of their status and educational qualifications efficiently and effectively at all times.

Location

The location of the pharmaceutical store will be along Market Road Ughelli which is certainly a very strategic location, since it is one of the major roads linking every part of Ughelli town. The will give the pharmaceutical store  opportunity to attract qualified workforce, get easy access to raw medicinal drugs from major marketers and distributors and also very accessible to our customers.

 Mission/vision statement

HEALTH-WISE PHARMACEUTICALS Mission Statement: Our mission is to serve Ughelli Metropolis with high quality pharmaceutical services, efficiently, effectively and professionally.

 Vision Statement: HEALTH-WISE PHARMACEUTICALS hope to expand its target area to the entire Delta State and beyond with its efficient, effective and professional pharmaceutical services.

Source of fund for Health-wise Pharmaceuticals

The fund for the establishment of Health-wise Pharmaceuticals will be a loan which will be obtained from Business Mediators Co-operative Society which will be priced at 10% per annum. Health-wise Pharmaceutical wishes to obtain a loan of ten million naira (N10,000,000.00) only from Business Mediators Co-operative Society.

Source of raw materials

Raw materials needed by Health-wise Pharmaceuticals will be medicinal drugs from major medicinal drugs distributors and major marketers.

Market analysis and research

It is obvious that the pharmaceutical store business is a very challenging one considering the number of pharmaceutical stores in the area and the economic situation of the country. In addition, we will have to compete favourably with some of the already existing pharmaceutical stores in the area, especially Godwill Pharmacy, Craig Pharmacy and popular Udinese Pharmacy. But we believe that by the delivery of efficient, effective and professional services, especially in getting to talk to the people in their local languages, will instil in them some trust and comradeship in dealing with us.

Our pharmaceutical store which to will reduce profit margin by 5% of our competitors which we believe will surely drive the sales volume up and hereby give us a very high turnover daily.

Business description

Running a pharmaceutical store in Market Road, Ughelli will certainly be very challenging, but focus on dedication, efficiency and professionalism will surely be very profitable. There are various business challenges in running a pharmaceutical store in Market Road, Ughelli, bearing in mind that many pharmaceutical stores have tried and not been successful before.

The start up with a business such as ours is risky because it does require certain equipment that other businesses do not other obstacles include the permits and licenses that we would need to get in order to operate a pharmaceutical stores such as Pharmaceutical Association of Nigeria, NDLEA, NAFDAC, but once we have passed these beginning challenges, we believe that our business will head in a positive direction.

 Competitive analysis

Health-wise Pharmaceuticals will have three major competitors in the in Market Road, Ughelli which is our location. They are Godwill Pharmacy, Craig Pharmacy and Udinese Pharmacy. Godwill Pharmacy is located south of Market Road. Due to the fact that it is located off the major traffic route, only the people in the locality will be their major customers if there is another pharmaceutical store that offers the same service with theirs. The remoteness of its location is a definite weakness. Craig Pharmacy is located at Post Office Junction on a busy side street that has various entrance and exit points and very limited parking. Craig Pharmacy has good traffic, but its poor parking and access are a definite weakness. Udinese Pharmacy is located in the Apple Blossom Mall in Close to AGGS Roundabout. Because of its mall presence its location is a definite strength.

An analysis of Health-wise Pharmaceutical competitor’s strengths and weakness can be seen on the following chart. These factors are ranked 1, 2, 3 or 4 with 1 being the best and 4 being the worst.

Factors                                 Godwill                Craig                   Udinese

Products                               2                                  3                                  3

Price                                       2                                  2                                  1

Quality                                  2                                  3                                  3

Product Selection                1                                  3                                  1

Customer Service                3                                  3                                  3

Expertise                               3                                  3                                  3

Image/Reputation               2                                  3                                  2

Location                                 4                                  3                                  1

Layout                                     2                                  2                                  3

Appearance                             1                                  2                                  2

Sales Method                          2                                  4                                  3

Credit Policy                            1                                  1                                  1

Availability                              2                                  3                                  2

Management                           2                                  3                                  2

Longevity/Stability                1                                  2                                  2

Advertising                               3                                  3                                  3

Health-wise Pharmaceuticals strongest competitor is Godwill Pharmacy. Godwill Pharmacy has four main weaknesses: product expertise, location, advertising and customer service. Their primary target market appears to be middle to upper middle-income customers. Many customers of this establishment have complained of their lack of follow up after a large sale to a first -time customer and lack of expertise in some of their product lines. Considering their remote location, their lack of advertising and customer follow up are their two major problems.

Craig Pharmacy and Udinese Pharmacy both deal in middle and lower middle income customer. Although Udinese Pharmacy is located in the local mall which is generally considered the best location for foot traffic, their product quality and pricing appeals to the customer who does not mind buying foreign made knock offs. Although their products are attractive, they are not for the type of customer that Health-wise Pharmaceuticals is targeting

Based on this reason we strongly believe that providing efficient, effective and professional services at an affordable price and being in the locality of our target market will certainly give us a competitive edge over our competitors..

 Management team plan

The day to day operation of Health-wise Pharmaceuticals shall be headed by a manger who must be a graduate of Pharmacy and with at least five year relevant experience at the time of recruitment. The recruitment of the other staff shall be entrusted to the managing director which the approval of the Chief Executive Officer.

Marketing plan

Health-wise Pharmaceuticals shall undertake the responsibilities of advertisement through newspapers, especially the Urhobo Voice which is widely read in the area of operation. Health-wise Pharmaceuticals shall also sell bread at a discount of 2% of the normal price to individual shop owners. This will serve as incentive for their transport expenses.

 Target Market: The target market for Health-wise Pharmaceuticals is medium and low income earns who make up about 90% of the entire population of Ughelli metropolis.

 Operation time

We shall be opening for business by 5.30 a.m. – 6.30 p.m. Monday through Saturday. Workers shall be running shift of eight hours daily.

 Pricing

Our price shall be the average price of our competitor. Though we are going to deliver a more efficient, effective and professional service, we shall hang on to a lesser profit but encourage higher turnover than our competitor, thereby making a higher profit in the long run.

 Financial plan

Capital Requirement and Equipment

The level of investment is based on the objectives of the project

Required Capital Investment

Capital Investment Item Qty Unit price(N) Total (N)
Rent 500,000 500,000
Furniture and fittings 100,000 100,000
Power (Generator) 1 100,000 100,000
Computers 4 60,000 240,000
Stock 8,000,000 8,000,000
Other tools 1,100,000 1,000,000
Total 10,000,000

 

General cost (Overheads)

Cost items Pdn cost/day Pdn cost/wk Pdn cost/mth Pdn cost/yr
Salaries 5,000 30,000 120,000 1,440,000
Utilities 700 4,200 16,800 201,600
Sales & distribution 2,000 12,000 48,000 576,000
Administrative Expenses 1,000 6,000 24,000 288,000
Cleaning and toiletries 200 1,200 4,800 57,600
Miscellaneous 500 3,000 12,000 144,000
Depreciation 200 1,200 4,800 57,600
Sub-total 9,600 57,600 230,400 2,764,800

 

Total Overhead cost for a year = N 2,764,800

  • Depreciation on fixed assets assumes 4-years life of assets written off at 25% year for all assets.
  • Direct costs include materials, supplies and other costs.
  • Total monthly days assumed are 24-days.
  • The valuation currency used is Naira.

Profitability Analysis Table

Profitability item Per day Per week Per month Per year
Revenue 196,000 1,176,000 4,704,000 56,448,000
Less: Cost Price of Medicinal drugs 98,000 588,000 2,352,000 28,224,000
Less: Operating Cost 9,600 57,600 230,400 2,764,800
Profit 88,400 530,400 2,121,600 25,459,200

 

Conclusion

Pharmaceutical store business is a very lucrative business, because from time to time people will be in need of pharmaceutical stores services to buy medicinal drug to cater for different illness.

 

References

Cayenne Consulting (2011). Cayenne Consulting LLC Ten Big Questions”.  London: Cayenne Consulting LLC.

Davis, K. (2007). Creating a Business Plan: Expert Solutions to Everyday Challenges. United States: Harvard Business School.

Eric, S. Siegel, R. Ford, J. & Bornstein, M. (2008), ‘The Ernst & Young Business Plan Guide’. New York: John Wiley and Sons.

Pinson, Linda. (2012). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future (6th Edition). Chicago: Dearborn Trade.

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