How to Open a Pharmacy

by Wanda Thibodeaux, studioD

The pharmaceutical industry is worth billions as of July 2011. Starting your own pharmacy allows you to have a piece of this highly lucrative business, but starting even a small pharmacy can prove challenging. You must strictly adhere to local, state and federal regulations, so stay well-organized as you plan for and launch your venture.

Contact your local Chamber of Commerce, zoning commission and other organizations such as your local Department of Health and Human Services (HHS) to determine regulations and licenses applicable in your jurisdiction. These vary regionally and are updated regularly, but you'll probably need a state pharmacy license, a Drug Enforcement Agency (DEA) number, National Association of Boards of Pharmacy/National Council for Prescription Drug Programs (NABP/NCPDP) number, Employer Identification Number (EIN) and National Provider Identifier (NPI) number at minimum. Comply with both Occupational Safety and Health Administration (OSHA) and Health Insurance Portability and Accountability Act (HIPAA) standards for patient information and sanitation. Licensed attorneys who specialize in business or medical law are good resources if you're uncertain where to start.

Write or call the human resources departments of other pharmacies and ask for basic information about sales to determine the market for particular services and products. View websites to get a concept of pricing.

Use your research to determine how you'll sell services and medications. For example, you could run online or walk-in services, which will determine the space you need, how you'll interact with customers and what other professionals you may need to assist you.

Get in touch with drug and pharmaceutical companies. Describe your pharmaceutical needs and establish relationships. Decide from where you'll procure each pharmacy item and determine the costs.

View business websites or call professionals such as website developers, real estate agents, graphic designers and copywriters who can help you secure and create space, as well as advertising materials. Establish tentative agreements for services.

Create a formal business plan to outline exactly what services and drugs you'll provide, how your pharmacy operates, and what niche it fills for members of your community and the general public. Show all costs associated with starting the pharmacy, such as website hosting, space rental, employee salaries and utility bills. Show data on individual items sold, as well as your profit potential.

Use your business plan to apply for any available grants or secure a business loan. Letters of recommendation from those in the industry will strengthen your applications.

Apply for necessary licenses and register with the state licensing authority. In most cases, this is the Secretary of State.

Construct a medication formulary or list of all medications or medicine-related products you plan to sell. Some drugs have stricter regulations than others, so it may prove useful to organize your formulary according to the degree of regulation applicable. Include a description of each item, information on its use, recommended dosage, price and additional information such as vendors from whom you can purchase the item.

Contact the professionals related to the services you need and formalize your tentative agreements once you're approved for funding.

Advertise job openings. Some positions -- such as pharmacists -- require you to check licensure, while others, such as general cashiers or stock clerks, do not. Chat with other pharmacy owners or use the Bureau of Labor Statistics's (BLS) online Occupational Outlook Handbook if you aren't sure which employees need licenses or what education level each should have.

Interview and hire employees. Review regulations such as the Fair Labor Standards Act with your attorney beforehand. Speak with your local tax agent, since he has information about how to classify each employee and how to file business taxes.

Create a formal operations manual or employee handbook. Provide training and give each employee a copy of the manual. Place a copy in a convenient location.

Order inventory and stock the shelves. Market to the public and open on the advertised date.

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