Independent Pharmacy Partnership

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Hello All,

I wanted to ask all current independent pharmacy owners some questions regarding the business.

1) How much capital is needed to start-up a independent pharmacy? Is it better to buy a running pharmacy?
2) What is the avg. gross profit (not including rph salary) for a independent pharmacy based on yearly revenue.(for example if the yearly revenue was 1 million)
3)If I decided to go into business with someone, how many partners should I consider in order to still make a profit? (what is the max partners I should consider)
4) What percentage of partnership is fair if lets say you have 3 partners and you would be the only one working at the pharmacy or if there are just 2 partners? (I am trying to figure out what percentage should the working partner have in the business and what percentage should the non-working partners have. I know that if everyone is putting in the same amt of work, than everyone should have equal amt of partnership)

1.)You need anywhere from 100k to 150k cash or some other kind of equity worth that much.
2.)Gross profit is gonna be between 15-20%. So if you do 1 million worth of business you will bring in a profit of 150-200k. Thats gonna be a pretty low volume store; probably 75-100 prescriptions per day. You shouldn't have any trouble reaching that.
3.)I probably wouldn't have more than 1 partner.

I think the only way to go right now is to buy an existing pharmacy. There are tons of guys in their 50s and 60s out there looking to retire that don't want to sell to CVS/Wags.

It is HARD to start any business from scratch. It might take you 2-3 years to get it off the ground. I know a guy that recently sold a pharmacy. Right now the store is doing anywhere from 400-600 every day. This same store did not turn a profit for almost 5 years!

Originally Posted by Chitoca

Hello All,

I wanted to ask all current independent pharmacy owners some questions regarding the business.
First I would say you need to attend a confirence or spend a year or so reading about the business. NCPA has an ownership conference I went to that was helpful. Build a base of knowledge first.

1) How much capital is needed to start-up a independent pharmacy? Is it better to buy a running pharmacy?
The amount I have seen is 500k. That includes build out, inventory and paying yourself for first 2 years while building up customer base. IMO if you don't have a house or kids you can boot strap it and do things cheaper, just live in the store.

Buying a pharmacy already open and running is going to be much much easier. There was an article in America's Pharmacist put out by NCPA written by the loan officer for a bank that specialize in healthcare start/finaincing buying an existing one and the numbers sure made buying an existing one look good.

2) What is the avg. gross profit (not including rph salary) for a independent pharmacy based on yearly revenue.(for example if the yearly revenue was 1 million)
ave independent does 4million in sales/year with profit at 3-8%, that is after paying all salaries including the owner if he/she is a pharmacist.

3)If I decided to go into business with someone, how many partners should I consider in order to still make a profit? (what is the max partners I should consider)
There is no correct answer to this. Pharmacies can vary a ton. Say you don't want too much risk and keep your current job but have more partners. Then maybe in a few years you still have your job and make 50k from the store you and several partners own.

4) What percentage of partnership is fair if lets say you have 3 partners and you would be the only one working at the pharmacy or if there are just 2 partners? (I am trying to figure out what percentage should the working partner have in the business and what percentage should the non-working partners have. I know that if everyone is putting in the same amt of work, than everyone should have equal amt of partnership)

You need to make a business plan and run all the numbers and projections. Amount of ownership can depend on the amount of capital put in. For example say there are 3 partners and 2 put in 85% of start up money and the third partner puts up 15% and is the pharmacist working at the store. I would pay the pharmacist working at the store an average pharmacist salary and at the end of the year any extra money divide up via the percentages owned. Or say the pharmacist working at the store agrees to work for much less than the average salary in exchage for an increased ownership percentage. There are hundreds of ways to structure deals and partnerships, just do some research.


In regard to partners make sure everyone has the same work ethic, goals and vision for what you are doing.

What is the best way to differentiate an independent from the chains? What is the best niche market for an independent to be successful?

offer free delivery...make same day delivery 5 dollars if they want it today...make it free if they can wait until the next day