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> Opening A Pharmacy - Is It Worth It?, Help me decide to go or not to go

braderizwan
post Jan 28 2019, 04:08 PM, updated 3w ago

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Hi,

My wife is a pharmacist and working with KKM now. And out of nowhere, her mom just suggest to open her own pharmacy and her mom be the funder. Since she is just working about 4 years now and never have any business before, kinda afraid to leave promising job to start a new business.

I can get the technical requirements like shop size, dispensing area etc from the pharmacist guidelines but still need more info on the non-technical parts.

Anyone here have a pharmacy? Can you enlighten me a bit on these?
- What's the entry cost?
- I live in an area where most people work makan gaji. It's not packed yet but expected to be. Lots of new development and no pharmacy yet so far close to this area. What are other requirements that you consider before choosing the area?
- How much is the overhead monthly on average? If my wife doesn't want to quit from job, then there must a certified pharmacist avail at all time right? What's the average salary for the pharmacist?
- How long do you need to have money to sustain before calling it a quit if it doesn't bring any profit? A year?
- What's the average sales per day should we expecting? I heard from a friend working in private pharmacy, sometime sales can go as low as RM 200 only per day.

Any other info I should know before entering the business?

Sorry if there is already a thread on this. But I found one way back 2008.

lucifah
post Jan 28 2019, 04:18 PM

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tell u what, it is much easier if your wife work with a retail pharmacy for few yrs first

working with KKM / MOH is WAYYYY DIFFERENT from working with retail pharmacy

aside from the many diff licenses you need to acquire (like poison, wholesale, dispensing, etc.), you also need to know your suppliers, payment terms (usually no credits for new customers) handle the cash flow (in & out), and staff management

and also the black arts part - your conscience. should you push a cheaper generic drug or more expensive one, which will give you more profit? that one, u need to have a heart of stone. this one most people fail

remember, you are not running a charity, u r running a business
ahpooki
post Jan 28 2019, 04:22 PM

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i see a lot of pharmacies suffering... even a lot of clinics are facing the same situation... imho, not a very good time to start a business in retail pharmacy
braderizwan
post Jan 28 2019, 04:43 PM

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QUOTE(lucifah @ Jan 28 2019, 04:18 PM)
tell u what, it is much easier if your wife work with a retail pharmacy for few yrs first

working with KKM / MOH is WAYYYY DIFFERENT from working with retail pharmacy

aside from the many diff licenses you need to acquire (like poison, wholesale, dispensing, etc.), you also need to know your suppliers, payment terms (usually no credits for new customers) handle the cash flow (in & out), and staff management

and also the black arts part - your conscience. should you push a cheaper generic drug or more expensive one, which will give you more profit? that one, u need to have a heart of stone. this one most people fail

remember, you are not running a charity, u r running a business
*
Thanks. Thinking about the same thing too.
Just this kinda chance doesn't easily come. Someone out of nowhere saying she can fund a business for us.

Any other business u think I should get into instead?
braderizwan
post Jan 28 2019, 04:44 PM

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QUOTE(ahpooki @ Jan 28 2019, 04:22 PM)
i see a lot of pharmacies suffering... even a lot of clinics are facing the same situation... imho, not a very good time to start a business in retail pharmacy
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In your seeing, if not good time for retail pharmacy, then what kind of business is good for now?
lucifah
post Jan 28 2019, 04:52 PM

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QUOTE(braderizwan @ Jan 28 2019, 04:43 PM)
Thanks. Thinking about the same thing too.
Just this kinda chance doesn't easily come. Someone out of nowhere saying she can fund a business for us.

Any other business u think I should get into instead?
*
nope. if u need to ask, then you are not ready to handle the business world

its stressful and 90% of the time, you WILL FAIL.


cherroy
post Jan 28 2019, 05:20 PM

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QUOTE(braderizwan @ Jan 28 2019, 04:44 PM)
In your seeing, if not good time for retail pharmacy, then what kind of business is good for now?
*
It is not about what kind business is good but what you are excel at.


braderizwan
post Jan 28 2019, 05:55 PM

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QUOTE(lucifah @ Jan 28 2019, 04:52 PM)
nope. if u need to ask, then you are not ready to handle the business world

its stressful and 90% of the time, you WILL FAIL.
*
i've been in business for about 3 years now supplying raw cooking foods for school and shops. and before that as sub-cont for house maintenance and construction. I do understand that it is stressful with the people, financing handling and legal license process etc. i've been through the ups and down of other business but never been in pharmaceutical before.

since it's her mom's money, i dont want her to invest in my own business. I don't mind other's money but if it my own family's money, it's a risk I cannot take. If somehow goes lingkup, its gonna be bad for both of us. So that's why I'm considering other basket. Even goes lingkup, not both of us gonna be sour face as i still have my own.

i can just open the retail pharmacy by referring to the guidelines and embrace the ups and down. But i think its better to ask for opinions and experiences from others first and since not many that I know is in this field, I come here.

retail pharmacy is just one of considerations at the moment and I open up to any joint venture or any other promising business plan. saying its stressful and will fail 99% of all time is like putting a fullstop to a discussion.

even late Goh Tong also ask around, meet people, ask for ideas before he march his own feet to the Genting deep forest. and 99% of people keep saying he will fail too bro.
braderizwan
post Jan 28 2019, 06:03 PM

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QUOTE(cherroy @ Jan 28 2019, 05:20 PM)
It is not about what kind business is good but what you are excel at.
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Well she's good with meds, she got connection in pharma. Imho, pharmaceutical it is.
But maybe my opinion is wrong, thus i'm looking for others opinion at the moment. At least I have 2 votes for no as of now.
IccyAsd
post Jan 28 2019, 07:16 PM

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Opening a pharmacy isnt as easy now, especially with so many pharmacy around where AA Pharmacy is the cheapest of all. AA Pharmacy internal management is a mess even though it looks big & all.

Working for a pharmacy would allow yr wife to gain more knowledge and the flow of business, its her mom's $ she can invest in future.
cherroy
post Jan 29 2019, 09:46 AM

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QUOTE(braderizwan @ Jan 28 2019, 06:03 PM)
Well she's good with meds, she got connection in pharma. Imho, pharmaceutical it is.
But maybe my opinion is wrong, thus i'm looking for others opinion at the moment. At least I have 2 votes for no as of now.
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Technically excellence and running a business is totally different front.

So, consideration should be put on business pov.
kochin
post Jan 29 2019, 09:56 AM

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QUOTE(braderizwan @ Jan 28 2019, 04:08 PM)
Hi,

My wife is a pharmacist and working with KKM now. And out of nowhere, her mom just suggest to open her own pharmacy and her mom be the funder. Since she is just working about 4 years now and never have any business before, kinda afraid to leave promising job to start a new business.

I can get the technical requirements like shop size, dispensing area etc from the pharmacist guidelines but still need more info on the non-technical parts.

Anyone here have a pharmacy? Can you enlighten me a bit on these?
- What's the entry cost?
- I live in an area where most people work makan gaji. It's not packed yet but expected to be. Lots of new development and no pharmacy yet so far close to this area. What are other requirements that you consider before choosing the area?
- How much is the overhead monthly on average? If my wife doesn't want to quit from job, then there must a certified pharmacist avail at all time right? What's the average salary for the pharmacist?
- How long do you need to have money to sustain before calling it a quit if it doesn't bring any profit? A year?
- What's the average sales per day should we expecting? I heard from a friend working in private pharmacy, sometime sales can go as low as RM 200 only per day.

Any other info I should know before entering the business?

Sorry if there is already a thread on this. But I found one way back 2008.
*
have seen many pharmacist surviving even though it's next to big brands such as caring, watson, guardian, etc.
key difference usually it's due to customer service experience and satisfaction from these small shop.
otherwise, they can't go against those big brands which commands higher commercial negotiation to bring in stocks.

so key thing is, assuming you go ahead, what's stopping the big brand to enter the market later. how do you propose to take on these giants?

if you got this sorted out i think it's worth trying.
afterall if failed, can always go back to apply other job. minimum funding lost due to fama support. even though it's still money.
but a risk worth taking imho.

good luck.
braderizwan
post Jan 29 2019, 10:09 AM

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QUOTE(cherroy @ Jan 29 2019, 09:46 AM)
Technically excellence and running a business is totally different front.

So, consideration should be put on business pov.
*
Yeap I do agree.
Thanks for sharing ur thought.
real55555
post Jan 29 2019, 12:13 PM

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Do a basic feasibility study first before coming back here for further discussion.

1. Location - Where do you plan to open your business. Give yourself at least 3 choices and list down the pros and cons of each location.
(A) Distance to the nearest pharmacies from each of your 3 preselected locations.
(B) Your advantages and disadvatages to the nearest pharmacy
© Any Plan B or counter strategy should a new pharmacy open up next to you?

2. Funding
(A) Renovation, furniture and fittings, electronic equipments incl CCTV etc (depending on your shop size)
(B) Own shop or rental (find out rental rates in that area by just calling some real estate agents or through online)
© You have to get some references regarding revenue and costs from some pharmacy operators. Maybe you can ask friends who operate a pharmacy in similar environment, or check with auditor friends see if they can reveal anything useful to you.
(D) Number of staff to employ (depends on your shop size, number of customers, level of experience, opening hours, market rate etc)
(E) Utilities cost (whether to install aircon or not)

3. Targeted market
(A) Who do you intend to sell your products to? Why will they want to buy from you?
(B) what range of products that suit your targeted market? Prescrption/controlled medicines? how much are these products selling for in the nearest pharmacy, and work out your margin
© Who are the suppliers? Try talking to them see what they can offer in terms of credit, order quantity, delivery, returns of excess stocks, any 'lobangs'... because they deal with a lot of pharmacies, so their knowledge sometimes is quite valuable
(D) Any other services you can offer? Blood pressure checking, blood test, etc (Not sure about the regulations governing these but you can find out if you are interested)

4. Sustainability
(A) Once you have your projected sales and costs (Fixed and variable), then you can calculate your required startup cost, monthly running cost/working capital.
(B) Calculate the time frame for you to earn back the startup costs and evaluate if this is a good investment. This also represent the time frame when you can repay your family for the funding if they want to (Depending on the arrangement between you and your family, whether she is to become shareholder or just give you to open a business or to return when business is doing well)
© Reserve a minimum of 6 months of working capital (which should last you a year unless you have 0 sales during that 6 months which is near to impossible), that means you can absorb the losses for this time frame should the business is not doing as well as it should. New businesses take time to mature, a lot of business failure comes from inadequate reserve funds.

I did not touch on the licensing and regulatory requirements, those are fairly straight forward I believe.

These are all i can think of at the moment. Hope it helps.

braderizwan
post Jan 29 2019, 12:17 PM

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QUOTE(kochin @ Jan 29 2019, 09:56 AM)
have seen many pharmacist surviving even though it's next to big brands such as caring, watson, guardian, etc.
key difference usually it's due to customer service experience and satisfaction from these small shop.
otherwise, they can't go against those big brands which commands higher commercial negotiation to bring in stocks.

so key thing is, assuming you go ahead, what's stopping the big brand to enter the market later. how do you propose to take on these giants?

if you got this sorted out i think it's worth trying.
afterall if failed, can always go back to apply other job. minimum funding lost due to fama support. even though it's still money.
but a risk worth taking imho.

good luck.
*
This is quite a big point on the decision making. Indeed big pharmas can just pop their store and sustain more years compare to mine.
Will plan more marketing strategies on how to build up loyal customers.

Thanks again for pointing it out.
braderizwan
post Jan 29 2019, 12:23 PM

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QUOTE(real55555 @ Jan 29 2019, 12:13 PM)
Do a basic feasibility study first before coming back here for further discussion.

1. Location - Where do you plan to open your business. Give yourself at least 3 choices and list down the pros and cons of each location.
(A) Distance to the nearest pharmacies from each of your 3 preselected locations.
(B) Your advantages and disadvatages to the nearest pharmacy
© Any Plan B or counter strategy should a new pharmacy open up next to you?

2. Funding
(A) Renovation, furniture and fittings, electronic equipments incl CCTV etc (depending on your shop size)
(B) Own shop or rental (find out rental rates in that area by just calling some real estate agents or through online)
© You have to get some references regarding revenue and costs from some pharmacy operators. Maybe you can ask friends who operate a pharmacy in similar environment, or check with auditor friends see if they can reveal anything useful to you.
(D) Number of staff to employ (depends on your shop size, number of customers, level of experience, opening hours, market rate etc)
(E) Utilities cost (whether to install aircon or not)

3. Targeted market
(A) Who do you intend to sell your products to? Why will they want to buy from you?
(B) what range of products that suit your targeted market? Prescrption/controlled medicines? how much are these products selling for in the nearest pharmacy, and work out your margin
© Who are the suppliers? Try talking to them see what they can offer in terms of credit, order quantity, delivery, returns of excess stocks, any 'lobangs'... because they deal with a lot of pharmacies, so their knowledge sometimes is quite valuable
(D) Any other services you can offer? Blood pressure checking, blood test, etc (Not sure about the regulations governing these but you can find out if you are interested)

4. Sustainability
(A) Once you have your projected sales and costs (Fixed and variable), then you can calculate your required startup cost, monthly running cost/working capital.
(B) Calculate the time frame for you to earn back the startup costs and evaluate if this is a good investment. This also represent the time frame when you can repay your family for the funding if they want to (Depending on the arrangement between you and your family, whether she is to become shareholder or just give you to open a business or to return when business is doing well)
© Reserve a minimum of 6 months of working capital (which should last you a year unless you have 0 sales during that 6 months which is near to impossible), that means you can absorb the losses for this time frame should the business is not doing as well as it should. New businesses take time to mature, a lot of business failure comes from inadequate reserve funds.

I did not touch on the licensing and regulatory requirements, those are fairly straight forward I believe.

These are all i can think of at the moment. Hope it helps.
*
Most of the questions here, I already have answers and data. Some of it still doing a research.
But you do point out certain things that I missed in my evaluation.

Will reply back with data and put it on my first post.

Thanks for highlighting this making it possible by giving suggestions.
NightHeart
post Jan 29 2019, 01:51 PM

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QUOTE(braderizwan @ Jan 28 2019, 04:08 PM)
Hi,

My wife is a pharmacist and working with KKM now. And out of nowhere, her mom just suggest to open her own pharmacy and her mom be the funder. Since she is just working about 4 years now and never have any business before, kinda afraid to leave promising job to start a new business.

I can get the technical requirements like shop size, dispensing area etc from the pharmacist guidelines but still need more info on the non-technical parts.

Anyone here have a pharmacy? Can you enlighten me a bit on these?
- What's the entry cost?
IMO it's quite high cause a lot of pharmacy core items are outright purchased.

- I live in an area where most people work makan gaji. It's not packed yet but expected to be. Lots of new development and no pharmacy yet so far close to this area. What are other requirements that you consider before choosing the area?
You can be the only pharmacy for now, but it'll be a matter of time before the A, B, C pharmacy come & steal all your customers.

- How much is the overhead monthly on average? If my wife doesn't want to quit from job, then there must a certified pharmacist avail at all time right? What's the average salary for the pharmacist?
Yes, you need a pharmacist license to apply for a pharmacy business license & you need a pharmacist to sell certain poisons.  

- How long do you need to have money to sustain before calling it a quit if it doesn't bring any profit? A year?
Depends on how deep is your pocket.

- What's the average sales per day should we expecting? I heard from a friend working in private pharmacy, sometime sales can go as low as RM 200 only per day.
One pharmacy i know has sales target of RM1k per day only while another pharmacy i know easily bags in RM50k per day. There's no clear answer for this question.

Any other info I should know before entering the business?
See my 2 cents below

Sorry if there is already a thread on this. But I found one way back 2008.
*
I'm working with multiple retail pharmacy for few years now & these are some of my 2 cents:

Firstly, get your wife to do locum with a retail pharmacist first to get a feel of the environment. Don't locum with the big establish ones, those tend to have existing large pool of regular customers coming in by themselves already. Ideally the small & new independent pharmacies with 2-3 branches max. Go experience the challenges to build awareness for a new pharmacy & building relationship with new potential customers.

Secondly, do note that a lot of typical pharmacy products including the poisons has paper thin margin thanks to A, B, C Pharmacy. The margin can be as low as 2% only & it's commonly COD terms with major brands from Zuellig, Abbot, DKSH, RB, GSK etc etc.

Thirdly, independent pharmacy's key to survival is service quality & differentiate themselves with unique products. So you have to win in both products & services. Good service is self explanatory, unique products is the key that makes people walk into your pharmacy over the others. Plus it gives you the margin you desperately need to survive. This is where your knowledge of unique & high potential products in the market comes in handy.

I'd give you another tip; nutritionist is more valuable than pharmacist.
WaCKy-Angel
post Jan 29 2019, 01:54 PM

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IMO easiest way is to franchise under existing big companies like AA pharmacy, Big pharmacy and etc...
pharmacies/clinics is one of the essentials even in bad economics, ppl still get sick and need medications.

cherroy
post Jan 29 2019, 02:50 PM

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Pharmacy as name implied that people taught selling medicine and prescribed drug, but nowadays, those healthy supplement product (vitamins), and heath care product (from shampoo, to toothpaste etc) may the main selling revenue for some pharmacy, while those medicine just occupy a small corner only of the shop only.

In term of business pov, pharmacy is not about selling medicine only.
ahpooki
post Jan 30 2019, 12:33 PM

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QUOTE(braderizwan @ Jan 28 2019, 04:44 PM)
In your seeing, if not good time for retail pharmacy, then what kind of business is good for now?
*
the kind of business that serves everyday needs...food (not those fancy cafe types..)..more like kopi tiam hawker foods, there are others but not exactly legal..lol

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