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Pharmaceutical Business Plan

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Health spending accounted for 9.3% of GDP on average across OECD countries in 2011. The Pharmaceutical expenditure, as a percentage of total expenditure on health, accounted for 15%. The pharmaceutical sector is highly regulated. On describe the major characteristics of the world pharmaceutical industry as one increased globalization, changing structure of competition and increased competitiveness. This are growing pressures on discovery and development. Drug liabilities become more frequent and more costly. The pharmaceutical industry is under immense pressure by external and internal stakeholders. Government and National Health Services are monopsonic practices. Pharmaceutical companies are criticised for high prices, over-intensive sales and marketing activities, presents to medical doctors, clinical trials and industry – government alliances. Lawyers, medical journals, physicians, politicians, and the media use product liabilities and marketing activities to denounce pharmaceutical companies as culprits. The pharmaceutical sector needs to demonstrate responsibility and take steps to increase awareness. Transparency would increase the credibility of the pharmaceutical industry. Corporate governance will prevent corruption by being in compliance with the legislation and establishing their own internal policies designed to prevent corruption. All firms will act more responsibly. In order to rebuild the trust the industry needs to work together and quickly.

Continuous innovation is one of the pharmaceutical industry's most defi ning characteristics. New medications can be crucial for maintaining the quality of human life, and may even affect its duration. The sales potential is staggering: the global pharmaceutical market is expected to reach $1.1 trillion by 2015. The pressure to succeed is tremendous. Yet, pharmaceutical innovation is hardly an orderly, predictable process. It follows a technology-push model dependent on a meandering path of scientifi c breakthroughs with uneven timing and hard to foresee outcomes. Technological competency, decades of rigorous research, and profound understanding of unmet customer needs, while necessary, may prove insuffi cient for market success as the critical decision for commercialization remains outside the fi rm. Drug innovation as a business process requires savvy strategic, organizational, and managerial decisions. It is already enjoying intensive research coverage, giving rise to abundant but relatively dispersed knowledge of the mechanisms driving drug discovery and development. In this chapter, we present a comprehensive overview of the process of drug innovation from a business and academic perspective. We discuss the evolving organizational forms and models for collaboration, summarize signifi cant empirical regularities, and highlight differences in market positions related to fi rms' strategic orientation, innovation emphasis, attitudes to risk, and specialized resources. As a guide to future research, critical drivers and modes for drug innovation are systematized in a unifying framework of characteristics and process decisions, and multiple areas in need of further scrutiny, analysis, and optimization are suggested. Because of its rich potential and high signifi cance, research on drug innovation seems poised to gain increasing momentum in the years to come.

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Opt-e-scrip, Inc., has developed a patented test for determining the efficacy of drugs in individual patients so that doctors can prescribe the drug that really works for each person. In addition, test results show that older, less expensive drugs are often as or more efficacious than the newer, expensive drugs pushed by manufacturers. It, thus, benefits physicians, patients, and drug benefit payers. However, the company has had difficulty entering the market, given its complexity and their lack of resources. The test remains a product in search of an application and a customer willing to pay for its usage.

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/ Article

Building effective business development in pharma.

By  Mark Lubkeman ,  André Kronimus , and  Filip Hansen

At a time of rapidly evolving scientific breakthroughs and, coincidentally, of the expiration of many blockbuster drug patents, the key to innovation and revenue growth is pharmaceutical business development. While some innovation and new revenue can come from internal pipelines and assets, business development teams are under intense pressure at most companies to supplement internal efforts with external licensing agreements and M&A. Unfortunately, those teams are frequently unable to deliver the transactions needed for innovation and growth.

Often a major reason for this shortfall is that executive team members are not fully aligned on the role of business development in achieving the company’s strategic priorities. They may agree in theory that business development should pursue partnerships, ecosystems, and collaborations, but that consensus falls apart when it comes to making decisions about specific deals.

We have identified six success factors that enable more rapid and effective decision making, which, in turn, will lead to substantially enhanced business development performance.

Subscribe to our Biopharma E-Alert.

Biopharma m&a and licensing remain strong.

Biopharma M&A deal value more than doubled between 2017 and 2019, from $138 billion to $336 billion, and valuations reached all-time highs. Most of those deals involved midsized biotech companies, for which the average premium paid was close to 70%, with an average EV/sales multiple of nearly 8x. All in all, close to 60% of new therapeutic drugs in the last five years have been externally sourced.

The COVID-19 pandemic slowed biopharma M&A activity in 2020, especially in the first half of the year. But since the core drivers of deals remain intact—scientific breakthroughs, expiring patents, and an increasing focus on key therapeutic areas or on modalities such as cell and gene therapy—deal activity will continue to rebound. A recent example is AstraZeneca’s acquisition in late December of Alexion for $39 billion.

Moreover, biopharma companies can finance transactions cheaply with today’s very low interest rates. They also have significant financial resources to pursue business development. BCG’s ValueScience team estimates that the top 20 biopharma companies have more than $700 billion in cash, short-term investments, and additional debt capacity. But as a result, many companies are pursuing the same assets, driving up valuations and the risk of overpaying.

Six Success Factors for Pharma Business Development While we focus here on M&A, the six success factors we have identified will enable business development teams to create value through both M&A and licensing. (See Exhibit 1.)

pharmaceutical company business plan

1. Prioritize what business development needs to accomplish for the company. Executive team members often have differing views about how to prioritize business units, technology areas, and technology platforms and what types of deals to pursue (early- versus late-stage R&D deals, for example, or transformative versus tuck-in acquisitions). To ensure alignment, it’s critical that team members agree on how and where they want to create value. Will they use business development to generate near-term revenues or to build the pipeline for future innovation? Will they seek to maximize the core, expand into adjacent markets, or explore new frontiers? (See Exhibit 2.)

pharmaceutical company business plan

As part of this prioritization process, the executive team needs to regularly review and agree on how much revenue growth the current internal portfolio or pipeline will deliver. Only then can it determine the revenue gaps that business development needs to address in which specific therapeutic areas or modalities—and with what urgency. It’s astonishing how often management teams are misaligned on this simple setting of objectives, which often results in business development teams wasting time assessing opportunities that are fundamentally unattractive to the executive team and will never get approved. To avoid such situations, the team should ask itself two key questions about every transaction early on: What revenue gap will the transaction fill? And who on the executive committee will champion the transaction from start to finish? By forcing these decisions early, the team can avoid a lot of wasted time.

2. Build relationships with prospective targets. Executive teams should commit to building relationships with potential partners or acquisition targets for two or three years. Proactive sourcing, screening, and relationship building are far better for deal execution than simply showing up at the target’s headquarters with a banker and an offer. An established relationship will give a prospective buyer an edge over other bidders, perhaps even preempting the bidding process altogether. Such relationships can also accelerate due diligence.

Active engagement with potential targets over several years also gives companies a better grasp of the range of potential deals available. It might, for example, make a pharmaceutical company more likely to take small equity stakes in a number of promising biotechs, perhaps supporting Phase 1 trials with its own clinical and regulatory expertise.

3. Agree on how to assess value. Depending on one’s assumptions when valuing a target, the same transaction may seem spectacularly attractive or exceptionally unattractive. So teams need to agree about how they will value all aspects of each deal and then apply that valuation with discipline. Too often, companies end up redoing their analysis and engaging in repetitive decision making because they haven’t agreed on valuation approaches or metrics from the start.

One common valuation pitfall is to focus only on core asset value, that is, the value of the cash flow generated by current and future products in the market. Valuation models need a wider lens, encompassing multiple dimensions of value, including the following:

  • Synergies. What is the value of cost, revenue, and capability synergies across the value chain—for example, in R&D, manufacturing, and sales?
  • Platform Value. What is the value of the future products a technology platform might make possible?
  • Strategic Value. What is the value of preempting a competitor from acquiring an asset, gaining access to a large proprietary data set, or being recognized as a leader in an emerging field?

Because these advantages are less tangible than core assets, large swings in valuation are possible depending on the underlying assumptions. We have found that companies with a clearly defined and endorsed valuation approach are able to use a common “language” in their deliberations, leading to better, faster decision making. These advantages are amplified when the company is highly transparent about the underlying assumptions and entertains a range of scenarios and associated probabilities.

4. Define integration issues early. Executive and business development teams are frequently so focused on due diligence and valuation that they don’t consider the integration process until after a term sheet has been signed. Integration issues should be considered at the outset, when assessing the deal’s attractiveness and viability, and in parallel with due diligence. Teams should ask such questions as: Will the acquired company be a distinct entity or be integrated into the acquiring company? What governance will be applied to the acquired assets? How will cost synergies factor into the valuation?

Knowing the answers to these questions early on is critical to realizing the full potential of the transaction. Our research shows that successful integration can drive 8% to 10% more value compared with the average transaction. Planning for that success right from the start is essential.

5. Enable agile business development teaming and governance. Even when a company has a clear vision for the transaction, it still needs an agile process and governance to execute the deal quickly and effectively. But because the business development process is highly cross-functional (and often involves many junior-level people), it can be unclear who has the authority to make decisions and who will provide the necessary analytical resources. In addition, preexisting governance committees (such as executive committees) often meet too infrequently to keep up with the fast pace of business development decision making.

To address these challenges, we recommend three best practices:

  • Designate resources. Within each function, several senior staff members with business development experience and authority should be on call. This will help build continuity and organizational learning.
  • Establish clear processes and responsibilities. All members of a business development project team should be aligned on processes, deliverables, and timelines. That should include who is responsible for what and who has what decision rights. For example, who in R&D will calculate the probability of success of a specific asset under review?
  • Create nimble governance. A few members of key governance committees should meet more frequently than the entire group (perhaps even on a weekly basis, depending on deal volume) and have the authority to mobilize the entire committee within 24 or 48 hours if there’s an urgent issue to be addressed.

6. Design an organizational structure suited to strategic priorities. Because companies have different revenue gaps and objectives and use business development in different ways, there is no single “right” organizational structure. One company might focus on early-stage and another on late-stage acquisitions. One company might be looking for deals to strengthen the core business, another to build up new therapeutic areas. A company’s business development organization must be suited to its strategic purpose, whatever that may be. There are three main approaches (with various permutations) to consider:

  • Centralize business development in one group. A central function maximizes scale, alignment of activities, and resource prioritization. This setup works well for companies looking to make relatively few late-stage or transformative acquisitions.
  • Separate R&D and commercial transactions. Assessing an early-stage R&D acquisition requires a different mix of expertise than assessing a late-stage, commercial acquisition. When a company intends to pursue both types of transactions, it’s best to keep at least some of these due diligence activities separate. But such companies can still centralize certain functions—valuation modeling, for example—in order to maximize scale.
  • Separate by business lines or therapeutic areas. It can be sensible to separate business development activities by business lines or therapeutic areas at different levels of maturity. This arrangement works well if a company has a mature business area looking for transformative deals and a smaller business unit looking for technology platform acquisitions. Here again, certain aspects of the business development process, such as valuation modeling, can be centralized for scale and efficiency.

Current market conditions present unique opportunities to tap into external innovation and drive revenue growth, but the inherently complex and cross-functional nature of business development makes it difficult for many pharmaceutical companies to execute effectively. As a result, these companies are not winning the transactions necessary for future success. We believe that the six success factors described above can significantly improve business development capabilities and are worth serious consideration by management teams.

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Emerging from disruption: The future of pharma operations strategy

In the past, many pharmaceutical companies (pharmacos) deprioritized operations strategy in the face of competing business pressures. This is now changing. Factors such as the COVID-19 pandemic, inflation, geopolitics, new therapeutic modalities, and new ways of working make it vital for pharmacos to carefully reconsider their long-term choices in sourcing, manufacturing, and supply chain.

Now is exactly the right time for this renewed emphasis on operations strategy, as pharmacos emerge from two years of intense firefighting. Succeeding in pharma under these new and challenging conditions will require succeeding in operations.

The focus for operational leaders may need to shift from the prevailing emphasis on continuous improvement—including cost savings, quality assurance, and constant readiness to deliver—to longer-term external challenges. These include high inflation and an increase in complexity and risk, as well as the compounding effects these forces have on each other.

Pharma operations leaders now have an opportunity to deliver even greater value to their organizations by achieving this shift in focus, but they must act quickly to keep abreast of the challenges confronting the industry. The effort will require enormous mobilization and thoughtful prioritization. This task will fall to leadership; only the CEO and head of operations are in the right positions to make it happen.

This article explores the challenges facing pharma leaders and the steps they can take to develop a more strategic, long-term, and integrated approach to operations strategy. It presents questions leaders can ask as they design the solutions needed to make sure operations can protect enterprise continuity while still delivering to patients.

A perfect storm of external challenges

The pharma industry is facing a multitude of challenging trends (Exhibit 1). Global demand is growing rapidly, and the unprecedented need for COVID-19 vaccines and therapeutics has put additional pressure on the industry. The industry’s ability to find innovative solutions to deliver COVID-19 vaccines while still meeting overall demand is a remarkable achievement, but rising global demand is still a significant challenge for the industry in the long term.

The product landscape also is changing swiftly. New modalities, such as cell and gene therapy and mRNA vaccine technology, have increased from 11 to 21 percent of the drug development pipeline—the fastest growth ever seen in the sector. This change is likely to bring more fragmentation of technology, new supply chains, and unique product life cycles.

In addition to these industry-specific trends, pharma has also been affected by broader global trends, such as supply chain pressures. While the pharma industry is considered somewhat protected by its high inventory levels and long-standing dual sourcing, over a given ten-year period, the likelihood of supply chain disruptions still represents a potential loss of 25 percent of EBITA . Inflation has risen in recent months to levels not seen for decades, leading to increasing costs for labor, raw materials, and transportation. This is over and above the persistent price pressures pharma is already facing, particularly in generics. Since pharma customers are not expected to fully absorb these cost increases, profit margins are under pressure.

Meanwhile, increased state interventions and protectionist trade policies are creating new pressures on manufacturing networks and could drive increased regionalization. This would be a capital-intensive exercise: to regionalize just 10 percent of current vaccine trade in one particular geographical region, governments would need to invest an estimated $100 million.

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The pharma industry is also facing talent shortages linked to wider labor market trends, including the 20 percent increase in demand for STEM-related roles across the life sciences industry in the United States. The current pool of pharma digital talent is at least 14 percent lower than demand, and many companies are finding it challenging to recruit technical talent. Compounding this challenge is the rise of remote working, which has increased employee expectations for flexibility. In response, nearly all pharmacos are experimenting with hybrid working models.

A few major trends point to an industry tailwind; one of them is the advancement of digital and analytics tools. Digital tools, robots, and sensors are becoming cheaper and easier to access, and they can be used to capture all manner of raw data. In addition, edge computing and cloud analytics are providing real-time optimization and transparency. Pharmacos are working to leverage the power of data to become more agile and resilient. However, to date, no pharmaco has emerged as a true global leader in this field.

The pharma industry is facing a multitude of industry-specific and global trends. But a few major trends point to an industry tailwind; one of them is the advancement of digital and analytics tools.

Each of these global trends represents significant challenges in and of itself, and the trends may be compounded and strengthened through their interactions. This compounding effect can add to the complexity of evaluating an effective strategic response.

Major implications for pharma

These global trends have six major implications for pharmacos: rising operational complexity, increasing risk, shifting capability requirements, higher capital expenditure requirements, variable-cost increases, and opportunities for savings (Exhibit 2).

Operations leaders may need to become comfortable navigating a more complex ecosystem as they respond to increased operational complexity. Risks may increase due to rising environmental, social, and governance (ESG) expectations and skills gaps, while new modalities and digital acceleration will also likely lead to a shift in capability requirements. This could necessitate reskilling and upskilling of staff, as well as a renewed focus on recruiting from outside of the pharma industry.

From a cost perspective, the pharma industry may see significantly increased capital expenditure requirements related to the construction of new sites and new digital infrastructure. Increases are also likely in variable costs in areas such as raw materials, transportation, and employee attrition, reskilling, and salaries.

Future of pharma operations

Pharma companies are experiencing a wave of innovations – from new treatment modalities, to smart machines, advanced analytics, and digital connectivity.

Although these implications are challenging, they may represent possible opportunities for savings in several areas. For example, ESG commitments on waste reduction could reduce costs, as could successful digital implementation. However, the challenge lies in monetizing these cost savings, given that the industry has long created value largely through revenue expansion rather than through cost savings.

Rising to the challenge: Actions to deliver value

To respond to these challenges, pharmaco leaders may now need to emphasize the importance of their operations strategy. They should consider taking a longer-term view and scaling activity across four key themes: network strategy and resilience, digital, operating model, and talent.

Expand focus on longer-term, transformative solutions

Operations leaders can address these challenges through several short-term and long-term responses. For example, problems associated with a more unpredictable supply chain could be addressed with a short-term approach of increasing inventory or a long-term initiative to establish an end-to-end supply chain digital nerve center.

Short-term levers can be an important part of the total response but are insufficient to fully mitigate the challenges facing the industry. To respond effectively, companies may need to accelerate new ways of working and embrace long-term thinking. This will require concrete action with a focus on making sure that strategies are put in place to weather the long-term headwinds the industry is facing.

Accelerate and scale responses across four strategic domains

To identify the actions that pharmacos could take, it may help to group these in terms of four strategic domains: network and resilience, digital strategy, operating model and ecosystem, and talent strategy (Exhibit 3). While these themes are likely to be familiar to any business leader, they now require a substantial shift in mindset. Acting on them also calls for a large investment of resources.

  • Plan for and manage future resilience and reliability needs . Recent supply chain disruptions have pushed supply chain resilience up corporate agendas. Companies have been forced into reactive modes that employ short-term levers like building inventory. However, companies could better position themselves by solving multiple variables and building resilience into their operations strategy through longer-term actions like network design and dual sourcing.
  • Scale end-to-end adoption of digital and automation . Digital has proven itself highly valuable to pharma operations. However, many companies struggle to move from targeted, single use cases to a fully scaled suite of solutions. And while the adoption of full-scale digital solutions can require heavy investment—around $50 million to $100 million per year for two to three years—the rewards can include significant cost savings, improved quality, and increased resilience, as well as greater employee effectiveness. Companies that truly scale and implement digital can better protect themselves from the pressures of the forces increasing costs for the industry. More and more companies are moving toward network-wide and end-to-end digitization; to date, the World Economic Forum has recognized 103 as “lighthouses,” based on their advanced application of digital technologies . Johnson & Johnson, for example, has successfully launched multiple Industry 4.0 lighthouses, including some focused on end-to-end patient connectivity and order fulfillment.
  • Expand adoption of end-to-end partner ecosystems . Companies could also consider changing their operating model from a traditional hub configuration around originators to an end-to-end ecosystem of true strategic partners. More than 50 percent of companies already expect to intensify their collaboration models with other industry players through, for example, service agreements, joint ventures, or eco­systems. Some are already in motion; examples include Pfizer and BioNTech, which have already established a strategic partnership in mRNA technology discovery, and AstraZeneca and Huma, which are collaborating to scale innovation for digital health. These partnerships are indicative of increasing collaborations throughout the industry across functions.

Automation, centralization, and new job requirements may affect nearly 90 percent of today’s workforce, and to deal with this challenge, companies could adopt effective long-term strategies. Retaining talent is challenging in the present environment, with the share of workers planning to leave their jobs in the next three to six months standing at 40 percent since 2021 . 1 Aaron De Smet, Bonnie Dowling, Bryan Hancock, and Bill Schaninger, “ The Great Attrition is making hiring harder. Are you searching the right talent pool? ” July 13, 2022. Strategies for talent retention should therefore be broad and focus on more than just salary.

A viable long-term solution to talent shortages may need to involve more than increasing wages to attract people. To solve structural talent gaps, companies could ensure long-term reskilling and upskilling of the existing workforce. For example, Roche runs an operations rotational program to attract top talent with bachelor’s and master’s degrees, and early in the COVID-19 pandemic, Novartis launched a “choice with responsibility” policy to improve overall employee experience.

Successfully developing a robust operations strategy is complex and requires dedicated resources with the ability to focus on the medium to long term. This means the C-suite will need to prioritize efforts and provide adequate resourcing. Only the CEO and head of operations can set the appropriate direction for their organization, steer their company’s effort, gather the right skills and teams, and manage complex interdependencies and resource-intensive interventions.

Are companies doing enough?

As COOs look to emerge from the disruption of the past two years, reflecting on several questions could help them evaluate their organizations’ level of preparedness to respond to the trends affecting the industry. The process could provide foundational answers to inform a renewed operations strategy.

  • Have you projected the impact of today’s current trends on your business?
  • Do you have a focused, skilled, and scaled operations strategy team that identifies, prioritizes, and deploys initiatives across different horizons?
  • Are your resilience measures proactive and dynamic, and are they being built on talent and digital capabilities to achieve greater agility and reliability?
  • Have you experienced greater access to innovation and flexibility as a result of expanding your services and strategic partnerships?
  • Has your digital strategy created benefits across your network and transformed your operation from digitally enabled to digitally driven?
  • Have you achieved ESG improvements, and do you have a broad, long-term road map for ESG commitments (beyond net zero)?
  • Has your operating model been agile enough to adapt to rapidly changing operations requirements, such as new modalities and potential disruptions?
  • Have you successfully transformed your operations workforce and comprehensively improved the employee experience?
  • Do you have an established governance process that incorporates past lessons into future strategy?

Although the pharma industry has performed a remarkable feat in delivering COVID-19 vaccines while also meeting growing demand, current trends create a challenging environment for pharma­ceutical companies. Companies face greater costs, complexity, and risk.

Now is the time to rethink operational strategy to respond to these trends and remain competitive. Such change may have associated challenges and will require bold and innovative leadership. But if companies successfully implement new strategies, they could position themselves to take advantage of the industry’s remarkable growth.

Hillary Dukart is an associate partner in McKinsey’s Denver office, Laurie Lanoue is a partner in the Montreal office, Mariel Rezende is a consultant in the Miami office, and Paul Rutten is a partner in the Amsterdam office.

The authors wish to thank Joe Hughes and Jean-Baptiste Pelletier for their contributions to this article.

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Pharmacy Business Plan

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The Discount Pharmacy

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

People need to be able to buy prescriptions at reduced prices. We make that possible by carefully maintaining efficiencies in our operations. So we can target a specific segment of the market – those customers who pay for their prescription medications themselves. They are poor, they are sick, they deserve the same care as those who can afford healthcare and full price prescriptions. 

The Discount Pharmacy’s mission is to provide our customers with the best prices for their prescription medications. Our convenience and services will exceed the expectations of our customers.

The Discount Pharmacy’s target market consists of two different groups, local customers or walk-ins, and mail order customers.

Competition

Competition takes many different forms in the pharmacy industry. They are: chain pharmacies, local pharmacies, mail in pharmacies, canadian pharmacies. 

The Discount Pharmacy’s we have superior pricing. To do that we must maintain our position as the low cost provider by painstakingly ensuring that costs are kept low through operating efficiencies.

Expectations

Costs will be minimized by maintaining only one pharmacist and filling the void with pharmaceutical techs. We expect to reach profitability by our third year and will generate substantial sales by year three

Financial Highlights by Year

Financing needed.

We will need $115,000 to start, we will be able to pay the investment back at the end of year 4

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Problem & solution, problem worth solving.

People need to be able to buy prescriptions at accessible prices. We make that possible by carefully maintaining efficiencies in our operations. So we can target a specific segment of the market – those customers who pay for their prescription medications themselves. They are poor, they are sick, they deserve the same care as those who can afford healthcare and full price prescriptions. 

Our Solution

The Discount Pharmacy’s main goal is to provide prescription medications for our customers at the lowest prices on the market. We will be able to sell prescriptions at reduced prices by carefully maintaining efficiencies in our operations and by targeting a specific segment of the market – those customers who pay for their prescription medications themselves. By focusing on this segment it gives us additional efficiencies – we avoid disruptions in cash flow often associated with insurance payments and we can eliminate unnecessary services for the type of knowledgeable, repeat customer taking maintenance-type medication.

The Discount Pharmacy will operate from one store that will serve both mail order customers and those who visit in person. We will thrive by employing friendly and knowledgeable personnel, which, along with our great prices, will drive the repeat business that we will rely upon. We only expect that as the price of medication continues to skyrocket, The Discount Pharmacy will appeal more and more to the customer’s sense of value and convenience.

Target Market

Market size & segments.

The Discount Pharmacy will seek to attract two different groups of customers and will thus have two strategies to attract them.

We anticipate that by far our largest group of customers will be those who order through the mail. These customers will be targeted through an advertising campaign in magazines and newsletters that have an older (>55) audience who regularly need medication and are aware in advance of their needs. For example, one of the main advertising vehicles will be the A.A.R.P monthly newsletter.

Walk-in customers will be targeted through advertisements in the local paper, "The Oregonian."  Ads will raise awareness for the The Discount Pharmacy and our low prices.

Current Alternatives

Competition takes many different forms in the pharmacy industry.

  • Chain pharmacies.  These are state or national chains such as Rite-Aid.  The advantage to these chains are better prices through economies of scale, as well as personalized service.  The personalized service takes the form of the chain having a record of your medication purchases as well as any allergies that you have disclosed to them.
  • Local pharmacies.   These are the pharmacies where you typically know the pharmacist and they know your medical history.  This option is high in personalized service and convenience, and high in price.
  • Mail order and Internet pharmacies.  These are similar to The Discount Pharmacy.
  • Canadian pharmacies.  These pharmacies are located in Canada where the cost of drugs is lower than in the U.S.  These pharmacies can be accessed through mail order, the Internet, or via travel.  Recently there has been the trend for trips arranged for senior citizens in Northern States to travel up to Canada for the day to pick up their medicines.

Our Advantages

The Discount Pharmacy’s competitive edge is superior pricing. To do that we must maintain our position as the low cost provider by painstakingly ensuring that costs are kept low through operating efficiencies.

We will be able to do that by eliminating some of the services traditionally offered by pharmacies. For example, we will employ only one pharmacist and use pharmaceutical technicians to fill the void. As long as a pharmacist is on site during the hours of operation, we can use the pharmaceutical techs for all other capacities where other pharmacies use pharmacists. Other efficiencies are created by having only a small store front and conducting most of our business through mail order.

Finally, The Discount Pharmacy is not designed to hold the patient’s hand during their purchase. We expect that the vast majority of our customers will already be informed of how to take the medication, and any side effects or drug interactions that should be avoided. We will simply provide each patient with a print out of all the relevant information for consumption of the medication.

Keys to Success

The keys to success are:

  • Satisfy our customers so they will return again and again
  • Maintain low overhead and operating costs
  • Provide better prices than all our competitors

Marketing & Sales

Marketing plan.

The marketing strategy will be based on social media, mainly Facebook and Twitter, offering useful information and opinion while quietly appealing to the customer’s sense of value. The marketing campaign’s goal will to be increase awareness of The Discount Pharmacy with their target market.

The sales strategy will be based on generating long-term relationships with customers. To facilitate that, we will provide medications at superior prices, have medicines in stock for both quick shipment and store front pick up, and provide superior customer service. All sales agents will be trained to provide friendly, knowledgeable customer service. By keeping to these simple, yet effective, business practices, we expect that our customers will make The Discount Pharmacy their exclusive source for medications. For some, medications are an integral part of their lives, so establishing long-term relationships will ensure a large, loyal customer base

Milestones & Metrics

Milestones table, key metrics.

Our key metrics are: 

  • The # of customers that walk in to the pharmacy 
  • The # of customers that choose to mail in 
  • The # of reviews saying that people could go to our pharmacy 
  • Facebook page views, Twitter retweets  and website shares 
  • Total customer traffic on the website 
  • Total customer traffic in and out of the store 

Ownership & Structure

The Discount Pharmacy is an Oregon limited liability corporation. The majority stock holder is John Reeleaf.

Management Team

John Reeleaf has experience working with a major drug manufacturer, Eli Lilly, as a drug representative. He was able to see first hand the profitability associated with the prescription drug industry, as well as the inefficiencies with which most companies are plagued.

John graduated with an MBA from the University of Oregon’s innovative entrepreneurship program. While there he was awarded a $50,000 no interest loan through a business plan competition. That seed money will be parlayed, along with some other investments, into start up expenses for The Discount Pharmacy. John received an undergraduate degree in chemistry from the University of Oregon.

Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

Key assumptions: 

Of course our main assumption is legality. Regulations affecting our business can change very fast. 

People appreciate:

  • The mail in order option for their convenience 
  • Prescription at affordable prices 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

The Discount Pharmacy will incur the following start-up equipment costs:

  • Office equipment including chairs, file cabinets, and desks.
  • Front counter, storage bins, cash register.
  • Three computer terminals.
  • Main computer server with a laser printer, and back-up system.
  • Software: Microsoft Office, QuickBooks Pro, drug interaction software, Physician Desk Reference software detailing side effects and other information pertinent to the customer.
  • Assorted bottles, boxes, envelopes, etc. for dispensing and shipment.
  • Scales for shipping.
  • Telecom system.
  • Storefront build-out.
  • Start-up inventory.
  • Rent, utilities, insurance.

Please note that these items will be used for more than one year and will therefore be labeled long-term assets, depreciated using G.A.A.P. approved straight-line depreciation.

Startup expenses – $24,100 listed as net earnings in dec 2017 

Start-up Expenses

Legal $1,000

Rent $2,000

Utilities  $400

Telecom System $400

Insurance $300

Storefront Build-out $15,000

Expensed Equipment $4,000

Website development $1,000

TOTAL START-UP EXPENSES $24,100

Sources of Funds

Planned Investment

Seed Funding $50,000

John $51,000

Friends and Family $82,100 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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Pharmacy Business Plan Sample

APR.29, 2017

Pharmacy Business Plan Sample

When someone is found doing workouts at home how to start a pharmacy, he must need relevant information, charts, table of content, independent pharmacy business plans, pharmacy business plan as well as few sample templates for pharmacy business branding. So, the entire business plans for pharmacy must include the most important points which must be well covered to start pharmacy business in full fledged.

Pharmacies must have stock of the best medications, and valuable healthcare accessories including sanitary pads, contraceptive pills and many more. Be modern and try to design a good pharmacy marketing plan before going for investment of financial resources in the industry. Get more new pharmacy business plan ideas from different sources.

Diseases, infections and virus attacks are very dangerous to shorten up the span of life of a guy. So, medications are needed to remove injuries, reinforce the immune system and increase the life expectancy to a great extent. For this reason, pharmaceutical agencies and drug manufacturing companies supply new drugs to people to resist the diseases in advance. Pharmacy business is really lucrative and profitable to an entrepreneur. Drugs are needed in hospitals, clinics, healthcare centers and in residential houses for preventive care.

Drugs are used to cure feeble patients. Children need a number of boosters and antibiotic shots to overtake a number of complicated health hazards. In large scale, medications and potions for patients are required in hospitals. Therefore, pharmacies have the jobs of selling drugs to customers. As an entrepreneur you can also start a small pharmacy or drug store in your locality. Sample pharmacy business plans and template will guide you. We, at OGSCapital, help you with this. Our executives have all the expertise for helping you to develop an appropriate strategy to fulfill your all objectives. If you wish to initiate the process, you just need to fill a contact form.

Choose Top Pharmacy Business Plans to Start Pharmacy Successfully

Well, are you a pharmacist to have licenses for running pharmacies in any town? This question is asked by many enthusiasts who are eager to know whether anyone has the permission to open a local drug store in the vicinity. Certainly, opening local drug stores, you must have an experienced pharmacist to check the prescribed drug lists. Pharmacists have the ability to read the prescriptions and identify the drugs at a first glance. His expertise in prescription reading, drug list checking and familiarity with new drugs helps the vendor to sell drugs comfortably.

If you are not a pharmacist, you need a specialist to hire in the case of inaugurating pharmacy in any popular area. He will help you to read prescriptions, handpick particular medications and understand the medical terms. Drug manufacturing companies in America have to sell only FDA approved medications. They must get authentic papers, citations and drug selling licenses from FDA as well American government.

Therefore, be familiar with local rules to starting a retail pharmacy business plan commercially. Go through a top sample pharmacy business plan and free template for more information.

Basic Requirements to Start Pharmacy Business

  • A complete retail pharmacy business plan
  • A preliminary financial budget
  • Specific site for posting retail pharmacy business plans
  • A specialist/experienced pharmacy
  • Good stock of new drugs in
  • Healthcare accessories like sanitary pads
  • Basic amenities like refrigerators, electricity, water and good air vents
  • Pharmacy needs to have a site for industry promotion
  • Site map with a sample Pharma business plan as well as template
  • Information brochures
  • Medical aids kits to supply
  • Initial affordable drug selling packages to attract customers to have drugs at low price
  • Free quotes to do comprehensive studies for opening up a pharmacy.

Understand the Innovation in Pharmacy Business

Pharmacies must not be dirty and poorly managed. Expensive drugs should be stored in safer place which is much more eco-friendly. Heat, fire, rain water and bacteria destroy life saving drugs. The drug store should have excellent air ventilation, clean ambience, least toxins inside the shop and soothing ambience. Refrigerators keep stored medications in good condition.

Internet browsing is not harmful. So, regular data checking must stand you in good stead. The more you research the more you will get new ideas to launch a compact pharmacy business project with bright expectation to have excellent returns. Initially, as a newbie, your ability to design a pharmacy business plan must be limited. You are an educated person with enthusiasm to stand resilient financially. You went for getting advices from seniors to open pharmacies.

Maybe you have had dream of becoming a good pharmacist with your own outlet to sell qualitative drugs. Fake and spurious medications, potions and medical aids are destructive. These fake drug dealers must be punished. In the open market, low quality, sub-standard medications and expired healthcare tonics are sold at low prices. Therefore, every year, the death toll increases due to the exposure to the drug adulteration. Perhaps you have the setback or previous caustic experience. Someone might have died due to consumption of bad drugs. Your dream must be fulfilled.

Online planners in pharmaceutical industry have pre-designed samples, fact sheets, research papers and documents to train newcomers. Novice financers have no industry expansion ideas. Especially pharmacies are different projects to highlight. Drug is the most valuable product as it saves lives. So, definitely lot of care is needed to run pharmacies or drug stores in the city. What type of pharmacy business do you need to opt for? Basically, drug retailers, individual sellers and small size company partners like to have free consultation before establishing a start-up drug store in any known area. The advantages of opening drug stores or local pharmacies in the residential areas include

  • Known ambience
  • Good familiarity with local citizens
  • Be accustomed to local administration
  • Good relationship with doctors, patients and oldies
  • Easy to find customers
  • Better options to enlarge pharmacy business in the home town

However, most probably, you are trapped because you must struggle to find more genuine options to expand your drug stores to have lot of money. So, geographical barrier must not be a problem. Often, it is a lucrative business for you in case you have the plan and templates to take your drug store to backcountry. There are not many drug stores. Competition is low. You can buy and sell expensive drugs to rich persons. Poor people will get affordable medications from your shop.

So, it is good business to manage in the rural areas. However, drug stores in cities are always dazzling in vanity. The buying strength of local people is obviously higher. City based pharmacies are equipped with modern infrastructures. In villages, poor people are not able to buy costly drugs. The availability of sumptuous medical aids packages is also not good in rural belts. Urban areas are developed. Therefore, locate the place and start evaluation. Pros and cons must be checked before deciding to deal with pharmaceutical industry. Retail pharmacy business plan writers are also helpful to people to have guidance in designing the independent plan for starting retail drug store business plan .

Brand medications are not cheaper. These drugs have qualitative components used by manufacturers to produce standard medications in the market. The effect of intake of brand medications is really awesome to help patients to avoid disaster. Doctors prescribe brand medications. Great. Well, one of the best ways to sell brand medications is to find the high profile class. Online ventures must bring a new customer to you. This is a different industry for entrepreneur as there is little chance to meet vendors face to face.

Customers hit the online sites to check the pharmacies for buying the branded drugs recommended by experts. All are not financially sound to buy brand drugs. Pack of Viagra (branded) costs a customer around $1000. Or a pack of 60 pills of Soma is equivalent to $400 inclusive of overnight shipment cost. So, economical buyers find generic medications which are affordable to some extent. Therefore, your drug stores must have both branded medications for the rich and generic medications for the economical class.

It will be a strategy to win customers by providing alternative medication buying option. Generic medications are cheap and components used in manufacturing these affordable drugs are not low in quality. The impact of consumption of generic medications is equal to the effect experienced by a person who takes brand medications. Retail pharmacy business plan writer has many ideas/ template to precise the process of industry inauguration smoothly.

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Discount Pharmacies

In the pharmaceutical industry, scientific probing, research and deep analysis are inseparable. Scientists in the medical arena are trying to invent more cost efficient products which must be vehicles for economical customers to save money. Pharmacists will emulate new technologies to increase the cost effectiveness and quality of the drugs. So, doctors, scientists and pharmacists are closely connected for making a convenient customer support portal for better drug supply at low cost. Discount pharmacies are byproduct of the innovative thoughts nurtured by experts.

The collaborative venture in the pharmaceutical industry has made a strong platform for pharmacy business owners to sell affordable medications at discounts. Customers get promotional codes on different types of generic medications. It is much more cost efficient. It is much affordable to a young guy. Result is also same. So as a pharmacist, offer your customers what you have in stock. Discount pharmacies are the places for buying cheap generic medications. Brick and mortar discount drug stores reduce the cost of buying valuable medications.

Well, think whether you are fitted to drug selling industry. A discount drug store needs to have only cheap medications which must be good. Customers will get their drugs by showcasing prescriptions. Now, tailor a business plan identifying the trend in the market. You have handful options to use. As a local guy, you can apply for loan for industry running. Banks will give you support to invest in the pharmaceutical industry.

Next steps include the easy refinancing, recruitment of competent employees, assistants , the availability of good medications at discounts and drug safety programs to minimize the threat. People need proper medical assistance from a vendor. As being a professional pharmacist, it is your concern to prioritize the table work/ground work to inaugurate the drug store in your residential area. Innovation can’t be stopped. Americans are habituated to consume sleeping pills, anti-anxiety drugs and self-boosting capsules to have energy in excess.

They are fast, sophisticated and crazy to travel for exploration. Well, most of American customers are seen buying drugs from online pharmacies which offer discounts. These online discount pharmacies assist busy Americans to have affordable qualitative medications at considerably cheap prices. So, you must have a compatible optimized online shop with an inventory storing only new drugs/ prescribed medications/non prescription medications at discounts. The local stores for drug selling are not permitted to sell non prescription drugs.

They need prescriptions. However, comparatively online pharmacies have good options to help customers to purchase non prescription drugs. Customers don’t need to send the scanned photocopies of prescriptions to pharmacists to buy packet of Soma or Viagra. Buy medications from vendors at any point of time. So, if you want to modernize your retail drug store, design an affordable business plan to start selling generic medications at discount drug stores without putting a band of legal obligation. The online pharmacy is not a local departmental store.

Customers don’t need to visit the store for product purchasing. The virtual shopping cart or pharmacy is actually run through internet. Its customers place orders at the shopping cart and complete transactions instantly. Vendors are liable to ship products to the customers. Now you must have a site which supports mobile phones, computers and different smart devices. Consumers will cross check list of drugs available in their areas. You have a group of employees who manage customers online. Usually, online pharmacies have no go-down or small warehouses.

They are professional and hire moving companies for product shipment. It is a chain for drug supplying. No manual paperwork is conducted. Nor is there any option for meeting customers physically. So, the whole transaction is done via internet. E-commerce infrastructure is easy to operate. This marketing strategy is extensive to help local traders to go for vast venture to reach million customers on a single go. Around $829 billion is invested in global pharmacy business. So, this opportunity is also open to you to have scum of the profits to upgrade your own life.

Online discount pharmacy is open regularly round the clock. Customers from different locations hit the online drug store and buy medications. Prices of these lifesaving drugs, sanitary pads, healthcare pills and antibiotic pills are affordable. Discounts of these medications are attractive to impress economical class. Like Rite Aid, you can also have a chain meds service to bring more fluent drug delivery options to customers. Give individualized service by keeping personal records of patients after clearing transactions.

In future, if the customers have allergies or infections, try to avoid supplying medications which are not prescribed. Besides, help them to choose the prefect meds from the inventory. Unlike local drug store, online discount pharmacies have multi channels to get customers. If you have licenses or permit to export medications to market abroad, strategy vastly. Then, you are also a good exporter with permits to deal with overseas clients. Online platform for medication selling is now modernized.

The shopping carts online must have fast content management, instant credit checking while making payment, quick transactions and free registration. The prescription refill process must be fast and easy. On the other side, the non prescription generic or brand medications should be supplied to have more positive visitors to hit your e-commerce website.

So, you will also have lot of sources to track the best retail pharmacy business plan/ templates, pharmacy start up business plan, pharmacy business plan pdf and innovative pharmaceutical sales business plans. Go through ins and outs of pharmaceutical business plan, pharmaceutical business plans sample, and retail pharmacy business plan including new templates.

Product Quality – Must

In the pharmacy business, the product quality is a must. A vendor or pharmacist should not earn money by delivering expired meds to patients. He should have social obligations to maintain for fairness in pharmacy business. Same way, he is also responsible to process the orders. If meds are delivered late then patients can die. If it is urgent, then shipping process must be fast. Overnight drug supply is not cost effective. Extra processing charges are borne by the buyer.

When your pharmacy business blooms, you must have some better options to make your customers happy. Your online pharmaceutical has few exceptional features which are unbeaten to take your pharmaceutical to million customers outperforming rivals. Pharmaceutical companies must facilitate customers to have their drugs at discounts. Quality of the drugs must not be low. For this reason, there must be analysts and experts to make their comments based on the products meant for sale. Customers will talk to consultants for getting pharma template.

They will go through reports, comments and reviews to have ideas about the quality of meds kept for being sold. Your online med supply stores should be compatible with multiple devices including smart phones. Customers are interested to cross check regular information and updates on their mobile phones. Your e-commerce portal is connected with vast network to support such a sophisticated device. Online customer management center assists new customers to buy products.

For this reason, people feel free to go for buying expensive brand meds from the best pharmacy online. Jot down pros of running a discount pharmaceutical online. Why do people want to buy products online? What is the difference between a local med store and the pharmaceutical on internet? What type of med is sold online? What are the most important pros of buying meds from online pharmacies? Is it cost effective or less time consuming to make deals with online vendors? Well, there are more such questions which can be highlighted for discussion.

Basically, internet based online med stores don’t need manual paperwork. Nor is there any need to entertain customers at the shop. So, investors are not required to buy the land for constructing a big set-up to sell packets of life saving meds, boosters, and health tonics. Online meds stores are operated by pharmacists through broadband. It is a different setting to attract people for business related transaction. Many people don’t understand how to buy meds online. They must be educated.

Well, your pharmacy business promoting campaigns should encourage customers to know about the good aspects of online transactions. First of all, post few blogs, photos, slide shows and of course glossy video clips on home screen to lure newbie customers to have a fast look at the site. After visiting the site, they will be energized to read content, check photos, videos, slide shows and navigate in the site. Online free start-up pharma template will make you more confident.

Site accessibility, information delivery, transaction method, registration, product buying as well as packing for shipment, prices of medications, and way of billing must be innovated. Therefore, ask your website designers to upgrade the site nicely to make it much more compatible with the latest i-devices. Ask them to assist you to change the old policy. Crazy customers in America, Canada, the UK and other parts in Europe have tendencies to buy non-prescription drugs which are not recommended or prescribed by doctors.

They have to pay higher prices to get packets of sedatives or anti-anxiety pills from the local market. Often they are addicted to spurious drugs which enhance the scope of faster deterioration in the health management. They don’t need prescribed drugs as they are not permitted to consume multiple sedatives within 24 hours. They are drug addicted and therefore proper counseling is needed. However, when they hit the online sites or med stores on internet, the surprising gifts are waiting for them.

At a time, it is possible to buy different meds from stores without providing prescriptions. Secondly, they have facilities to deal with a number of drug stores in this online drugstore industry. Promotional offers and discounts are offered to customers as well. At first, when you establish a small size pharmacy, you require the base to stand. It is the ground for you to start building up a strong long lasting structure. It is a dynamic policy to enhance the much faster business promoting.

New Policy for Starting Pharmaceutical Company

Minimum investment is needed to run a pharmacy business. So, the product selling base is required first to ensure the good prospect in this meds supply industry. How to achieve success depends on the strength, resilience, willing force, and lot of energy to do the hard work out. Maybe, it is time consuming but success will come through devotion, hard struggles, and meticulous research to find the best opportunities to be successful entrepreneur with a solid pharmacy business structure.

Invest in the best market where there is excellent ambience to gear up the money earning. It is one of the best things for you to locate the area where you will open the small drug store with innovated structure, and other facilities to tempt customers. It stands to reason; you require lot of plans to design. When you have the dream projects to implement for the business expansion, you must have someone to take you to the last resort successfully.

Many of start-up entrepreneurs are not well organized due to the lack of experience in pharmacy business planning as well as endorsement policy. Well, in this case, a professional business planer needs to be hired for innovating the business plans before investing in the pharmacy industry. Money is needed but you should have excellent projects which have lot of information, data, template, strategy, table of content and resources to let the pharmacy business run smoothly.

Research, probing, intuition and self-discovery study are important to aspiring pharmacy entrepreneurs. To become an experienced entrepreneur, you will have to have strong desires to probe deeply. This research oriented mind will give you a booster to scale up in the industry with success. That’s why, when you have new innovative commercial management plans, policy, programs and glossy projects to implement, you must not stop. The start-up pharmacy business must be expanded.

The profits must be generated. The mobility in the business promotion should be uninterrupted. The longevity of the pharmacy business should be surprisingly longer. Therefore, concentrate on different aspects of commercial management. Go to professional business consultants, experts and business analyzers to have new guidelines/instructions/ plans for extensive analysis.

Brand Business

Brand name of your business works as a booster. It is the workforce. It is the vehicle with a new strategy for you to start the business smoothly. Who will track your business? Brand name is the sign of identification. People will be familiar with your company through the brand name. So, choose the most suitable name for your pharmacy. Well, maybe you have lot of confusion how to configure the brand name and logo.

Really it is much important to you. A cumbersome brand name is not easy to understand. If the name of the pharmacy is long and technically intricate, people are not able to read the brand name easily. So, select the relevant short and attractive words to name your med store. Obviously you need a strategy to conduct more productive business branding.

Invest Money in Promoting Products

Million dollars are overspent in the business promotion campaigns. Giant entrepreneurs have lot of money and they spend financial resources to promote business. Gifts, discounts, and promo codes are offered by these multinational companies. Well, you are a small entrepreneur and you need to earn more money. In the beginning, you have few attractive projects to inaugurate the small business. Well, strategically, you must advertise your products. Advertisement agencies can make your dream productive through lot of ground work, plans, programs and tips.

Hire the top notch advertisers who will make a brief-up covering the most important areas of pharmacy business. Your online advertisements, ads and video clips showcase the med store to impress customers. Certainly, you must have some awesome product endorsement publicizing projects. How to promote the pharmacy business? The objective of your promotional expedition lies in the expansion of the customer management platform with more opportunities to build up the foundation for rejuvenating the business.

Business branding through internet is the weapon for you to convey the best message to people. Your strategy to run business must be effective. What type of medication do you need to sell? Are you a drug retailer? Are you able to sell cheap generic meds? What sort of med do you have in stock? People need better price tags. They are economical. They have the least interest to buy brand meds. Well, your discount drug pharmacy is very much modernized with the stock of high caliber generic medications, life saving meds and qualitative drugs at discounts.

Next step is to have all legal papers, and documents. The paperwork must be done step-wise. First of all, you have to apply for a license. It is the passport for your pharmacy to run. Certainly, it is not easy. Drug licenses are approved only after several surveys, cross verifications and probing. You can’t damage one’s precious life by supplying low quality spurious meds. Right now, government and FDI are not flexible to issue drug licenses easily. Drug addiction is now accelerating to make young generation incompetent.

They have lot of drug buying options. Fake dealers and spurious drug suppliers are seen tempting customers. That’s why; fake licenses and wrong documentation are severely increasing to threaten up people to a great extent. Therefore, you must be fair and honest to have your licenses legally. In this connection, meet an attorney who will advise you how to get the drug license from the superior authority. Smartly speaking, it is not entirely difficult. The legal power will assist you to convince the concerned authority to have the original drug license.

In the beginning, it is the most unavoidable assignment to contact a group of legal experts to ensure the advertising project completion successfully. Pharmacy business must not be dried up after few weeks. You should not backtrack in shame. Bold and strong entrepreneurs must have energy to prioritize the collection of important components to format a new strategic version of business plan to nourish the pharmacy outlet dynamically.

It is a must to maximize the vast media exposure, business branding, meticulous analysis and study to probe deep with good motif to locate the most fruitful niche to speed up the business promotion. Your decision must not be obscure because of the disorders created by your subordinates. Therefore, organize your team to finalize the business branding program and innovative commercial management strategy with the resolution of giving thousand horsepower to your small med store to gain speed.

Tailor Futuristic Advertising Projects

Design futuristic advertising projects. Calculate how much fund is required to establish a single compartment as a small street outlet for selling generic meds. Money you need must be available. If you are not so lucky to arrange fund immediately to overtake hurdle, you must not be found being in lethargic state. Business loans, short term financial aids, and good financial support from different agencies are obtained without complicated paperwork. So, search for this type of secured/unsecured business loan to finance the med store. Financial assistance must be required to buy packets of brands drugs, install computers, and other tools to decorate the drug store.

Basic Components of Discount Pharmacy Business Plan

  • Basic indoor furniture pieces like table, chair, desks, small file storing cabinets
  • Cash registering systems
  • Front counter
  • Computer terminal
  • Printer for billing
  • Electrical goods
  • Small data storage server
  • Shipping accessories
  • Good insurance coverage
  • Storing bins

Important Facts to Remember

Customers are different in nature. They don’t have similar mindsets. Nor are they on same strings. Well, study and then evaluate the mindsets of customers. Choose the area where you will get positive customers to sell drugs. Reinvent new strategy to promote pharma. Specific groups of customers need to make walk-in visits to the outlet to purchase meds. This sort of customer has the habit to go to the local med store to buy meds. They are literate.

However, many laymen in the lower middle class are interested to buy prescribed meds from the pharmacies. Secondly, there is another group of people. They are online buyers. They have money to go to the online pharmacy to purchase drugs. Basically, generic medications, and different types of stress management pills they buy from online stores. Prescriptions are not a must for them to buy Viagra, Cialis, Soma or any cheap generic medication to consume.

Apart from this economical class, the enriched and affluent high profile buyers opt for brand meds. Now these medications are very expensive. Even vendors of publicizing portal are not capable of storing different types of brand medications for sale. So, tailor a compact financial budget which must include the overall cost of storing brand, generic and local meds at discounts. The product sale must be fast. Drugs which stored in your refrigerator must be qualitative.

Top Strategies to Expand Pharma

Strategies are applicable to the drug selling. Promotional campaigns are conducive to the faster development of the business. However, forecast is needed to evaluate the vision of yours in the long run. In the first year, estimate the profit percentage. Then you must compare whether you are a gainer or loser. Moderate revenue collection is also good as you are a novice entrepreneur. Well, you need to improve by hook or by crook. Commercial management is not a new thing. Even local traders and informal entrepreneurs know this term.

When your pharmacy business will be launched, your target must concentrate on the store management. Employees should be duty bound. Your pharmacist must be responsible. Drugs kept in your refrigerator must be hygienic. Temperature inside the drug store must be eco-friendly. Apart from this, documentation, billing, registration process and other paper work must be carried out properly. At present, computer application is very urgent. Your tiny med store must be renovated with a set of computers, laser printer and printable papers.

Customers will get bills and invoices through automated bill generated machine. So innovation in the decoration of the med store is certainly essential. Commercial management is also done via internet. Online documentation is undoubtedly smooth. Contact customers on online chatting platform. Talk to them over phone. Make video calls to have advices from experts if required. Permit your employees to use cell phones to send emails to your inbox. Oracle based commercial management portal must be installed into your pharmacy store for taking care of back office jobs smoothly.

Understand Competition and Reset Your Marketing Strategy

You are not alone in the pharmacy advertising portal. Regularly minimum 1 million visitors check over thousand sites to buy medications in the world. Billion dollars are hovering in the med manufacturing trade. The advancement in the med field is the turning point and slowly people are showcasing their interest in buying drugs from the online pharmacies. Rivalry, competition, and struggles are basic things for a trader. To make your pharmacy business/ marketing profitable, be proactive to be much more competent.

Emulate new strategies. Borrow much innovative marketing plans and imitate successful sample business templates to bring innovation to the pharmacy business/ pharma marketing. Who is your rival in the market? Well, rivalry doesn’t mean hostility. You must not have impatience to kill someone. Nor are you a militant to spray venom for terminating the city. So, don’t be misled. Competition means the fair rivalry in advertising trade. You should upgrade your trade structure.

You should be efficient to sell drugs at more affordable prices. You should have dozens of futuristic plans to enlarge the trade faster. The cost efficiency is the objective of a newbie to reduce the cost of drugs. Similarly he will not violate the FDI law to sell drugs at lower prices. Competition is needed for the betterment of the service. Fancy how to bring a result oriented business promotion strategy to expect a sound financial structure by operating a small pharmacy store.

Be a creative person. You are budding pharmacy entrepreneurs. So, recycle your raw energy embedded in mind. Go through periodicals, brochures, and magazines to have authentic information. Research materials need to be gathered for making a giant project to enhance the superb commercial management. Therefore, create a different business plan for pharmacy. It is your draft. You have quality to express what you need. You have bundles of new concepts, and ideas to use.

So in draft assignment, feel free to describe the goals, objectives, business starting plans, budget related issues, sources of arranging fund and basic requirements and marketing to start the drug store. Well, the finishing touch needs to be added to the draft. An experienced pharmacy business planner has over hundred samples. He is a professional business plan writer for pharmacy.

He has solved complicated problems. He is one of the most successful planners in the field. So he can give you a summary of the business plan. Even his instant business plan writing backup must be fruitful to you. Do more probing in the modernized med manufacturing and pharmacy company.

Upgrade your basic knowledge for the sake of good familiarity with the pharmacy field/ marketing. Online library, data and million tons of samples boost up novice traders to track their loopholes in upgrading futuristic strategy. Through compact SWOT analysis, he is able to find the negative factors which are not helpful to him to run the small size drug store. Strength of the entrepreneurs must be identified. It is also applicable to you as well. Track where are going? If you have no vision, the area will not be resilient. You should find the niche in which you will cultivate the land for flourishing the pharmacy business dynamically.

Install Plan Software

Conventional planning needs to be replaced. Computers minimize the jobs of taking care of customers. Well, few years back, drug stores have to keep large space for entertaining customers who were found standing for buying medications. Separate counters for billing were open to all consumers. Drugs were not sold through a single counter during emergency. So, there must be extra space for drugs storing, supplying and customer management. Besides, lighting fixtures, indoor furniture pieces and other important accessories must be installed in the drug store.

Simultaneously, change the traditional billing system. Commercial management/ marketing process must undergo vast innovation. Compact highly advanced SAP software for management/ marketing software is on display in Google. Experts have reset this SAP model to help entrepreneurs to complete handful jobs perfectly. Billing, customer care, marketing, data management, invoice processing, and company analysis are conducted. You have the fast software to take decision within short span of time.

Your marketing trade must be perfectly integrated into a unique platform. Monthly you must analyze the trend. Is your pharmacy running fast or any downtime is likely to happen? Profit ratio, and revenues collected for the particular year must be cross checked. Industry remodeling must be done. However, it is really urgent to go deep and find more facts to compare. Is your drug store compatible with new technology? For instance, virtual pharmacy industry is now much sought-after.

Many American guys buy drugs from online med stores. However, in South Africa, Nigeria, and many countries located in Asia are not perfectly tuned up to run online med stores. Mail order delivery system is not innovative in the remote places as well. So, before opening a new drug store online, once again study to understand the mindsets of local people. However, online mail order marketing system is a vast business expansion portal. You will get more customers in this pharma industry.

Even if you have authentic permits and licenses to export expensive meds to overseas customers, you are a successful entrepreneur with good prospect. Drugs are not useless things. Patients must need medications to save their lives. So, the importance of online pharmacy business will not go down even after a millennium. So, slowly you must have command over the pharmacy commercial management/ marketing. Newbie entrepreneurs should do experiments to be much acquainted with the latest industry operating ethics.

It is obviously time consuming but with technical innovation, and advancement in the commercial management, it is wonderfully much more convenient for a newcomer to learn how to open a good pharmacy store in this specific industry. Starting a pharmacy business plan designed by experts is basically a tool for a newcomer to get a roadmap to innovate the pharmacy in much more dynamic way.

In this connection, OGS capital consultants online are experts to guide newcomers how to chalk out futuristic pharmacy business projects fantastically. Take valuable business promoting tips, modern strategy and free advices from these consultants. Chat with OGS capital business consultants to have new strategy, and ideas to remodel the entire corporate portal successfully.

Download Pharmacy Business Plan Sample in pdf

OGS capital writers specialize in business plan themes such as massage business plan , medical clinic business plan , cannabis dispensary business plan , nursing business plan ideas , transportation corporation health services business plan , reiki business plan and many others.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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pharmaceutical company business plan

Pharmaceutical Companies Business Model

A Pharmaceutical or drug company is a part of the healthcare sector and involved in a commercial licensed business of research & development, manufacturing, marketing, and distributing drugs and medications. Different laws and regulations are imposed on the pharmaceutical companies related to patent, drug testing and marketing, drug safety, pricing and quality of drugs, etc. The pharmaceutical industry includes both private and public pharmaceutical companies that play an important role in vaccine and medication development for the purpose of preventing and reducing diseases. Enhancing quality of life by making a significant contribution in innovative research and active engagement in technological advancements so that the complex healthcare demands of people can be fulfilled; also comes under the portfolio of Pharmaceutical companies. The main aim of the industry is to make sure the availability of drugs for maintaining health by preventing and curing infectious diseases that affect a large population. The pharmaceutical companies are further classified into subcategories based upon their functioning i.e. biotechnology companies, drug manufacturing companies, and the wholesale & distribution companies that are responsible for handling the produced products. As per IBEF (India Brand Equity Foundation), India is considered as the largest providers in generic drugs category all over the world. The Pharmaceutical companies of India supply various vaccines i.e. more than 50% of global demand. Recently, on the demand of International countries that are most affected countries due to Covid-19 such as U.S., Russia, Sri Lanka, etc; India has supplied Hydroxychloroquine tablets to these countries for the treatment of the disease as India is one of the largest producers of these tablets all around the world.

A Brief Background

The history of Pharmaceutical companies and the use of drugs or medicines are quite old from the Medieval Ages where the records are found of people making use of herbs and other plants for healing. We can trace the concept of the modern pharmaceutical industry by the discovery of penicillin and insulin drugs in the 20 th century. Different developed countries, especially European countries, started manufacturing these drugs on a mass production basis. Arabian Pharmacists of Baghdad opened the first drugstore in 754. Lots of drugstores in North America and Europe were converted or developed into big pharmaceutical companies in the 19 th century. 19 th and 20 th centuries became a witness for the discovery of major pharmaceutical companies that exist today.

Business Model of Pharmaceutical Companies

A business model can be viewed as a framework that considers the technological characteristics and potentials of the company as inputs which are built on key resources, key partners and key activities of the company; and further converts these inputs into valuable economic output through the customer relationship, target customer segments, and key distribution channels by means of product or service offering i.e. value proposition. Before going into the detail of each element of the business Model of Pharmaceutical companies, let’s understand first different business segments of Pharmaceutical companies and how they work:

Pharmaceutical Companies- Business Segments

1) API (Active Pharmaceutical Ingredient): To understand the business model of pharmaceutical companies, it is worth taking an idea of the important ingredient in the Pharma industry i.e. API which is considered as the main active ingredient in the drug or medicine to cure diseases. The raw material that is being used to produce medicines, also termed as bulk drugs or API. Various pharmaceutical companies are there that are specialists in producing only APIs. These companies either purchase or produce intermediates themselves for making the final API. Further, these companies sell APIs to different formulation companies for producing final medical drug/medicine. One of such API pharmaceutical companies is Lupin Pharma.

2) Formulations: The term pharmaceutical formulation refers to the process of producing the final medical drug or medicine by combining various chemical substances, including the APIs. In the process of medicine manufacturing, formulations are the end result or product and are available in the form of capsules, tablets, syrups, or injectables.

The pharmaceutical companies indulge in manufacturing of formulations are considered as formulation pharma companies like Dr. Reddy’s Laboratories. Pharmaceutical formulations are of two types i.e.

  • Oral formulation: This is related to the formulation of drugs like capsules, tablets, etc. that can be delivered by the mouth.
  • Topical medication forms : i.e. creams, gel, powder, paste, ointment, etc.

3) CRAMS (Contract Research and Manufacturing): CRAMS stands for Contract Research and Manufacturing service which is considered as a process by which pharmaceutical companies outsource their research services or activities related to product manufacturing to the companies which offer        low- cost services. Basically, two main activities i.e. Contract Research and Contract Manufacturing come under CRAMS. Pharmaceutical and Biotechnology companies that need extensive Research & Development and manufacturing facilities at large-scale, use CRAMS. This segment of the Pharmaceutical and Biotech industry is also growing at a fast rate. Most of the pharma companies are increasing their outsourcing activities due to the extreme pressure of maintaining fixed costs.

4)  Export/Import Business segment: The Pharmaceutical sector of India is considered as the largest supplier of generic medicines to the developed countries and these medicines are cost-effective too. India exports drugs/ medicines over 200 countries around the globe and the U.S. is the key market for exports. India has witnessed US $19.14 billion pharmaceutical exports in FY19 and US $13.69 exports were there up to January 2020. The exports of pharmaceutical companies consist of drug formulations, bulk drugs, biological, surgical, intermediates, Ayush & herbal products, etc.

  5)  Pipelines in Biotech Companies: Pipeline in pharmaceutical companies, especially in biotech companies refers to the different phases of clinical trials of drug medicine. In the pharmaceutical sector, this term is often used while defining and evaluating the activities, R&D (Research & Development) progress, measuring success, and growth potential for biotechnology pharmaceutical companies. When the status of a drug is considered in the pipeline; it means different clinical trial stages in which it is undergoing or have to undergo before getting approval for final use in the market. So, we can say that different drug medicines that are into clinical trial phases and seeking approval of USFDA (U.S. Food and Drug Administration Authority) are considered as pipeline drugs.

The various stages of a drug clinical trial are as under:

6) Biotech: Pharmaceutical companies are inter-linked with biotechnology companies in terms of obtaining licenses from them for the manufacturing of patented products. Different segments of the Biotechnology sector of India are Bio-Agriculture, Bio-Pharmaceutical, Bio-Services, Bio-Informatics, and Bio-Industrial. Biopharmaceutical products which are mostly pharmaceuticals, also referred to as biological medical product which is a pharmaceutical drug product, manufactured and extracted from biological sources.  This includes allergenic, vaccines, tissues, living medicines that are being used for cell therapy, etc.

7 )  Drug marketing: One of the important business segments of Pharmaceutical companies is marketing. Pharmaceutical companies enhance their market reach with the support of marketing companies or in-house marketing team. Drug marketing companies facilitate these companies by selling their products where pharmaceutical manufacturing companies are not able to sell products in a particular area or region due to the absence of necessary license or marketing network. Now, after gaining insights into the business segments of Pharmaceutical companies, let’s review the different current and emerging business models of the companies:

Current Business Models of Pharmaceutical Companies

A) Block Business Model

In traditional terms, the pharmaceutical industry’s current business model is made around the blockbuster drugs and is referred to as the Blockbuster business model. The mass market is the main target of this business model with an expectation to bring revenue from high sales. Any drug that generates annual sales of over US$1 billion then it is said as a blockbuster. The main uses of these drugs are for the treatment of common medical issues such as diabetes, asthma, high blood pressure, cancer, and high cholesterol, etc. The blockbuster business model of pharmaceutical companies is related to investing a significant budget into in-house R&D (Research & Development) activities, to search different dead-end projects with the hope of turning a few of them into the successful blockbusters that generate high returns.

Blockbuster business Model Canvas of Pharmaceutical Companies

Different elements mentioned in the above Blockbuster business model canvas of Pharmaceutical Companies are as under:  

1. Value Proposition

  • The new blockbuster drug offering is one of the main value propositions provided by pharmaceutical companies through which value is created for customers by invented drug usage. Also, delivery of the offering is through drug innovation. Despite starting from the comparatively higher price in the market, the price level of the blockbuster drug soon gets reduce.
  • Pharmaceutical companies that are using blockbuster business model cater to a wide range of customers i.e. mass market.
  • Drugs are developed by aiming at both innovation and quality. Pharmaceutical companies devote a reasonable part of their revenue to R&D activities in order to provide unique and new products based on technological innovation.
  • The product portfolio of big pharmaceutical companies is also diverse as they deliver products and medications to a broad range of customers.
  • Big pharmaceutical companies serve customers in various international countries too.

2. Customer Segments

The target customers of pharmaceutical companies under the blockbuster business model are mainly doctors and patients as the companies cover a mass market. Moreover, various health institutions like hospitals, clinics, pharmacies, etc. also come under customer segment portfolio.

3. Key Partners

Pharmaceutical companies generally have the following key partners:

  • Channel partners include distributors or sales agents for the purpose of expanding market reach and in-house sales.
  • CSR or Corporate Social Responsibility partners comprise of NGOs or non-profit organizations for collaboration on social projects.
  • Strategic alliance partners consist of different technology-driven and other pharmaceutical companies and pharmaceutical companies have partnerships with these on shared resources or joint venture projects.
  • Merger & acquisition partnership is the strategy adopted by Pharmaceutical companies to expand their reach in emerging markets, maintaining market share by participation in generics, strengthening growth in markets that are matured, etc.

4. Key Activities

Pharmaceutical companies that operate on Blockbuster business model have various key activities such as Research & Development with the companies rather than outsourcing, Development and production or manufacturing of various drugs/ medicines and healthcare products, Testing of drugs, marketing and distribution of drugs to appropriate customer segments using various marketing and distribution channels, and managing internal personnel, production, costing, etc.

  5. Key Resources

The main resources of pharmaceutical companies include research & development platform, technology (Artificial intelligence and Machine learning), technical and non-technical staff, intellectual property, generic capabilities (use of today’s drug innovation for future innovations i.e. both production and innovation), etc.

6. Channels

Various medium or channels of pharmaceutical companies include:

  • Website of these companies using which information is provided to different customers related to their products, business activities.
  • Sales and marketing personnel plays a key role in making sales and conducting marketing activities of pharmaceutical companies. These sales and marketing team can be segment-wise or geographic region-wise depending upon the market approach of companies.
  • Pharmacies and Distribution networks are also key channels of pharmaceutical companies to sell consumer products.

7. Customer Relationship

  Pharmaceutical companies enhance and maintain their customer relationship by providing various customer assistance and customer support facilities such as :

  • Customer service support of 24/7 to handle any query or issue of customers
  • CRM (Customer relationship management) for better customer service
  • Sales team through which customers can interact directly and also, contact numbers, email IDs to facilitate customers to stay in touch with concerned departments of pharmaceutical companies so that they can get real-time assistance from their sales representatives.
  • Online presence through social media and website is there for providing any online information, and FAQs (frequently asked questions). Using social media accounts of pharmaceutical companies i.e. on Facebook, Youtube, Linkedin, Twitter, etc. customers can interact with them directly.
  • Pharmaceutical companies also enhance customer relations by creating the awareness of their brand through various print and digital medium, and also, build trust by making an effort to provide better products and services.

8. Revenue Streams

  The revenue model of pharmaceutical companies is clubbed in the below chart:

  •   Sale of products & services: The main source of revenue of Pharmaceutical companies is through the development and sale of drugs or medicines to different customers in the mass market. Generic drugs, different bulk drugs like antibiotics, steroids, vitamins, along with herbal and biological products, drug formulations, etc. play a significant role in revenue generation of pharma companies. Net profit (in billion Indian rupees) of renowned pharmaceutical companies as of April 2020 in India is shown in the below chart. This profit also includes the revenue earned from the sale of products of these companies.

  Net Profit of Leading Indian Pharmaceutical Companies

As of April 2020

  *(Information Source: Statista.com)

  •   Patents: Another important money or profit earning source of pharmaceutical companies is the patent that provides incentives for companies to research and development of innovative and new pharmaceutical drugs. The patent refers to a product’s property right, and in terms of pharmaceutical companies, it is considered as a chemical formula that any rival pharmaceutical company may not copy. A patent gives a guarantee to investors that their product will remain as the only product of its exact type in the market for long years i.e. 20 years. Patents are highly important to pharmaceutical companies due to the great possibility of guaranteed profit. The patent system facilitates companies to gain profit from patents by the mean of restricting any other competitor to market and sell a similar kind of prescription drug or medicine. Also, pharmaceutical companies can fix the high price/cost of their products because of having somewhat monopoly on their drug and absence of any competitive forces in the market that usually are responsible for bringing prices down.
  • Research and Development (R&D): One revenue resource of pharmaceutical companies is the R&D factor that has a great significance in the pharma industry because revenue’s major share depends upon research and development. A huge budget is generally allocated to invest in R&D activities by pharmaceutical companies to ensure future profit once a new formulation research process is completed. R&D returns on the private pharma sector are quite attractive as well and very based upon drug type. The companies having the capability of advanced R&D tend to be considered as the most profitable as through their R&D, drugs that have the potential to be highly profitable, can be patented.
  •   Strategic alliances: Pharmaceutical companies also earn a small portion of their revenue from different strategic alliance agreements through which products of third-parties are co-promoted by them

9) Cost Structure

Pharmaceutical companies bear different expenses in the development and sale of products & services such as:

  • Research & Development cost: R&D is considered as one of the crucial ROI (Return on investment) function of Pharmaceutical companies and so they spend heavily on R&D activities. The study reveals that pharmaceutical companies spend roughly 17% share of their revenues on R&D activities. As per statistics, most big pharma firms have spent around 20% on R&D last year i.e. 2019. The reason behind such a big investment in R&D is that in the process of new drug discovery, it undergoes various testing stages before selling them in the market which is both costly and time-consuming. Also, it costs millions to discover and develop an effective and innovative new drug.
  • Manufacturing cost: Another major segment of costing of pharmaceutical companies are expenses involved in the manufacturing process of drugs in different stages i.e. production including the cost of raw material, quality control, quality assurance, regulatory approval, packaging, warehousing, etc.
  • Apart from the above two, other cost includes sales & marketing expenses, partnership management, general and administrative expenses comprises of the salaries and benefits to staff, etc.
  • B) DEFRAGMENTED BUSINESS MODEL:
  • Defragmented business model has a much wider verity of value propositions as it focuses on a particular segment of the drug pipeline. The value proposition attributes in this model depend on the offerings of pharmaceutical companies and a niche market is the center focus of value proposition. This niche market can be a particular category of patients who are suffering from a common disease or pharmaceutical companies that are into the outsourcing business of drug manufacturing, etc. So, the value proposition of the Defragmented business model consists of offerings based upon the niche market and products of high-quality and comparatively low-cost.
  • Customer segments include B2B or B2C customers and pharmaceutical companies focus on niche market segments.
  • Customer relationship in the Defragmented business model is more personalized that provides pharmaceutical companies to obtain active feedback from customers. Also, through participation in the collaboration process with customers for the purpose of quality improvement in value proposition; companies are able to strengthen customer relations.
  • Key resources include both tangible resources such as technology, plants, and Intangible resources like Intellectual capital. Moreover, the staff of pharmaceutical companies is also main resources.
  • Key partners can be other pharmaceutical companies and partnership purpose can be customer acquisition, acquisition of knowledge, outsource certain activities, and risk-sharing.
  • Key channels are direct and indirect distribution channels.
  • The key activities of the model focus on core capabilities such as capabilities related to gain a competitive advantage. Non-core capabilities are outsourced and internal sourcing is there for capabilities that are required for delivering value proposition. Also, pharmaceutical companies who use this model, participate in the business networks for reducing uncertainty and risks.
  • The cost structure of pharmaceutical companies in the defragment model is related to the utilization of core capabilities. Both fixed and variable costs are part of it. The revenue is earned through the manufacturing of drugs.

Emerging Business Model of Pharmaceutical Companies

The pharmaceutical companies working on the Blockbuster business model are facing the biggest challenge i.e. expiry of the patent of the blockbuster drugs and a great expansion of generic drugs. Apart from the expiry of patent, other challenges in front of these companies are of deficiency of new product innovations and high cost-margins. This resulted in the diversification of innovative drug manufacturing companies into generic drug manufacturing. The current blockbuster business model of pharmaceutical companies is moving slowly into a focused and lean type business model which is made of small and local R&D clusters. Wherein, the earlier blockbuster business model is focused on more diversified global R&D clusters. So future pharmaceutical companies demand more specialized and defragmented business model with a focus on core capabilities to sustain long-term growth.

The future of the pharmaceutical industry seeks improvement in R&D productivity, cost reduction, to grasp the opportunities of emerging economies, etc. The futuristic approach will even look forward of the collaboration of large pharmaceutical companies with others for the development of more economical and effective new medicines, support patients for health management, and for ensuring the true impact of products and services offered by them. Mainly, 2 emerging business model i.e. Federated and Fully Diversified will support in future prospects of Pharmaceutical companies.

Let’s have a look at these emerging Business models of Pharmaceutical companies:

A) Federated Business Model:

The federated approach includes network creation of separate identities by the companies that consist of a common platform of supporting infrastructure. The different participant companies have a common goal like managing outcomes in the available population of patients. Companies are interdependent with each other as they share data, funds, back-office services, and patient access. This model facilitates a framework for developing a product’s integrated packages and so, it diversifies beyond the core offering of a pharmaceutical company. Each participant in this model is enabled to make a particular segment of expertise, to have a competitive advantage as an outcome of expertise, and to sell its offerings i.e. products or skills, by transferring those activities that are better disbursed by other partner firms of the federation. The federated business model is further categorized into two categories i.e.:

1.a) Federated model’s virtual variant

  In this type of federated business model, the pharmaceutical companies outsource almost all of its operations and the company reflects as a management hub that coordinates the various activities of partners. Several large pharmaceutical companies are already working on this model up to some extent. These pharmaceutical companies acquire external contractors to fulfill their own resources. By outsourcing various activities i.e. manufacturing, marketing & promotional activities, R&D, etc. to 3 rd parties, they can take advantage of specialist skills, wider scope of opportunities, and market access. Doing so, these companies can further focus on other value-addition activities like business development, project management, management of intellectual property, regulatory affairs, etc.

1.b) Federated model’s venture variant

This vertical of federated business model demands an investment in a portfolio of pharmaceutical companies and in return to have a share of capital growth or the intellectual assets, instead of outsourcing specific activities.  Pharmaceutical companies can focus on investing in a specific therapeutic segment or divide them into a number of activities or areas for risk minimization. Once the investment period ends, either the generated intellectual property might be claimed or to give to a 3 rd party via out-licensing. As an alternate, the intellectual property might be retained and commercialized by the original companies and its ROI (Return on Investment) is paid to sponsoring companies.  Different big pharmaceutical companies like Pfizer, Novartis, etc. have venture capital funds at the corporate level.

1.B) The fully diversified model

  In this business model, Pharmaceutical companies expand their horizon from their core capabilities or core business into different related products or services like generics, health management, diagnostics, etc.  This facilitates companies in reducing their dependability on Blockbuster medicines.

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  • Business Plans Handbook
  • Business Plans - Volume 03
  • Pharmaceutical Company Business Plan

Pharmaceutical Company

Pharmaceutical Company 432

BUSINESS PLAN

PAIN AWAY LTD.

1117 High St. Poughkeepsie, NY 13495

The company described in this plan has moved beyond the initial start-up phase and is now seeking investors to finance its growth. Much of the plan, therefore, is geared toward persuading, explaining, and reassuring potential investors that the company (which produces a therapeutic, topical pain cream), is well-managed and stable. The in-depth analysis of the company's competitors is an outstanding feature of this plan, as is its market research.

EXECUTIVE SUMMARY/OVERVIEW

Competition.

  • PROPERTY & FACILITIES
  • PATENTS & TRADEMARKS
  • RESEARCH & DEVELOPMENT

GOVERNMENT REGULATIONS

Insurance and taxes, corporate structure, risk factors.

  • RETURN ON INVESTMENT AND EXIT
  • ANALYSIS OF OPERATIONS & PROJECTIONS

FINANCIAL STATEMENTS

Type of business.

Non-prescription drug wholesalers; US SIC Code - 2834 Pharmaceutical Preparations.

Company Summary

Pain Away Ltd. is a going concern, a Delaware corporation formed in January 1995 to manufacture and sell its premier launch product Pain Away, a topical pain remedy using FDA-approved homeopathic ingredients developed for the simple purpose of relieving pain. The company was formed by its parent S-corporation, Peale, Inc. in order to market products nationally and internationally. Peale, Inc. was formed in February 1994 to complete the development of the launch product. The formation of the company was a significant step in a 9-year process of refining and testing a homeopathic formula first used by company founder and CEO Robert Peale to alleviate his pain from carpal tunnel syndrome. The R&D phase of this product began when Mr. Peale purchased the original formula, did a thorough study of homeopathy, and refined the formula to its present marketable state. From the beginning of R&D, Mr. Peale worked within FDA guidelines in order to secure FDA registration. Then, in February 1994, the company was formed to finally manufacture and sell the product. Starting with only a handful of customers, including some professionals, chiropractors, physical therapists, etc., only 19 months of operation have yielded 12,000 individual customers with an 80% reorder rate. The current customer base now includes medical doctors from different specialties, sports trainers, and athletes, both professional and amateur. The company expects to show a profit in 1996 and estimates that it will be very profitable in 3 years.

Mr. Peale is 49 years old and has a 25-year history in sales, sales management, and marketing for a tool distribution company. His deep study of homeopathic medicines started in 1985 and included studies in nutritional supplements. Mr. Peale has been invited to sit on a newly-formed FDA committee addressing the growing national interest in natural medicines.

Curtis Company president, Ms. Alana has 25 years of experience in retail and direct sales. She has been a senior sales director and sales trainer for Beautiful You Cosmetics, has owned and operated a retail sporting goods store, and has managed a 15 person, $1 million department for a major chain retailer. She also has some banking experience.

Vice-president of marketing, Ryan Lemon has 32 years of experience as production manager, buyer, sales manager, and marketing manager. He was director of marketing for Pilgrim Health and was responsible for their first launch into New Jersey which led to their first $18MM in sales (in 3 years). He has a BS degree in textile engineering and has also done independent marketing consulting.

Product and Competition

The R&D mission was to develop a greaseless, odorless, topical cream which was measurably more effective at relieving pain than any other OTC (over the counter) topical product. This mission has been accomplished. The company has collected anecdotal, testimonial, and uncontrolled medical study evidence that Pain Away is more effective than the leading topical analgesics such as Arthritin and others. The product's effectiveness in relieving pain is its most powerful benefit, besides the added benefits of it being greaseless and odorless. What distinguishes Pain Away from any other topical analgesic in this still-growing $402.1MM market is its advanced homeopathic formula - a refined blend of 11 FDA approved pure and natural ingredients. The typical OTC topical analgesic works to either block the sensation of pain or distract perception of deep pain by "counterirritating" another localized area near the pain. Pain Away's formula is different. Pain Away treats pain at its source. It stimulates improved circulation in the micro-capillary system in the ligaments and tendons, where most pain is felt. Pain-relief from Pain Away is the result of the body's own self-healing. It also can be applied several times a day because it is odorless and greaseless. The US pain management market ($15.2 billion by 1997) is a mature market with intense, established competition ("The Market for Pain Management Products in the US - Introduction, Drugs, Devices, Trends, and Market Structure," in FIND-SVP). With future pharmaceutical market growth dependent upon new and innovative product additions, Pain Away is entering the field at the right time. The company will distinguish itself and its market position by dedication to the development of only natural-ingredient products. Since its unique formula of ingredients already has FDA approval, the company aims to penetrate the OTC pharmaceutical market, where new products traditionally find success. Here Pain Away will compete with topical as well as internal analgesics, including aspirin, acetaminophin and ibuprofen. An estimated 4,000 people a year die from aspirin overdose. A condition known as "analgesic neuropathy" can result from extended or inappropriate use of analgesics. Medical studies linking heavy usage to health problems have affected aspirin, acetaminophin, and ibuprofen. Pain Away can be marketed as a substitute for (reducing overdose risk with internal analgesics), or as a supplement to (using Pain Away can reduce needed dosage of internal analgesics) internal analgesics when used for certain pain relief. Furthermore, Pain Away is not contraindicated for use with any other medication. This broad-based appeal is built upon the reliability of Pain Away's effectiveness in relieving pain, inflammation, and spasm associated with arthritis, bursitis, sciatic spasm, neck/back pain, tendonitis, tennis elbow, tension headache, achilles tendonitis, and carpal tunnel syndrome.

A second product, a natural anti-inflammatory nutritional support system formula known as "Pain Away Plus," will soon be marketed as a companion product to Pain Away. This multistaged formula is a combination of trace minerals, herbs, and a natural cartilage-derived substance. The company has long-term plans to develop more health-related products.

Funds Requested

Company principals have invested all available personal assets into the product development and operations to date. The need for capital is in the context of the readiness of the product for mass marketing. Management is seeking a $1,500,000 equity investment in exchange for a suggested 30% ownership of the company. All terms of financing are negotiable in order to meet the financial requirements of the investor.

Use of Proceeds

Advertising & promotion campaign - $1,200,000 (see below); Market research - $300,000. The company anticipates the need for follow-on financing after 24 months of business.

Pharmaceutical Company: Pain Away Ltd.

Financial History

Pharmaceutical Company: Pain Away Ltd.

Sales were first made in 5/94 under Peale Inc. ($143,881). As sales expanded nationally, Pain Away Ltd was formed in January 1995. All sales since then have been under Pain Away Ltd.

Financial Projections

Pharmaceutical Company: Pain Away Ltd.

With capital request accomodated, the company believes that Pain Away will jump in sales starting in 1996.

The company will attempt a public offering based on year 2000 earnings. If there is no public market and no prospect for a public market in the near future, then the company will offer to buy back the stock owned by the venture capitalist. A predetermined price could be set ahead of time, if desired by the venture capitalist.

The product effectiveness, evidenced largely through anecdotal evidence, personal testimonials, and repeat sales, has formed the basis for the future growth of the company. Together with a second, complementary product (nearly ready for market), the launch product will be aggressively mass marketed as a pain management system for the next five to ten years. Past and current sales have been to end-users, health professionals, and to some retail chains. The company and product are now poised for first stage expansion. Over 30 target wholesale markets have been identified. While the company uses its marketing strategy to enter these wholesale markets, simultaneous efforts will be made to develop research protocols. Management is confident that the anecdotal evidence and personal testimonials will be strengthened by controlled studies, designed to test the effectiveness of the product and demonstrate the physiological healing activity stimulated by the formula. With scientific credibility, the product will not only build its position in the $150 million homeopathic product category but will also strengthen its transition into the formidable mainstream topical analgesic category.

Future research is planned, based upon inquiry, in order to adapt the formula for animal use (Pain Away currently being tested on thoroughbred horses).

At the end of five years, the company intends to have at least one additional health product and should be able to go public off its revenues. The long-term goal for the company is to become an entrepreneurial leader in the development of natural products for various segments of the health care market. The company plans to capture enough share of the topical analgesic market to become either a viable joint venture partner or an acquisition candidate.

The product formula and delivery system are proprietary. The formula is uniquely advanced and is nearly immediately effective in relieving pain. Homeopathy and immunization have much in common, namely the principle of similars, which states that whatever a substance causes in a large dose, it can stimulate an immune response to defend against it in a small dose. It works by the principles of stimulation to the body's own self-healing mechanism and by the scientific balancing of its natural active ingredients through a dilution process called micro-dosing. Micro-dosing has given homeopathy its 200-year history of safety with no known side effects or toxicity. This self-healing process is in contrast to the majority of commercially successful topical analgesics, which contain counter-irritants, including the newer capsaicin-based products. These ingredients cause a superficial inflammation on the skin which masks pain by deadening the sensation of pain in the epidermal nerve endings only, or by distracting from the perception of pain by irritating an area near the pain source. The Pain Away formula has been developed with precision and balance and is a product that is effective and safe for use on all skin types. Pain Away's eleven active ingredients stimulate improved circulation in the micro-capillary system to ligaments and tendons, where most pain is felt. Pain relief is the result of the body's self-healing.

The manufacturing is sub-contracted out to a highly respected FDA-licensed manufacturer of homeopathic products.

An important unique feature of Pain Away which distinguishes it from other homeopathic remedies is that Pain Away is a topical treatment and is not a systemic treatment. As such, it requires little knowledge to use and is conducive to cross-merchandising in the mainstream analgesic category. Furthermore, since Pain Away is a formula of ingredients, it provides a broad spectrum of effects as compared to single remedies.

The personal commitment of the founder to relieve his own pain also adds a unique value to the story of this product - a story which can enhance marketability - to anyone who is in pain or anyone who knows someone in pain.

Although Pain Away is an homeopathic product, the company will position itself as a natural ingredients company - not necessarily homeopathic. All the company principals plan to engage both septics and advocates of complementary medicine by applying rigorous scientific standards equally across the board, for both conventional and unconventional treatments. Contacts have already been made with the National Institute of Health regarding future research.

Product Description

The product is a specialty consumer good carrying a suggested retail price of $19.95 for a 3.7 oz. jar (1.9 oz. jar also available at $12.95). The jar is designed with a medical appearance. The jar is easy to ship in multiples, is easy to stack on a shelf, is aesthetically pleasing, and has an easy-to-handle screw cap. The actual cream is greaseless, easy and pleasant to apply, and is odorless. Pain Away has, to date, largely been sold directly to end-users, and wholesale to retailers, distributors, and catalogues. The markets have supported the suggested retail price, which was arrived at by surveying market research supporting the $19.95 price along with the perceived value of the product compared to similar products at about the same price. This price also yielded a gross profit of $3.75 per jar and allowed for 100% markup from wholesale.

The eleven ingredients are readily available through top-quality labs which control for purity and authenticity. The cream is compatible with any medication being taken. The product carries a money-back 30-day guarantee.

Purchasers of the Product

Preliminary studies done by independent treatment professionals (no control group used) have shown that Pain Away has been effective for relieving the pain, inflammation, and spasm associated with arthritis, bursitis, sciatic spasm, neck and back pain, tendonitis, tennis elbow, tension headache, achilles tendonitis, and carpal tunnel syndrome. Anyone suffering these ailments, treating these ailments, or caring about anyone suffering these ailments is a potential purchaser of the product. A New Jersey hockey team uses Pain Away prior to workouts, competition, and for pain relief. The head trainer for the team says, "There's no product better for contusion of the quadriceps." He has reported shorter recovery times as a result of using Pain Away. Reports from athletes are that using Pain Away before and after workouts yields less cramping, fatigue, and soreness.

Top purchasers of TPR to date:

Pharmaceutical Company: Pain Away Ltd.

The total market for OTC internal and topical analgesics is estimated at $3.6 billion for 1995 and is projected to be $4 billion by 1997. With over 400 brands saturating this mature market, growth is still occurring through new products and product innovations. Driving this growth are:

  • increasing use of pain management products for the over-50 population segment, whose numbers are increasing
  • increasing awareness that pain does not have to be tolerated and can be treated
  • price increases

Body/Muscle Pain Market

The market is dominated by internal analgesics:

Pharmaceutical Company: Pain Away Ltd.

Pain Away is a new product to this sizable OTC pain-relief market. It will enter this large arena riding on its effectiveness and coming from the new and growing alternative health care market segment. As a new OTC product, Pain Away has such a broad-based appeal that it will be sold to a large portion of the total OTC pain-relief market (both internal & topical), estimated to be 84% of all US adults and growing as the baby boom population ages and concerns regarding age-related ailments, such as arthritis, increase. Of this 84%, about 25% alone use pain-relief products for body/muscle pain for which Pain Away is especially suited. Just this one type of ailment offers a substantial market potential:

Pharmaceutical Company: Pain Away Ltd.

If only 40.3 million Americans (25% of 84% of adults) use an OTC pain-relief product three times a week for body/muscle pain alone, then the market potential is 6.3 billion uses of a pain-relieving product per year. Past use of Pain Away has indicated that a minimum of 3 applications per week would use about one 3.7 oz. jar per month. A conservative yearly estimate would be 10 jars per year, with consistent use. In order to reach a five-year sales goal of $50 million (6.7 MM jars), 667 MM consistent purchasers (10 jars/yr.) are needed. Product history has indicated a consistent 80% reorder rate, so at this rate, 833,000 original purchasers are required. This figure is 2.07% of just this one market segment. The company is very confident that it can capture 2.07% of this market segment within five years, especially considering that the roughly 40 million Americans who exercise on a regular basis, and who are aging, are included in this segment. Anecdotal reports from athletes who use Pain Away are that it can prevent injuries by "warming up" vulnerable muscles and joints prior to a workout. The product has wide applicability within this segment. The table below shows the percentage of the body/muscle pain market segment required to meet the next 5 years of sales projections.

Pharmaceutical Company: Pain Away Ltd.

These numbers are based upon a wholesale price of $7.50 per jar and a usage rate of 10 jars/year with a segment population of 40.3 million potential purchasers.

The prescription pain relief market is a distinct market which Pain Away will not attempt to penetrate. Pain Away can, however, compete directly with nearly all pain-relief products because of its unique identity of being both a substitute and a supplement to ail competing products. This uniqueness fits a projected market shift from internal to topical analgesic use as the population ages, and derives from 2 factors: 1) Use of Pain Away can reduce the needed dosage of any pain-relieving medication and 2) Pain Away is already part of a rapidly growing segment (25%-30%/year) of consumers who use alternative health care because of a disenchantment with OTC drugs and a concern about side effects with adverse reactions. Use of Pain Away can reduce needed dosage of other pain-relieving medications. As stated earlier, Pain Away's effectiveness is based upon the homeopathic principle of microdosing. While it promotes self-healing by stimulating blood flow to micro-capillaries, it remains safe for all skin types and with use of any other medication. Anecdotal evidence (from hospitals, some doctors, and occupational rehab center) has indicated that use of Pain Away alone has yielded positive results and use of Pain Away, along with other treatments, has seemed to accelerate recovery. As always, this kind of evidence will be scientifically studied. The salient point is that Pain Away can be a substitute and/or a supplement in pain management, and thereby reduce needed dosages of other medications.

Alternative Health Care Segment

Homeopathy, being an established (officially recognized by UK National Health Service) and significant alternative mode of treatment, is gaining increasing acceptance in mainstream American health care. The National Institute of Health has even awarded grant money for research in alternative treatments, including homeopathy. Drug retailers report that homeopathy may be the fastest-growing category in the trade class of drug chains. Since homeopathy is gaining acceptance as an alternative treatment, the market segments which are already embracing these alternatives will continue to be targeted in the company's initial expansion. These segments include people ages 25-elderly, who seek improved quality in life, and whose lifestyle values involve "newness." This segment includes most of the "baby-boomer" population, estimated at over 75 million. The market of alternative health care seekers is characterized by patients who can and will pay for their own care. As much as 70% of alternative medical treatments are still paid for by patients themselves rather than insurers. This kind of purchasing indicates a willingness to try an alternative product and continue purchasing based upon perceived value of the product's effectiveness. Company management has been encouraged by the consistent 80% reorder rate and knows sales will be sustained once initial purchases are made. The alternative health care market is of respectable proportion. According to the New England Journal of Medicine (1/28/93), 34% of Americans spend $13 billion/year on alternative treatments such as chiropractic, acupuncture, massage, and homeopathy. Pain Away is already marketed to all of these treatment specialties so it will reach the spectrum of alternative treatment. This 34% of Americans are familiar with the term "homeopathic," so there's a consumer predisposition to being further educated about homeopathy as a value-added natural ingredient alternative.

The company will build an early market position on the alternative health-care market and will join the growth of the homeopathic segment as it moves from the fringes to the mainstream of the OTC pharmaceutical market.

Alternative Market Potential:

Pharmaceutical Company: Pain Away Ltd.

If only about one third of Americans use an an alternative pain-reliever just twice per month, then the market potential is 2 trillion uses of an alternative pain-relieving product per year. Market indicators are that both the number of users and the frequency of use will increase as the population ages. The use rate of 2 times per month converts to 2 jars of Pain Away per year with consistent use. Again, in order to reach the 6.7 million jar sales goal ($50 MM), at the re-order rate of 80%, Pain Away would have to make 4.2 million initial sales in order to sustain 3.3 million consistent purchasers. This size customer base comprises 4.71% of the growing alternative health care market. The company believes that this sales goal is attainable within the next five years. The table below shows the percentage of the alternative health care market segment required to meet projected sales.

Pharmaceutical Company: Pain Away Ltd.

These numbers are based upon a wholesale price of $7.50 per jar and a usage rate of 2 jars/year with a segment population of 89.1 million potential purchasers.

Narrowing the Market Focus 2X

The market potential for pain relief products is huge. By narrowing the focus to product category sales, the potential becomes more exact. Pain Away's product category is within the topical analgesic market, estimated at $402.1 MM annually with a projected $522.7 MM market in 1996 (30% growth) and $692.6 in 1997 (32.5% growth). Starting with $522.7 as the base market volume, and with 30% growth per year for the next 5 years, Pain Away would have to capture 3.33% of the year 2000 market volume to make its sales goal of $50MM. Management believes that these goals are attainable.

The table below shows what percentage of the topical analgesic market will meet Pain Away's sales projections.

Pharmaceutical Company: Pain Away Ltd.

The focus can be narrowed further to the homeopathic product category, which is growing at a rapid rate at this time. The dollar volume of this segment is estimated at present to be between $150 million and $215 million and expected to grow at a rate of 25% to 30% a year. Some market-trackers say that retail sales haven't grown enough to support the existing number of homeopathic manufacturers and that a shakeout will consolidate sales in the hands of fewer manufacturers. The forseeable trend, however, is progressive growth from the fringes to mainstream markets, and at a rapid rate. The table below again shows percentages of this dollar volume required to meet sales projections.

Pharmaceutical Company: Pain Away Ltd.

These numbers are based upon a 1996 volume mid-point between the projected volume range of $150 MM and $215 MM. Growth rate is 25% a year. At first glance these percentages may seem daunting. However, the manufacturers supplying this niche are relatively few in number and therefore hold significant market shares A new player can get a reasonable market share with the right product and marketing plan. The mainstream merchandising of homeopathic products started in the early '90's and has been tested as a lucrative direction. Company management is very confident that Pain Away will gain enough share points to capitalize on the rapid growth of this product category. Pain Away will not remain in the homeopathic niche. Its effectiveness will make it competitive with mainstream topical angalgesics.

International Markets

The company will also develop an international market. A 10,000-unit order has already been received from a distribution company in Hungary and is awaiting final approval from the Hungarian State Department of Pharmacy. A small order was also sent to well-known sports figure in Spain. Discussions are underway for this individual to start large-scale distribution. The homeopathy market in the UK is estimated at 18M pounds and in Germany at 120M pounds, so European marketing could be strengthened by the homeopathic identity alone. In Germany, an independent division of the German Federal Health Agency publishes monographs on the safety and efficacy of herbal medicines. The company believes that Pain Away would fare excellently under such review and will carefully research and plan when and how to reach such markets.

There are many companies competing for shares of the 3.6 billion dollar OTC analgesic market. The major players are the internal analgesic manufacturers:

Pharmaceutical Company: Pain Away Ltd.

The balance of the OTC internal analgesic market is held by private label companies and "others." The major strengths of this level of competition are obvious in comparison to Pain Away's present market position. The major players have:

  • a manufacturing cost advantage,
  • sophisticated market knowledge and access,
  • established sales capability,
  • strong R&D capacity,
  • and of course, brand name loyalty.

An important competitive strength of Pain Away is that it is topical - pain relief is accomplished without risk of overdose and consequent risk of serious side effects. This competitive strength derives from a previously noted shift in the market from internal to topical analgesic use. This shift in consumer preference, along with Pain Away's effectiveness, can position the product as a substitute/supplement among these large competitors. Management is ever mindful that mainstream pharmaceutical companies are watchful of the homeopathic market and will act accordingly should market share be lost to homeopathic remedies. Becoming a viable acquisition candidate to any one of its major competitors is a realistic goal. Pain Away management is committed to quality product development and is also open to strategic alliances which would enhance its market capability.

The competition in the topical analgesic market is head-to-head. The top competitors are:

Pharmaceutical Company: Pain Away Ltd.

The basis for the competitive analysis is Pain Away's most competitive feature:

  • It doesn't have any of the aforementioned advantages held by the major, well-known players in this market - yet.
  • It doesn't have widespread brand name recognition - yet.
  • It doesn't have appreciable market share in topical analgesics, alternative health, or homeopathy - yet.
  • It does have a unique formula of safe and effective ingredients which none of the above products have.

All topical analgesics contain counter-irritants, including camphor, menthol, methyl salicylate, eucalyptus, wintergreen, and even the popular capsaicin. These ingredients, even when blended, act primarily to cause a superficial inflammation on the skin. This inflammation serves to hide the pain by deadening pain receptors in the skin.

What distinguishes Pain Away from all of the above products is that the eleven active homeopathic ingredients stimulate the blood flow in the body's micro-capillaries and act synergistically with the body tissue. This stimulates the body's own self-healing. Pain is treated at its source. Company management believes that the unique effectiveness of Pain Away will give it competitive clout. The issue then becomes how to compete.

Although Pepperub (Pepper) and Vapol (Athens) enjoy the largest market share, they are vulnerable to new product introductions. Menthol Plus (Lucia) held the top position in this category last year until Pepperub was re-packaged and relaunched with line extensions. That relaunch along with a relaunch of Zanprin boosted sales of both brands and put Pepperub back on top. Pepperub, Vapol, and Mentholplus are all menthol-based products. Zanprin is a capsaicin-based product and has boosted usage of its relatively new ingredient. Other relatively new capsaicin products are Capcreme (Bioderm) and Capthol (Men-Thol Co.).

Company management believes that Pain Away is generally more effective than Pepperub and Vapol. However, these venerated brand names, large advertising budgets, and consumer loyalty are formidable competitive advantages. Pain Away will focus on other competitors in order to gain a market position.

The key competitors are Menthol Plus, made by Lucia and Zanprin, made by Skin Care Corp.. Menthol Plus is a menthol-based product which Pain Away has encountered head to head in the sports market. Menthol Plus has a retail price advantage in the mass market, selling for $4 for a 2 oz. tube. This price difference is of little concern because Pain Away will promote itself as a high value product. The topical analgesic, alternative health, and homeopathic markets all support pricing based on perceived product value. Menthol Plus' manufacturer has reduced the advertising budget for this product (about $2 million) recognizing from a 21% decrease in 1994 sales that the product has matured. The company plans to acquire other brands (no topical analgesics) and extend its other lines in order to generate sales growth. The company sells another topical analgesic which is doing well in sales but has not reached the same position as Menthol Plus. Pain Away will monitor the life cycle of Menthol Plus and move to gain any market share it might lose.

Zanprin, made by Skin Care Corp., is gaining market share because Zanprin (.025%) and Zanprin- X (.075%) are capsaicin-based products. Capsaicin, derived from cayenne peppers, has created a new segment in the market and is very popular. Other companies are making capsaic in products but Skin Care Corp. attracted market attention by relaunching Zanprin as an OTC consumer product. It had been marketed for seven years to physicians and kept behind the counter, carrying the credibility of a prescription product. In early 1995, the product was re-packaged for shelf space and supported by TV ads. Despite commanding premium prices ($19.95/2oz of Zanprin-X), the product has done dramatically well.

Skin Care Corp. claims that Zanprin is the "only brand with physician endorsement and specific clinical support." This is a credible claim, cultivated for seven years, and obviously contributing to sales of the product.

Skin Care claims to be the first in the industry to develop their highly purified version of capsaicin for a pharmaceutical base. Zanprin distinguishes itself by promoting controlled clinical studies which have supported its effectiveness. Skin Care claims that such clinical trials don't apply to other, less pure, capsaicin formulas. This scientific feature enhances product credibility among physicians and pharmacists.

The management of Pain Away Ltd. recognizes the effective marketing strategy used by Skin Care because it is similar to their own strategy. Advertising and promotion expense is critical. With proper capitalization, Pain Away can compete because the Pain Away homeopathic formula is unique and effective. Many capsaicin users, including Zanprin users, have complained about the burning sensation caused by capsaicin. Pain Away will stand up to any topical analgesic on the market and do very well with comfort, safety, and effectiveness. The company needs to get this message out. The seven-year product life of Zanprin, supported by unique and heavy TV advertising, gives Zanprin quite an edge. Zanprin is now a "new" growth product and Pain Away can grow behind it, by comparing ingredients and effectiveness at every turn. Pain Away is also in the same price range as Zanprin, doing slightly better with $19.95 for a 3.7 oz. jar or $12.95 for a 1.9 oz. jar.

Zanprin is not the "only brand with physician endorsement and specific clinical support." Pain Away has been cultivating health professional support since the R&D phase. The product is heavily endorsed, and more medical support is developing. Many of Pain Away's sales to date have been to health professionals. Regarding clinical support, Skin Care's success with this strategy underscores the strategic importance of Pain Away's plans for controlled clinical studies.

Speaking of "highly purified" formulas, Pain Away can compete strongly with any formula on the market, especially capsaicin-based. The company wants to discuss purity of ingredients and formula and will do so in all promotional efforts.

The remainder of the products listed in the top competitor list have of course the same advantages that any established company with significant market share has. Beyond these immediate competitive advantages, Pain Away can compete, again, on the ingredient effectiveness basis.

Aspratin, an odorless rub which contains Salycin, sold well when it was introduced in 1992. It held third place among topical analgesics at the end of 1993. It has since been surpassed by capsaicin-based Zanprin. Bioderm developed Capcreme and lowered its price when Zanprin was relaunched.

Capthol was recently developed by the long-established Men-Thol Co. and is a capsaicin-menthol blend designed to compensate for the sometimes delayed pain relief when using capsaicin alone.

Salicreme is a methylsalicylate product which has shown flat growth and has lost market share.

Lyptum was a rapid-growth product in 1990-1991 but has since lost market share. Besides the well-established brands like Pepperub, the products which are gaining in this market are the capsaicin-based. This product category is known to be affected by product innovation and development. With proper support, Pain Away will take a respectable market share.

Homeopathic Competition

The competition takes place in the drug chain arena. Homeopathy may well be the fastest-growing category in the trade class of drug chains (20% of all homeopathic product sales). Among the growing number of drug chains which are giving shelf space to homeopathic products are: Walgreens, Medicine Shoppes International, Thrifty Payless, Eckerd Corp., Edgehill Drugs, Genovese and FEDCO, a California supermarket chain. Research published in the Journal of Clinical Pharmacy and Therapeutics states that 27% of US pharmacists consider homeopathic medicines helpful while only 18% consider them useless. The crossover of homeopathy from health food stores, where sales are still strong, to mass markets is gaining momentum.

As mentioned earlier, there are relatively few companies supplying homeopathic products to the mass market. There are five major producers/distributors of homeopathic products.

Pharmaceutical Company: Pain Away Ltd.

Health System, Homeopathic Co., and Life-Right pioneered the distribution of homeopathic products to chain drug stores in the early 1990's and are now market leaders, although more companies are entering this lucrative market. Health System Products now has about 40% market share. Homeopathic Co. and Del Sol are aggressively developing the crossover into mass marketing with line development and heavy TV advertising.

All the topical analgesics listed above are arnica-based, with few other ingredients. Arnica Montana is the premier homeopathic medicine for the treatment of shock and trauma to the muscle. These formulas come the closest to Pain Away's because they contain some of the essential homeopathic pain-reducing ingredients. Pain Away's formula, however, blends more ingredients than any other homeopathic topical analgesic on the market. This more inclusive formula gives the product wider applicability. Price-wise, Pain Away is more expensive than most of the competing homeopathic products, where prices are in the $5-$10 range for 2oz.-4oz. sizes. But, this is a value-priced market, so price is not a critical variable. Since Pain Away is very competitive on an ingredient/effectiveness basis, the critical factor is having the resources to promote the product.

Future Competition

As has been noted, the topical analgesic category, including natural ingredient, is rapidly influenced by new clinical studies and product innovations. There are three main sources of new competition:

  • New ingredients and/or new innovations of existing ingredients. Examples are new products which employ the medicinal benefits of ammonium compounds. These products are designed to provide pain relief without the objectionable training room smells, burning sensations and stinging of abraded skin that are often caused by the majority of topical analgesics that contain menthol, methyl salicylate or capsaicin as active ingredients. Pain Away's formula has solved this sensation problem and is a less "high-tech" product, for which consumers are showing a preference.
  • Companies currently in this market who could increase market share and become major players. Pain Away Ltd. is in this category.
  • Chain drug companies may produce their own private label homeopathic products and corral a significant share of this growing market - much as they did in the non-homeopathic analgesic market. This scenario is more likely to happen as homeopathic companies expand the sales volume in this market and there are share points to be taken away by private labeling.

Pain Away Ltd. can be very competitive with the right promotional support.

Marketing Strategies

Increase market share by reducing market share of competitors. This strategy will capitalize on the market development to date and capture a share of markets held by existing pain-relieving topical applications. The key benefit is that conventional pain-relievers mask pain while Pain Away stimulates the body's own healing ability to directly battle an ailment. Another benefit is that homeopathic remedies have no known side effects while many pain-relievers, especially those ingested, have side effects. Neither will Pain Away interfere with any medication. This strategy requires extensive advertising in mainstream media, including infomercial, QVC (Pain Away already under review), 60 second commercial, cable TV, interactive TV, direct mail, independent sales reps, POP displays, and educational inserts/newsletters. One objective of planned controlled studies on the effectiveness of Pain Away is to use scientific evidence to help bridge the narrowing gap between natural and conventional medicine. Product studies will support this marketing strategy. In this context, the company will pursue preliminary inquiries from a favored vendor to use Pain Away in the workplace to study any reduction of lost work time and/or medical costs precipitated by repetitive stress injuries.

Expand a growing new market for alternative health care by positioning to lead this growing market. This strategy involves specialty catalogues (placed in 5 currently), placement on retail shelves of health food stores, educational product inserts/newsletters, media appearances discussing product, and independent sales reps. This strategy addresses the 89.1 million users of alternative health care.

The company has already been approached by two large Multi-Level Marketing companies. This strategy would involve creating private labels for a large customer. Of utmost consideration with this strategy is product identity and how this channel of distribution would affect it. This channel of distribution usually requires more price mark-up than the product would tolerate.

The company will create its own "competition" by developing private labels and/or separate companies to market to different niches.

Keep capital outlay to a minimum by licensing/franchising Pain Away to a brand-name company. This strategy would add value to the product in the form of brand name loyalty, manufacturing strength, and a strong sales/service force already in place. The company envisions its role in this type of strategic alliance as conducting scientific studies to increase the credibility of TPR and in developing new products. This strategy remains an option which could preclude other strategies under mutually acceptable terms.

Building on an initial order from a health product distribution company in Hungary, Pain Away Ltd. will penetrate the European market by targeting England and Germany, where homeopathy is an accepted form of treatment. This strategy would be developed only after a US market position was established.

Marketing Plan

The company is moving from start-up stage into its first growth stage. Market strategy to date can be succinctly described as selling "one jar at a time." Direct personal selling has been the mainstay in sales growth. This strategy has targeted any end-user willing to try the product. These early customers were reached through health care professionals and direct selling through state/county fairs, shopping mall space, health food store chains, and most recently lifestyle catalogues. As the company moves away from direct selling, a strategy which proved to be an excellent market test, into mass-marketing, identified market segments are being matched with appropriate distribution channels. The plan now is to expand and concentrate more on helping the consumer develop product preference by heavy advertising of the brand name, the benefits of the product, the ease of use, and the guarantee. Company expectations are that all advertising will be enhanced by results of controlled studies of product effectiveness.

The company intends to expand regionally, based on existing markets and consumer profiles (e.g., households from the South are likely heavy users of analgesics). The national market will only be tested by placement in catalogues with a distribution of 200 million. As regional sales grow and as the product gains recognition, then a national marketing strategy will take shape. Company management have begun discussions with a major marketing communications agency (Fortune 500 client list) who themselves approached Pain Away. The marketing and sales outline is as follows.

Marketing Function

  • A complete review and analysis of the topical analgesic market.
  • Utilization of Triad Groups conducted with the professional community and general consumers. Purpose is to identify professional and consumer preferences.
  • Based on research, create a product identity.
  • From product identity, establish professional and consumer strategic directions, which would affect product design, packaging, advertising, consumer promotion, and product publicity.
  • Test both professional and consumer strategic direction via two more Triad Groups.
  • Develop launch marketing plan with all elements and budget for both professional and consumer.
  • Actual implementation of the plan to include product design changes, packaging, advertising, consumer promotion, display, and product publicity.

Sales Function

Utilize a sales organization enabling direct-call coverage on the top 25 customers, which generally account for 80% of retail sales, and broker-managed coverage for the remainder. Launch plan would include a national sales meeting and all necessary materials.

Professional

Concentrate on the pharmacist community via co-op direct mail. Pharmacist recommendation at the purchase counter does affect sales.

The production process takes place in a standard homeopathic laboratory where raw materials are blended. There are no significant health or safety risks involved. Production orders are processed by purchase order for finished product. Some raw materials are usually on hand but more are ordered against purchase order requirements. Jars are ordered from a separate manufacturer and sent to the homeopathic laboratory to be filled, packaged, and shipped to Pain Away Ltd., where fulfillment is done.

The homeopathic laboratory has the capacity to fill all projected orders. As orders increase, Pain Away management will consider using a fulfillment service and more drop-shipping to wholesale customers. Cost of goods is estimated at 18% of gross sales. This figure has been consistent throughout production to date and is based on the complete production cycle.

There is no backlog.

Production Characteristics

The production process does not require any specialized or proprietary machinery. The critical factors in the production process are the highest quality of raw materials and the incubation process, which assures a stable finished product. Water is added to a base of vegetable/plant emollients. The eleven active ingredients are then mixed into the emulsion, which incubates for about 48 hours in large vats, while monitored for any fungal invasion. The finished product is then lab-tested for potency, which is done by lot number (the company gets lot samples). Filling is currently done by gravity-feed. The manufacturer might advance to computerized filling. One batch is 500 gallons. Lead time from order to packaged product is 4 weeks. Only a skilled and experienced manufacturer can produce the formula. Even other homeopathic manufacturers not familiar with a cream-based product would have difficulty with the production process. General topical analgesic manufacturers would need to become familiar with the raw materials and the production process in order to blend Pain Away's eleven active and ten inert ingredients. The company currently has one back-up manufacturer, which has never been used.

Labor Force and Employees

The company administrative staff consists of 5 people (recently reduced by 3) including the 3 officers. The two employees are paid an hourly wage. The staff are not unionized and there is no expectation of such. The labor supply in the region is more than sufficient to meet all future staffing needs. The sales force is comprised of independent agents who are paid on commission.

Pharmaceutical Company: Pain Away Ltd.

Currently, the laboratory procures all production materials. There are no shortages of key components, and multiple sources are available.

Subcontractors

All production is sub contracted out. Only fulfillment and shipping are done in-house. The company has formed a strong working relationship with Herbal Laboratories, which is the key subcontractor. Although management has selected a back-up manufacturer, the existing relationship with Herbal Labs has been more than satisfactory, so no change is foreseen. Other subcontractors supplying jars, labels, and boxes are used based upon price and service and can be replaced.

Standard office equipment is used for administrative functions. All production equipment at Herbal Laboratories is new and there is nothing that would cause production to be stopped for any appreciable time.

PROPERTY AND FACILITIES

The company facility is a single-story 1,950 square foot, cement block structure on about a two-acre cleared lot that is leased in one-year increments. The facility is located in northern Dutchess County, NY. All necessary commercial and industrial infrastructure is in place. The facility is easily accessible from major thoroughfares. The general area has been and is recovering from the closing of 2 large industrial facilities, so there's been anoticeable decline in property values. There is, however, a regional effort to re-direct the area to rely more upon small and entrepreneurial business. Management plans to purchase the building in order to add an appreciable fixed asset and to reduce expenses. The structure is easily expandable, so the company will not have to move during its critical growth stage.

PATENTS AND TRADEMARKS

Active homeopathics are not patentable. Management is exploring establishing a trademark and a formula patent.

RESEARCH AND DEVELOPMENT

The three principals have invested collectively $100,000, which has been capitalized. Plans for the immediate future include forming a research alliance with a university, hospital, or research group in order to develop a protocol for applying the "rigorous scientific standards" against which the effectiveness of Pain Away can be proven. Management has projected R&D expenses at $ 30,000 for the next 12-month period. These expenditures are intended for controlled studies proving effectiveness, and for continuation of developing applications for animals. Management is sales-marketing oriented and does not want to develop only a research lab. Any R&D will be designed to enhance sales and profits. Company management is currently investigating an SBIR grant.

There are no particular federal, state or local laws/regulations that affect the conduct of business. The manufacturer meets OSHA requirements, as does the Pain Away administrative facility. The FDA regulates homeopathy as an OTC non-prescription medicine. Pain Away's ingredients are in total compliance with FDA standards. Mr. Peale cultivated a working relationship with FDA representatives during the initial research and wisely intends to sustain such.

Product liability insurance is underwritten. A buy-sell agreement among officers exists but is not yet backed by insurance. Key employee insurance is also yet to be written.

All taxes are current. The company pays standard payroll, Social Security, and corporate taxes. The product is sales tax exempt in many states.

Company principals first formed an S-corporation under the name Peale Inc. The realization of the likelihood of international sales prompted management to form Pain Away Ltd. as the operational company. Peale Inc. serves a limited partnership which was formed to attract investors. Both companies are run by the same management team. All R&D is done through Peale Inc. There is comingling of funds. This proposal seeks financing for Pain Away Ltd. Return on the investment will derive from the sale of the product Pain Away itself and any other products which the company sells.

Pain Away Ltd. is a member of the Homeopathic Manufacturers Association. The officers were invited to participate in an annual meeting of the newly formed FDA committee on natural medicines. This committee works on the bases for regulations, compliance, and claims for the natural ingredient industry, covering vitamins, herbs, and homeopathy.

Management subscribes to the following publications:

  • Homeopathy Today
  • Natural Foods Merchandiser
  • American Health
  • Prevention Magazine
  • Let's Live
  • New England Journal of Medicine letter

Directors and Officers

A board of directors will be developed in the near future. There is interest from the medical, nutritional, and professional sports communities, as well as from a local bank. Officers are:

Robert Peale - CEO Alana Curtis - President Ryan Lemon - Vice-President, Marketing

Profit and loss responsibilities are shared by the officers.

The officers are primary key employees (backgrounds in executive summary). Other key employees include:

Key Employees

Leslie Ottaviani - bookkeeper and office manager - known by management for 5 years and described as "a dedicated innovator with a true grasp for details." She has experience supervising 20 employees in the accounting department of Worldwide Airlines and has worked as an independent bookkeeper for several companies in Hudson Valley, NY.

Julia Allen - administrative assistant - known by management for 6 years and described as "having people and problem-solving skills and works incredibly well under pressure." Her background includes sales in a successful business which included business consulting.

Remuneration

Pharmaceutical Company: Pain Away Ltd.

Accountant and Banker

Pharmaceutical Company: Pain Away Ltd.

All other fees paid on an ad hoc basis. Different attorneys have been used on an ad hoc basis (finance closing fees will be paid by the company).

Principal Shareholders

Pharmaceutical Company: Pain Away Ltd.

Proposed Financing

Management is willing to negotiate any structure which suits the investor. The company is seeking an equity investor. Management will provide a seat on the company's board of directors. Ongoing reports of key ratios, profit-loss statements, balance sheets, and annual audits would be provided to the investor. It is management's intent that the investor will enjoy returns on investment in excess of that of alternative investments, as a privately held company, while providing investor liquidity of his investment by taking the company public at its earliest opportunity.

Capital Structure

The existing capital structure includes a $50,000 unsecured line of credit with Poughkeepsie National Savings Bank. This line of credit was just brought to maturity in 1/96 for a 30-day period, at which time the line was renewed. If the current financing proposal is accomodated, then the line of credit can be increased.

Additional financing to date has derived from the sale of limited partnerships offering $.01 per 3.7 oz. jar royalty for every $1,000 invested. Each limited partner has been given the right to convert his/her capital investment into common stock when the company goes public, or, to receive back his/her original capital investment when the company goes public. Total amount of financing raised through the limited partnership is $100,000.

As mentioned earlier, officers have collectively invested about $100,000 in the company, mostly through the R&D phase. Officers' "sweat equity" is immeasurable.

As stated in the executive summary: Advertising & promotion campaign - $1,200,000 (see below); Market research - $300,000. The company anticipates the need for follow-on financing after 24 months of business.

Pharmaceutical Company: Pain Away Ltd.

Management intends to preserve cash flow by factoring much of the receivables. With the current lead time of 4 weeks, however, some capital may be used to increase merchandising inventory in order to fulfill initial large orders. It is hoped that any follow-on financing can and will be debt financing, serviced by cash flow.

The following table sets forth the capitalization of Pain Away Ltd. as of 12/31/95 and as adjusted to reflect the proposed sale of common stock.

Pharmaceutical Company: Pain Away Ltd.

Dilution: The net tangible book value of the company as of 12/31/95 was minus $1,673 per share. Without taking into account any other changes in such net tangible book value after 12/31/96, other than to give effect to the sale of 60 shares (proposed 30% equity share) hereby, the pro forma net tangible book value of the company on 12/31/95 will be $5,827 per share, representing an immediate dilution of $13,597 per share to new investors.

Pharmaceutical Company: Pain Away Ltd.

Management recognizes that this proposed financing implies a large premium value on the existing equity and so will negotiate any other conditions which would induce the investor to make the investment.

At the time of the company's IPO, limited partners who opt for common stock will receive their shares from the officers' share of owned stock. The negotiated ownership held by the investor will not be further diluted.

Investor Involvement

Management seeks a close working relationship with the investor. The investor will be given one seat on the board of directors. Management would solicit consultations (for a fee) on financial matters, or any other area of investor expertise (e.g., planning, management development), but voting power is not an option. Fees will also be paid for any future financing and/or profitable business connections arranged by the investor.

Limited Operating History

Even though management feels that the company is at first-stage expansion, it is definitely still an early-stage company. Two obvious risks inherent in early-stage companies are undercapitalization and poor liquidity. Management has capitalized the business operations to date well enough to have developed the product and identified penetrable market segments. The current proposed financing will provide enough capital to handle the anticipated growth.

Limited Resources

Management believes that it has the resources to continue at the present pace of business. An anticipated increase in sales through advertising media such as QVC , regional/national catalogues, retail outlets, and some European distribution can be financed by factoring. These "bootstrapping" approaches have sustained the company to date and will accommodate slow growth. Management believes, however, that more rapid expansion is desirable in order to penetrate its identified market segments. More rapid expansion requires more resources.

Limited Management Experience

All officers have successful backgrounds in marketing. Additional experience in manufacturing/distribution has been gained in the past nine years of product development. Management has consistently shown a willingness to leverage themselves with accomplished professional consulting relationships. The company culture is one which reinforces sharing of expertise with mutual benefit to all concerned.

Market Uncertainties

Any consumer product business is subject to the changing preferences of the marketplace. As presented in the marketing section of this proposal, the target markets are showing substantial growth, which limits uncertainty. There is currently a growing consumer preference for homeopathic topical remedies. More uncertainty is evident when considering competition, but can be made tolerable by on-going research and analysis.

Production Uncertainties

The only uncertainty at present is whether or not the lead time (4 weeks) from purchase order to finished product can consistently be reduced. This uncertainty is of material concern as sales increase. Herbal Laboratories is a sound company with a promising long-term future and has always been customer-friendly, so no more serious uncertainties exist at present. Management believes that vertical integration of manufacturing is feasible in the long-term but is not practical in the near-term.

Liquidation

In the event that liquidation becomes necessary, management believes that the most value could be realized from the sale of the product formula itself. The formula is not patented, so valuation remains uncertain. However, the sales history, along with the testimonials attesting to the effectiveness of this "ready-made" product, should determine value. Office equipment would yield limited value, and unless the company building was purchased prior to liquidation, no value would be realized. Management believes that the company can and will generate increasing value in the near future, evidenced by increasing sales.

Dependence on Key Management

At present, CEO Robert Peale is considered the primary key manager/officer. His knowledge of the product ingredients, his history of public appearances promoting the product, his increasing recognition by the health community as an expert in natural medicine, and his charisma as a business professional highlight his key role. Managerially, the other officers are thoroughly competent and could manage the company and market its products without Mr. Peale. At this critical early stage, however, the product needs an identity and a market position before the loss of any key managers could be overcome. Once the premier product is securely launched and the product line is expanded, the loss of any officer could be absorbed by continued proper management of the company. Management believes that such a development is not far off, once the company is properly capitalized. Until such time, key person life insurance will be purchased.

What Could Go Wrong?

Upgraded advertising campaigns could not lead to any substantial increase in sales. This problem can be avoided by using experienced advertising/marketing consultants who have familiarity with the targeted markets. Furthermore, properly designed test runs on any advertising campaign would provide objective indicators of expected returns. Capital investment in advertising should be gradual and progressively based upon certain expected levels of return.

Stronger competition could capitalize on and stall Pain Away's early success by replicating the product and its marketing strategy. This problem can be solved in two ways: First, with proper capitalization, Pain Away can make an entry into targeted markets rapidly and with enough strength to grab market share. Keeping market share can be easier than getting it. This market requires extensive advertising. Increasing market share could mean an increasing advertising budget. An increasing advertising budget can easily reduce profit margin, so strategic planning is required. The second way to solve the competition problem is in the formula itself. Management will seek to patent the formula. The nature of the homeopathic ingredients is likely to inhibit any mainstream non-homeopathic company from replicating the product. Acquisition of a homeopathic company would make more sense. Narrowing the competition, then, to other homeopathic companies gives Pain Away more of a fighting chance, since its formula is more sophisticated and user-friendly than any homeopathic topical analgesic on the market.

Governmental controls could conceivably impede sales. This problem is unlikely because the ingredients are already FDA-approved. Furthermore, management's participation in the FDA committee to develop regulatory standards for the natural medicine field would provide early warnings of any such prohibitory controls.

The company could be controlled by non-investor stockholders. This problem is not likely to develop because the management team would hold a majority. Management is dedicated to the principles of increasing value and profits and is confident that its efforts will be in concert with those of the investor.

RETURN ON INVESTMENT ANDEXIT

Public offering.

Management plans for an IPO in 5-7 years. The investor's shares would be sold to provide the targeted return on investment. Should there be no public market, then a buy back would occur.

Management will negotiate a buy back formula with the investor and will target milestones in planning for this possibility. Management aims for returning 6 times the original investment in five years.

ANALYSIS OF OPERATIONS AND PROJECTIONS

The business has not shown a profit since sales activity began in May 1994. This lack of profit is not unusual for an early-stage company. Losses were incurred in the start-up phase, where the objective was to get consumers to try the product. Gross profit margins have remained stable, however. Management focus was targeted on getting professionals and consumers to try the product in order to collect anecdotal evidence and testimonials of its effectiveness. Not enough focus was on asset management, as evidenced by a low return on assets ratio (p.32). Now that the product has gotten some recognition, especially in professional circles, the focus will shift toward mass marketing. Management intends to improve inventory management by using factoring of receivables in conjunction with JIT inventory control. As sales volume increases, drop-shipping from plant to wholesale customer, will also be arranged.

Balance Sheet

Pharmaceutical Company: Pain Away Ltd.

Monthly Income Statements 1995

Pharmaceutical Company: Pain Away Ltd.

Income Statement - 12/31/95

Pharmaceutical Company: Pain Away Ltd.

Key Ratio Analysis

Pharmaceutical Company: Pain Away Ltd.

THIS PORTION OF PAGE INTENTIONALLY LEFT BLANK SEE NEXT PAGE FOR PROJECTED CASH FLOW TABLE

Projected Cash Flow

Pharmaceutical Company: Pain Away Ltd.

Projected Annual Financial Statements

Pharmaceutical Company: Pain Away Ltd.

Assumptions

Pharmaceutical Company: Pain Away Ltd.

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ProfitableVenture

Retail Pharmacy Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Healthcare and Medical » Pharmacy

Retail Pharmacy Business

Are you about starting a pharmacy (chemist shop)? If YES, here’s a complete sample wholesale / retail pharmacy business plan template & feasibility report you can use for FREE.

Okay, so we have considered all the requirements for starting a retail pharmacy . We also took it further by analyzing and drafting a sample retail pharmacy marketing plan template backed up by actionable guerrilla marketing ideas for pharmacies. So let’s proceed to the business planning section.

Being in the pharmacy trade is a very good thing. This is because of the great returns on investment that is being guaranteed.

Starting a retail business is a very right step to take if you are looking to delve into the retail pharmacy business. It is important that you are a pharmacist ; this is so that you can get a proper hang of the business, as well as bring in your hands-on prowess into the venture.

A Sample Retail Pharmacy Business Plan Template

1. industry overview.

What really is the pharmaceutical business all about? The pharmaceutical industry is known for developing, producing, and marketing medicine (drugs). Retail pharmacy business is known to be involved in the sale (retailing) of generic or brand medications; some big pharmaceutical stores even engage in the sale of medical devices.

All over the world, the pharmaceutical industry is highly regulated. This is so because of the devastating effect of fake drugs and drug abuse which can’t be quantified. As a matter of fact, there are several universal laws and regulations that govern the patenting, testing, safety, efficacy and marketing of drugs.

For example; in the united states, new pharmaceutical products must be approved by the Food and Drug Administration (FDA) as being both safe and effective before they can be allowed to go into the market. Any entrepreneur (investor) who has a plan of starting his or her own retail pharmacy business must comply with the Regulation of Retail Pharmacy Businesses that was passed into law in 2008.

Anyone who wants to establish a retail pharmacy business must follow the regulations that guides the sourcing, storage, sale, supply and keeping of records, in respect of medicinal products. Other requirements that they are expected to comply with are; requirements that relates to staff, premises, equipment and procedures are also stipulated.

No doubt retail pharmacy business is indeed a profitable industry; at the end of 2011, there were just over 23,100 independent retail pharmacies operating domestically.

For instance; in 2012 about 62,000 retail, mail and specialty pharmacies operating in America filled more than 4 billion prescriptions. As a matter of fact, in 2012 alone, statistics indicated that the total industry revenues was between $275 billion and $290 billion.

Statistics has it that global spending on prescription drugs grew to a whopping sum of $954 billion in 2011 and The United States accounts for more than a third of the global pharmaceutical market, with an estimate of $340 billion in annual sales.

It is on record that the retail pharmacy industry is growing at an annual rate of 1.6 percent. Retail pharmaceutical stores are amongst the top beneficiaries; they have experienced high sales growth in the first aid, eye care, sun care, smoking deterrent, foot care and home healthcare categories.

Over and above, the retail pharmacy industry is indeed a growing and a profitable industry and it is open to any aspiring investor (entrepreneur) to come in and establish his or her retail pharmacy outlet.

2. Executive Summary

Kingsley Greeno Retail Pharmacy Store will be located in one of the busiest streets in Baltimore, Maryland, U.S. We have been able to lease a facility for 5 years with the option of acquiring the property once the property is put up for sale.

The facility is well positioned and it matches the ideal picture of a community retail pharmacy store. We are not going to spend much to revamp the facility because before taking over the facility, it was used as a retail shop. Although the business is launching out with just one outlet, but we have plans to open other outlets in key locations around Baltimore, MD.

Kingsley Greeno retail pharmacy store will be involved in the retailing of prescription drugs and over-the-counter drugs. We will also be involved in the sale of beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products.

We are in retail pharmacy business to retail a wide range of pharmaceuticals for our customers, at the lowest prices they can get anywhere in Baltimore, MD. Our employees are well trained and qualified to handle the wide range of customers that we are positioned to serve. We will engage in the sale of prescriptions at reduced prices both at the counter and online order.

Kingsley Greeno Retail Pharmacy will operate a 24 hours, 7 days a week pharmaceutical store. We shall also have customers like; walk – in customers and mail order customers. Our work force is going to be well trained to operate within the framework of our company’s corporate culture and also to meet the needs of all our customers.

Kingsley Greeno Retail Pharmacy Store will ensure that all our customers are given first class treatment whenever they visit our shop.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base grows. We will ensure that we get our customers involved in the selection of brands that will be on our racks and also when make some business decisions.

Kingsley Greeno Retail Pharmacy Store is a family business that is owned and managed by Kinsley Greeno and Family. Mr. Kingsley Greeno is going to be the Chief Executive Officer of the business; he has a first Degree in Pharmacy and an MBA from Harvard University.

He has well over 10 years of experience working as a pharmacist with the United States’ government. His son who is an undergraduate is currently studying pharmacy, with the hope of taking over the family business when he (Mr. Greeno) retires.

3. Our Products and Services

Kingsley Greeno Retail Pharmacy Store will retail a wide range of prescription drugs from different manufacturing brands to customers who are based in Baltimore, MD. We also engage in the sale of beauty products, cosmetic, postcards (greeting cards), baby products, convenience foods and other related products (small scale medical equipment / instruments et al).

4. Our Mission and Vision Statement

  • Our vision is to become the largest retail pharmacy store in the whole of Maryland, U.S.
  • Our mission is to establish a first class retail pharmacy store that will make available a wide range of generic and branded prescription drugs from top pharmaceutical manufacturing brands at affordable prices to the residence of Baltimore, MD.

Our Business Structure

Kinsley Greeno Retail Pharmacy Store is a business that will be built on a solid foundation. From the outset, we have decided to recruit only qualified people to man various job positions in our organization. We are quite aware of the rules and regulations governing the pharmaceutical industry which is why we decided to recruit experienced and qualify employees as foundational staff of the organization.

We hope to leverage on their expertise to build our business. When hiring, we will look out for applicants that are not just qualified and experienced, but honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. This are the positions that will be available at Kingsley Greeno Retail Pharmacy Store;

  • CEO (pharmacy owner, superintendent pharmacist and supervising pharmacist)
  • Pharmacist (Manager)

Merchandize Manager

  • Pharmacist technician (3)
  • Information Technologist (Contract)
  • Sales agents (3)
  • Cashier (Counter Agent).

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

  • Responsible for providing direction for the business
  • Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
  • Responsible for fixing prices and signing business deals
  • Responsible for recruitment
  • Responsible for payment of salaries
  • Responsible for signing checks and documents on behalf of the company
  • Evaluates the success of the organization

  Pharmacist (Manager):

  • Responsible for managing the daily activities in the restaurant
  • provides advice about health issues, symptoms and medications in response to customer enquiries
  • recruits, trains and manages staff
  • processes prescriptions and dispensing medication
  • orders, sells and controls medicines and other stock
  • meets medical representatives
  • manages budgets
  • keeps statistical and financial records
  • prepares publicity materials and displays
  • markets services
  • Interfaces with third – party providers (vendors)
  • Controls the sales floor inventory
  • Supervises the entire sales staff and workforce
  • Any other duty as assigned by the CEO
  • Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
  • Helps to ensure consistent quality of drugs and products on our rack
  • Responsible for the purchase of goods and products for the organizations
  • Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
  • Ensures that the organization operates within stipulated budget.

Pharmacy Technician

  • Ensures that the store facility is in tip top shape and conducive enough to welcome customers (This includes turning on equipment such as computers, scales, printers and fax machines)
  • Ensures that goods and products are properly arranged
  • Responsible for processing prescriptions
  • Responsible for sterilizing the counter tops, scales, pill counting trays, and other medication measuring devices.
  • Handles administrative and bookkeeping tasks, inventory control, stocking shelves, and data entry
  • Performs monthly inventory counts, file paperwork, and stock inventory
  • Handles any other duty as assigned by the floor manager (Pharmacist)

Sales Agents

  • Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
  • Models demographic information and analyze the volumes of transactional data generated by customer purchases
  • Sources for clients for the company
  • Responsible for promoting the company’s image
  • Responsible for creating marketing and sales strategies, etc.
  • Represents the organization in some strategic business meetings

Information Technologist

  • Manages the organization website
  • Handles ecommerce aspect of the business
  • Responsible for installing and maintenance of computer software and hardware for the organization
  • Manage logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
  • Manage the organization’s CCTV
  • Handles any other technological and IT related duties.

Cashier (Counter Agent):

  • Receives payments on behalf of the organization
  • Issues receipt to customers
  • Prepare financial report at the end of every working week
  • Handles financial transaction on behalf of the company
  • Interfaces with our bankers
  • Responsible for payment of tax, levies and utility bills
  • Responsible for cleaning the pharmacy facility at all times
  • Ensures that toiletries and supplies don’t run out of stock
  • Cleans both the interior and exterior of the pharmacy facility
  • Handle any other duty as assigned by the floor manager (Pharmacist)

6. SWOT Analysis

Kingsley Greeno Retail Pharmacy Store is not looking forward to operate a regular retail pharmacy store, because we want to become the biggest retail community pharmacy in Baltimore. We want our pharmacy to be the number one choice of all residence of Baltimore.

We know that if we are going to achieve the goals that we have set for our business, then we must ensure that we build our business on a solid foundation. We must ensure that we follow due process in setting up our retail pharmacy store.

Despite the fact that our CEO (owner) has a robust experience in retail pharmacy business, we still went ahead to hire the services of business consultants that are specialized in setting up new businesses to help our organization conduct detailed SWOT analysis and to also provide professional support in helping us structure our business. This is the summary of the SWOT analysis that was conducted for Kingsley Greeno Retail Pharmacy Store;

Our location is one of our strength. The Business model we will be operating on (physical store and online store) will be opened for 24 hours daily and 7 days in a week. There would be multiple payment options; wide range of prescription drugs, home delivery services and our excellent customer service culture will definitely count as a strong strength for us.

Our perceived weakness is the fact that we are just starting out and we may not have the required finance to sustain the kind of publicity that we intend giving the business.

  • Opportunities:

The opportunities that are available to retail pharmacy business is unlimited and we are going to position our business to make the best out of the opportunities that will be available to us in Baltimore, MD.

Just like any other retail business, one of the major threats that we are likely going to face is economic downturn and unfavorable government policies (healthcare reform). It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new retail pharmacy outlet in same location where ours is located (Baltimore, MD.).

7. MARKET ANALYSIS

  • Market Trends

The market trend in retail pharmacy industry is directly influenced by a country’s healthcare reform policies. The fact that the pharmaceutical industry is highly regulated means that any entrepreneur who wants to run a retail pharmacy store must be ready to play by the book.

Loads of other factors influences the market trend in the industry and it is normal to see bigger retail pharmacy stores (especially those with chains of outlets) weathering the storm whenever there are major shaking in the industry. In essence, the easiest way to build a solid and highly profitable retail pharmacy business is to engage in opening various outlets in key cities around the U.S. and the

No doubt the industry will continue to grow and become more profitable because the aging baby-boomer generation in United States are expected to drive increasing demand for prescription drugs.

Retail Pharmacies are now making use of technology to effectively manage their business by plugging financial leakages which happens to be one of the biggest challenges that retail businesses faces. The use of technology, i.e. CRM software et al are very effective in helping retail businesses manage their clientele base.

8. Our Target Market

Kingsley Greeno Retail Pharmacy Store is in business to service a wide range of customers in Baltimore, Maryland. We will ensure that we target self – pay customers (who do not have drug plans), mail order customers, and walk in customers et al.

The fact that we are going to open our doors to a wide range of customers does not in any way stop us from demanding and screening prescriptions as required by the law. Our staff are trained to effectively service our customers and still play by the rules governing the industry. Our customers can be categorized into the following;

  • Corporate Executives
  • Business People
  • Elderly people
  • Expectant Mothers
  • Sports Men and Women

Our Competitive Advantage

The retail pharmacy industry is known to be highly competitive in the U.S and in most parts of the world. The industry is growing and there are alternative ways through which clients / patients can get their medications / prescriptions / drugs.

There are alternative provides like mail-order firms, grocery chains, mass merchants and dollar stores; these are the real competitors in the industry. These competitors ensures that they do all that lies within their powers to gain favorable market share of the available market in any given region.

It is a fact that small retail pharmacy stores will always struggle with larger pharmacy chains when it comes to pricing power and brand recognition, which is why smaller retail pharmacy store always go out of their ways to deliver excellent customer service. It is through top notch customer service that they can secure a fair share of the available market.

Smaller retail pharmacies ensures that each order carries a printout. The printout accompany the medications providing directions on how patient are expected to take the medications, other drugs that should be avoided concurrently, and other useful information.

Kingsley Greeno Retail Pharmacy Store is coming into the market well prepared to favorably compete in the industry. Our pharmacy is well positioned and visible, we have enough parking space with good security. Our management staff are well groomed in retail pharmacy and all our employees are trained to provide customized customer service to all our clients.

We are going to be one of the few retail pharmacies in Baltimore that will be opened 24 hours a week and 7 days a week. We have enough staff that are ready to run a shift system. Kingsley Greeno Retail Pharmacy we will ensure that we have a wide range of products (prescription drugs and over-the-counter drugs.

We will also be involved in the sale of beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products) available in our store at all times. It will be difficult for customers to visit our store and not see the product that they are looking for. One of our business goals is to make our pharmacy a one stop pharmacy shop.

9. SALES AND MARKETING STRATEGY

  • Sources of Income

Our source of income will be majorly in the retailing of prescription drugs and over-the-counter drugs. Kingsley Greeno Retail Pharmacy will also generate income from the sale of beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products.

10. Sales Forecast

It is important to state that our sales forecast is based on the data gathered during our feasibility studies, market survey and also some of the assumptions readily available on the field.. Below are the sales projections that we were able to come up with for the first three years of operations;

  • First Year-: $200,000 (From Walk – in customers) + $250,000 (From Mail Order customers)
  • Second Year-: $450,000 (From Walk – in customers) + $470,000 (From Mail Order customers)
  • Third Year-: $700,000 (From Walk – in customers) + $800,000 (From Mail Order customers)

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.

  • Marketing Strategy and Sales Strategy

The marketing and sales strategy of Kingsley Greeno Retail Pharmacy Store will be based on generating long-term personalized relationships with customers.

In order to achieve that, we will ensure that we offer medications at lower prices, compared to what is obtainable in Baltimore. We will also ensure that we have a wide range of drug supplies in stock for both quick shipment and storefront pick up.

All our employees will be well trained and equipped to provide excellent and knowledgeable customer service. We know that if we are consistent with offering high quality drugs and excellent customer service we will increase the number of our customers by more than 25% for the first year and then more than 30 percent subsequently.

Before choosing a location for our pharmacy store, we conducted a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market and become the preferred choice for residence of Baltimore, MD.

We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time.

We hired experts who have good understanding of the retail industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Baltimore, Maryland. In summary, Kingsley Greeno Retail Pharmacy Store will adopt the following sales and marketing approach to win customers over;

  • Introduce our business by sending introductory letters to residence, business owners and organizations
  • Advertise our business in community based newspapers, local TV and radio stations
  • List our business on yellow pages ads
  • Leverage on the internet to promote our business
  • Direct marketing
  • Word of mouth marketing (referrals)
  • Enter into business partnership with hospitals, healthcare provider and health insurance companies.
  • Attend pharmaceutical related exhibitions / expos.

11. Publicity and Advertising Strategy

Regardless of the fact that our retail pharmacy store is well located in Baltimore, MD., we will still go ahead to intensify publicity for the business. We are going to explore all available conventional and non – conventional means to promote our retail business.

Kingsley Greeno Retail Pharmacy Store has a long term plan of opening outlets in various locations all around Maryland which is why we will deliberately build our brand to be well accepted in Baltimore before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand to the general public. Here are the platforms we intend leveraging on to promote and advertise Kinsley Greeno Retail Pharmacy Store;

  • Place adverts on both print (community based newspapers and magazines) and electronic media platforms
  • Sponsor relevant community programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, et al to promote our brand
  • Install our BillBoards on strategic locations all around Baltimore, MD.
  • Engage in road show from time to time
  • Distribute our fliers and handbills in target areas
  • Position our Flexi Banners at strategic positions in the location where our retail store is located.

12. Our Pricing Strategy

Kingsley Greeno Retail Pharmacy Store will work towards ensuring that all our products (prescription drugs and over-the-counter drugs and beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products) are offered at highly competitive prices compare to what is obtainable in Baltimore.

The fact that we are going to be offering our products at cheaper prices does not in any way means that we will sell sub – standard goods. Selling our products at a lower price than what is obtainable in our competitors store means that we will only reduce our profit margin.

  • Payment Options

At Kingsley Greeno Retail Pharmacy Store, our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that will be available in every of our outlets;

  • Payment by cash
  • Payment via Point of Sale (POS) Machine
  • Payment via online bank transfer (online payment portal)
  • Payment via Mobile money
  • Check (only from loyal customers)

In view of the above, we have chosen banking platforms that will help us achieve our payment plans without any itches.

13. Startup Expenditure (Budget)

This is the key areas where we will spend our start – up capital on;

  • The Total Fee for Registering the Business in Maryland – $750.
  • Legal expenses for obtaining licenses and permits- $1,500.
  • Marketing promotion expenses for the grand opening of People’s Choice Retail Store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • Cost for hiring Consultant – $2,500.
  • Cost for Computer Software (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, drug interaction software, Physician Desk Reference software) – $7,000
  • Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $3,400.
  • Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
  • Cost for Shop remodeling (construction of racks and shelves) – $20,000.
  • Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
  • The cost for Start-up inventory (stocking with a wide range of products) – $150,000
  • Storage hardware (bins, rack, shelves,) – $3,720
  • The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
  • Cost for Supplies (Assorted bottles, boxes, envelopes, etc. for dispensing and shipment)- $3,000
  • Cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • Cost of purchase and installation of CCTVs: $7,000
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al): $4,000.
  • The cost of Launching a Website: $700
  • The cost for our opening party: $7,000
  • Miscellaneous: $10,000

We would need an estimate of $500,000 to successfully set up our retail pharmacy store in Baltimore, MD. Please note that this amount includes the salaries of all the staff for the first month of operation.

Generating Funding / Startup Capital

Kingsley Greeno Retail Pharmacy Store is a private business that is solely owned and financed by Kingsley Greeno and family.

They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources. These are the areas Kingsley Greeno Retail Pharmacy Store intends to generate our start – up capital;

  • Generate part of the start – up capital from personal savings
  • Source for soft loans from family members and friends
  • Apply for loan from my Bank

N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it may not be too long before the business closes shop.

One of our major goals of starting Kingsley Greeno Retail Pharmacy Store is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our product a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin.

Kingsley Greeno Retail Pharmacy Store will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

  • Business Name Availability Check:>Completed
  • Business Registration: Completed
  • Opening of Corporate Bank Accounts: Completed
  • Securing Point of Sales (POS) Machines: Completed
  • Opening Mobile Money Accounts: Completed
  • Opening Online Payment Platforms: Completed
  • Application and Obtaining Tax Payer’s ID: In Progress
  • Application for business license and permit: Completed
  • Purchase of Insurance for the Business: Completed
  • Leasing of facility and remodeling the shop: In Progress
  • Conducting Feasibility Studies: Completed
  • Generating capital from family members: Completed
  • Applications for Loan from the bank: In Progress
  • writing of business plan: Completed
  • Drafting of Employee’s Handbook: Completed
  • Drafting of Contract Documents and other relevant Legal Documents: In Progress
  • Design of The Company’s Logo: Completed
  • Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
  • Recruitment of employees: In Progress
  • Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
  • Creating Official Website for the Company: In Progress
  • Creating Awareness for the business both online and around the community: In Progress
  • Health and Safety and Fire Safety Arrangement (License): Secured
  • Opening party / launching party planning: In Progress
  • Compilation of our list of products that will be available in our pharmacy store: Completed
  • Establishing business relationship with vendors (wholesale pharmaceutical companies): In Progress

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Pharmaceutical Lab Business Plan

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Pharmacy Business Plan Template

Pharmacy competitive analysis.

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors  are other pharmacies.

Indirect competitors  are other options that customers have to purchase from you that aren’t direct competitors. This includes retailers such as supermarkets and vitamin stores that may offer lower-priced OTC products. You need to mention such competition to show you understand that not everyone who needs medication uses a pharmacy for all their needs.

With regards to direct competition, you want to detail the other pharmacies with which you compete. Most likely, your direct competitors will be pharmacies located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

  • What types of customers do they serve?
  • What products do they offer?
  • What is their pricing (premium, low, etc.)?
  • What are they good at?
  • What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to stand outside your competitors’ locations and ask customers as they leave what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you provide products that your competitors don’t offer?
  • Will you make it easier or faster for customers to fill prescriptions?
  • Will you provide better customer service?
  • Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

PHARMACY BUSINESS PLAN OUTLINE

  • Pharmacy Business Plan Home
  • 1. Executive Summary
  • 2. Company Overview
  • 3. Industry Analysis
  • 4. Customer Analysis
  • 5. Competitive Analysis
  • 6. Marketing Plan
  • 7. Operations Plan
  • 8. Management Team
  • 9. Financial Plan
  • 10. Appendix
  • Pharmacy Business Plan Summary

Rosatom Health Technologies (RTZ) formerly Rusatom Healthcare (Rusatom Helskea)

Rosatom Health Technologies JSC (formerly Rusatom Healthcare JSC) is a division that accumulates the expertise of Rosatom State Corporation in the field of health care . The company was created on the basis of Rosatom enterprises and institutes with the aim of integrated development of medical technologies in Russia and abroad.

Rosatom Health Technologies is an integrator and management company established on the basis of enterprises and institutes of Rosatom State Corporation for the development of nuclear medicine and innovative processing technologies in Russia and abroad.

Areas of activity

Rosatom Health Technologies is developing in four main areas: comprehensive turnkey solutions for medicine ; production and supply of medical isotopes and radiopharmaceuticals (supplies to 50 countries of the world ); equipment for diagnostics and therapy; solutions for ionizing treatment of medical products.

2024: Renamed Rosatom Health Technologies

Rosatom has agreed with the Government of the Russian Federation to rename 21 companies that are part of the state corporation's management loop in such a way as to include the words "Russian Federation," " Russia " or their derivatives in their names. The corresponding order of the Cabinet of Ministers (of 22.01.2024 No. 109-r) was published on the official portal of legal information on January 23, 2024. According to the list approved by the order, Rusatom Healthcare JSC received the name Rosatom Health Technologies JSC (RTZ JSC).

Completion of the transaction on the purchase of 100% of Akcentr shares

Rusatom Healthcare (Health Technologies Division of Rosatom State Corporation) has completed the acquisition of a 100% stake in the Accent Group of Companies, which specializes in the treatment of food and disposable medical products with ionizing radiation. On August 29, 2023, Zdrav.Expert was informed about this by representatives of the Health Technologies division of Rosatom State Corporation. Read more here .

Increase in the share in the capital of the Medskan group of companies to 50%

Rusatom Healthcare (Health Technologies division, which accumulates the expertise of Rosatom State Corporation in the field of health ) bought out an additional issue of shares in Medskan JSC, increasing its stake in the capital of the group of companies to 50%. This was reported to Zdrav.Expert on July 20, 2023 by representatives of Rosatom. According to the shareholder agreement, the funds will be invested in the development of the medical holding. Read more here.

Agreement with Medtekhnocenter on the joint development of heavy-grade medical devices

On April 7, 2023, information appeared that Rusatom Healthcare JSC (medical division Rosatom "") and the Belarusian RUE Medtekhnocenter agreed on the joint implementation of a number of union programs, involving both supply Belarus to the produced in the Russian Federation and medical equipment joint development. medical devices

As Stanislav Levitsky, director of the country office of the Rosatom state corporation in Belarus, clarified, two or three union programs are planned in total. Within the framework of one of them, it is planned to develop heavy-grade medical devices (large-sized medical equipment for hospitals used for diagnostic, medical, preventive and rehabilitation purposes [1] ).

According to the top manager, the current version of the Brahium gamma-therapeutic complex was founded by the Agat complex, which was developed in the 1980s.

The agreement signed by Rusatom Healthcare and Medtekhnocenter also consolidated the intentions of the parties on the supply of Russian medical equipment to Belarus.

According to Stanislav Levitsky, in early April 2023, representatives of Rosatom visited two cancer centers, where they presented the Brachium apparatus.

The next development is the Onyx linear accelerator , which was registered in the Russian Federation.

Creation of a joint venture "Alliance of Health Technologies"

Rusatom Healthcare JSC (a division that accumulates the expertise of Rosatom State Corporation in the field of health ) and Medtech Alliance Engineering LLC, which is a supplier of a wide range of Russian and foreign medical equipment, have created a joint venture - Alliance Health Technologies LLC. Each of the parties owns a 50% stake. Representatives of Rusatom Healthcare reported this to Zdrav.Expert on April 12, 2023. Read more here.

Cooperation Agreement with FMBA of Russia for the Development of Radiopharmaceuticals

On January 19, 2023, Rusatom Healthcare JSC (a division that accumulates the expertise of Rosatom State Corporation in the field of health care ) and the Federal Biomedical Agency of Russia (FMBA) signed an agreement on cooperation and interaction. Read more here.

Agreement with Medtekhnocenter on the supply of medical equipment for the treatment of cancer to Belarus

On November 21, 2022, an agreement on interaction and cooperation between Rusatom Healthcare JSC and the Republican Unitary Enterprise Medtekhnocenter was signed in Sochi . The signed document fixed the intentions of the parties in relation to the organization of interaction on the supply of medical equipment produced on the territory of the Russian Federation for the treatment of oncological diseases .

The state corporation Rosatom "" has a large product portfolio in terms of the production of high-tech medical equipment. In 2022, "Rusatom Healthcare" began serial production of the first Russian linear accelerator "Onyx," as well as a complex for brachytherapy Brachium "." In addition, Rusatom Healthcare is developing a gel-free magnetic resonance tomograph (), MRI which will be more convenient to use and more reliable than analogues. Work has also begun on the creation of a domestic complex of remote radiation therapy of the toroidal type. " Thorus

Equipment of ROSATOM State Corporation of domestic development, due to which the price does not depend on the volatility of the exchange rate. Service and warranty service is provided by JSC NIITFA (an enterprise in the management loop of Rusatom Healthcare) in Moscow , which guarantees a high service speed.

Purchase of 50% of the Accent network

On September 22, 2022, it became known about the sale of Aktsentr's stake in Rusatom Healthcare (a division of Rosatom that accumulates competencies in the field of health care ). Financial and other terms of the transaction were not disclosed. According to TASS sources, we are talking about buying 50% of the capital of a company specializing in industrial sterilization and electron beam processing. Read more here.

Memorandum of Cooperation with Pharmaco Pharmaceuticals for the Development of Radiopharmaceuticals

Rusatom Healthcare, a single integrator in the field of radiation technologies for medicine industries both the contour of the State Corporation, and Rosatom the Egyptian pharmaceutical the company Pharco Pharmaceuticals agreed on the further development of cooperation and the implementation of joint projects. The companies signed the corresponding memorandum securing the intentions of the parties on June 5, 2022.

In particular, the document provides for cooperation on projects for the joint development and production of radiopharmaceuticals , preclinical, clinical studies, registration and launch of developed products on the market of the Arab Republic of Egypt , the countries of the Eurasian Economic Union and other countries .

As Igor Obrubov , General Director of Rusatom Healthcare, noted, the radiopharmaceutical industry is one of the most dynamically developing areas in medicine due to the high demand for radiopharmaceuticals by doctors and patients. Thus, radiotherapy is required for diagnosis and treatment in about 50% of patients with cancer , and about 20 million new cases are detected annually in the world. In addition, radiopharma is actively used in a number of other nosologies: cardiology, rheumatology, endocrinology. With the development of medical science, this list will expand, the head of Rusatom Healthcare is convinced.

MRI production launch plan with 1.5 Tesla magnetic field strength

The Rusatom Healthcare division, which accumulates the expertise of Rosatom State Corporation in the field of health , on April 6, 2022 announced the launch of a project to develop domestic magnetic resonance imaging devices with a magnetic field strength of 1.5 Tesla. The state corporation plans to launch mass production by 2026. The Rosatom tomograph will be the first device to meet the requirements for the origin of goods on the territory of the Russian Federation .

The implementation of the project was a timely response of ROSATOM to the growing need of Russian healthcare for domestic equipment to provide high-tech medical patient care. At the same time, MRI diagnostics are included in the list of recommended examination methods for more than thirty types of diseases, including pregnant women women for children.

Medical institutions of the Russian Federation note a high interest in domestic equipment. According to the Organization for Economic Cooperation and Development, at least 2,500 MRI devices should be installed in medical institutions of the country , and as of April 6, 2022, 1,400 are functioning.

There are no domestic analogues on the market - foreign manufacturers occupy high positions, which significantly affects the cost of equipment and the availability of MRI diagnostic services for the population.

The Rusatom Healthcare division has a serious expertise in the development of high-tech equipment for diagnostics and therapy. Thus, Scientifically the Research Institute of Technical Physics and Automation, which is part of the control circuit of Rusatom Healthcare JSC, has been producing an apparatus for contact radiation therapy (brachytherapy) since 1970. " Agate It was replaced by a new generation of devices - the gamma-therapeutic complex Brachium "," for which at the end of 2021 the institute received a registration certificate, and in 2022 the division expects to receive a registration certificate for a radiation therapy complex based on the electron accelerator Onyx "" - 6 MeV (KLT-6).

In addition, in 2021, Rusatom Healthcare and GE Healthcare signed a production agreement to localize the production of three GE magnetic resonance imaging models in Russia . Localization provides for the creation of a modern site for the production of three MRI models: Signa Creator, Signa Explorer and Signa Voyager. In 2022, the division plans to launch production under this agreement.

Rosatom State Corporation has superconducting competencies, which are one of the leading in the world - they are necessary for the development of a magnetic resonance imaging scanner in terms of the production of low-temperature superconducting products (NTSP), NTSP wires for MRI. The experience of developing a superconducting wire for MRI will allow you to successfully create a high-quality domestic product for a magnetic system.

Domestic MRI, which Rusatom Healthcare will mass-produce on the territory of the Russian Federation, belongs to the most popular segment of systems on the market with a magnetic field strength of 1.5 Tesla. The technologies that will be used in these devices will solve the largest range of problems. Low-voltage cryogenic systems that do not require refueling with helium will ensure continuity of operation and reduce cost of ownership; The wide aperture of the magnetic system tunnel will allow more patients to receive high-quality medical care. Special attention will be paid to the safety and service of the equipment.

The implementation of the project provides for the development, testing, registration of equipment at Roszdravnadzor , the launch of serial production, the creation of a center for the use of an MRI prototype for training radiologists.

{{quote 'author = said Igor Obrubov , General Director of JSC "Rusatom Healthcare." | Our task is to be a partner of the state in increasing the duration and improving the quality of life of the population. We plan to reduce the cost and time of delivery of equipment from the production site to medical institutions by centralizing the most complete range of work in a single contour of the State Corporation,}}

The production capacity of "Rusatom Healthcare" will allow the production of up to 65 MRI units annually. This will ensure a significant share of the annual demand of Russian healthcare for magnetic resonance imaging.

Appointment of Igor Obrubov as general director

On April 1, 2022, Igor Obrubov headed Rusatom Healthcare JSC, a division that accumulates the expertise of Rosatom State Corporation in the field of health care . In this post, he replaced Natalia Komarova . Read more here .

Acquisition of a 25% stake in Medskan Group of Companies

On February 16, 2022, it became known that the structure of Rosatom - JSC Rusatom Healthcare (RHK) - acquired 25.001% of Medskan Group of Companies . The owner of the medical holding Yevgeny Tugolukov told Forbes about the deal. Read more here .

JV with Cosylab to develop radiotherapy software

Rusatom Healthcare JSC (a division that accumulates the expertise of Rosatom State Corporation in the field of healthcare ) and the Slovenian company Cosylab, specializing in the development and implementation of digital solutions in the field of nuclear medicine, created a joint venture - RuSat Digital Healthcare LLC - and began to develop software for radiation therapy. This was announced on December 9, 2021 by representatives of Rusatom Healthcare. Read more here.

Exit from "P2med"

At the end of November 2021, it became known about the withdrawal of Rusatom Healthcare (a subsidiary of Rosatom ) from a joint venture with R-Pharm - LLC |R2med . This company produces radiopharmaceuticals used to treat severe diseases. Read more here.

Plan to bring to market the Russian version of MRI GT Healthcare by the end of 2022

Localized at the Rusatom Healthcare facilities (part of the GC Rosatom ""), the version of magnetic resonance imaging MRI GE Healthcare () will enter the Russian market by the end of 2022. This became known on October 7, 2021. The company began a major overhaul of the production site on the territory of the subordinate JSC "," and NIITFA GE validated the site for the assembly of MRI of the Signa line in the registration dossier. Roszdravnadzor

The total building area of ​ ​ the production and test building prepared for the release of MRI will be 930 square meters. m. This building will allow to establish the production of several dozen MRIs per year. Rusatom Healthcare plans to complete a major overhaul in December 2021 with the subsequent validation and certification of the site in order to launch production by the end of 2022.

{{quote 'Site peculiarity consists in creation of a single industrial system allowing to maintain and monitor in real time the level of liquid helium in magnetic systems. We also provide for the localization of a number of MRI production processes previously carried out by GE Healthcare plants in China and the USA . Production testing of a number of MRI elements will significantly increase the level of localization and ensure consistently high quality of products for end consumers, - said Natalya Komarova , General Director of Rusatom Healthcare . }}

Rusatom Healthcare signed an agreement with GE Healthcare to localize three 1.5 Tl high-voltage MRI models at the facilities of NIITFA JSC in June 2021.

The project intends to organize the production of three MRI models: universal Signa Creator with an aperture of 60 cm, specialized Signa Explorer and Signa Voyager with an aperture of 70 cm and a magnetic field strength of 1.5 T. The production capacity of the enterprise will allow the production of up to 50 units of MRI annually. The total investment in the project is estimated at more than $8.5 million.

In 2019 and 2020, MRI was included in the list of re-equipment of medical organizations under the Healthcare national project for cancer clinics and modernization of primary care with a total funding of 290 billion and 550 billion rubles . The Ministry of Health in January 2019 recommended purchasing domestic equipment with equivalent technical characteristics. In December 2020, the Government of the Russian Federation established a minimum quota for the purchase of domestic medical products - for MRI they amounted to 30% in 2021 with an increase to 50% in 2022 and 2023 for tenders for 223-FZ and 44-FZ [4] .

Agreement with GE Healthcare on localization of MR tomographs production in Russia

GE Healthcare and Rusatom Healthcare JSC (Rosatom State Corporation integrator in the field of radiation technologies in medicine and industry ) on June 4, 2021 informed Zdrav.Expert about the creation of a local production of magnetic resonance imaging ( MRI) in order to meet the growing need of the Russian population for affordable high-tech medical diagnostics .

pharmaceutical company business plan

The production agreement was signed by Elena Legezina , President and CEO of GE Healthcare in Russia/CIS , and Natalia Komarova , CEO of Rusatom Healthcare JSC in the presence of Katrin Estramp , President and CEO of GE Healthcare in EMEA ( Europe, Middle East, Africa) , and Kirill Komarov, First Deputy CEO - Director of the Development and International Business Unit of Rosatom State Corporation.

This is GE's first project in localizing MRI production at the site. of the Russian Federation Localization provides for the creation of a production site for three MRI models:,, Signa Creator Signa Explorer Signa Voyager. They belong to the most popular segment of systems on the market with a magnetic field strength of 1.5 Tesla. The advanced technologies used in MRI data help solve the widest range of tasks, including diagnosis oncological and cardiac diseases, and meet the clinical needs medical of institutions of all levels: from to policlinics federal scientific centers. The production capacity of the enterprise will allow the production of up to 50 units of MRI annually. This will provide a significant share of the annual need Russian healthcare for magnetic resonance imaging. The total investment in the project will exceed 8.5 million. dollars USA

As noted, GE Healthcare has been localizing global expertise and technologies in Russia for more than 10 years. Since 2009, the country has launched the production of high-performance computed tomographs and ultrasound devices for general imaging, including monitoring of cancer patients, for cardiovascular and female health diagnostics.

Appointment of Natalia Komarova as CEO

The company "Rusatom Healthcare" on January 12, 2021 announced the appointment of Komarova Natalia Mikhailovna to the post of general director from January 1, 2021. Read more here .

Plan for the creation of a multifunctional irradiation center at the site of the medical industrial park of Tatarstan

On December 28, 2020, information appeared that the company "Rusatom Healthcare" (part of the state corporation " Rosatom ") took the initiative to create a multifunctional irradiation center for sterilization of medical devices , polymer materials and food on the site of the medical industrial park of Tatarstan . About this "Business Online" told in LLC " PharmMedPolis RT ."

The advantages of this type of sterilization are a high processing speed, the possibility of packaging already finished products and ensuring the death of pathogenic forms of microorganisms in the form of spores and non-pathogenic microorganisms on the surface and inside the material.

In Tatarstan, 63% of manufacturers of medical devices in the Volga Federal District are concentrated, thus, the issue of sterilization is extremely relevant, said Albert Gayfullin, director of PharmMedPolis RT.

It is expected that the project will increase the attractiveness of Tatarstan for localizing industries from all over Russia and open the next stage in the development of the healthcare industry. [5]

Plans for the construction of 25 medical infrastructure facilities

Rosatom intends to build 25 medical infrastructure facilities within the framework of state private partnership (PPP) projects in the field health care by 2025. This became known on November 27, 2020.

pharmaceutical company business plan

The state corporation plans to open specialized centers in Siberia, the Urals and the Far East. Olga Esaulova, director of PPP development at Rusatom Healthcare, spoke about this.

According to her, the corporation plans to open three nuclear medicine centers, six radionuclide therapy departments, 11 sterilization treatment centers, three multifunctional radiation centers in the next five years, as well as create an isotope production site in Obninsk and a production site in Istra . As a result, the geography of Rosatom's presence will expand in the regions of Siberia ( Yakutsk, Barnaul, Krasnoyarsk and Irkutsk) , the Urals ( Yekaterinburg, Ozersk and Lesnoy) and the Far East ( Yuzhno-Sakhalinsk, Birobidzhan , Vladivostok ).

Rusatom Healthcare JSC was separated from the Rosatom structure in 2017 in order to promote developments in the field of nuclear medicine to the world and domestic markets. The company implements projects in the field of radiation medicine, oncoradiology, the creation of equipment and drugs for nuclear and radiation medicine [6]

Development of isotope business together with Rosenergoatom

On May 8, 2020, it became known that the Rosenergoatom concern, together with Rusatom Healthcare JSC and V/O Isotope JSC (part of Rosatom), began implementing a program for the development of the isotope business of the Electric Power Division of the state corporation until 2030.

According to the press service of the Civil Code, the project is designed until 2030 and provides for an increase in production volumes and an expansion of the range of production of various widely used and most popular isotopes on the world market.

Thus, the production of the So-60 isotope, used in the disinfection treatment of medical equipment , food and drinking water, is expected to double and increase the share of Rosenergoatom in the world market from 15% to 30%.

As the head of the project office for the development of the isotope business of Rosenergoatom Artur Miskov noted, at the Kursk nuclear power plant , according to the results of irradiation of the loaded cobalt absorber, about a fifth of the annual world demand for this useful isotope is formed. At the Smolensk NPP , the amount of So-60 extracted only from one power unit No. 3 is enough to sterilize 400 thousand tons of medical devices or over 2 million tons of meat.

The nomenclature for the production of medical isotopes will be expanded due to such positions as: molybdenum-99, iodine-131, iodine-125, samarium-153, lutetium-177, etc.

In addition, it is planned to develop the product direction for the doping of silicon. In the reactor plant, silicon single crystals under the influence of thermal neutrons acquire unique properties that are in demand in the military-industrial complex and the aerospace industry, where the ultra-reliability of semiconductor devices is needed.

Leniningrad NPP already in May 2020 provides about 60% of the Russian market with doped silicon.

According to Nikita Konstantinov, Deputy General Director of Rosatom State Corporation, the implementation of the basic scenario of the program will allow by 2030 to multiply the annual revenue [7] .

Agreement with the Italian region of Puglia on mutual understanding in the field of nuclear medicine

On November 18, 2019, it became known that the general director of Rusatom Healthcare Alexander Shibanov , the head of the Puglia region Michele Emiliano, representatives of Moscow Sechenov University and Bari University, as well as V/O Isotope signed a memorandum of understanding in order to develop and strengthen cooperation in the field of health , therapeutic radiology in oncology and nuclear medicine in the Russian Federation and the Puglia region (Republic of Italy ).

The memorandum should be the starting point of cooperation between ROSATOM and the Puglia region in the field of cooperation in such areas as R&D, nuclear medicine , professional training. The competencies accumulated by the parties, the production capabilities of ROSATOM enterprises, the active development of technologies and the modernization of the previous ones represent wide opportunities for mutually beneficial and successful cooperation in the future.

The parties discussed ways to develop cooperation and formed a plan for further steps for 2020.

Agreement with Elekta on the localization in Russia of the production of linear accelerators for the treatment of cancer

On November 8, 2019, Rosatom announced that Rusatom Healthcare JSC had agreed to strengthen cooperation with one of the leaders in the production of medical accelerator equipment - Elekta Ltd. Read more here .

Agreement with the Nizhny Novgorod region in the field of radiation technologies

On October 10, 2019, it became known about the signing of the Memorandum of Cooperation in the Field of Radiation Technologies between Rusatom Healthcare JSC and the Ministry of Agriculture and Food Resources of the Nizhny Novgorod Region .

The document was signed by the Director General of Rusatom Healthcare JSC Alexander Shibanov and the Minister of Agriculture and Food Resources of the Nizhny Novgorod Region Nikolai Denisov. The signing ceremony took place in the presence of the first vice-governor of the region, Yevgeny Lyulin.

The memorandum provides for the approval of the basic principles of interaction between the parties in the implementation of a joint project to create industrial processing facilities for agricultural products in the Nizhny Novgorod region, which will contribute to the development of cooperation and the introduction of advanced technologies. The centers will provide phytosanitary treatment services to agricultural producers in order to reduce storage losses, kill pathogens and pathogens of food infections. The parties agreed to develop a feasibility study for the project to create a multi-purpose processing center. Alexander Shibanov stressed the importance of the signed agreement, which opens the horizons of mutually beneficial cooperation with the Nizhny Novgorod region.

{{quote 'author = said Alexander [9] see great potential in the Nizhny Novgorod market for processing agricultural products by modern methods and are convinced of the demand for our technologies, }}

Agreement with Inversiones Gamma to establish a radiation treatment center for products and medical products in Cuba

On October 3, 2019 TAdviser , it became known that Rusatom Healthcare JSC (integrator Rosatom in the field of radiation technologies in) to medicine the Cuban Inversiones Gamma and signed To Havana an agreement on the creation of a center for radiation processing agricultural of products and sterilization in Cuba. medical devices

RuSat

The center will deal with the radiation treatment of agricultural products, which will increase its storage time and reduce the cost of electricity consumed by refrigerated plants, as well as allow to abandon the chemical treatment of fruits and vegetables. The center is also planned to be used for sterilization of medical products, pharmaceuticals , cosmetics and other products.

If the project is successfully implemented, the Parties will explore the possibility of creating a network of such Centers in Cuba [10] .

Radiopharmaceuticals

In July 2019, Rusatom Healthcare CEO Alexander Shibanov spoke about the latest developments of Rosatom for medicine. Of the most important - ​radiofarmpreparaty based on alpha emitters, alpha particle emitters. They target cancer cells without damaging the healthy. By this time, only one such drug had been registered in the world - the ​Xofigo of the German company Bayer .

Russia is leading in the world market of isotopes for medicine, while there are still very few domestic radiopharmaceuticals, Alexander Shibanov stated: we have no solvent demand in the country, the infrastructure for treatment with nuclear medicine is poorly developed, there are not enough doctors. In such conditions, it is unprofitable to develop and produce FPM. Long-term expensive clinical trials, a complex drug registration system also interfere with development.

To solve problems, doctors, developers, government officials need to coordinate efforts. You can radically change the situation in just three to four years, says the head of Rusatom Healthcare.

Cooperation with Rusat - International Network and the Institute of Nuclear Physics of the Academy of Sciences of the Republic of Uzbekistan

On April 15, 2019, it became known that Rusatom Healthcare JSC, the Rusatom International Network (RMS) industry complex and the Institute of Nuclear Physics of the Academy of Sciences of the Republic of Uzbekistan signed a memorandum of cooperation in the field of radiation technologies and nuclear medicine . Read more here .

Signing a roadmap with GE Healthcare on localization of technologies for nuclear medicine in Russia

On February 14, 2019, Rusatom Healthcare (RCK), an integrator in the field of radiation technologies in medicine and industry, and GE Healthcare signed a roadmap on the creation of local production of high-tech medical equipment in order to meet the growing need of the population of the regions of the Russian Federation for high-quality medical diagnosis and treatment of oncological diseases . The document was signed by the general director of Rusatom Healthcare JSC Alexander Shibanov and the president and chief executive officer of GE Healthcare in Russia/SNGNIN Kandelaki .

Alexander Shibanov and Nina Kandelaki after signing the agreement

The roadmap as a whole defines the procedure for joint actions for the one and a half year period for the localization of PET/CT in Russia with the possibility of further expansion of the product line. In particular, by the end of 2020, it is planned to begin assembling computer tomographs for planning radiation therapy (CT for RT), magnetic resonance computer tomographs ( MRI) and combined single-photon emission computer tomographs (SPECT/CT). The document provides for the formation of a working team, the development of a package of license agreements, terms of service and quality management programs. It also defines the timing and procedure for the design of the production site in accordance with the technical requirements, GE Healthcare quality standards, Rosatom production system and Russian regulations .

According to research, in February in Russia there are only 0.36 PET scanners per 1 million of the population, while in Europe this figure is 1.1, in Japan - 3.7, and in the USA - 7.11. According to Alexander Shibanov, for the state corporation Rosatom, the creation of production of high-tech diagnostic equipment on the territory of the Russian Federation is a question that lies not only in the plane of business, but also in the plane of social responsibility.

The development and introduction of innovations in the diagnosis of oncological diseases is a key area of ​ ​ investment for GE Healthcare: for more than 10 years the company has been implementing comprehensive projects in the field of oncology in Russia and is participating in the development of nuclear medicine . According to Nina Kandelaki, President and CEO of GE Healthcare in Russia/CIS, the signed agreement is an important step for the development of the production of innovative medical equipment in the Russian Federation and will contribute to solving the most important tasks of Russian healthcare - ensuring access to high-quality medical care and reducing mortality from cancer. [11]

Cooperation with Schwabe in the fight against oncology

On February 13, 2019, Rostec announced that Schwabe Holding and Rusatom Healthcare entered into an agreement of understanding. The parties are considering the possibility of implementing joint projects for the treatment of cancer . Read more here .

Partnership with NECSA to develop nuclear medicine in South Africa

RuSat Halskea and the Nuclear Energy Corporation of South Africa (NECSA) signed an agreement on cooperation in the use of nuclear non-energy technologies on July 26, 2018. The main areas of cooperation are nuclear medicine , in particular, the diagnosis and treatment of cancer in Africa and on other continents. Read more here .

Agreement with Beta Gamma Malaysia to set up irradiation centres in Malaysia

pharmaceutical company business plan

Rusatom Halskea (an enterprise of the state corporation Rosatom ) and Beta Gamma Malaysia (BGM) signed an agreement on the implementation of a project to build a network of irrigation centers in Malaysia on May 15, 2018.

The document was signed by Zulkafli Gazali, chairman of the board of directors of BGM, and Denis Cherednichenko , general director of Rusatom Helskea.

Under the terms of the agreement, the parties will develop a joint action plan for the implementation of the project for the construction of a network of irradiation centers in Malaysia. At the first stage, it is planned to build an electron beam irradiation center, which will sterilize valuable medical instruments and process fruits for export.

The signed document defines the specific stages of project development from the preparation of a feasibility study to construction and commissioning. It also stipulates that Rusatom Halskaa and BGM will prepare and sign the contract after the completion of all necessary preparatory procedures.

Agreement with the CK3 on the creation of a joint venture for the sterilization of cosmetics in Brazil

The company "Rusatom Healthcare" (the management company of the state corporation " Rosatom ," responsible for the development of nuclear medicine and radiation processing technology) and the Brazilian company CK3 May 15, 2018 signed an agreement to create an irradiation center in Brazil , RIA Novosti reported.

The main agreement was the project of creating a project company in the form of a joint venture, the main task of which will be the sterilization of pharmaceutical, cosmetic and medical products in Brazil using Russian technologies based on electron accelerators and X-rays.

Construction of a pharmaceutical plant in the Moscow region for 6 billion rubles.

At the end of February 2018, information appeared that Rosatom intends to invest 6 billion rubles. in the construction of a plant in the Moscow region for the production of drugs for the treatment of oncological and autoimmune diseases. The exact timing of the work is not called, however, according to market experts, the implementation of the project - from the start of construction to the release of drugs into circulation - can take at least ten years.

The Kommersant publication had at its disposal a presentation of the Agency for Technological Development (APR), which is a partner in the plant's project for the production of drugs for the treatment of oncological, autoimmune and other socially significant diseases. According to the document, its construction will be carried out by Rusatom Healthcare, a subsidiary of Rosatom.

Rusatom Healthcares confirmed that such a project is indeed being discussed, but its details are still being worked out, as a result of which they cannot be disclosed. The Asia-Pacific region declined to comment due to an agreement signed with Rosatom on non-disclosure of confidential information.

According to the deputy general director of Stada CISIVAN Glushkov , the construction of the plant may further grant Rosatom the right to conduct inspections of pharmaceutical production for their compliance with GMP standards. The corresponding draft resolution in February 2018 was developed by the Ministry of Industry and Trade. Thus, Glushkov believes, the state corporation may try to take control of some segments of the pharmaceutical industry. In turn, the products of the Rosatom plant, apparently, will be aimed at the public procurement segment.

Joining the Digital Health Consortium

The national consortium "Digital Health " began work in Russia, the memorandum of creation of which was signed on February 16, 2018 at the National Medical Research Center named after Almazov . The consortium is attended by the Shvabe holding (structure of Rostec Group of Companies), the Ministry of Communications and Mass Media of Russia , Rusatom Healthcare, Almazov National Medical Research Center, Lomonosov Moscow State University, ITMO University and the engineering center ElTech SPb . Read more here .

JSC "Rusatom Healthcare" implements projects in two areas: nuclear medicine ; Innovative processing technologies.

In 2017, Rusatom Healthcare JSC included:

  • OJSC "V/O Isotope,"
  • JSC NIITFA,
  • JSC " NIFHI named after L. Ya. Karpova ,"
  • JSC Rusreactor,
  • two centers for the production of ultrashort radionuclides based on fluorine for PET diagnostics, one of which is Nuclear Medical Technologies - Snezhinsk LLC.

He is an integrator of other enterprises of the State Corporation Rosatom "" producing products based on medical and industrial radiation technologies.

Plans for the construction of a nuclear medicine center in North Ossetia

The head of North Ossetia Vyacheslav Bitarov and the general director of Rusatom Healthcare Denis Cherednichenko during a meeting in Moscow on October 17, 2017 discussed the possibility of creating a nuclear medicine center in the republic for the diagnosis and treatment of cancer. Read more here .

Construction of a nuclear medicine center in the Far East

In September 2017, it became known about Rosatom's plans to build a nuclear medicine center in Vladivostok . The estimated investment in the project will amount to 2.5 billion rubles . Read more here .

Admission of the first patient in the center of Snezhinsk

In April 2017, the new nuclear medicine center of the Rusatom Healthcare subsidiary Nuclear Medical Technologies - Snezhinsk LLC began admitting patients for diagnosis by positron emission tomography (PET) on the basis of the Chelyabinsk oncological dispensary. Read more here .

Creation of a company with an authorized capital of 480 million rubles

In January 2017, it became known that Rosatom State Corporation will create Rusatom Healthcare (Rusatom Helskea JSC), which will promote Russian nuclear technologies for medicine and radiation technologies for radiation and sterilization centers in Russia and abroad.

The new company will become an integrator of the Russian proposal in the field of nuclear medicine technologies to bring them to world markets.

Nuclear medicine uses radioactive substances to diagnose and treat various diseases. Nuclear medicine is an actively developing area in the Russian nuclear industry aimed at developing the potential of Rosatom enterprises and creating new, non-nuclear businesses.

Sterilization of medical devices and disinfection of food products by radiation treatment is one of the applications of modern radiation technologies offered by Rosatom to its foreign partners. In particular, in 2016, an agreement was signed on the development in India with the participation of Rosatom of a network of integrated radiation sterilization centers.

As follows from the materials on the corporate information disclosure website, the authorized capital of Rusatom Healthcare will amount to 480 million, rubles 100% of the company's shares will be owned by JSC Rosatom Atomenergoprom (part of Rosatom, controls all civil assets of the Russian nuclear industry) [14] will [14]

  • ↑ , Russia and Belarus will together create large-sized medical equipment
  • ↑ Research reactor and charging stations. Rosatom on cooperation with Belarus on nuclear technologies
  • ↑ will supply medical equipment for the treatment of cancer to the Republic of Belarus
  • ↑ Rosatom structures will open an irradiation center in Tatarstan for sterilizing medical products
  • ↑ Rosatom will build 25 medical infrastructure facilities by 2025.
  • ↑ and Rosenergoatom has begun to develop the isotope business
  • ↑ Emiliano Rosatom signed a memorandum of understanding with the Italian region of Puglia in the field of nuclear medicine
  • ↑ Shibanov "Rusatom Healthcare" and the Ministry of Agriculture of the Nizhny Novgorod region signed an agreement "We
  • ↑ "Daughter" Rosatom will create a center for processing products and medical devices with radiation in Cuba
  • ↑ Rusatom Healthcare and GE Healthcare approved a plan to localize advanced technologies for nuclear medicine in Russia
  • ↑ Rosatom technologies will help disinfect cosmetics in Brazil with radiation
  • ↑ Rosatom will treat cancer
  • ↑ 14,0 14,1 [ https://ria.ru/atomtec/20170102/1485087490.html Rosatom

Model Studio CS: How to use BIM to give new impetus to the development of the fuel and energy complex

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Pharmacies across US disrupted following hack at Change Healthcare network

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Reporting by Raphael Satter in Washington, Sriparna Roy and Rishabh Jaiswal in Bengaluru, and Tom Hals in Wilmington, Delaware; Editing by Rashmi Aich, Maju Samuel and Sonali Paul and Miral Fahmy

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What will Alabama ruling mean for those storing frozen embryos there? One woman's story

Union demands Lufthansa makes improved offer before agreeing fresh talks

German labour union Verdi on Saturday demanded Lufthansa offers a higher wage increase for thousands of the German airline's ground crew before it agrees to a fresh round of pay talks aimed at averting further industrial action.

NVIDIA HGX AI Supercomputer on display during the annual Foxconn Tech Day in Taipei

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LegalZoom LLC review 2024: Cost, plans, features and more

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LegalZoom can help you form your LLC for just $0, plus state fees. But if your formation needs are more complex or you need legal advice, LegalZoom can get expensive.

BEST FOR BUSINESS ATTORNEY GUIDANCE

LegalZoom

Free version available

Lowest published package price

  • Offers a free LLC service.
  • Free package includes a Wix website.
  • 60-day 100% satisfaction guarantee.
  • Free package has limited services.
  • Add-ons are costly.
  • Pricing can be confusing.

Why trust our small business experts

Our team of experts evaluates hundreds of business products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.

  • 12 companies reviewed.
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  • 408 data points analyzed.

Featured LLC service offers

Zenbusiness.

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Via ZenBusiness’ website

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Via LegalZoom’s website

Northwest Registered Agent

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Via Northwest’s website

LegalZoom (LZ) can be a good service for someone with a do-it-yourself approach to business formation. 

If you’re shopping around for a low-cost LLC formation package with articles of organization and name check services included, LZ’s Basic Plan will do the trick. But you’ll have to take care of your operating agreement and EIN on your own, and LZ’s registered agent services will cost you an extra $249 per year.

LegalZoom stands out amongst the competition for its unlimited 30-minute legal consultations, included with the Premium Plan for the first three months. LZ also has a 60-day, 100% satisfaction guarantee and Wix websites to build your business’s online presence are complimentary with every plan.

LegalZoom LLC overview and facts

LegalZoom was established as a tech company in 2001. Since then, LZ has added business formation services, tax filing/advising and other business and personal services to its roster. The company now has corporate offices in Los Angeles, Austin and the San Francisco Bay Area.

While LegalZoom offers a $0 LLC formation package, the price tag isn’t the only thing to look for when deciding whether or not to sign up. According to William Fry, CEO of Beacon, a company that assists with buying and selling small businesses, you should also focus on customer reviews.

“Some providers have terrible customer service,” warned Fry, “so you’ll regret going with a service that appeared cheaper on the front end but cost you more in time and headaches on the back end.”

Most customers have positive things to say about LegalZoom. On Trustpilot, over 80% of LegalZoom reviews are five stars. Most customers comment on how easy it is to use LegalZoom and their positive experiences with customer service.

LegalZoom LLC plans and pricing

LegalZoom is one of many LLC formation services that has packages starting at $0, plus state filing fees. But you should be prepared to pay state filing fees of $50 to $500 or more, and depending on your needs, the $0 package may not include everything it takes to form your business. 

“Feature-wise, you definitely want filing of your articles of organization and registered agent services, but the EIN is so easy to D.I.Y. it’s not worth paying for,” said Fry. 

With LegalZoom, registered agent services aren’t included in any package, so you’ll have to pay $249 per year to get the services on top of your plan’s fee. By comparison, Bizee includes complimentary registered agent services in its $0 package for the first year and charges $119 annually afterward.

While registered agent services may be cheaper through some competitors, most business formation companies charge fees for EINs and operating agreements, just like LegalZoom. However, unlike some competitors, LegalZoom’s offers live chat support, a free app and a website, regardless of which plan you sign up for. 

LegalZoom’s Basic plan costs $0, plus state fees. According to LegalZoom, this plan is for someone who can do most of the work themselves and who only wants the necessities for making their business official. (Namely, filing of your articles of organization.)

For just the cost of your state filing fees, LegalZoom’s Basic plan comes with the following:

  • Articles of organization filing.
  • Name check service.
  • Wix website.

If you go directly through Wix, you’ll pay a minimum of $16 per month for a website.

The mid-tier plan from LZ costs $249 plus state fees. LegalZoom recommends the Pro Plan for customers who need the essentials for compliant operations but who can do most of the work themselves.

For the $249 Pro plan, LegalZoom customers get these additional features that don’t come with the Basic plan:

  • Operating agreement.
  • Tax consultation with a small business specialist.
  • Consultation with a business insurance agent.

If purchased separately, you’ll pay $79 for LegalZoom’s EIN filing.

The Premium plan from LegalZoom costs $299, plus state fees. This top-tier plan is recommended for customers who want upfront advice from attorneys to help ensure they properly form their business.

When you opt for the Premium plan — which is $50 more than the Pro plan — you get all of the features listed above, plus a three-month subscription to the following services:

  • Unlimited 30-minute attorney consultations.
  • Attorney review of your legal contracts and documents.
  • Monthly copyright registration.
  • Access to a library of legal forms.

Note that attorney consultations are limited to one call per business topic, and you’ll be charged $49 per month for the legal services in this plan after the month period ends. Alternatively, legal advising is available through LegalZoom’s Business Advisory Plan for $469.00 a year ($39.09 per month) or $ 43.17 per month, which would be billed at $259.00 every six months.

LegalZoom add-ons and optional features

LegalZoom’s three LLC formation packages are bare-bones when it comes to business formation features, but there are plenty of services you can add to your package for an extra fee. Add-ons can be chosen during the set-up process, and they include:

  • Registered agent services: $249 per year. 
  • Compliance calendar: $69 per year.
  • Tax plan: $1,188 to $1,428 per year.
  • Legal protection plan: $469 per year. 
  • Standard annual report filing: $99, plus state fees.
  • Rushed annual report filing: $119, plus state fees.
  • EIN filing: $79. 

Registered agent services

Businesses must designate a registered agent in each state where they conduct business to ensure that time-sensitive legal, government and tax documents are received and promptly forwarded to the company’s headquarters.

Since registered agents are required to list their physical locations (P.O. box addresses are not allowed), Hal Brand, a CPA in southern California, suggests “home-based business owners use registered agents within their own states, so their home addresses aren’t exposed.” 

LegalZoom’s registered agent services are easy to sign up for and use. They cost $249 per year per state. If you purchase these services as a stand-alone option, you will not be refunded if you decide to cancel. 

LegalZoom is also among the most expensive options, with companies like BetterLegal ($90 per year) and InCorp ($129 per year) offering cheaper services.

If your company already has a registered agent designated in your formation documents, LegalZoom will file the required change in registered agent documents with the state for no additional charge.

Once any mail is received, it takes five to 14 days for documents to be scanned and uploaded to your account. In comparison, there are many competitors that offer same-day delivery of documents, like Bizee . 

This service also includes access to email or SMS alerts from LegalZoom’s compliance calendar, which is typically an extra $69 per year. These alerts warn subscribers about critical tax and annual report deadlines to help avoid incurring filing penalties. LegalZoom’s registered agent services also include $1 million in identity theft protection and credit monitoring for you and your business through Experian. 

If you’re on a tight budget, you might want to go with another option, especially since the registered agent services aren’t included in any of LegalZoom’s business formation packages. Like its competitors, LegalZoom offers registered agent services in all 50 states and the District of Columbia. 

Business advisory plan

If you want the legal perks that come with the Premium plan, you might consider a Business Advisory plan instead. LegalZoom’s Business Advisory plan includes:

  • Thirty-minute attorney consultation per legal matter.
  • Contract/legal document review (up to 10 pages).
  • Annual business evaluation (with the 12-month plan only).
  • Unlimited downloads from legal form library.

These plans are available for an annual payment of $469 a year ($39.08 a month) or $259 ($43.16 a month) billed every six months.

LegalZoom customer support and experience

LegalZoom offers live chat support on its website, and you can use chat to connect to an agent in less than a minute. Phone support is also available Monday through Friday from 5 a.m. to 7 p.m. and on the weekends from 7 a.m. to 4 p.m. PST.

LegalZoom vs. ZenBusiness

If you go through LegalZoom or ZenBusiness, it can get expensive to purchase all of the key business formation services you need.

LegalZoom offers a better price on one-time EIN filing, but if you also want a registered agent and an operating agreement, you could save $24 per year by going through ZenBusiness. Plus, ZenBusiness has excellent customer reviews on TrustPilot and only around 95 closed complaints on BBB for the last year, versus LegalZoom’s over 400 closed complaints.

LegalZoom vs. Bizee 

Bizee is another business formation company that offers free packages, and just like LegalZoom, the $0 package from Bizee does not include an EIN or operating agreement. 

It’s free to file with the IRS for your EIN, but some business owners prefer the help of an LLC service .

If you want to spring for help with your EIN, operating agreement and registered agent services, you’ll want to choose one of the LLC services paid plans. Both companies offer EIN filing and operating agreements with their mid-tier plans. However, you’ll save quite a bit of money by choosing Bizee’s Gold plan over LegalZoom because Bizee includes a free year of registered agent services with its plan.

Is LegalZoom right for your business?

LegalZoom can be a cost-effective option for someone who doesn’t mind doing most of their own paperwork. While the $0 package lacks some of the features you might eventually want, like an EIN, it can be easy enough to file for an EIN on your own . 

If you spring for a pricier package, you’ll still have to pay for some of the business formation services you may need, like registered agent services. For most customers, the legal consultations that come with the Platinum plan are likely to be the most valuable feature. Still, you’ll have to budget your consultation time wisely since you only get 30 minutes of advising per topic.

There are also no discounts with LegalZoom. However, if you own a law or tax firm, you can get discounts for registered agents in multiple states through Legalinc, a fully-owned subsidiary of LegalZoom.

If weekend support is important to your business, LegalZoom offers nine hours of customer service access on Saturdays and Sundays. And some of its services, such as unlimited document storage and instant compliance alerts, are helpful tools. But, for most small businesses, a more affordable option will likely be the right choice.

Methodology

We extensively research the key competitors within an industry to determine the best products and services for your business. Our experts identify the factors that matter most to business owners, including pricing, features and customer support, to ensure that our recommendations offer well-rounded products that will meet the needs of various small businesses.

We collect extensive data to narrow our best list to reputable, easy-to-use products with stand-out features at a reasonable price point. And we look at user reviews to ensure that business owners like you are satisfied with our top picks’ services. We use the same rubric to assess companies within a particular space so you can confidently follow our blueprint to the Best LLC Services.

Frequently asked questions (FAQs)

LegalZoom offers all the basic services you’ll need to start an LLC, but they can get pricey if you need multiple services, like annual report filing, registered agent services or an EIN, since you may have to pay a separate fee for each one.

LegalZoom does not provide annual report filing or alerts with any of its LLC formation plans.

Their compliance package is available for $280 a year, and it includes filing of your annual reports, a compliance calendar to help you monitor upcoming filing dates and alerts . LegalZoom guarantees that they’ll pay your fine or penalty if they miss a deadline while you’re subscribed to their compliance package.

Customers with Premium plans from LegalZoom will automatically be charged $49 per month for legal service s after 30 days. Some customers have filed complaints with the BBB about unexpected, recurring charges, so you may want to monitor your payment account for unexpected transactions while using LegalZoom.

LegalZoom guarantees a refund for customers who are not 100% satisfied during the first 60 days. Refunds do not include fees that have already been paid to third parties, such as state filing fees and attorney fees.

LegalZoom offers a variety of business formation services, including registered agent services. LegalZoom also offers legal advice for business and personal matters, including:

  • Estate planning.
  • Tax advising.
  • Accounting services.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy . The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Sarah Brady

Sarah Brady is a personal finance writer and educator who's been helping individuals and entrepreneurs improve their financial wellness since 2013. Sarah's other publications include Investopedia, Experian, the National Foundation for Credit Counseling (NFCC), Credit Karma and LendingTree and her work has been syndicated by Yahoo! News and MSN. She is also a former HUD-Certified Housing Counselor and NFCC-Certified Credit Counselor.

Bryce Colburn is a USA TODAY Blueprint small business editor with a history of helping startups and small firms nationwide grow their business. He has worked as a freelance writer, digital marketing professional and business-to-business (B2B) editor at U.S. News and World Report, gaining a strong understanding of the challenges businesses face. Bryce is enthusiastic about helping businesses make the best decisions for their company and specializes in reviewing business software and services. His expertise includes topics such as credit card processing companies, payroll software, company formation services and virtual private networks (VPNs).

How to start a small business: A step-by-step guide

How to start a small business: A step-by-step guide

Business Eric Rosenberg

IMAGES

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  1. Pharmaceutical Business Plan Template

    A business plan provides a snapshot of your pharmaceutical business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans. Why You Need a Business Plan

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    Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan. The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of pharmacy business you are operating and the status; for example, are ...

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  19. Pharmacy Business Plan Competitive Analysis

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