LEARNING OBJECTIVES • Identify the characteristics of entrepreneurship and describe the opportunities that exist within independent community pharmacy practice. • Compare and contrast starting up a new independent community pharmacy versus purchasing an established pharmacy. • list and describe the steps necessary for starting an independent community pharmacy. • Identify methods of purchasing an established pharmacy. • List and discuss various issues facing independent community pharmacy practice
WHAT IS INDEPENDENT COMMUNITY PHARMACY? • Many would envision a privately owned business that not only filled prescriptions but also took care of patients and their families • A drug store • Chemist ’s shop • One might find a relatively small but very helpful and friendly staff that know their customers by name and provide great service.
THE ENVIRONMENTS OF INDEPENDENT COMMUNITY PHARMACY • Overall Health Care Environment • 2006, prescription drug expenditures were predicted to increase slightly to $213 billion in the us • Spending for drugs is expected to reach nearly $500 billion by 2016 in the us
Internal Pharmacy Environment • Independent community pharmacies have incorporated various elements of technology into the practice setting, including specialized software that checks for medication errors, fills and labels each prescription, and even the processes the sales transaction • automated dispensing machines, specialized compounding and intravenous mixing equipment, and customized software that can be used in the management of patients with particular disease states such as diabetes.
electronic prescribing • specialized services, including but not limited to nutrition, delivery, patient charge accounts, compounding, herbal medicine, hospice, and durable medical goods, as well as scheduling of patient appointments and speaking to local organizations • disease-state management programs • The most frequently offered programs are blood pressure monitoring, diabetes training, and immunization
MTM programs are designed to • improve medication use • enhance patient safety • increase patient adherence to their medication regimens
CHARACTERISTICS OF THE INDEPENDENT COMMUNITY PHARMACIST • Independent community pharmacy provides a unique places for an individual pharmacist: • Owner and run the pharmacy, • A part-time employee interested in staying in touch with community pharmacy practice, • An entrepreneur with ideas for creating new service offerings for patients, • Employee working for the owner/manager.
Problem-solving skills • great opportunity to help patients • ability to embrace change, deal with risk, and adapt to an ever-changing environment
“They are only going into business for the money,” • First, independent pharmacists are placed in a difficult situation because of their need to possess expertise in pharmacy practice and business. • Second, independent community pharmacy practice represents one of the most accessible health care venues for patients. Because of this, there exist numerous clinical opportunities for pharmacists in the provision of quality patient care and positive patient outcomes.
Third, independent community pharmacists contribute to the overall health of any community not only in the care provided but also in contributions to the economic and civic health of the community
ENTREPRENEURSHIP/INTRAPRENEURSHIP • An intrapreneur is an employee who uses the approach of an entrepreneur within an organization • Intrapreneurs are critical in that they question the establishment and provide the internal spark to pursue innovation and new opportunities. • Remember Characteristics of Entrepreneurs from previous lecture
ENTREPRENEURIAL OPPORTUNITIES IN INDEPENDENTCOMMUNITY PHARMACY • Independent practitioners were some of the first to provide and use • Complete patient medication profiles • Total parenteral nutrition • Delivery of products and care to prisons and long-term care facilities • Home infusion services • Veterinary pharmacy • Specialty compounding services
Individuals are limited only by their imagination in developing new services or other innovations. • Rules that can be used in creating that climate in the pharmacy include (1) Encourage action (2) Tolerate failure and use as a learning example, (3) Be persistent in getting an idea to market, (4) Use informal meetings to provide opportunities to share ideas (5) Provide challenges with the staff to help problem-solve given situations (6) Reward and/or promote innovative personnel
INDEPENDENT COMMUNITY PHARMACYOWNERSHIP • Top reasons for wanting to go into business include • self-management, creative freedom, and financial independence • Not having to answer to others regarding the focus of the pharmacy • Being recognized and playing an important role in the business and health care needs of the community • Achieving a level of self-fulfillment and pride • Continuing the legacy of pharmacy ownership established by family
Option 1: Starting from Scratch • How to Get Started 1. Decide on the type of pharmacy. 2. Assess the potential market. 3. Develop a detailed business plan. 4. Determine the organization’s structure. 5. Identify financing options. 6. Select a location. 7. Obtain licenses, permits, and insurance. 8. Develop a marketing and promotion plan. 9. Establish the management philosophy of the business.
Decide on the Type of Pharmacy • What products and services will I sell? • From what base will I derive my customers? • What skills do I bring to this business? • Where should I be located? • Will I have any competition?
Assess the Potential Market • What is the potential customer base? • How many physicians are in the community? Specialists? • What is the competition? Other pharmacies? Other businesses?
Determine the Business Structure of the Pharmacy (organization structure lecture) • Legal structures available to pharmacy owners: • sole proprietorship : owns all the assets, receives all profits, and is responsible for all aspects of the business no legal distinction between the business and the owner • partnership an association of two or more persons to carry on as co-owners of a business for profit
Types of partnerships • A general partnership entails all partners to divide the responsibility for management and liability, as well as profit or loss • A limited partnership consists of at least one general partner and one or more “limited” partners Limited partners are individuals who provide capital to the business but are held liable only for the amount of their investment
A corporation is a business that is chartered by the state and legally operates as a separate entity from its owner. • Identify Financing Options • What are the financial needs for this venture? (Capital setup capital, startup capital, and operating capital) • What type of financing will be best for the given situation?(Personal financing, Debt financing , equity financing) • Where does one go to obtain capital for such a venture?
Select a Location :The selection of the trade area, as well as the actual physical site of the pharmacy, is a primary factor in determining the success of the business. • Obtain Licenses, Permits, and Insurance • Develop a Marketing and Promotion Plan (marketing lecture) • Establish the Management Philosophy of the Business (strategic planning lecture)
Option 2:Purchasing an Established Pharmacy • Advantages • Lower level of risk for the buyer • No additional competition added to the current marketplace • Reduced startup costs/less risk • Less time required to show a profit • Buyer receives established goodwill • Business has an established clientele • Business provides buyer with trained employees, inventory, physical facilities, and established relationships area healthcare providers
Disadvantages • Inadequate facilities • Old/outdated fixtures and equipment • Inventory that is too large and/or unsalable • Established policies and procedures do not match with new ownership’s philosophy • Inflated sale price • Problems with the location • Undesirable established leases
Once a potential pharmacy is identified, an important question to ask is, “Why is this pharmacy for sale?” • Is the owner retiring? • Has the neighborhood changed owing to increased competition or economic changes to “sour” the location? • Is the pharmacy on the verge of bankruptcy?
1. Do you consider yourself to be entrepreneurial? Intrapreneurial? Why or why not? Can you identify another individual as being entrepreneurial and/or Intrapreneurial? Explain why you selected that person. 2. After reading , what interests (or what does not interest) you about a career in independent community pharmacy practice? 3. Imagine that you are the owner of a new independent community pharmacy. If money were no object, where would you be located? What patient care services would you offer? Would you have a general or specialized practice? 4. What is the most difficult management responsibility for the owner of an independent community pharmacy?