Should a Pharmacy Open a New Branch in a Commercial Area or Residential Area?

Should a Pharmacy Open a New Branch in a Commercial Area or Residential Area?

Introduction

A pharmacy is a store where drugs and medicines are sold. The store requires one to have a professional who can prescribe the necessary medications to the patients. The store requires one who can understand doctors’ prescriptions to patients. For one to open a branch of a pharmacy in a different area, specific consideration has to be taken into account. Locations are the primary factor when a pharmacy is being opened. The location of the pharmacy will determine the flow of customers who, in turn, will make the business a success. There is always a debate about the appropriate place to open a pharmacy. Some are proponents of commercial areas, while the others support residential areas. Each of the groups has a reason for their choice. Residential areas are parcels of lands that are dominated by housing, specifically for family purposes. The house in the residential areas comprises mobile homes, multifamily dwellings, and single-family residences.

On the other hand, commercial areas are in urban places like cities and towns. The buildings in such areas are for business and government uses. Commercial areas comprise of building such as chain stores, shopping centers, financial district, downtown, central business district, and commercial strips. Both commercial and residential areas can be host to a new branch of a pharmacy. Therefore this study will aim to determine which among the two should a pharmacy be set up. To aid the study will be the comparison between the two areas to determine the location that will be useful for the business. Research on the consideration to help one set a successful pharmacy will help determine the best are to set the pharmacy..

Methodology

Some considerations are taken to determine the best place to open a new pharmacy. The factors will determine the appropriate and affordable location to begin the pharmacy. After discovering the elements, an in-depth comparison between commercial and residential areas will reveal the proper place to set the business.

Findings and Analysis

Opening a new branch requires one to have enough detailed information about the place intended to open the new business. The data will help in the preparation and acquiring the requirements for the investment. Therefore several factors the proprietor should consider are location, capital, research, competition, staff, marketing, consistency, physician relationships, and workload.

Location

The success of the venture solely depends on the area it will be set up. The current pharmacy may be successful because of its location, but there is no guarantee that the new one will be successful (PBA Health, 2019). Therefore when setting up a new pharmacy location is very important. When choosing the appropriate area for the pharmacy, it is essential to consider the population of the area you want. The community will determine the success of your business.

Staff

For the pharmacy to function effectively, it has to have professional and qualified staff. What a proprietor has to decide is whether there are enough employees to transfer to the new pharmacy or there will be a need to hire new ones. You may need to hire new employees, and that requires you to have money to fund the recruitment process (Legg, 2016). Apart from recruitment, you will need to have extra money to pay for their salaries once they start working. You will also need to have a current employee available to train the recruited one of how to go about their duties.

Capital

When a new pharmacy is opened, you need to have sufficient cash flow to fund activities around the business before it starts making any money. Pharmacies usually take six to nine months before they start becoming profitable, and during that time, you should have enough money to cater for costs and expenses within the business. The other purpose of capital is during startup, and the pharmacy will require more payment to provide for staffing, inventory, equipment, and the location (PBA Health, 2019). Therefore it is crucial to have enough capital to enable set up the pharmacy successfully.

Research

The success of any business one open depends on the analysis performed on the area, products, customers, and even the customers. The purpose of examining is to ascertain the target market for the products or, in this case, the drugs you will be selling (Legg, 2016). The research will help you understand the population of the people who will require to use your medications, how often they will need the medicines, and which area of the new location do they occupy. Research determines the areas where one should direct the effort. So analysis can be used as a tool to decide where to direct the marketing efforts.

Marketing

Marketing is the promotion or advertising of your business; in this case, the pharmacy to attract new customers. After opening a new branch, you must devise a way to ensure that people in the areas know that the pharmacy exists. Therefore resources are set aside and allocated to the marketing strategies used by the marketing team to tell everyone about the new location of the pharmacy (PBA Health, 2019). The use of fliers do marketing, direct mailing, and poster to get the attention of the people in the new area. Social media nowadays is also a helpful tool since it can target patients in an online campaign to market the pharmacy.

Consistency

The reason for opening a new branch is because you have been successful in another location and now you want to test the same in a new area. Consistency ensures the business remains durable. Consistency is ensuring that the way the successful pharmacy operates replicates in the new pharmacy(PBA Health, 2019). That is through customer services and how it is run. When consistency is not taken into account, the reputation of the pharmacy will diminish even before it grows, resulting in the business not being successful.

Workload

Pharmacy requires a lot of attention from the owners because of the workload associated with them. To operate one pharmacy may be easy since one may be able to handle the workload associate with it (PBA Health, 2019). When you decide to add another in a different location, that will mean the workload will double. And to ensure you devote enough time to the new venture, the current one should be running smoothly. Not balancing the workloads of the existing pharmacy and the new one may lead to the failure of both the pharmacies.

Physician Links

When a new pharmacy is opened in a new location, pharmacist-physician relationships are crucial. You will have to devote some time to create relationships with the resident physicians. What physician does is that they increase the credibility of your new pharmacy at the same time referring patients to your pharmacy to get drugs prescribed to them. The association with the physician will enable your pharmacy to conduct business effectively at the same time, offering better services to customers. The relationships with the physicians will allow you to know the culture of the area before venturing into the business since the different locations may have different cultures (PBA Health, 2019).

Competition

Competition is usually present in any venture one engages in. Therefore when the need arises for a new pharmacy, you must research the competitors in the business and how you can rise above them. Your pharmacy will have to look for a unique strength to specialize in so that it can give you an advantage over your rivals (PBA Health, 2019). The best way to deal with competitors is by setting goals and tracking them often to ascertain the progress. That way, you can know if you measure up to the competitors or an evaluation is needed.

Location Choice

The above were the factors that you should consider when opening a pharmacy, the main one being the location. Between commercial and residential areas, you have to choose the appropriate place to set up the business. Some factors will enable you to decide on the proper place to place the pharmacy. The factors include location, visibility, accessibility and parking, space and layout, and real estate agent.

Location

As stated earlier, the area of the pharmacy is crucial to its success. There are best places to set up the pharmacy, such as near national chain pharmacy. The reason being the national chain pharmacy has done their research on the best location, best real estate that is affordable (PBA Health, 2019). The other places that can fit to set the pharmacy are near upscale neighborhoods, areas with ample retail space, high traffic areas, near doctor’s hospitals or offices, and community with a large population of older people. From the site stated it clear the best-preferred places are residential areas since that where you can get upscale neighborhood, older demographics, and dense retail.

Visibility

What eyes can see is what attracts a person. Your pharmacy should be situated in a place where people can see the signs directing them or have the view of the pharmacy itself. If the customers cannot see the pharmacy or the signs, then they will not know it exists. The pharmacy should be situated in places where residents, commuters, bikers, and those walking can see it from all angles. A pharmacy should be located in an area where there are no giant trees to block the pharmacy or the sign showing direction (Cella, 2018). When it is in the city, it should not be behind tall buildings since it will not be seen. The sign of the pharmacy should be easily readable from the road. The pharmacy or its sign should be easily visible from the bus stop. Commercial buildings are found in cities and towns, which are congested. Therefore it is better to set the pharmacy in residential areas since the pharmacy visibility is enhanced, consequently easy to attract a large number of patients.

Accessibility And Parking

You may have a good location, best visibility, but the pharmacy is not accessible. If your pharmacy is not convenient and also the customers cannot find a parking spot, then they will opt for other pharmacies that offer what they desire. If it is impossible to find parking, then one should create a drive-in where the customers can pick their prescriptions while in the car (Cella, 2018). In residential areas, it is easy to find parking, unlike in commercial areas where one is required to pay for parking. Residential areas are also easily accessible, unlike commercial areas where there is congestion due to traffic.

Space And Layout

The building you need to set up your pharmacy should be spacious enough to accommodate all the needs. So before renting or buying a space, you are supposed to ascertain whether it will be capable of providing your needs like immunization room, consultation room, store to sell the drugs, and a store to keep the inventory (PBA Health, 2019). To get such a place, one requires to have enough capital. In commercial buildings, it is challenging to acquire such a spacious building without parting with an enormous sum of money. Still, in residential areas, one can get a spacious building at an affordable price.

Real Estate Agent

When opening a new location to set up a pharmacy, a real estate agent could be of practical assistance. The agent can help you get an excellent property or the best. They know the areas with high traffic and easily accessible. They are also equipped with negotiating skills that are crucial since they can save you lots of money (PBA Health, 2019). What you are required to do is choose an agent you can trust and is experienced with pharmacy real estate deals. That way, you can get an excellent place to set up your business. To get the right agent, you have to interview several and check the great deals they have closed. You should make sure they are conversant with the needs you want for your pharmacy and also the procedure in which they will be paid.

Recommendation

From the factors that one should consider when starting a pharmacy, it is clear that the location of the pharmacy is the critical factor that should be considered. Position can be represented in many ways, including residential and commercial areas. From the discussion about the location choice, opportunities are indicated in the residential areas. Suburban areas have been a more positive side compared to industrial areas. The reason being in residential areas are populated by the elderly, residential areas are accessible and have ample parking slots. In residential areas, it is easy to find a spacious building that will accommodate the needs of the pharmacy.

Conclusion

Commercial and residential areas can play host to a new pharmacy. Therefore it is the role of the owner to decide the most appropriate area to set up the pharmacy. Suburban areas have shown the potential of having more opportunities to the owner due to the location, visibility, accessibility, and space, and layout. That does not mean that commercial areas have been ruled out. Industrial sectors are also the right areas to set up a pharmacy. Still, due to the congestion and demand, it is difficult to find an excellent location to set up the business. Therefore setting up the business in residential areas will give the owner more cost advantage compared to setting it up in commercial spaces.

References

Cella, C. (2018, March 19). Starting a Pharmacy: What to Consider. Retrieved from https://join.healthmart.com/business-and-operations/starting-a-pharmacy/

Legg, H. (2016, February 22). Top 7 Tips for Individuals Starting a Pharmacy Business. Retrieved from https://smallbizclub.com/startup/creating-a-plan/top-7-tips-for-individuals-starting-a-pharmacy-business/

PBAhealth. (2019, November 18). How to Select the Best Pharmacy Location. Retrieved from https://www.pbahealth.com/select-best-pharmacy-location/

PBAhealth. (2019, August 29). 10 Things to Consider Before Opening a New Pharmacy Location. Retrieved from https://www.pbahealth.com/10-things-to-consider-before-opening-a-new-pharmacy-location/