retail future and business

[ac24]

First of all can i thank you for this forum, i think its a brilliant idea.

Im interested in business, its something i think i'd get a buzz out of trying. I was wondering about what it would be like to do this in pharmacy. I have done work experience at an independant and got to see vaguely how things are done.

from your experience what do you thing the future is like in this area?

this was one of the reasons i chose pharmacy.

Also what is the future like in pharmacy. I know theyve been talking about change a lot, but do you think there will be too many of us in the future as there are new schools opening and also the 9% increase in people applying.

Ive heard a lot about the big chains taking over but dont understand how this works.

thanks

[Linnear]

[/quote]
Also what is the future like in pharmacy. I know theyve been talking about change a lot, but do you think there will be too many of us in the future as there are new schools opening and also the 9% increase in people applying.

Ive heard a lot about the big chains taking over but dont understand how this works.

thanks[/quote]

Hi there.

There was actually a piece in the Chemist and Druggist today that said that the High Street 2015 survey (I think that's the name for it!) for the govt stated that fi nothing was done to stop the multiples and Supermarkets then pharmacy numbers would drop by 50% in the next ten years and independents would be a thing of the past.

The big chains are taking over because they can buy in large stocks of prescription and over the counter medicines at a cheap price and so can undercut the independent pharmacist.

If you really want to get into onign your own shop I believe that several companies will now back you and help out with costs etc. It means that you lose some autonomy but it also means that you're not on your own.

The Independent Pharmacy Federation is a new organisation that has just been launched the only contact info I ahve is the following email address but they might be able to give you a better idea of what you'd be facing.

info@irxf.co.uk


Good Luck with your future endeavours

[Apothecary]

Hi there,

The opportunity to own your own pharmacy is becoming rare these days. If you find a new spot (like a new developing, large housing estate) you could try to start one from fresh. This has the bonus of not paying anyone for goodwill, stock etc. Also the major drug suppliers like Unichem, AAH etc will extend you a certain amount of credit.

The remuneration in pharmacy is quite complex, but basically: -

1. you buy drugs
2. receive a prescription and supply that drug
3. submit your prescription at the end of the month to the prescription pricing authority,
4. they pay you the cost of the drug, and a fee for dispensing it.

The problem is payments are behind, often up to 3 or 4 months behind! So you have to buy the drugs, dispense them against prescriptions and wait for this length of time to get paid. This can mean you run up a lot of credit, or need a big pot of cash to start. You also need to attract customers of course, and about 80% of a pharmacy's turnover comes from prescriptions, so selling shampoo etc won't make you a living on its own.

You can buy an existing pharmacy. They will charge you for the business (based upon annual turnover), a fee for goodwill, and the stock at evaluation. The stock can cost anything from 20k for a very small pharmacy, to 100k for a large one. So you'll need between 250k and 500k to buy out another persons pharmacy from them. The multiples are also buying everything they can get their hands on, so they can just up their offer over yours.

There can be problems buying an existing shop. A large chain bought a pharmacy in Hull which dispensed 30,000 prescriptions a month. After owning it for about 6 months that figure was down to 17,000 and someone today told me it was now down to 12,000. The initial cost of buying the business will have been based on a turnover resulting from 30,000 scripts a month, so the turnover will be well down now. Sometimes customers like the pharmacist. Maybe they have worked there for over 30 years, amd know everyone in the neighbourhood. A new face will often make them go elsewhere.

You can also be reliable on one or two sets of Doctors for your prescriptions. What happens if they move? Your business is gone! I used to do a regular locum at a pharmacy adjacent to the Doctors. The owners told the Doctors that if they were moving the pharmacy would not re-fit the store, but wait and move with them. The Dr's said they were staying put. The company spent over 50k re-fitting the shop out, and six months later the Dr's moved! They then had the cheek to tell the pharmacy owner that he could move into their new building, but would have to fund part of their surgery - in other words part of their business as well as his own, and after wasting 50k already! He stayed put and his business is dead, it must barely make a profit.

There are other ways for a shop to make money apart from prescriptions. Drug addicts can bring in a lot of money, but you need a lot of them to make it worth your while. They can also bring in a lot of trouble too!

You have to weigh up that all the stress of opening your own business, against working for a chain, earning 35 to 40k, for managing a business, with no financial risk to yourself. You can run a business where you are self employed for your own company. I do that and not only get paid more, but pay out less tax. Basically my business is me.

If you are from a rich family, and money is no problem, then you could go for it. But then if you are from a rich family where is there the need to own a pharmacy?

Personally I don't think the chance of owning your own pharmacy is very good now, and it will only get worse the way the multiples are buying all pharmacies that are up for sale.

This is of course only my opinion. You may find someone who owns their own pharmacy, and is very happy and well off from doing that. As with anything in business, you need hard work, skill and luck.

If owning your own pharmacy is your dream then go for it. You never know what the future holds, and you could get a lucky break. You might find a run down pharmacy for not too much money, and build it up into a successful business. If you don't try you may always regret it. I have never been tempted into this way myself, but it wouldn't do if we were all the same.

I think Linnear makes some good points in his reply.

[ac24]

It all sounds very risky but if it is possible i will try and keep the option open.
thanks for the info . im looking forward to studying pharmacy.

i checked out the The Independent Pharmacy Federation site. the url is:
irxf.co.uk