BUSINESS PLAN TO ESTABLISH PHARMACY STORE IN JABALPUR

Submitted by Saket JAin

Executive Summary The Pharma Retail business has become an integral part of today's economy. Medicine industry has grown in leaps and bound through the years. In a nutshell, medical stores are described as retail establishments that market drugs, be it prescription, proprietary, or non-prescription medicine. The Shanky Pharmacy will be a sole proprietorship and will be led by Mr. Sudesh Jain, a Bachelor in Pharmacy (which will also serve the basic requirement to set up the pharmacy business in India) with experience in the pharmaceutical industry. The Shanky Pharmacy will be registered firm in the city of Madhya Pradesh under Jabalpur Muncipal Corporation and will operate from one store situated in Main Bazar Khamariya (Jabalpur). The firm will also be registered with the Regional Drug Association to get the approval to get establish and will also pay the royalty to the Government of India to operate such business. The Shanky Pharmacy's main goal is to provide prescription medications for our customers at the competitive 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 by giving non-prescription medicines.

The firms will be established in a posh locality with no other competitor in about 3 Km. radius with a population density of over 1000 families, one government and one private hospitals along with number of several multi specialty clinics. This gives the firm an ample opportunity to establish in two ways i.e., firstly by serving customers who visit in person and secondly will look forward to collect orders from nearby locality to supply monthly medicines in order to boost up business and otherwise give good customer service. 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 Shanky Pharmacy will appeal more and more to the customer's sense of value and convenience. The firm will look forward to adapt strategy to cut costs which will be minimized by keeping a regular check on outdated products, change in trend and taste of locality, demand of product and also by following the fundamental by maintaining only one pharmacist support staff and filling the void with pharmaceutical techs. The Shanky Pharmacy is planning to advertise mainly through putting up hoardings and using public relations to make people aware about our presence into the market. The Shanky Pharmacy looks forward to target all possible age group people by serving to every necessity of an individual. Major focus will be on those who are looking to save money on a pricey but necessary and regular expense. The Shanky Pharmacy is looking forward to cater the society by selling all range of necessary drugs for diseases (medicines), baby food, vitamins, contact lens solutions, baby food, diapers and disposables, toiletries, fragrances, cosmetics and more.

The Shanky Pharmacy Organisational structure will be: Proprietor

Support Staff

Pharmacist Tech.

Estimated Initial Funding Budget: To start up the Pharmacy shop, the pharmacist license is a must which by themselves is with the proprietor, leading to cut down the cost to hire one. The firm will be established in the rented property on 3 years contract in Khamariya estate, which needs authorization and registration to many legal authorities. After the formalities the purchase of stock will be considered by listing down and ordering the common disease medicines, baby food, toiletries and cosmetics. To the extend during the initial phase stock will be purchased on cash and later on credit from the wholesaler on 15 days site to pay back the billing amount. In Retail Pharma law some medicines need to be kept in cool under certain low temperature making it compulsion for a refrigerator. The furniture including display counter, side wall glass display, racks to shelf medicines, chairs need to be assemble at the premises. The following is the estimated cost which need to be funded at the initial stage of establishment. Particulars Stock (Medicines) Stock (Cosmetics & Baby Products) Stock (Others) Furniture Rented Property (Rent for 12 month) Refrigerator (to store medicines) Electricity Bill Estimated (for 12 months) Royalty to govt. (for 4 yrs. One time payment) Two Skilled staff Salary (5000/- x 2 x 12 months) Amount 100000 20000 10000 30000 36000 7000 12000 3000 120000

Firm Registration Fees with Medical Association Firm Registration/license Fees with Muncipal Corporation Initial Fund Requirement

1000 1000 340000

Expected Returns / Income during Initial Period: The Shanky Pharmacy will enjoy the state of monopoly in the surrounding locality which gives competitive advantage to smoothly setup of the business. The rate of return on sales of medicines is around 20 % compared to cosmetics and toiletries which give approximately 15 % profit whereas sale of surgical items fetches more than 40% return on sales. On this background firm is expected to reach

profitability by our second year of inception and will generate substantial sales by year three. The following is the estimated income and expenditure account for the period of one year of Shanky Pharmacy:

Expenditure Purchase of stock (cash & credit) Rent (for 12 months) Yearly License Renewal Annual Electricity Bill Two Skilled Staff (2x 5000/x 12 months) Net Profit

Amount

Income

Amount 2920000

2555000 Expected Daily Sales (8000 /- x 365 days) 36000 1000 12000 120000

196000 2920000 2920000

Though the Shanky Pharmacy is expected to make the profit of Rs. 196000/- in its first year but its investment amount will be earned back by the end of second year. The firm is expected to face certain fixed expenses for the next year as well making

it possible for the firm to fetch back its overall investment made initially and there after business will run in profit. Investment Return Period = Initial Investment Annual Profit

= 340000 / 196000 = 1.8 approx months

If business is expected to earn the same profit next year than its initial investment will be returned soon after 01 year and 8 months. Return on Investment = Profit at the end of the Year Initial Investment = 196000 x 100 340000 = 57.67 % The Shanky Pharmacy is estimated to provide the healthy return on investment of 57.67 % which gives tremendous opportunity to develop in the coming future of time. The business creates ample options to the owner to grow the firm in order to boost up the sales and ultimately profitability. x 100

Summary A retail Pharmacy business is unorganized industry in India opening lots of scope for investors to encashing their chances by getting the higher returns on investment. The idea to establish the Shanky Pharmacy has created lots of scope to cater the society and getting the return by tapping at the right time opening up good opportunity for any businessman. At last it can be summarized that to initiate with such an opportunity will boost up the mind set of any investor to get the higher return and chances to explore untapped customers to register significant growth.