The Cost Of Starting A Community Pharmacy At Different Location In Nigeria

Cost of community pharmacy

Pharmacy students are always curious as to the career path they will find themselves as they graduate. Majority of pharmacy interns plan to be entrepreneurs. That is, opening a community pharmacy shop. The plan is to use internship salary and National Youth Service Corps (N.Y.S.C) reimbursement for the start-up capital. The few that succeed in saving up for this may find out the initial plan did not work out the way it was all plan.
The cost of opening a community pharmacy with the Pharmacists Council of Nigeria (PCN) is the same everywhere in Nigeria. It is same for both new pharmacist and old ones. Therefore, this post should be able to bare open an aspect of community practice I notice posts in other blogs have always shy away from, location.
To start a community pharmacy, the pharmacist must register with Pharmacists Council of Nigeria (P.C.N). The cost of processing this registration is fixed by PCN and changes every now and them. To get the cost, the pharmacist should visit PCN website for the most recent value. The next cost includes licencing by PCN also specified by PCN and business registration with Corporate Affairs Commission (C.A.C) with cost fixed by CAC. This cost changes every time. Therefore, a pharmacist with the intention of opening a community pharmacy should visit their website.

The cost of starting a community pharmacy goes up for none pharmacist who wish to start it. They will have to pay for a pharmacist licence and registration for CAC. Also, the CAC registration increases as they will be required to do limited liability company which is more expensive.
Read Also: Tips On Starting Off A Community Pharmacy Shop In Nigeria
Once registration of the business is over, the next decision is location. Location is as important as opening a community pharmacy. There are two locations to site a community pharmacy. The cost is different. Let us look at each.

Cost Of Community Pharmacy Between Urban And Rural Setting

Urban Setting

The truth is that most pharmacy interns find themselves in urban areas when they did their internship programme. Most pharmacy starts community pharmacy in locations where they did either internship or NYSC. That is while they prefer urban area. However, there are advantages and disadvantages to this decision.
Urban area in this post refer to states with high competitions like Lagos, Abuja, Kaduna, etc.
For a starter, it will cost much to start up a community pharmacy in urban area. The reason is that;

The Cost Of Living

The cost of living in these locations is very high. This will affect the pharmacist, as the gain at the beginning will not be able to finance the pharmacist standard of living. The probability that the pharmacist will live in the urban area is high. This translate to cost of transportation to the shop when going and coming. Cost of goods and services for the personal upkeep of the pharmacist can put a lot of strain on the start-up gain.

Cost Of Rents

Renting stores in the urban area is high. Another contributory factor is the fact that some property owner asks for about two years advance rent.

Cost Of Furniture

Furniture and other fittings are very expensive in these locations. Going for cheap ones may even offend some customers who may tease you for a high grade of furniture. Imagine a customer telling you to buy a piece of furniture that is imported because that is what your competitor is using. Some may even say they will not come again until you get their preferred piece of furniture. That is when you try to sweet mouth them to come back.

Competitors

This is the main reason why I do not recommend pharmacist starting up in towns/cities. The competitors there has established a brand. They also have facilities and equipment that are very expensive that anyone who wants to try another place will look for one that offers higher service.

Cost Of Services

If you are to employ a staff, the starting price in these locations is usually very high. Other than that, you need the service of the man to fix the Close-Circuit Television who has a price set to enable him to pay for his high house rent, children’s school fees in private schools etc. The list goes on and on. Unfortunately, the difference in the amount of selling drugs is almost same around Nigeria. This means that raising money to settle overhead expensive is difficult.
However, for those who want to start in an urban area, the benefits are much if and only if you have sponsors and have enough capital to start up a shop that can compete or even beat others in the environment. In this case, the gain is instant if not from the very first month. Sales are very fast. As for those who struggle to start, it takes a much longer time to talk about profit.
Most people like trying out new things. That is an advantage for start-ups. Nobody wants to leave a pharmacy shop with an air conditioner (A.C) to one not even with a fan. That is only possible when selling at a very, very cheap rate. Now with such a market strategy, how do you intend to pay up the high cost of the bills in the area?
If you intend to use just part of your salary that you save from your internship and NYSC, this is a bad idea. To rise up to the difficult challenge, consider working for some years in a community pharmacy in that location. During that period, you can learn more entrepreneurial skills that will help in your own and add to your savings. However, a majority are carried away with the buoyant pay and forget the initial priority of saving form personal community pharmacy. They consider the risk, fear failure, and just settle for an increment of salary.
For those whose initial capital could not cover the cost of opening a new community pharmacy, my little suggestion is to start up a patent medicine store if the money at hand can do this. To me, it is better than working for another for that period. There are enormous benefits. You get to know about the business, the competition, the customers and others. In addition, the salary the other guy will be paying you may not be more than the gain from the patent medicine store. I have seen who did this and how it paid off. However, a lot of young pharmacist and PCN frown at this. The choice lies in the hands of the pharmacist.

Rural Community

The word rural communities here include locations such as most places in Delta State, Edo State etc. The pharmacist that wants to do this may experience some setbacks. Most of these rural communities are without basic amenities like light, good roads, good water supply. However, the monetary value was to compensate for that. Some that started like this later gathered money enough to start up a community pharmacist strong enough to withstand the heat of competition beating already established name to their game.
The reason why rural pharmacist succeed is that in the rural setting;

Cost Of Living

As you already know, cost of living is low. No one will even consider if you took a public transport or even trek down to your shop. The cost of buying goods and services is quiet affordable.

Cost Of Rent

Rents are cheap and affordable. To cap it all, most property owners demand a monthly rent as compared to the cost of renting for two years obtainable in most urban areas.

Cost Of Furniture

Nobody will care to see very expensive furniture in the shop. All that they care about here is that they have a comfortable chair to sit on. Besides, the cost of furniture in the rural community is low compared to urban area. The cheap furniture is very okay to them. That is the major thing. That is customer satisfaction.

Competitors

There are very few competitors. Most community pharmacists have respect from their respective community considering the service they render as the first line of call. Most at times, hospitals are far away from these ones. The pharmacist can enjoy monopoly until he decides to leave for greener pasture.

Cost Of Service

The cost of paying an extra staff is not much compared to those in the urban area. However, the gain is not much as the cost of buying drugs may be high and the buying power of the rural community is low. This can lead to low gain. However, the high volume of low sales is a compliment.
For a young pharmacist to succeed in urban areas, salary from the internship will not solve the problem. However, that should be able to cover the cost of a community pharmacy in a rural setting.
To begin, it is vital to observe the location and do a little survey and analysis. Consider the hospitals that are there and where they refer patients to get drugs the hospital do not have. Try to gather patients card from them and read up the drugs mostly prescribe. Investigate the prominent disease in the area. Check out the drugs most useful in treating them.
Read Also: How To Set Up A Patent Medicine Store In Nigeria
Someone suggested working for a community pharmacy in that area for some few weeks. After this, stock few drugs. As you do, consider the economic situation of the people, the age, and other demography.
Buying a community pharmacy is more expensive. However, always look very well asking around while the owner wants to swap ownership. There is a likely possibility that the pharmacist could not weather the storm of competition from another one. If that is the case, ask yourself if you can achieve success amidst the competition. However, a healthy community pharmacy can really help remove the initial stress and provide gains almost immediately. All these strategies can help in cutting cost to maximize gain.
The best thing is if the shop is bigger than the next competitor is.
The exact value of starting a community pharmacy is not stable. That is why the suggestion is never stable. The above factors are the major decider of the cost it will take to start one. It is cheaper in rural areas.

Estimated Cost Of Starting A Community Pharmacy In Lagos

● Registration fee with CAC : ₦60,000

● License: ₦7,000

● Furniture: ₦400,000

● Freezer : ₦50,000

● Electronic (computer, printer, lighting, software and others): ₦5000000

● Rent : ₦40,000 per month

● Operational cost for the first 3 months (salaries of employees, payments of bills)

– ₦3000,000

● Other start-up expenses include stationery (₦5000) and phone deposits

(₦2,500).

● The cost for Start-up inventory (stocking with a wide range of products) –

₦1,00,000

● The cost for our opening party: ₦20000

● Insurance : ₦30000

● Miscellaneous: ₦10000.

We would need an estimated amount of ₦3,000,000 to successfully set up our

community pharmacy store in Lagos Island. This amount includes the salaries of all the

staff for the first month of operation.