Being the owner of an independent pharmacy takes you beyond working strictly for a paycheck.
Pharmacist as Owner
It adds both the opportunity and risk in making a commitment to establishing and running a business in your community. It allows you to make the decisions about the service approach – and to better connect with your customers. Before diving into what you can expect as a community pharmacist owner, you should take a moment to understand the factors that influence your success.
A typical independent pharmacy’s revenue is primarily generated from prescription drugs, followed by over-the-counter products, vitamins, cosmetics, groceries, and other goods. Since what you’re able to pay yourself will ultimately come from the profits you earn and the choices you make, you’ll want to assess the opportunities that new offerings and services can make to the bottom line.
Let’s take a look at a few more metrics. In 2018, the average annual prescription volume per pharmacy dropped by -0.5%%, to 58,823 prescriptions. Estimates show that on a per-pharmacy basis, the owner’s discretionary profit also shrank from $200,000 in 2015 to $129,000 in 2018. During this time, non-owner payroll expenses stayed relatively constant, which means the decrease in owner revenue was directly related to the lower volume of prescriptions per pharmacy.
This industry trend suggests that the salary gap between a pharmacy owner and a pharmacy employee has almost vanished in independent pharmacies that rely heavily on prescription volume to generate revenue, which is to say, most of them. Given that pharmacy owners assume more risks by taking on ownership responsibilities, and the stresses of starting a new business are well-documented, you should also consider potential tradeoffs outside of salary that might affect your decision.
The bottom line is, be sure to understand your customers, what products and services they’ll require, and whether or not you’ll be able to turn a profit before making the significant financial investment into owning your own business. Working with your advising team to evaluate a specific pharmacy opportunity and your business plan is key to making an informed decision.
