In this editorial, we will analyse how to start a pharmacy business in Nigeria. With this, you’ll come to see that setting up a legitimate pharmacy store in Nigeria isn’t as difficult as you thought.
Having a drug store or pharmacy business in Nigeria can be financially rewarding even though you may face a few obstacles on the way. But then again, tell me a business that has no challenge. None, right?
Opening a chemist shop goes beyond making a profit, because you’ll also be providing a valuable service to the society.
It is important to note that in Nigeria, a pharmaceutical store is usually referred to as a drug store, chemist shop, or pharmacy business. Hence, these phrases will be used interchangeably.
An overview of pharmacy business in Nigeria
However, in order to make a pharmacy business lucrative in Nigeria, there are a few steps you must take. And we are here to guide you through those steps. We have done a significant portion of the work for you, which includes market research, how to get a license, how to make financial arrangements and lots more.
At this juncture, I would like to entreat you to read every detail provided on this research. You can even take a step further to conduct your own research, then compare and contrast. If you have any questions, feel free to contact us. A member of our team would respond to you in no distant time.
This is because more than 50% of people fail to extensively educate themselves before venturing into pharmacy business. Such hasty decisions don’t usually yield good results.
Why open a drug store in Nigeria
A popular axiom of business states that ‘the higher the demand for a particular product or service, the greater the financial reward.’
Drugs have become a common component of life as a human. Every once in a while we’re being reminded of how fragile life is when we fall ill.
Sadly, a majority of hospitals established by the government rarely have pharmaceutical supplies. Hence, the doctors write drug prescriptions for patients to procure outside the hospital’s premises.
This, however, creates a business opportunity for drug store owners. Coupled with the fact that a lot of individuals prefer to get over-the-counter medications, rather than see a doctor for proper diagnosis.
While we do not endorse such acts, we are simply stating the ugly reality. And this is one reason why the pharmacy business in Nigeria is very lucrative.
Requirements to open a pharmacy store in Nigeria
When it comes to owning a pharmaceutical store in Nigeria, you have two options:
Option 1: Setting up your own pharmacy store
- According to the statutory regulation of pharmacy in the country, you must be accredited by the Pharmacists Council of Nigeria (PCN) to legally open a pharmacy store in Nigeria.
- To obtain a license from the Pharmacists Council of Nigeria, you must either have a Bachelor’s degree in Pharmacy or a Doctor’s degree in Pharmacy from a college of pharmacy that is accredited by PCN.
- Otherwise, you’d have to employ or enter into a partnership with a qualified professional. Afterward, you can visit the official website of PCN at www.pcn.gov.ng to apply for a license.
This option can be challenging if you do not possess the minimum requirements. The good news is you have another option.
Nevertheless, if you do meet the minimum requirements in this method, make sure to read the guide given below before visiting the council’s official site to apply for a license. There are a few things you must do before you proceed.
Option 2: Setting up a pharmacy business under a franchise
- Another way to legally start a pharmacy business in Nigeria is to partner with a certified pharmacist who already has an accredited drug store.
- By so doing, you’re telling the regulatory body that the new pharmacy business you’re setting up is under the license of an existing one.
While this is a crafty way to start a pharmacy business, it falls within the legal framework. Hence, this is another legal way to start a pharmacy business in Nigeria.
Benefits of starting a pharmaceutical business under a franchise
- This makes it possible for someone without any pharmaceutical certification to have a controlling interest in the pharmacy business.
- It eliminates the difficulty of obtaining a pharmaceutical license since the franchise pharmacy you’ve partnered with has one already.
Now, let’s take a look at the necessary steps one has to take in order to successfully open a drug store in Nigeria.
How to start a pharmacy business in Nigeria (2020)
Here are steps to follow when opening a drug store in Nigeria;
- Analyse your community
- Search for the right location
- Learn from successful pharmacists
- Draft a business plan
- Raise some capital
- Contact a reliable supplier
- Acquire all the necessary equipment
- Obtain a license
- Register your business
- Hire an employee
- Promote your business
These are steps are to be followed in an orderly manner, for skipping a step could yield an undesirable result. A summary of each step is given below.
1. Analyse your community
It is very important to understand your target market before venturing into any business. This also applies to the pharmacy business. It will help you to know the kind of services that people will expect from you when you open your start your drug store.
Your goal should be to do better than your potential competitors. When the services you offer stand out, it gives you a better chance to penetrate the market.
How to analyse your community
- Ask the right questions. If a chemist shop was once in that community but it’s now closed, it is in your best interest to know the exact reasons why it stopped functioning. This would prevent you from making the same mistakes as did this owner.
- Engage members of your community in a casual conversation to identify what they feel the chemist shop in that locality isn’t doing right. Then work on that.
- Study the population distribution of your community to ascertain which demographic group is dominant. Are there more children in your community? If so, you may want to explore offering pediatric services.
You can become more successful than others who started before you, if you offer a form of specialized services that your potential competitors do not offer.
What is the financial position of residents in your community? If the people in your community are not financially stable, you may offer some discounts to attract customers. Besides, in such an area the cost of renting a store for your business shouldn’t be too high.
2. Search for the right location
Choosing a location has significant consequences. This could either make or break any business. Competition may be good but too much of it will definitely stifle a new business.
Opening a chemist shop in a place where there are too many existing ones will make it every aspect of your business difficult. Even if you up your game, it will be difficult to offer better services than everyone else.
And even when you do, how would people know if they don’t patronize you. Therefore, you may have to incur more costs to promote your business.
How about starting a pharmacy business in a hidden corner? Well, if you do that, you’d have to mount several signposts to tell people that you exist. Even then, you can’t be sure they’ll follow the signpost.
Suitable places to open a drug store
- For that reason, it is best for new businesses to be located in a visible area. A place where people can easily access your store. Opening a chemist shop in a busy area is one of the smartest decisions on could make for a pharmacy business.
- Even better, you could rent a store close to a government hospital. Since doctors in government hospitals often write a prescription for patients to buy outside the shop because they usually do not have drugs in such hospitals.
However, if the government hospitals in your community have too many drug stores nearby, you should pick the first option.
3. Learn from successful pharmacists
The first few years of starting a business are usually the most cumbersome. Every business person or entrepreneur has experienced this at least once. Hence, to be better prepared for what lies ahead, you have to discuss with people that have passed through the path you have chosen.
If you know any successful pharmacist, you can meet them and ask for advice. Make it obvious that you wouldn’t create any competition for them. This is because if they see you as a potential competitor, they wouldn’t be comfortable enough to tell you some intricacies.
Better still, you can join the association and confide in other certified pharmacists who barely know you. That way, you wouldn’t be seen as a threat. Thus, they can reveal the risks associated with starting a pharmacy business and how to mitigate such risks.
This step will prove useful later on because it will help you in the steps that follow and prepare you for the challenges that may arise after commencement.
Here is another reason why you shouldn’t skip this step. If you do not have any degree in pharmacy, which is the minimum requirements of the Pharmacist Council of Nigeria (PCN). You can find a franchise pharmacy that would partner with you in this step.
4. Draft a pharmacy business plan
At this point, you must have analysed your community, chosen a suitable location for your drug store, and spoken with certified professionals.
The information gotten from the above steps will aid you to draft a business plan. This plan will contain how you will source for capital, the equipment you need, how to grow your business, and how to increase profitability.
You can also include details of what gives you an edge over existing pharmaceutical stores, the specialised services you offer, and a breakdown of cost.
Important questions to examine before starting a pharmacy business
How much would renting a store cost you? What is the cost of pharmaceutical supplies? What quantity show you buy? How long will it take to sell the pharmaceutical supplies before it expires? How do you break even or make a profit? How long will it take before you start making a profit?
Now you see why we said you can’t skip a step. The information gotten from steps one to three will help you to draft a good business plan.
5. Raise some capital
At this stage, you would have already determined how you intend to get the needed finance to start the business. This should be clearly stated in your business plan. You need this capital to cover the opening and operating costs of your business.
Perhaps, you have been saving some money to fund the commencement of this business. If you have the intention to open a large scale pharmaceutical store, this may require you to take a loan.
If you decide to take a loan, you’ll need the business plan you’ve developed. The better your business plan, the greater your chances of getting a loan from a bank.
On the other hand, you could consult family members, friends, or private investors to provide you with some funds. There must be an agreement on how you intend to pay back. You could choose to pay back with interest or they could own a part of your business.
6. Contact a reliable supplier
Now you have to reach out to a reliable pharmaceutical supplier. Since you’ve interacted with some experienced and successful pharmacists, they might have connected you with one.
You need to be sure of the quality of drugs he supplies. Whether it is branded or unbranded (generic), these drugs should have been vetted by the regulatory authorities in the country. The NDLEA and NAFDAC have contributed to alleviating the number of fake drugs in the market. You do not want to start your drug store with a bad impression that you sell substandard products.
Due diligence is required on your part because giving flimsy excuses like you didn’t know they were fake drugs wouldn’t shield you from the consequences.
7. Acquire all the necessary equipment
If you are setting up a small scale pharmacy business, you need just a few equipments. For example, you’ll need some counters, some shelves, a few seats (two to four), a calculator, etc.
For a large scale pharmacy business, you’ll need a security system (security cameras), computers, and all the necessary software, phones and phone lines, cash registers, good-quality chairs for waiting areas.
Additionally, you’ll need some vials and pill bottles, inventory for the front of the store, over-the-counter medications, cleaning supplies, paper towels, topicals, and products that were written on your business plan.
Make sure your store is well organised. This will make it easier for you to find drugs that your customers may request. Also, ensure the environment is neat, and some chairs have armrests so elderly or disabled patients can get up easily.
Furthermore, as a common practice, your drug store should be painted with white oil paint.
8. Obtain a license
Whichever means you have decided to execute your pharmacy business plan, you need to have a license to legally sell drugs in Nigeria. If you are starting a pharmacy business under a franchise then getting a license would be too easy.
However, if you are setting up your own chemist shop you’ll need to apply for a license from the Pharmacists Council of Nigeria (PCN).
9. Register your business
It is a statutory requirement in Nigeria that all businesses must be registered. Having gotten to this stage, the details you need are the pharmacy business name, the location, the size of your business, a copy of your license, and other information and documentation.
This is quite straightforward. And you shouldn’t encounter any challenge, ceteris paribus.
10. Hire an employee
For a small scale pharmacy business, you may need just one employee. As a large scale pharmacy business, you would need five to fifteen employees which will include cashiers, security personnel, storekeepers and attendants or technicians, an accountant, and a manager.
If your pharmacy business isn’t under a franchise, and you do not have any degree in pharmacy, you’d need to employ a pharmacist to avoid legal actions.
11. Promote your business
There are several ways to advertise or promote your business. You can use banners on strategic locations, flyers, place an advert on a newspaper or T.V. station, or use social media to promote your business.
Your choice of advertisements depends on how large your pharmacy business is and what fits into your budget. With good social media accounts, you can broadcast your services to people around you. Also, encourage your staffs to do the same