In this article, you will learn all what you need to start a profitable pharmacy business in Nigeria. This will include; steps to start pharmacy business, cost of starting pharmacy business, how to make your pharmacy business profitable and many more.
Starting a pharmacy business in Nigeria is one way to make money while you’re caring for your community. Unlike the Patent Medicine store, pharmacy business is supposedly run by trained Pharmacist or in partnership with a Pharmacist. But, both businesses deal on the sale of drugs and medications for treating human illnesses and sicknesses. Pharmacy business is one of the few flourishing businesses in Nigeria. People spend money on daily basis to buy drugs to treat one ailment or the other making pharmacy business a lucrative venture.
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Different types of pharmacy Store to start in Nigeria
There are many different types of pharmacy outlet you can start if you’re a trained pharmacist. The common ones are:
- Hospital pharmacy – this type of pharmacy store is run in conjunction with hospitals or clinics.
- Retail pharmacy store – this is also known as the Community Pharmacy. The retail pharmacy store business is the type you can start in Nigeria as a trained pharmacist.
A market survey we carried out in Abuja, Lagos, Enugu and Ogun state shows that the retail pharmacy business is a profitable business although highly competitive and capital intensive. The net profit margin is up to 40% on many drug products and annual ROI is over 65%.
Apart from being competitive, the pharmacy business faces the issue of expired drugs, fake drugs and counterfeit medicines. The National Agency for Food and Drug Administration and Control (NAFDAC) frowns at that. A lot of campaign is on-going against counterfeit drugs.
Another challenge you’ll face in starting retail pharmacy business is the high startup capital. That is to say that, apart from meeting up with the professional and legal requirements; you’ll need to raise a huge start-up capital for this business which is not easy to do. Interestingly, in the long-run the profit margin in this business will outweighs all these challenges.
Now that you’re equipped with the kind of pharmacy store you can start in Nigeria and some of the challenges you might face, let’s look at how to start the pharmacy business…
How to Start Pharmacy business in Nigeria
Here are steps you can follow to start a profitable pharmacy business in Nigeria:
Get trained as a Pharmacist
Before you can start a pharmacy store, the first step to take is to get trained as a pharmacist. You must either be a fully trained and registered pharmacist or your partner with a trained pharmacist before you can open a pharmacy business in Nigeria. In other words, only a Pharmacist can own a Pharmacy drug store in Nigeria.
Non-Pharmacists can however deal in Wholesale pharmacy though you will still need the assistance of a Superintendent Pharmacist to register the Pharmacy with the Pharmacists Council of Nigeria (PCN).
Carry out a feasibility study
The next step is to carry out market feasibility studies. Ask questions and find out what those who are already in the pharmacy business are doing. Undertake necessary research by browsing the internet to get the knowledge needed, as well as read books by various pharmacist authors on how you too might get started.
You also need to take into consideration your demographics – the people you’re targeting and their income levels. Are they low, middle or higher income earners? This will help in your pricing. Though, most pharmaceutical companies’ places price limits for their drugs.
Register your pharmacy company with CAC
Register your Pharmacy Company with Corporate Affairs Commission (CAC) when starting is very important. In terms of share of the company, the Pharmacist must have like 60% shares of profit in the company if you’re partnering with a pharmacist while you gets 40%.Otherwise you may not be able to proceed later.
Although, you can reach a mutual agreement with the pharmacist. Your forms must be clear about who owns the Pharmacy (the Pharmacist) and who is/ are the other Director(s). I have this article on how to register a business with CAC in Nigeria, it will definitely be of help.
Find good location and a store
You have to find a good location for your pharmacy store if you want to make money in this business. A highly dense residential area will be a perfect location for this business. If you have a good location with your 40% share (as non-pharmacist) in the company, you can make money in the long run than many other retail businesses.
One Pharmacy store can make sales of 1million naira in just a single day. This is not common anyway; it can only happen with excellent locations and great customer care service. In moderately good locations, a pharmacy can make an amount less than N300000 – N500000/day. This is the commonest sales rate of most pharmacy in moderately good locations.
Most Pharmacies shut down mostly because of bad location and poor management. They assume they don’t need expert advice- especially true for pharmacists- and end up wasting their investment.
If you have your own shop, that’s fantastic but if not, you will need to find a way of tying down the location to go through the process of approval. Otherwise, buy an old pharmacy store, rename and rebrand it.
Employ Superintendent Pharmacist if you’re not a Pharmacist
Employ superintendent pharmacist if you’re not a pharmacist is another step you need to take. Otherwise, you will not be able to operate the pharmacy business in Nigeria. That’s because the rules and regulations governing the operation of pharmacy in Nigeria will requires that you need to be pharmacist to own a pharmacy business. To save yourself from stress, let your Superintendent Pharmacist be the same as the Pharmacist who is your partner.
The payment for this role is however different, you have to note that. In fact, it’s in two phases, you will pay for the License to register the Pharmacy with PCN and then, you also pay the pharmacist the monthly salary based on agreement. It is the Superintendent Pharmacist that will register the Pharmacy with Pharmacists Council of Nigeria (PCN).
In other to register the pharmacy business with PCN, the Superintendent Pharmacist takes the following steps:
Write for Location Inspection
The Superintendent Pharmacist (SP) will write to the PCN Registrar through their state office requesting for inspection location. Payment is then made to the bank. The Superintendent Pharmacist should be able to find out current charge from your state PCN office.
It is advisable you start this process around June or early in December or seek local advice through the Superintendent Pharmacist from the state Pharmacists Council of Nigeria office. I said you should start the process in December because the plan for inspection will be in the following year so you can be among the first to be inspected in your own locality.
This is not always so anyway; a lot of politics are involved. Then June, because it may take 6months or more to complete the registration process and this can save you paying for License twice before starting real business. You can’t be so sure how fast or slow the process will be as at now.
Collect and fill necessary forms and return them to the PCN office
Your Superintendent Pharmacist can help you collect and fill necessary form. Your Superintendent Pharmacist should carry you along when doing this, to avoid unnecessary mistake.
Set up the Premises but DON’T STOCK THE STORE YET
Once your location is approved, you may be asked to start setting up the Premises for business. You should be given some requirements- things to put in place like your shelves, fire extinguisher, Pharmacist office, A/C, Poison Box and some books. You may be asked to pay some fees at this stage to collect the requirements.
Apply for Registration of Pharmacy Premises
Your premises will be inspected to see if you met the requirements and you will also be asked to pay for the license and registration. The Superintendent Pharmacist is the one that will help in doing all this. In fact, PCN will not want to deal with you if you are not a Pharmacist. Secondly, you don’t even need to be there during all the inspections. Only the Superintendent Pharmacist and the Pharmacist on the Board of Directors (if different) are expected to be seen.
Please, note that each year’s registration usually ends December. If you start too early and the inspection was made, and you commence the next step. You may need to pay for registration of premises twice before commencing the pharmacy business.
But like I said, the process is not so predictable. It is better to prepare to wait for 6-8months approval. This means that if the Superintendent Pharmacist is not the same as the Pharmacist on Board of Director, you need to be ready to keep paying the Pharmacist “salary” to “tie her/him down” till the process is completed otherwise the SP may not be available for the inspections.
The short cut to all these is to buy a Pharmacy that is on sale when you are sure you’re ready but it comes with its own challenges too.
Employ qualify candidates who will work with you. You may consider putting up an advert on the local Advert boards as well as the newspapers for the various vacant positions. These positions would include the post of:
- Pharmacy technician
- Stock takers/store keepers.
Start your Pharmacy Store
Once registered, you will be given a copy of all the documents and then you can go ahead with stocking and the business proper.
Contact the various drugs and pharmaceutical companies. Establish a good rapport with them while describing your pharmaceutical needs when seeking for drug suppliers or dispensers. The best place to get drug suppliers is in Lagos, Nigeria. Most pharmaceutical companies have their headquarters there. You can also purchase drugs from Onitsha, Anambra State but most suppliers there are cheats(Most of them deal on fake products).
In terms of pricing, the individual pharmacy fixes the price of each of their drug. An investment of N7 million could yield over N5.5 million as Profit after tax within 12 months. The good thing about the pharmacy business is that you can combine it with several complementary businesses like cosmetics business.
Advertise your Pharmacy business
Finally, produce handbills, calendars and brochures to share to people as way to advertising and promoting your pharmacy store. Also, tell people about your new pharmacy and the quality of your products. You can consider giving out free drugs to a sect of persons.
The above are steps on how you can start your own pharmacy drug store business. Above all, serving your clients or patients should be your top priority at all time if you must succeed in this business.
Cost of Starting New Pharmacy Store in Nigeria
The cost for opening a new pharmacy drug store depends largely on your entry level. You can choose to enter the business in medium scale or on large scale depending on your financial capacity. But with capital of N7, 000,000 – N10, 000,000; you can start a new standard pharmacy store in Nigeria. Here is the breakdown for the cost of starting pharmacy store in Nigeria;
- POS retail system – N180,000
- 2 Fridges – N250,000
- Pharmacy Shelves – N600,000
- Inventory – N5,000,000
- Rent – N600,000
- Contingency – N300,000
- Cash at hand – N400,000
- Other expenses – N900,000
How to Make Your Pharmacy Business More Profitable
To make your pharmacy business more profitable, you need to brand your pharmacy. Doing all the registrations and starting is not enough.
- Begin with a bang.
- Design or Get a professional to design your logo
- Get a good mobile friendly website
- Go on social media and start a blog where you discuss health related matters.
- Put up strong marketing strategies
- Respond fast to your customers complaints and there you are.
I wish you all the best as you start your Pharmacy (drug store) business in Nigeria!