Choosing to open your own pharmacy is the first step toward building your business. The decisions made during the initial phases will influence how well it grows, how profitable it is, how efficiently it can be managed, and how successful it will be.
Select an easy-to-say, read and type name. It may be different from the official corporate name. If it is
different, it is called a DBA (doing business as) name and requires a separate filing in the state of the
Google the name and check for competition. It is lawful to reuse a name from a different state, and even
the same state if use and geography are not confusing. See your attorney for details.
Work with an attorney or accountant to select the corporation structure, such as an LLC, S-Corp, or other.
These are IRS-set entities that each have different tax consequences and processes.
Avoid common pharmacy names, or trying to be overly clever.
Apply for an Employer Identification Number (EIN)
Get federal and state tax IDs
Apply for a business license and permits, if applicable
Open a business bank account
Apply for appropriate trademarks, copyrights or patents
Purchase insurance policies
Obtain a Facility or Location
Leasing is difficult to start because landlords usually want 3-5 years to start. For a starting business,
it is emotionally difficult to commit. But, when your business does well, you will appreciate the stability
of a lease. It is not uncommon for a landlord to evict and rent at a higher rate to a new pharmacy once the
site is built up and the business is established.
Location is critical.
Locating near writing physicians is still important as it aids in establishing relationships.
Don't underestimate the size required; determine the professional and retail space required.
Target more than the lawful minimum, but a professional pharmacy may exist well on 300-400sqft to start.
Normally a pharmacy can run smoothly under 1000 sqft for years.
Try to obtain a lease extension option and have an option to sublease, in case a small clinic, testing
service, or another office service may need space.
Licensing - Board of Pharmacy License
Pharmacy and pharmacist licensing is required.
State and Federal (DEA) licensing required
Research all the requirements and carefully complete the forms.
Recognize that certain facility systems may need to be operational before State licensing, such as
facility insurance, water, counseling area, pharmacy systems, and similar.
Certificate of Occupancy and Fire Evacuation Plans are almost always needed prior to State inspection.
Apply for the DEA Certificate as soon Board of Pharmacy Licensing is obtained.
If payroll is to be issues, apply for an unemployment insurance license (number).
Find a business insurance agent:
Purchase building (or rental) insurance.
Purchase workman's compensation insurance.
Purchase business facility (liability insurance).
Purchase business auto insurance.
Michigan LLC Creation
Attorneys can manage all the paperwork for the State and IRS, but the process for an LLC is relatively simple and can be done on its own. Below are the basic steps for filing in Michigan to assist in understanding the process.
Information needed in advance:
Choose your favorite attorney to use as Resident Agent. If there is any official correspondence to the corporation, it will go to the Resident Agent.
With the above information, a bank account should be allowed to be opened.
Sales tax license.
Locate security/alarm company:
This is required for most pharmacies to have an active alarm that is monitored.
Wise to invest in video surveillance systems for drug shelving, pharmacy counter, and retail area.
Internet security with IT management:
Most pharmacies forget this is important need and think that the Cable router's firewall is sufficient or the computer company's server is sufficient.
Most pharmacy software vendors specifically do not monitor networks, have retreated to just supplying the data server, and don’t set up security. It is the responsibility of the pharmacy. Find a pharmacy vendor that not only provides pharmacy software but also provides network and system security.
IMS/IQVIA reporting as many pharmas use this for doctor rating.
PDMP controll reporting:
Opioid reporting, wholesaler know your pharmacy.
Policy book for key staff functions and duties pertaining to 5 Star program, Track & Trace (DSCSA), among others.
Be aware of additional contracts and integration requirements.