Business plan for opening a pharmacy, with a financial model
DATE OF THE REPORT: 06/05/2020
SCOPE OF THE REPORT: 165 pages, 62 tables, 22 graphs, 14 diagrams and 6 figures.
METHOD OF PROVIDING: in electronic form
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The document is an economic justification for the feasibility of opening a pharmacy. For all key issues, this business plan is typical - its implementation is possible in any subject of the Russian Federation. When drawing up the financial plan, the values of the parameters that determine the regional specifics (rental rates, wages, the level of effective demand) were taken in relation to Moscow.
The main source of data for financial calculations was interviews with the owners of the pharmacy business, a comprehensive analysis of the experience of functioning of successful pharmacies, the results of a marketing study, assessments of industry experts, interviews with representatives of Rospotrebnadzor, an analysis of the regulatory framework of the market and other primary and secondary information.
Financial reports are generated on the basis of a model developed by Inventica. To assess the effectiveness of investments, the discounted cash flow (FCF) method was used.
The business plan was drawn up taking into account the requirements of UNIDO, has repeatedly passed the approval procedure in credit institutions of Russia.The concept of the project is a reflection of the most promising, from our point of view, market entry strategy for a new pharmacy.
If necessary, the concept can be easily adjusted, while all financial indicators of the project can be automatically recalculated using the attached model (see below "Features").
The essence of the project
Trade form: closed layoutBasic services: sale of finished medicinal products (including homeopathic ones) on prescription and without a doctor's prescription without the right to manufacture medicinal products; sale of personal hygiene items (in particular, skin care products, hair care products, aromatic oils and others), medical, children's and dietary food (in particular, food additives for medical and prophylactic purposes and others), cosmetic and perfumery products and other parapharmaceutical products.
Additional services: telephone information, ordering missing products, issuing orders www.apteka.ru.
Pharmacy area: 52 m2 in total, including sales area - ... m2, warehouse and utility rooms - ... m2, administrative and utility rooms - ... m2.
Cost structure of sales: Parapharmaceuticals - 20.4% (including dietary supplements - 4.9%, cosmetics - 3.7%, other parapharmaceutical products - 11.8%); ZhViNLS - 28.4%, non-ZhViNLS - 51.2%.
Average number of buyers: 160 people / day
Average check: .. rub.
Average trade margin: Parapharmaceuticals: dietary supplements - 36.5%, medicinal cosmetics - 39.5%, selective cosmetics ...%, mass-market cosmetics - ...%, other goods –40%; non-ZhVINLS - ...%, ....
Staff: 5 people
1) The business plan of the pharmacy is developed in close cooperation with the current leaders and industry experts of the pharmacy business.
2) Financial calculations were carried out using Excel-model, which is a proprietary development of Inventica.
3) The financial model is 100% automated
• Parameter values can be changed.
• The total number of parameters entered into the financial model is more than 500 (month of the start of the project, list and cost of obtaining permits, area of premises, equipment and its cost, staffing, rental rate, number of customers, average bill, margin, credit conditions, etc. ).
• Changing any of the project parameters leads to automatic recalculation of the model.
• The ability to quickly recalculate allows you to independently calculate various strategies and scenarios for the development of your business, even if you do not know the basics of financial modeling and investment management.
Thus, you get a universal decision-making tool that will allow you to select the optimal values of the parameters for the functioning of your future pharmacy:
• area and rental rate;
• sales volume and markup;
• tax regime;
• location of the pharmacy: center, TTK, outskirts, etc. (you can change the rental rate);
• staffing table, salary grid, payment system (white / gray);
• equipment: price segment, quantity, cost (in accordance with your proposed project concept);
• month of the start of the project;
• region: any (it is possible to adjust the values of the parameters depending on the location of the project);• terms of the franchise;
• etc. (all parameters can be changed).
In addition, you can analyze the project's resistance to external and internal changes. For example, how does the profit change in the case of an increase or decrease:
• area of the premises for __ sq.m.,
• rental rate by __%,
• staff salaries by __%,
• the number of clients per __ person,
• an average check for __ rubles. or __% markup,
• etc.
The process of working with the financial model is simplified as much as possible, which allows you to independently calculate the economic efficiency of the project, even if you do not know the basics of financial modeling and investment management.
The financial model is attached to the business planINTRODUCTION 10
Intellectual Property Rights 10
Risk and responsibility level when drawing up a business plan 10
Chapter 1. PROJECT SUMMARY 11
Project essence 11
Main objectives of the project 12
Marketing Effort 13
Total project cost 13
Financial Outlook and Key Performance Indicators
kta 14
Chapter 2. LEGAL ISSUES 16
Normative legal acts regulating the activities of pharmacies 16
Organizational and legal form 16
Registration of a company (individual entrepreneur or LLC) 20
Pharmacy type 23
Key regulatory requirements for pharmacies 25
Rooms 25
Equipment 26
Assortment 27
Lease agreement or certificate of ownership of premises 28
Redevelopment approval 30
Definition of room conversion 30
Project Documentation 31
Authorized bodies and organizations 33
Sanitary and epidemiological requirements and fire safety requirements 34
Package of sanitary documents 34
Sanitary and Epidemiological Conclusion 34
Licensing of pharmaceutical activities 36
State Fire Control Documents (some subjects) 38
Online cash register connection 42
Drug labeling 43
Conclusion GPN 43
Permit to trade 43
Sign Permit 43
Budget for registration of permits 45
Chapter 3. MARKETING RESEARCH 47
Number of pharmacies in RF 47
Dynamics of the number of pharmacies 47
Market structure by types of pharmacies 48
Market share of single pharmacies 49
Largest market participants 50
Pharmacy operating parameters in RF 52
Monthly Revenue by Pharmacy Type 52
Average bill by type of pharmacy 54
Number of checks per day by type of pharmacy 55
Pharmacy area 55
Pharmacy market size in RF 56
Sales of medicines in pharmacies 56
Sales of pharmaceuticals in pharmacies in value terms 56
Sales of pharmaceuticals in pharmacies in quantitative terms 57
Sales structure in pharmacies: Russian / imported drugs 58
Sales structure in pharmacies: prescription / non-prescription drugs 58
Sales structure in pharmacies: VED / non-VED 59
Sales structure in pharmacies: by ATC group 60
Sales structure in pharmacies: drugs with the highest sales volume 61
Sales structure in pharmacies: by the cost of drug packaging 61
Drug price growth 62
Sales of parapharmaceuticals in pharmacies 63
Sales of dietary supplements in pharmacies 63
Sales of cosmetics in pharmacies 65
Sales of other non-drug assortment in pharmacies 68
Online Pharmacy Market 69
Pharmacy market in 2020 70
Sales growth in Q1 70
Market Forecast 71
Chapter 4. PROJECT CONCEPT 73
Pharmacy type 73
Services provided 73
Additional service 74
Chapter 5. MARKETING STRATEGY AND PLAN 77
Marketing objectives of the project 77
Selecting a location 77
Demographic factors 77
Competition level 78
Functional location 78
Trade zone type 79
Infrastructure 80
Pricing policy 81
Assortment policy 86
Purchasing Policy and Suppliers 88
Advertising Policy 90
Investment Stage 90 Promotional Events
Operational phase promotions 92
Promotional work 93
Pharmacy “Growth Points” 95
Chapter 6. INVESTMENT STAGE OF THE PROJECT 96
Project schedule 96
Selection of premises 97
Recruiting 98
Getting a loan 100
Registration of permits 100
Design 100
Repair of premises 102
Promotional Events 102
Purchase of equipment and furniture 102
Shopping area 102
Exhibition equipment 105
Storage equipment 106
Administrative premises 107
4 Furniture and equipment for the head of the pharmacy 107
Places of goods expert 108
Furniture and equipment for staff, dressing area 108
Pharmacy automation 109
Carrying out telecommunications 110
Telephone line and Internet 110
Security and fire alarm 111
Video surveillance system 111
Climate system and ventilation 112
Lighting 112
Plumbing equipment 112
Household expenses 113
Contingencies 113
Purchase of products 113
Investment Stage 114 Cost Budget
Financing the costs of the investment stage 116
Chapter 9. OPERATIONAL STAGE OF THE PROJECT 117
Organizational structure 117
The main items of expenses of the operational stage 117
Purchase of goods 118
Wage fund 118
Community expenses 119
Electricity 119
Heating 119
Water supply 119
Resource consumption cost 120
Territory cleaning 120
Rental expenses 121
Advertising costs 121
Telecommunication expenses (installation of telephones, security and fire alarms) 121
General operating expenses and equipment repair 122
Cost of purchasing supplies 123
Equipment insurance 124
Other expenses 124
Operating budget 125
Borrowed funds 125
Operating Phase Main Revenues 126
Sales structure 126
Extra 126
Average check and number of customers 127
Seasonal content 127
Reaching design capacity 128
Additional income 128
Operating revenue budget 128
Chapter 10. FINANCIAL PLAN 130
Conditions and assumptions 130
Inflation 130
Tax environment 131
Profit and Loss Statement 132
Cash flow statement 134
Forecasted balance 135
Tax payments budget 135
Chapter 11. EVALUATION OF PROJECT PERFORMANCE 136
Structure of operating expenses 136
Cost-benefit analysis 136
Project profitability 136
Net profit 137
Discount rate calculation 137
NPV, payback period, IRR 139
Business value 140
Break-even point of the project 141
Key investment and financial indicators of the project 142
Chapter 12. RISK ANALYSIS 143
Organizational and Management Risks 143
HR risks 146
Risks of interaction with suppliers 148
Pricing risks 150
Technological risks 153
Financial risks 155
Economic and market risks 156
Force majeure (force majeure) 159
Appendix 1. Revenue, average check and number of checks per day in the TOP-100 pharmacy chains of the Russian Federation 160
List of charts
Schedule 1. Dynamics of the number of pharmacies in Russia (thousand units), 2011-2019 47
Chart 2. Number of residents served by one pharmacy, 2018 48
Schedule 3. Dynamics of commissioning of new housing in the Russian Federation, 2011-2019. 48
Graph 4. Level of concentration of market participants, 2017-2019 fifty
Schedule 5. Dynamics of the monthly revenue of pharmacies in the Russian Federation, 2016-2019 52
Chart 6. Dynamics of average monthly revenue by types of pharmacies 52
Graph 7. Dynamics of the average check in pharmacies in the Russian Federation 54
Chart 8. Dynamics of the average bill by network affiliation of pharmacies 54
Chart 9. Average bill by type of pharmacy 55
Schedule 10. Number of receipts per day in pharmacies depending on the type of pharmacy 55
Schedule 11. Dynamics of the average floor space in pharmacies in the Russian Federation (sq. M.), 2011-2019 56
Schedule 12. Dynamics of the volume of the commercial drug market in value terms, 2015-2019 57
Schedule 13. Dynamics of the volume of the commercial drug market in quantitative terms, 2015-2019 57
Schedule 14. Dynamics of the value of sales of parapharmaceuticals in pharmacies, 2013-2019 63
Schedule 15. Dynamics of sales of dietary supplements in value and quantitative terms, 2015-2019 64
Chart 16. Dynamics of sales of cosmetics in pharmacies in value and quantity terms, 2015-2019 66
Schedule 17. Seasonality of pharmacy sales 128
Schedule 18. Income, expenses and net profit for the project 137
Schedule 19. Cumulative total project net profit 137
Chart 20. Cumulative cash flow and NPV 140
Chart 21. Sensitivity of NPV to changes in sales volume 141
Figure 22. Sensitivity of net profit to changes in sales volume 141
List of charts
Diagram 1. Market structure by types of pharmacies, 2011-2019 49
Diagram 2. The structure of pharmacies by network. 2016-2018 49
Chart 3. Share of out-of-chain pharmacy retail in revenue depending on the region, 2018 50
Chart 4. Structure of pharmacies by income 53
Diagram 5. Structure of sales of medicines (Russian / imported) in value and quantity, 2018-2019 58
Chart 6. Structure of sales of medicines (prescription / non-prescription) in value and quantity, 2018-2019 59
Chart 7. Structure of sales of medicines (VED / non-VED) in value and quantity, 2018-2019 59
Chart 8. Structure of retail sales of medicines by package value, 2018-2019 62
Diagram 9. Structure of dietary supplements sales in pharmacies by package price, 2019 64
Chart 10. Structure of sales of cosmetics in a pharmacy by product segment, 2018-2019 67
Chart 11. Structure of sales of cosmetics in pharmacies by purpose of the product, 2019 67
Chart 12. Structure of sales of non-drug assortment in pharmacies, 2019 68
Diagram 13. Structure of investment expenses 115
Chart 14. Structure of operating expenses 136
List of tables
Table 1. Schedule of expenses of the investment stage (in thousand RUR) 14
Table 2. Main investment and financial indicators of the project 14
Table 3. Comparison of forms of ownership (individual entrepreneur and LLC) 19
Table 4. Investment budget for registration of permits and licenses for the project, thousand RUR 45
Table 5. TOP-30 pharmacy chains by sales volume, 2019 51
Table 6. Sales of medicines in pharmacies by ATC group, 2019 60
Table 7. TOP-20 drugs by retail sales in pharmacies, 2019 61
Table 8. TOP-10 types of dietary supplements by retail sales in pharmacies, 2019 65
Table 9. Revenue of the largest online pharmacies, 2019 70
Table 10. Comparison of the marketing strategy for positioning pharmacies with high traffic and located in "sleeping" areas 80
Table 11. The principle of forming the assortment of the pharmacy 86
Table 12. Promotional Activities and Marketing Budget of the Investment Stage 91
Table 13. Promotional Activities and Marketing Budget of the Operational Phase 92
Table 14. Dependence of the commission of the real estate agency on the monthly rent for the premises 98
Table 15. Pharmacy premises area 98
Table 16. Cost of repair and construction works 102
Table 17. Equipment for the sales area of the pharmacy 104
Table 18. Exhibition equipment 105
Table 19. Equipment of material rooms 106
Table 20. Equipment and furniture for the head of the pharmacy 107
Table 21. Equipment and furniture for the head of the pharmacy 108
Table 22. Equipment and furniture for staff, dressing area 108
Table 23. Equipment and furniture for the head of the pharmacy 110
Table 24. Security and fire alarm equipment 111
Table 25. Video surveillance system equipment 112
Table 26. Plumbing equipment 112
Table 27. Costs for the initial purchase of products 114
Table 28. Budget of expenses of the investment stage (thousand RUR) 115
Table 29. Financing of the investment stage of the project (in thousand RUR) 116
Table 30. Expenses for the purchase of pharmaceutical products (thousand RUR) 118
Table 31. Staffing list 118
Table 32. Calculation of consumed water 120
Table 33. Cost of the main types of resources (thousand RUR) 120
Table 34. Cost of cleaning the territory (thousand RUR) 121
Table 35. Expenses for advertising and sales promotion (thousand RUR) 121
Table 36. Parameters for calculating the cost of maintaining telecommunication systems 122
Table 37. Current expenses for telecommunications (thousand RUR) 122
Table 38. Parameters for calculating the cost of repairing equipment and the dynamics of general expenses and costs for repairing equipment (thousand RUR) 123
Table 39. Costs for the purchase of consumables (thousand RUR) 124
Table 40. Operating budget of expenses 125
Table 41. Structure of pharmacy sales in value terms 126
Table 42. Margins (in% of the purchase price) 127
Table 43. Operating income budget (VAT included) 128
Table 44. Inflation rates 130
Table 45. Rates of main taxes 131
Table 46. Rates of contributions to state extra-budgetary funds 132
Table 47. Forecast of changes in marginal wages used in calculating the amount of insurance payments for the period 2020-2025, thousand RUR 132
Table 48. Profit and loss statement (in thousand RUR) 133
Table 49. Cash flow statement (thousand RUR) 134
Table 50. Balance sheet, thousand RUR (at the end of the year) 135
Table 51. Budget of tax payments (in thousand rubles) 135
Table 52. Profitability indicators 136
Table 53. Initial data for calculating the cost of equity capital 138
Table 54. Calculation of WACC 139
Table 55. Calculation of NPV 139
Table 56. Calculation of NPV + TV 140
Table 57. Main investment and financial indicators of the project 142
Table 58. Change in key indicators with an increase in the investment stage by 1 month 143
Table 59. Change in key indicators in case of non-compliance with sanitary-epidemiological and fire conditions of the pharmacy 144
Table 60. Change in key indicators with a decrease in the cost of services by 1% 151
Table 61. Change in key indicators when the investment budget is exceeded by 1% 155
Table 62. Change in key indicators with a decrease in the planned sales volume 157.
List of figures
Figure 1. The procedure for obtaining the conclusion of the SES 37
Figure 2. Schedule of investment stage 97
Figure 3. Schematic arrangement of commercial equipment in a pharmacy with a closed display of goods 103
Figure 4. Determination of the optimal location of goods in the shop windows 103
Figure 5. Pharmacy automation scheme 109
Figure 6. Organizational structure of a pharmacy 117
The annual growth in the number of participants in the pharmacy market over the past 9 years has been fixed at 3.9% per year, which is equivalent to the appearance of 2,100 new pharmacies per year.
On average in the country, one pharmacy serves about 2,250 people. In terms of the level of competition, the most favorable situation for the arrival of new players is observed in the North Caucasian and Far Eastern districts, where one pharmacy serves 45-50% more residents than the average for the Russian Federation. Here, the markets are characterized by the lowest degree of consolidation (for example, in the North Caucasus Federal District, the share of single pharmacies reaches 35%).
The growth of the Russian pharmacy market is primarily due to the high volumes of new housing commissioned. Thus, the volume of annually commissioned residential premises in the Russian Federation has varied in recent years in the range from 70 to 85 million square meters, which is equivalent to the appearance of 0.93 - 1.2 million new apartments, designed for 2.5-4.5 million new tenants.
The strategy for entering the market of a new participant is to open a pharmacy in a new residential neighborhood at the rate of 1 pharmacy for 5-8 houses, depending on the number of residents in the house, and further sell the business to a large network project.
