Refresh Your Pharmacy With a Remodel

When your pharmacy first opened its doors, it was probably decked out with the era’s most stylish decor. But after two or three decades, those once-stylish features may now read as dated and send the message to your patients that the practice is stuck in the past.

You want your pharmacy’s look and feel to reflect the quality of care you provide, and if the space appears a little rough around the edges, it may be time to remodel.

“You have to think about your customers’ experience when visiting your pharmacy. Do you want to look like a chain pharmacy, or are you trying to offer a friendlier, more welcoming environment?” said Christopher McClung, president and partner at Eclipse Brand Builders, a design-build firm based in Georgia.

A remodel can help you keep up with the competition, and it communicates to your patients that your pharmacy is staying on the cutting edge of industry trends. This is especially important as the scope of retail pharmacy continues to expand.

“An outdated look can be a determinant in customer apathy, especially when competitors have recently updated, and a remodel can rejuvenate customer excitement,” advised Bryon Muir, vice president of Knoebel Construction, which is based in the St. Louis area.

Keep these tips in mind as you tackle your pharmacy remodeling project.

Why to Remodel

As a pharmacist who works in the pharmacy space every single day, you may not notice ratty carpets or dinged fixtures. But your patients sure do. “I think retailers of all kinds need to visit their spaces with their customer glasses on,” McClung said. “They should try to experience their business as a customer would.” Think about what your space is telling patients, and if that message doesn’t line up with the message you want to send, it may be time for a remodel.

Since there’s a significant investment involved with undertaking a remodel, it shouldn’t be done on a whim, but in order to stay competitive, your pharmacy will eventually have to make some updates. “One of these factors is making a market shift,” said Muir. “Several of our clients have decided to do that by taking a retail location and remodeling it into a hybrid of retail and service to compete more efficiently with the online market.”

The landscape of pharmacy has changed rapidly over the last few years, and if you’re providing more clinical services than you have in the past, for example, you may want to remodel so your pharmacy can accommodate more than simple dispensing.

Owners often overlook their staff when thinking about a remodel, but you should make improvements with them in mind, as well. “It seems like everyone across the board is having trouble with hiring and retaining staff, and that can cost you,” McClung said. If your pharmacy’s workspace behind the counter is not well lit, dingy, cramped, or difficult to navigate, making improvements could help your productivity and your staff retention. Think about how to optimize your workspace to make staff members’ jobs easier and incorporate space for them to relax when they are on their breaks.

Choosing a Contractor

Embarking on a remodel is a big decision, so pharmacy owners need to be sure they have the right partners. You have two choices when working with contractors. The more traditional route is the design-bid-build method, where you hire a designer to draw up plans then have contractors bid on the project. The other option is using a design-build firm that handles designs and construction all under one roof.

If you’re going the design-bid-build route, McClung said to make sure you have thoughtful designs before soliciting bids. “You can call contractors to come out and give you prices, but without a complete design and consistent scope of work, they are giving you pricing and information based on their individual opinion of what needs to be done on your project, which can vary wildly from contractor to contractor,” he said. “You need an experienced design firm to work with you to turn your goals and objectives into accurate and well-thought-out drawings and specifications for a project.”

Once you’ve settled on a contractor, thoroughly vet them before you start work. “When interviewing a potential general contractor for your upcoming remodel or renovation, it’s always a good idea to verify the experience that not only the company has, but the project management team that they will be assigning to your project,” Muir recommended. Even if the company has decades of experience doing remodels, if they’re assigning their newest project manager to your pharmacy remodel, you may not reap the benefits of that experience.

Ask for references from past clients with remodel projects similar to your own. “A good general contractor would never shy away from providing three or more comparable references and if they don’t give you client references for similar project types, then they most likely don’t have the experience they’re telling you they have,” Muir said.

When speaking with references, McClung suggests asking a broad scope of questions. Ask about the quality, of course, but also ask about if they completed the work within the established schedule, if there were many change orders, and if they ran into any other unique challenges during their project. “One of the biggest issues we’re running into these days is availability of subcontractors,” he said. “There’s a lot of work happening and there’s a shortage of labor. These things are out of control for everyone, but some people are doing a better job than others at managing it.”

Another thing to check on is the contractor’s current workload. If a company has a heavy workload, that can be a sign that they do quality work, but it also could be a sign they won’t have time to give you personalized service. Instead of going with the trendy, in-demand contractor, you may have better luck with a smaller operation that can devote time and attention to your remodel.

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Design-Build vs. Design-Bid-Build

When starting on a remodel project, there are two routes: design-build and design-bid-build.

The Design-Build Route

In a design-build project, a single company manages the design and the implementation of the remodel. It’s typically the faster option, since you’re working with the same team throughout the entire process.

It’s also easier to stay on budget because the build team is involved in the design phase and can help work out any potential issues before construction starts.

This option also reduces the time and involvement in a project for owners since they don’t have to be the middleman between designers and contractors.

However, when you go the design-build route, you may not go through a bidding process, which could make it harder to find the best price. You may also sacrifice flexibility as the project moves along at a fast clip.

The Design-Bid-Build Route

With the design-bid-build method, the pharmacy hires the designer and the contractor separately, placing the owner at the center of the team. The design firm creates the design for the remodel, then the pharmacy gets bids from contractors who estimate the price to complete the work.

The bidding system means the pharmacy owner can weigh their options and choose the most competitive price. Owners also have the freedom to choose vendors.

On the downside, because designers and contractors aren’t always on the same page, there’s a higher risk of change orders, which adds to the overall price tag. Lack of communication between each party can cause logistical problems and delays.

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Managing Costs

Renovating your pharmacy is a big investment, but there are certain things you can do to minimize costs.

Both Muir and McClung emphasize the best way to keep costs down is to minimize change orders. That can usually be accomplished by having designs that are thorough.

Don’t start construction until you have a design that you are completely happy with. “The higher the quality of the drawings and the more accurate they are, the fewer surprises there will be during construction,” McClung said. “Think of the designs as an instruction manual. Construction should be able to follow the drawing exactly as they are.”

Thorough drawings can also prevent unforeseen issues with the building. “I could not count the times that we’ve opened up a wall and found a column that wasn’t known to exist or discovered that the sanitary lines weren’t deep enough for a new restroom or fixture to be installed,” Muir said.

Designers should make an exploratory visit to your pharmacy space so they have a good idea of any problems that might crop up. They should look at the building’s original structural plans to get an idea of what they are working with, but be aware that sometimes those can be incorrect. There are unobtrusive ways that design teams can open the walls, floor, and ceiling to eliminate surprises during the construction process.

Even though keeping costs low is a priority for most independent pharmacy remodel projects, McClung said not to let budget concerns get in the way of creating the space you’re dreaming of. “I have never had anyone say they felt like they spent too much money at the end of a project. Usually, they say that they shouldn’t have waited so long.”

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Remodeling Trends

To give your pharmacy a modern feel, incorporate some of these popular retail remodeling trends.

Designing for Comfort

Make changes that make the wait for prescriptions seem shorter. Have comfortable chairs in your pharmacy area. Add a TV or some kind of digital signage to capture patients’ attention.

Exam Space

With pharmacies providing more clinical services, private space is a necessity. Consider adding in a dedicated exam room for immunizations and counseling.

Drive-Thrus

Because of the Covid-19 pandemic, more patients want to pick up their prescriptions without leaving the comfort and safety of their cars. Adding in a drive-thru creates that convenience.

Mini Departments

In your front end, consider breaking up your traditional aisle format. Create mini departments with varied fixtures and colors to increase product visibility.

Extra Doors

Install additional entrances that open into specific service areas, like online order pickup. This way, patients on a mission don’t have to navigate the rest of the pharmacy.

Self-Service Kiosks

Add kiosks within your front end for patients to check product availability or look up additional information. Another high-tech option is to add a self-checkout option in addition to your in-person register.

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Financing Your Renovation

Unless you’re sitting on a large cash cushion, you’ll most likely have to seek a loan to finance your renovation project. Look for a 7(a) loan backed by the U.S. Small Business Administration (SBA). They offer perks for small businesses like lower interest rates, longer repayment terms, and smaller down payment requirements.

The major caveat to SBA loans is that most applications are denied on the first try. To secure your loan, you’ll need to put together an airtight loan package. Include these essentials to make your pharmacy’s application stand out and improve your chances of approval.

Statement of Purpose

A statement of purpose, sometimes called an executive summary, is the first item in your loan package, and it gives lenders a quick idea of why you’re seeking a loan. It should include:

• The amount of money you’re seeking
• The purpose of your loan
• Available collateral
• Duration and terms of repayment

Your statement of purpose should also include a brief description of your pharmacy. Since SBA loans require owners have equity in their business, you’ll also want to describe any investments you’ve made in the pharmacy.

Business Plan

You probably created a business plan when you first started your pharmacy, but it will probably need a refresh for your loan application. Most banks won’t even consider giving your pharmacy a loan if you don’t have an up-to-date business plan

The business plan included in your loan package should have:

• A vision statement and mission statement
• Market analysis
• Description of your products and services
• Overview of your pharmacy operations and management

Financial Statements

Lending institutions want to know your pharmacy is a good investment and have confidence you’ll be able to pay back your loan.

These four statements will give lenders an idea of your pharmacy’s financial footing:

• Cash flow statement: This statement shows how money moves in and out of your pharmacy on a monthly basis. Include 12 months of cash flow statements and 6 months of projected cash flow.
• Income statement: Sometimes known as a profit and loss statement, the income statement shows your profits over a period of time. Include income statements from the last three years in your loan package.
• Balance sheet: This statement measures assets against liabilities to demonstrate your total net worth. Include three years’ worth of balance sheets.
• Personal financial statement: Since SBA loans require you to be invested, lenders want to know about your personal debts and assets along with those of your business.

Polished Presentation

Pay attention to the finishing touches before submitting your SBA loan package. It shouldn’t just be a collection of facts and figures—it should tell the story of your pharmacy and convince lenders of your competence and passion.

Give your loan package a final pass for spelling and grammar errors. Even small mistakes can make you look unprofessional, and you don’t want to give lenders any reason to hesitate.

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From the Magazine

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