Congratulations, you’re starting a pharmacy. Or, you’re ready to add a new pharmacy location.
Before you start improving patients’ lives, you need a building.
Selecting the best pharmacy location may seem as simple as picking a space at a busy intersection in a thriving part of town.
But that’s not enough to make your pharmacy flourish.
Several surprising factors can affect the success of your pharmacy. Make sure to consider all of them to choose the best site for your pharmacy.
1. Location
The location of your pharmacy is crucial.
There’s plenty of advice on finding the best pharmacy location, but here’s some you probably haven’t heard.
Pick a spot next to a national chain pharmacy.
That seems counterintuitive, but it could be your best option.
Why you should pick a site next to a national chain pharmacy:
- National chain pharmacies find the best real estate because they can afford high-cost real estate specialists. And, they conduct thorough research before they invest in a new building.
- National chain pharmacies bring in customers mainly looking to aid their maladies, not to find a trusted pharmacist to help them improve their health. If you truly differentiate your independent pharmacy, people will notice and start walking through your doors instead of theirs.
Even if hitching up next to a national chain pharmacy isn’t your best option, you need to consider the anchor tenants of the area. These are the big players (often retail chains) that drive traffic, so their success will affect yours.
The bigger they are, the more traffic they’ll bring, which will expose your pharmacy to more people and make your location a convenient stop.
Other effective pharmacy site choices:
- Near an upscale neighborhood
- Area with older demographics
- Near doctors’ offices and hospitals
- Heavy retail area
- High traffic area
2. Visibility
Even in a digital age, many people only discover retail stores by sight. If people can’t see your building and your sign, they’ll never know you exist.
But you don’t just want people to know your pharmacy location is there. You want to remind them every day.
You want the bikers, walkers, commuters and local residents to see your pharmacy from every angle.
Consider the visibility of a pharmacy site including:
- Are there giant trees in front that could block your building or your sign?
- Is the building dwarfed behind a towering building?
- Is the building within a strip mall far from the street?
- Can the building be seen from the bus stop?
- Is your sign easily readable from the road?
3. Accessibility and parking
No matter how great the area is (or how visible your building is), if people can’t easily access your pharmacy and find a parking spot, they’ll turn away.
(CVS always has plenty of parking…)
So, even if there’s a prime spot downtown with high traffic and great visibility, you want to consider whether your patients will have to park on the street.
Also, consider whether the location allows a drive-through.
Customers value convenience and like the option of picking up their prescriptions from the comfort of their car—especially in the winter.
4. Space and layout
The layout and square footage of the building needs to accommodate your pharmacy’s needs.
So, before you purchase, it’s best to know exactly what you plan to offer and the space it will require.
For example, will your pharmacy need an immunization room or a consultation area? Will it need a large front end for over-the-counter products and other merchandise? Will it require a large storage area?
Find a balance between what you need now and what you’ll want later.
Consider whether the space allows for:
- Double the inventory you’ll sell at first
- Future clinical services
- Other revenue streams that keep you relevant
5. Ordinances and zoning
Zoning ordinances and regulations dictate how you can use your property.
City restrictions may not permit a pharmacy in some areas. Or, in some cases, a neighboring pharmacy may have a non-compete agreement in the purchasing contract.
Other restrictions might address development standards, such as:
- Height restrictions
- Building setbacks
- Building and landscape design
- Minimum lot size
- Lot coverage
- Transportation and access
- Density
- Parking
- Drainage
Do the due diligence before you spend precious time and money investing in a property you can’t legally inhabit or one you’ll have to drastically alter.
6. Miscellaneous costs
Non-rent or non-mortgage costs can vary greatly depending on the location.
Before you choose a place to set up shop, consider the total annual payments for the building.
For example, you might settle on a spot because the rent is lower, but taxes and utilities for the building could make your total annual payments similar to a better location with more expensive rent.
Consider all your location-related expenses and factor them into your decision.
Costs of operating a pharmacy building include:
- Utilities
- Insurance
- Property taxes
- Parking
- Lawn care
- Maintenance
- Security
- Fees associated with the area
- Required updates
Even if these costs don’t change your mind about where to build or rent, they’re important to set the budget you’ll need.
7. Real estate agent
Your real estate agent could be the difference between finding a good property and a great one.
As area experts, they’ll recommend pharmacy locations with high traffic and easy accessibility that you wouldn’t have considered.
And their negotiating skills could save you money.
Make sure you pick someone you trust and who has brokered pharmacy real estate before.
Follow these tips to choose the best real estate agent:
- Interview more than one agent
- Ask as many questions as you can
- Ask for examples of similar deals they’ve closed
- Make sure the agent understands your specific rental priorities
- Understand how they’ll be compensated
Don’t miss out on the perfect property. Use these tips to pick the best pharmacy location.
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
