Pharmacy Business Plan

Pharmacy Business Plan
Executive Summary
The Discount Pharmacy's main goal is to provide prescription medications for our customers at
the lowest prices on the market. We will be able to sell prescriptions at reduced prices by
carefully maintaining efficiencies in our operations and by targeting a specific segment of the
market - those customers who pay for their prescription medications themselves. By focusing on
this segment it gives us additional efficiencies - we avoid disruptions in cash flow often
associated with insurance payments and we can eliminate unnecessary services for the type of
knowledgeable, repeat customer taking maintenance-type medication.
The Discount Pharmacy will operate from one store that will serve both mail order customers
and those who visit in person. We will thrive by employing friendly and knowledgeable
personnel, which, along with our great prices, will drive the repeat business that we will rely
upon. We only expect that as the price of medication continues to skyrocket, The Discount
Pharmacy will appeal more and more to the customer's sense of value and convenience.
Our advertising, mainly through ads in magazines targeted at the over-55 crowd, will be targeted
at those who are looking to save money on a pricey but necessary and regular expense.
The Discount Pharmacy will be led by John Reeleaf, an MBA with experience in the
pharmaceutical industry. Costs will be minimized by maintaining only one pharmacist and filling
the void with pharmaceutical techs. We expect to reach profitability by our second year and will
generate substantial sales by year three.
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1.1 Objectives
The objectives for the first three years include:
1. Exceed customer expectations with superior pricing

2. Increase the number of customers by more than 30% per year
3. Develop a business that survives off its own cash flow
1.2 Mission
The Discount Pharmacy's mission is to provide our customers with the best prices for their
prescription medications. Our convenience and services will exceed the expectations of our
customers.
1.3 Keys to Success
The keys to success are:
 Satisfy our customers so they will return again and again

 Maintain low overhead and operating costs
 Provide better prices than all our competitors
Company Summary
The Discount Pharmacy is located in Portland, OR and offers prescription medications at

discount prices to our customers by mail order or at the store front.
2.1 Company Ownership
The Discount Pharmacy is an Oregon limited liability corporation. The majority stock holder is
John Reeleaf.
2.2 Start-up Summary
The Discount Pharmacy will incur the following start-up equipment costs:
 Office equipment including chairs, file cabinets, and desks.

 Front counter, storage bins, cash register.
 Three computer terminals.
 Main computer server with a laser printer, and back-up system.
 Software: Microsoft Office, QuickBooks Pro, drug interaction software, Physician Desk Reference
software detailing side effects and other information pertinent to the customer.
 Assorted bottles, boxes, envelopes, etc. for dispensing and shipment.
 Scales for shipping.
 Telecom system.
 Storefront build-out.
 Start-up inventory.
 Rent, utilities, insurance.
Please note that these items will be used for more than one year and will therefore be labeled
long-term assets, depreciated using G.A.A.P. approved straight-line depreciation.
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Start-up Requirements
Start-up Expenses
Legal $1,000
Rent $2,000
Utilities $400
Telecom System $400
Insurance $300
Storefront Build-out $15,000
Expensed Equipment $4,000
Website development $1,000
Total Start-up Expenses $24,100
Start-up Assets
Cash Required $140,500
Start-up Inventory $10,000
Other Current Assets $0
Long-term Assets $8,500
Total Assets $159,000
Total Requirements $183,100
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Start-up Funding
Start-up Expenses to Fund $24,100
Start-up Assets to Fund $159,000
Total Funding Required $183,100

Assets
Non-cash Assets from Start-up $18,500
Cash Requirements from Start-up $140,500
Additional Cash Raised $0
Cash Balance on Starting Date $140,500
Total Assets $159,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Seed Funding $50,000
John $51,000
Friends and Family $50,000
Additional Investment Requirement $32,100
Total Planned Investment $183,100
Loss at Start-up (Start-up Expenses) ($24,100)
Total Capital $159,000
Total Capital and Liabilities $159,000
Total Funding $183,100

Products
The Discount Pharmacy offers a wide range of prescription drugs to patients based in Oregon or
nationally. Both generics and name brands are offered.
In order for a customer to purchase medications mail order, they must first contact The Discount
Pharmacy over the phone. The customer then needs to either mail in the prescription, fax it, or
email it. Once it is received and payment arrangements are complete, the medicines will be sent
out to the customer via U.S.P.S. or U.P.S. Local customers may stop by the store front to pick up
the medications.
The Discount Pharmacy will only service customers who self pay. The self pay customers will be
attracted to The Discount Pharmacy because of its superior prices. For many Americans that do
not have drug plans, including the vast majority of Americans over 65, a discount on drugs is
very welcome on today's increasingly tight monthly budgets.
The Discount Pharmacy will be able to survive on lower margins due to operating efficiencies
gained through national mail order operations and not accepting insurance policy drug plans
which hampers cash flow. The Discount Pharmacy will also save money by not paying for
customer's unlimited access to a pharmacist. If a customer has a question regarding a drug, the
pharmaceutical technician will attempt to answer it. As a last resort the pharmacist will provide
the answer. Generally, the technician or the accompanying printed literature will answer the
question.
This model of saving costs by not providing unlimited access to the pharmacist will be
successful because the majority of customers will be customers who have been taking said
drug for awhile, as opposed to a new prescription, and will not require their hand to be held
during the transaction. They are interested in The Pharmacy as an inexpensive source for their
medication.
With each order a printout will accompany the medications providing directions on how to take
the medications, other drugs that should be avoided concurrently, and other useful information.
The Discount Pharmacy will be using computer print outs from industry software to reduce the
cost of providing this information.
Note--while the term "self pay" is typically associated with the notion that the customer is paying
for the medication out of pocket without insurance, it is used in this context as the
customer paying for the medications up front regardless if they have insurance. They may be
paying out of pocket, or they may be paying up front and then submitting to their insurance
company's drug plan to reimburse them later.
Market Analysis Summary
The Discount Pharmacy's target market consists of two different groups, local customers or
walk-ins, and mail order customers.
The Discount Pharmacy will employ two different strategies to reach these two diverse market
segments.
4.1 Market Segmentation
The Discount Pharmacy's customers can be broken down into two different groups, mail order
customers and walk-in customers:
 Mail order customers. This group of customers orders their medication through the mail in an
effort to save money. Generally, the mail order customers are older in age, typically over 50. In
general, elderly customers consume more medication relative to younger people. The mail order
customer will typically purchase maintenance medications - prescriptions for an ongoing ailment
that requires regular treatment. This group of customers will also be more likely to purchase
several months of medication at once.
 Walk-in customers. This group of customers are also looking for the lowest prices for their
medication. However, they tend to purchase medications monthly at their local pharmacy, often
at a higher price. There is not a common demographic for this group of people, other than living
in the Portland metropolitan area. Some of these customers will pay for the medications out of
pocket and some will submit a claim to their insurance company for reimbursement at a later
date.
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Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Walk-in customers 8% 345,887 373,558 403,443 435,718 470,575 8.00%
Mail order customers 9% 54,876,345 59,815,216 65,198,585 71,066,458 77,462,439 9.00%
Total 8.99% 55,222,232 60,188,774 65,602,028 71,502,176 77,933,014 8.99%
business plan.
4.2 Target Market Segment Strategy
The Discount Pharmacy will seek to attract two different groups of customers and will thus have
two strategies to attract them.
We anticipate that by far our largest group of customers will be those who order through the
mail. These customers will be targeted through an advertising campaign in magazines and
newsletters that have an older (>55) audience who regularly need medication and are aware in
advance of their needs. For example, one of the main advertising vehicles will be the A.A.R.P
monthly newsletter.
Walk-in customers will be targeted through advertisements in the local paper, "The Oregonian."
Ads will raise awareness for the The Discount Pharmacy and our low prices.
4.3 Competition and Buying Patterns
Competition takes many different forms in the pharmacy industry.

 Chain pharmacies. These are state or national chains such as Rite-Aid. The advantage to these
chains are better prices through economies of scale, as well as personalized service. The
personalized service takes the form of the chain having a record of your medication purchases
as well as any allergies that you have disclosed to them.
 Local pharmacies. These are the pharmacies where you typically know the pharmacist and they
know your medical history. This option is high in personalized service and convenience, and
high in price.
 Mail order and Internet pharmacies. These are similar to The Discount Pharmacy.
 Canadian pharmacies. These pharmacies are located in Canada where the cost of drugs is lower
than in the U.S. These pharmacies can be accessed through mail order, the Internet, or via
travel. Recently there has been the trend for trips arranged for senior citizens in Northern
States to travel up to Canada for the day to pick up their medicines.
Strategy and Implementation Summary
The Discount Pharmacy will use their website to develop visibility and disseminate information.
5.1 Competitive Edge
The Discount Pharmacy's competitive edge is superior pricing. To do that we must maintain our
position as the low cost provider by painstakingly ensuring that costs are kept low through
operating efficiencies.
We will be able to do that by eliminating some of the services traditionally offered by

pharmacies. For example, we will employ only one pharmacist and use pharmaceutical
technicians to fill the void. As long as a pharmacist is on site during the hours of operation, we
can use the pharmaceutical techs for all other capacities where other pharmacies use pharmacists.
Other efficiencies are created by having only a small store front and conducting most of our
business through mail order.
Finally, The Discount Pharmacy is not designed to hold the patient's hand during their purchase.
We expect that the vast majority of our customers will already be informed of how to take the
medication, and any side effects or drug interactions that should be avoided. We will
simply provide each patient with a print out of all the relevant information for consumption of
the medication.
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5.2 Marketing Strategy
The marketing strategy will be based on targeted advertisements, appealing to the customer's
sense of value. The marketing campaign's goal will to be increase awareness of The Discount
Pharmacy with their target market.
5.3 Sales Strategy
The sales strategy will be based on generating long-term relationships with customers. To
facilitate that, we will provide medications at superior prices, have medicines in stock for both
quick shipment and store front pick up, and provide superior customer service. All sales agents
will be trained to provide friendly, knowledgeable customer service. By keeping to these simple,
yet effective, business practices, we expect that our customers will make The Discount Pharmacy
their exclusive source for medications. For some, medications are an integral part of their lives,
so establishing long-term relationships will ensure a large, loyal customer base.
5.3.1 Sales Forecast
During the first month we will focus on setting up the store front and generating both local and
national visibility. Sales activity will begin in month two. Sales during months three through five
there will mainly consist of local business through the store front. In month six we expect to see
a jump in sales from mail order. Sales will grow steadily from month six on.
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Sales Forecast
Year 1 Year 2 Year 3
Sales
Walk-in customers $209,600 $399,833 $431,334
Mail order customers $232,222 $567,432 $640,543
Total Sales $441,822 $967,265 $1,071,877
Direct Cost of Sales Year 1 Year 2 Year 3

Walk-in customers $83,840 $159,933 $172,534
Mail order customers $92,889 $226,973 $256,217
Subtotal Direct Cost of Sales $176,729 $386,906 $428,751
business plan.
5.4 Milestones
The Discount Pharmacy will have several milestones early on:
 Office/business set up.

 Establishment of the first strategic relationship.
 Profitability.
Milestones
Milestone Start Date End Date Budget Manager Department
Office/business set up 1/1/2001 5/1/2001 $0 John Executive
Establishment of the first Business

1/1/2001 7/1/2001 $0 John
stategic relationship Development
Profitability 1/1/2001 11/1/2002 $0 Everyone Finance
Totals $0
Web Plan Summary
The website will be used for the dissemination of information as well as a mechanism for email
communication. Initially there will be no ordering through our website since we do not expect
that method to be widely used and trusted by our target customers.
6.1 Development Requirements
The Discount Pharmacy will hire a recent college graduate with a major in computer science to
complete and maintain our simple website. This will keep costs down.
Management Summary
John Reeleaf has experience working with a major drug manufacturer, Eli Lilly, as a drug
representative. He was able to see first hand the profitability associated with the prescription
drug industry, as well as the inefficiencies with which most companies are plagued.
John graduated with an MBA from the University of Oregon's innovative entrepreneurship
program. While there he was awarded a $50,000 no interest loan through a business plan
competition. That seed money will be parlayed, along with some other investments, into start up
expenses for The Discount Pharmacy. John received an undergraduate degree in chemistry from
the University of Oregon.
7.1 Personnel Plan
The Discount Pharmacy will employ the following people:
 Sales agents/phone representatives: two at month three, an additional person at month sixth.
 Pharmaceutical technicians: two at month two, a third at month six.
 Pharmacists: month two.
 Order fulfillment agents: two for month five, a third for month eight.
 Counter person/phone representative: one at month three.
Personnel Plan
CEO (John) $48,000 $52,000 $60,000
Pharmacist $55,000 $60,000 $60,000
Pharmacist technician $27,500 $30,000 $30,000
Sales agent $19,200 $23,040 $23,040
Sales agent $19,200 $23,040 $23,040

Sales agent $11,520 $23,040 $23,040
Counter person/phone rep. $14,400 $17,280 $17,280
Counter person/phone rep. $14,400 $17,280 $17,280
Order fulfillment $14,400 $17,280 $17,280
Total People 11 11 11
Total Payroll $268,620 $322,960 $330,960
Financial Plan
The following sections will outline important financial information.
8.1 Break-even Analysis
The Break-even Analysis calculates what will be needed in monthly revenue to reach the break-
even point.
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Break-even Analysis
Monthly Revenue Break-even $48,808
Assumptions:
Average Percent Variable Cost 40%
Estimated Monthly Fixed Cost $29,285
business plan.
8.2 Projected Profit and Loss
The following table and charts present projected profit and loss.
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Pro Forma Profit and Loss
Sales $441,822 $967,265 $1,071,877
Direct Cost of Sales $176,729 $386,906 $428,751
Other Production Expenses $0 $0 $0
Total Cost of Sales $176,729 $386,906 $428,751
Gross Margin $265,093 $580,359 $643,126
Gross Margin % 60.00% 60.00% 60.00%
Expenses
Payroll $268,620 $322,960 $330,960
Sales and Marketing and Other Expenses $8,400 $8,400 $8,400
Depreciation $1,704 $1,704 $1,704
Leased Equipment $0 $0 $0
Utilities $4,800 $4,800 $4,800
Insurance $3,600 $3,600 $3,600
Rent $24,000 $24,000 $24,000
Payroll Taxes $40,293 $48,444 $49,644
Other $0 $0 $0
Total Operating Expenses $351,417 $413,908 $423,108
Profit Before Interest and Taxes ($86,324) $166,451 $220,018
EBITDA ($84,620) $168,155 $221,722

Interest Expense $0 $0 $0
Taxes Incurred $0 $49,935 $66,005
Net Profit ($86,324) $116,516 $154,013
Net Profit/Sales -19.54% 12.05% 14.37%
8.3 Projected Cash Flow
The following chart and table display the projected cash flow.
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Pro Forma Cash Flow
Cash Received
Cash from Operations
Cash Sales $441,822 $967,265 $1,071,877
Subtotal Cash from Operations $441,822 $967,265 $1,071,877
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $441,822 $967,265 $1,071,877
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $268,620 $322,960 $330,960
Bill Payments $244,177 $546,807 $589,427
Subtotal Spent on Operations $512,797 $869,767 $920,387
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $512,797 $869,767 $920,387
Net Cash Flow ($70,975) $97,498 $151,490
Cash Balance $69,525 $167,024 $318,513
8.4 Important Assumptions
The following table details important financial assumptions.

General Assumptions
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
8.5 Projected Balance Sheet
The following table shows the projected balance sheet.
Pro Forma Balance Sheet
Assets
Current Assets
Cash $69,525 $167,024 $318,513
Inventory $28,838 $63,135 $69,963
Other Current Assets $0 $0 $0
Total Current Assets $98,364 $230,159 $388,477
Long-term Assets
Long-term Assets $8,500 $8,500 $8,500
Accumulated Depreciation $1,704 $3,408 $5,112

Total Long-term Assets $6,796 $5,092 $3,388
Total Assets $105,160 $235,251 $391,865
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $32,484 $46,059 $48,660
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $32,484 $46,059 $48,660
Long-term Liabilities $0 $0 $0
Total Liabilities $32,484 $46,059 $48,660
Paid-in Capital $183,100 $183,100 $183,100
Retained Earnings ($24,100) ($110,424) $6,092
Earnings ($86,324) $116,516 $154,013
Total Capital $72,676 $189,192 $343,205
Total Liabilities and Capital $105,160 $235,251 $391,865
Net Worth $72,676 $189,192 $343,205
business plan.
8.6 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on
the NAICS code 446110, Pharmacies and Drug Stores, are shown for comparison.
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 118.93% 10.82% 11.07%
Percent of Total Assets
Inventory 27.42% 26.84% 17.85% 36.78%
Other Current Assets 0.00% 0.00% 0.00% 26.80%
Total Current Assets 93.54% 97.84% 99.14% 90.26%
Long-term Assets 6.46% 2.16% 0.86% 9.74%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 30.89% 19.58% 12.42% 45.28%
Long-term Liabilities 0.00% 0.00% 0.00% 14.93%
Total Liabilities 30.89% 19.58% 12.42% 60.21%
Net Worth 69.11% 80.42% 87.58% 39.79%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 60.00% 60.00% 60.00% 14.44%
Selling, General & Administrative

93.39% 44.47% 42.20% 2.35%
Expenses
Advertising Expenses 1.28% 0.50% 0.45% 0.38%
Profit Before Interest and Taxes -19.54% 17.21% 20.53% 1.99%
Main Ratios
Current 3.03 5.00 7.98 1.74

Quick 2.14 3.63 6.55 0.86
Total Debt to Total Assets 30.89% 19.58% 12.42% 63.63%
Pre-tax Return on Net Worth -118.78% 87.98% 64.11% 5.59%
Pre-tax Return on Assets -82.09% 70.75% 56.15% 15.37%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -19.54% 12.05% 14.37% n.a
Return on Equity -118.78% 61.59% 44.87% n.a
Activity Ratios
Inventory Turnover 10.34 8.41 6.44 n.a
Accounts Payable Turnover 8.52 12.17 12.17 n.a
Payment Days 27 26 29 n.a
Total Asset Turnover 4.20 4.11 2.74 n.a
Debt Ratios
Debt to Net Worth 0.45 0.24 0.14 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $65,880 $184,100 $339,817 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.24 0.24 0.37 n.a
Current Debt/Total Assets 31% 20% 12% n.a
Acid Test 2.14 3.63 6.55 n.a
Sales/Net Worth 6.08 5.11 3.12 n.a

Dividend Payout 0.00 0.00 0.00 n.a
Appendix
Sales Forecast
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Sales
Walk-in $10,98 $26,54

40% $0 $8,765 $12,554 $16,776 $18,443 $20,001 $21,332 $22,343 $25,311 $26,544
customers 7 4
Mail
$38,99
order 40% $0 $2,245 $5,543 $6,543 $12,344 $15,454 $19,877 $26,765 $31,223 $34,232 $38,998
8
customers
Total $16,53 $65,54

$0 $11,010 $19,097 $29,120 $33,897 $39,878 $48,097 $53,566 $59,543 $65,542
Sales 0 2
Direct
Cost of
1 2 3 4 5 6 7 8 9 10 11 12
Sales
Walk-in $10,61
$0 $3,506 $4,395 $5,022 $6,710 $7,377 $8,000 $8,533 $8,937 $10,124 $10,618
customers 8
Mail
$15,59
order $0 $898 $2,217 $2,617 $4,938 $6,182 $7,951 $10,706 $12,489 $13,693 $15,599
9
customers
Subtotal
Direct $26,21
$0 $4,404 $6,612 $7,639 $11,648 $13,559 $15,951 $19,239 $21,426 $23,817 $26,217
Cost of 7
Sales
business plan.

Personnel Plan
1 2 3 4 5 6 7 8 9 10 11 12
$4,00
CEO (John) 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
0
Pharmacist 0% $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Pharmacist
0% $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
technician
Pharmacist
0% $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
technician
Pharmacist
0% $0 $0 $0 $0 $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
technician
Sales agent 0% $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Sales agent 0% $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Sales agent 0% $0 $0 $0 $0 $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
Counter
person/phon 0% $0 $0 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440
e rep.
Counter
person/phon 0% $0 $0 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440
e rep.
Order
0% $0 $0 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440
fulfillment
Total People 1 4 9 9 9 10 11 11 11 11 11 11
$4,00 $14,00 $22,16 $22,16 $22,16 $24,66 $26,58 $26,58 $26,58 $26,58 $26,58
Total Payroll $26,580
0 0 0 0 0 0 0 0 0 0 0
General Assumptions
1 2 3 4 5 6 7 8 9 10 11 12
Plan
1 2 3 4 5 6 7 8 9 10 11 12
Month
Current
Interest 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Rate
Long-term
Interest 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Rate
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Pro Forma Profit and Loss
1 2 3 4 5 6 7 8 9 10 11 12
$48,09 $53,56 $59,54 $65,54 $65,54

Sales $0 $11,010 $16,530 $19,097 $29,120 $33,897 $39,878
7 6 3 2 2
Direct Cost $19,23 $21,42 $23,81 $26,21 $26,21

$0 $4,404 $6,612 $7,639 $11,648 $13,559 $15,951
of Sales 9 6 7 7 7
Other
Production $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expenses
Total Cost $19,23 $21,42 $23,81 $26,21 $26,21

$0 $4,404 $6,612 $7,639 $11,648 $13,559 $15,951
of Sales 9 6 7 7 7
Gross $28,85 $32,14 $35,72 $39,32 $39,32

$0 $6,606 $9,918 $11,458 $17,472 $20,338 $23,927
Margin 8 0 6 5 5
Gross 60.00 60.00

0.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%
Margin % % %
Expenses
$26,58 $26,58 $26,58 $26,58 $26,58

Payroll $4,000 $14,000 $22,160 $22,160 $22,160 $24,660 $26,580
0 0 0 0 0
Sales and
Marketing
$700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700
and Other
Expenses
Depreciati
$142 $142 $142 $142 $142 $142 $142 $142 $142 $142 $142 $142
on
Leased
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Equipment
Utilities $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Insurance $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Payroll 15
$600 $2,100 $3,324 $3,324 $3,324 $3,699 $3,987 $3,987 $3,987 $3,987 $3,987 $3,987
Taxes %
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total
$34,10 $34,10 $34,10 $34,10 $34,10
Operating $8,142 $19,642 $29,026 $29,026 $29,026 $31,901 $34,109
9 9 9 9 9
Expenses
Profit
Before ($8,14 ($13,03 ($19,10 ($17,56 ($11,55 ($11,56 ($10,18 ($5,25 ($1,96
$1,617 $5,216 $5,216
Interest 2) 6) 8) 8) 4) 3) 2) 1) 9)
and Taxes
($8,00 ($12,89 ($18,96 ($17,42 ($11,41 ($11,42 ($10,04 ($5,10 ($1,82

EBITDA $1,759 $5,358 $5,358
0) 4) 6) 6) 2) 1) 0) 9) 7)
Interest
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expense
Taxes
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Incurred
($8,14 ($13,03 ($19,10 ($17,56 ($11,55 ($11,56 ($10,18 ($5,25 ($1,96
Net Profit $1,617 $5,216 $5,216
2) 6) 8) 8) 4) 3) 2) 1) 9)
Net - -
-
Profit/Sale 0.00% 118.40 115.60 -91.99% -39.68% -34.11% -25.53% -3.68% 2.72% 7.96% 7.96%
10.92%
s % %
Pro Forma Cash Flow
Month Month Month

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
10 11 12
Cash Received
Cash from
Operations
Cash Sales $0 $11,010 $16,530 $19,097 $29,120 $33,897 $39,878 $48,097 $53,566 $59,543 $65,542 $65,542
Subtotal Cash
$0 $11,010 $16,530 $19,097 $29,120 $33,897 $39,878 $48,097 $53,566 $59,543 $65,542 $65,542
from Operations
Additional Cash
Received
Sales Tax, VAT,

0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
HST/GST Received
New Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
New Other
Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
(interest-free)
New Long-term
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Sales of Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Assets
Sales of Long-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets
New Investment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received
Subtotal Cash
$0 $11,010 $16,530 $19,097 $29,120 $33,897 $39,878 $48,097 $53,566 $59,543 $65,542 $65,542
Received
Month Month Month
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
10 11 12
Expenditures
from Operations
Cash Spending $4,000 $14,000 $22,160 $22,160 $22,160 $24,660 $26,580 $26,580 $26,580 $26,580 $26,580 $26,580
Bill Payments $133 $4,050 $5,817 $15,029 $15,735 $22,781 $22,867 $26,112 $30,275 $31,307 $33,914 $36,155
Subtotal Spent on
$4,133 $18,050 $27,977 $37,189 $37,895 $47,441 $49,447 $52,692 $56,855 $57,887 $60,494 $62,735
Operations
Additional Cash
Spent
Sales Tax, VAT,

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
HST/GST Paid Out
Principal
Repayment of
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Borrowing
Other Liabilities
Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Long-term
Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Purchase Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Assets
Purchase Long-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash
$4,133 $18,050 $27,977 $37,189 $37,895 $47,441 $49,447 $52,692 $56,855 $57,887 $60,494 $62,735
Spent
Net Cash Flow ($4,133) ($7,040) ($11,447) ($18,092) ($8,775) ($13,544) ($9,569) ($4,595) ($3,289) $1,656 $5,048 $2,807
Cash Balance $136,367 $129,327 $117,880 $99,787 $91,012 $77,468 $67,899 $63,304 $60,015 $61,671 $66,719 $69,525
business plan.
Pro Forma Balance Sheet
Month Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 12
10 11
Starting
Assets
Balances
Current
Assets
Cash $140,500 $136,367 $129,327 $117,880 $99,787 $91,012 $77,468 $67,899 $63,304 $60,015 $61,671 $66,719 $69,525
Inventory $10,000 $10,000 $5,596 $7,273 $8,403 $12,813 $14,915 $17,546 $21,163 $23,569 $26,199 $28,838 $28,838
Other
Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets
Total Current
$150,500 $146,367 $134,923 $125,153 $108,190 $103,825 $92,382 $85,445 $84,466 $83,584 $87,870 $95,557 $98,364
Assets
Long-term
Assets
Long-term
$8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500
Assets
Accumulated
$0 $142 $284 $426 $568 $710 $852 $994 $1,136 $1,278 $1,420 $1,562 $1,704
Depreciation
Total Long-
$8,500 $8,358 $8,216 $8,074 $7,932 $7,790 $7,648 $7,506 $7,364 $7,222 $7,080 $6,938 $6,796
term Assets
Total Assets $159,000 $154,725 $143,139 $133,227 $116,122 $111,615 $100,030 $92,951 $91,830 $90,806 $94,950 $102,495 $105,160
Liabilities Month Month

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 12
and Capital 10 11
Current
Liabilities
Accounts
$0 $3,867 $5,317 $14,513 $14,976 $22,023 $22,001 $25,104 $29,234 $30,179 $32,706 $35,035 $32,484
Payable
Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Liabilities
Subtotal
Current $0 $3,867 $5,317 $14,513 $14,976 $22,023 $22,001 $25,104 $29,234 $30,179 $32,706 $35,035 $32,484
Liabilities
Long-term
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Total
$0 $3,867 $5,317 $14,513 $14,976 $22,023 $22,001 $25,104 $29,234 $30,179 $32,706 $35,035 $32,484
Liabilities
Paid-in
$183,100 $183,100 $183,100 $183,100 $183,100 $183,100 $183,100 $183,100 $183,100 $183,100 $183,100 $183,100 $183,100
Capital
Retained
($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100) ($24,100)
Earnings
Earnings $0 ($8,142) ($21,178) ($40,286) ($57,854) ($69,408) ($80,971) ($91,153) ($96,404) ($98,373) ($96,756) ($91,540) ($86,324)
Total Capital $159,000 $150,858 $137,822 $118,714 $101,146 $89,592 $78,029 $67,847 $62,596 $60,627 $62,244 $67,460 $72,676
Total
Liabilities $159,000 $154,725 $143,139 $133,227 $116,122 $111,615 $100,030 $92,951 $91,830 $90,806 $94,950 $102,495 $105,160
and Capital
Net Worth $159,000 $150,858 $137,822 $118,714 $101,146 $89,592 $78,029 $67,847 $62,596 $60,627 $62,244 $67,460 $72,676

Pharmacy Business Plan

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Pharmacy Business Plan

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Pharmacy Business Plan

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The objectives for the first three years include:

1. Exceed customer expectations with superior pricing

1.3 Keys to Success

The keys to success are:

 Satisfy our customers so they will return again and again

The Discount Pharmacy is located in Portland, OR and offers prescription medications at

2.1 Company Ownership

2.2 Start-up Summary

 Office equipment including chairs, file cabinets, and desks.

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Telecom System $400

Storefront Build-out $15,000

Expensed Equipment $4,000

Website development $1,000

Total Start-up Expenses $24,100

Cash Required $140,500

Start-up Inventory $10,000

Other Current Assets $0

Long-term Assets $8,500

Total Assets $159,000

Total Requirements $183,100

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Start-up Expenses to Fund $24,100

Start-up Assets to Fund $159,000

Total Funding Required $183,100

Non-cash Assets from Start-up $18,500

Cash Requirements from Start-up $140,500

Additional Cash Raised $0

Cash Balance on Starting Date $140,500

Total Assets $159,000

Liabilities and Capital

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Seed Funding $50,000

Friends and Family $50,000

Additional Investment Requirement $32,100

Total Planned Investment $183,100

Loss at Start-up (Start-up Expenses) ($24,100)

Total Capital $159,000

Total Capital and Liabilities $159,000

Total Funding $183,100

4.1 Market Segmentation

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Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Walk-in customers 8% 345,887 373,558 403,443 435,718 470,575 8.00%

Mail order customers 9% 54,876,345 59,815,216 65,198,585 71,066,458 77,462,439 9.00%

Total 8.99% 55,222,232 60,188,774 65,602,028 71,502,176 77,933,014 8.99%

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4.2 Target Market Segment Strategy

4.3 Competition and Buying Patterns

Competition takes many different forms in the pharmacy industry.

Strategy and Implementation Summary

5.1 Competitive Edge

We will be able to do that by eliminating some of the services traditionally offered by