pharmaceutical factory business plan

Pharmaceutical Business Plan Template

Written by Dave Lavinsky

Pharmaceutical Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their pharmaceutical companies.

If you’re unfamiliar with creating a pharmaceutical business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a pharmaceutical business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Pharmaceutical Business Plan?

A business plan provides a snapshot of your pharmaceutical business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Pharmaceutical Company

If you’re looking to start a pharmaceutical business or grow your existing company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your pharmaceutical company to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Pharmaceutical Businesses

With regards to funding, the main sources of funding for a pharmaceutical business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for pharmaceutical businesses.

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How to write a business plan for a pharmaceutical company.

If you want to start a pharmaceutical company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your pharmaceutical business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of pharmaceutical business you are running and the status. For example, are you a startup, do you have a company that you would like to grow, or are you operating pharmaceutical companies in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the pharmaceutical industry.
• Discuss the type of pharmaceutical business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of pharmaceutical company you are operating.

For example, you might specialize in one of the following types of pharmaceutical businesses:

• Generic Pharmaceutical Manufacturing : this type of pharmaceutical business develops prescription or over-the-counter drugs products that do not have patent protection.
• Vitamin & Supplement Manufacturing: this type of pharmaceutical company primarily develops products that contain ingredients intended to supplement the diet.
• Brand Name Pharmaceutical Manufacturing: this type of pharmaceutical business engages in significant research and development of patent-protected prescription and over-the-counter medications.

In addition to explaining the type of pharmaceutical business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of patents awarded, the extent of your product portfolio, reaching X number of distributors under contract, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the pharmaceutical industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the pharmaceutical industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the pharmaceutical industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your pharmaceutical company? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: healthcare providers, chain pharmacies, independent retailers, and consumers.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of pharmaceutical business you operate. Clearly, individuals would respond to different marketing promotions than hospitals, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other pharmaceutical businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes imported alternatives, herbal remedies, or customers’ nutritional self-care. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of products do they manufacture?
• What are their research and development capabilities?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide product development?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a pharmaceutical company, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of pharmaceutical business that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you manufacture patent-protected prescription medications, or a range of vitamins?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your pharmaceutical business. Document where your company is situated and mention how the site will impact your success. For example, is your pharmaceutical company located in an industrial district, near a major medical and/or scientific hub, or near input markets? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your pharmaceutical marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Advertise in trade publications
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your pharmaceutical company, including meeting with potential customers, creating and distributing product information, developing and manufacturing products, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to produce your Xth product, or when you hope to reach $X in revenue. It could also be when you expect to expand your pharmaceutical business to a new city.  

Management Team

To demonstrate your pharmaceutical company’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing pharmaceutical businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a pharmaceutical business or successfully running a R&D company.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions including your sales projections. For example, will you manufacture a line of general sales products, or will you specialize in manufacturing controlled drugs? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your pharmaceutical company, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a pharmaceutical company:

• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your facility blueprint or a list of products you manufacture.  

Writing a business plan for your pharmaceutical business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the pharmaceutical company industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful pharmaceutical company.  

Pharmaceutical Business Plan Template FAQs

What is the easiest way to complete my pharmaceutical business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your pharmaceutical business plan.

How Do You Start a Pharmaceutical Business?

Starting a pharmaceutical business is easy with these 14 steps:

• Choose the Name for Your Pharmaceutical Business
• Create Your Pharmaceutical Business Plan
• Choose the Legal Structure for Your Pharmaceutical Business
• Secure Startup Funding for Your Pharmaceutical Business (If Needed)
• Secure a Location for Your Business
• Register Your Pharmaceutical Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Pharmaceutical Business
• Buy or Lease the Right Pharmaceutical Business Equipment
• Develop Your Pharmaceutical Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Pharmaceutical Business
• Open for Business

Don’t you wish there was a faster, easier way to finish your Pharmaceutical business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan writers can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Business Plan Template for Pharmaceutical Companies

• Great for beginners
• Ready-to-use, fully customizable Subcategory
• Get started in seconds

Securing funding and navigating the highly regulated pharmaceutical industry can be a daunting task for any company. But with ClickUp's Business Plan Template for Pharmaceutical Companies, you can streamline the process and increase your chances of success!

Our template provides you with all the essential elements you need to create a comprehensive and compelling business plan, including:

• Strategic goals to guide your company's growth and development
• Financial projections to showcase the potential profitability of your products and services
• Market analysis to identify key trends, competitors, and target markets
• Operational plans to outline your manufacturing, distribution, and regulatory strategies

Don't miss out on the opportunity to attract investors and secure funding for your pharmaceutical company. Get started with ClickUp's Business Plan Template today and take your business to new heights!

Business Plan Template for Pharmaceutical Companies Benefits

A business plan template designed specifically for pharmaceutical companies offers a range of benefits, including:

• Streamlining the process of creating a comprehensive business plan, saving time and effort
• Providing a clear structure and framework for organizing key information and data
• Ensuring all critical components of a pharmaceutical business plan are included, such as market analysis, competitive analysis, and regulatory compliance
• Presenting a professional and polished document that is attractive to investors and lenders
• Helping pharmaceutical companies articulate their unique value proposition and competitive advantage in the market
• Guiding strategic decision-making and long-term planning for growth and success in the industry.

Main Elements of Pharmaceutical Companies Business Plan Template

ClickUp's Business Plan Template for Pharmaceutical Companies provides a comprehensive solution for creating and managing your pharmaceutical business plan. Here are the main elements of this template:

• Custom Statuses: Keep track of the progress of each section of your business plan with statuses like Complete, In Progress, Needs Revision, and To Do.
• Custom Fields: Add important details to your business plan, such as Reference, Approved, and Section, to ensure accurate documentation and easy reference.
• Custom Views: Access different views, including Topics, Status, Timeline, Business Plan, and Getting Started Guide, to organize and visualize your business plan from different perspectives.
• Collaboration Tools: Utilize ClickUp's collaboration features like comments, mentions, and task assignments to collaborate effectively with your team members and stakeholders.
• Document Management: Store and manage all relevant documents related to your business plan using ClickUp Docs, ensuring easy access and version control.

How To Use Business Plan Template for Pharmaceutical Companies

If you're in the pharmaceutical industry and need to create a business plan, the Business Plan Template for Pharmaceutical Companies in ClickUp can help you get started. Follow these five steps to develop a comprehensive plan for your company's success:

1. Company Overview

Begin by providing a clear and concise overview of your pharmaceutical company. Include details such as your mission statement, vision, values, and a brief history of your organization. Highlight your unique selling proposition and explain how your company stands out in the competitive pharmaceutical market.

Use the Docs feature in ClickUp to write a compelling company overview with all the necessary information.

2. Market Analysis

Conduct a thorough analysis of the pharmaceutical market to identify trends, opportunities, and potential challenges. Research your target audience, competitors, and industry regulations. Provide insights into market size, growth projections, and key market segments that you plan to target.

Utilize the Table view in ClickUp to organize and analyze your market research data effectively.

3. Product Portfolio

Outline your product portfolio and describe the pharmaceutical products or services you offer. Highlight their unique features, benefits, and potential impact on patients' lives. Discuss your research and development efforts, clinical trials, and any patents or intellectual property you have.

Create tasks in ClickUp to track your product development milestones and progress.

4. Marketing and Sales Strategy

Detail your marketing and sales strategies to reach your target audience and generate revenue. Identify your target market segments and outline your marketing channels, such as digital advertising, trade shows, or partnerships with healthcare providers. Define your pricing strategy, distribution channels, and sales forecasting.

Use the Gantt chart feature in ClickUp to visualize and track your marketing and sales activities over time.

5. Financial Projections

Provide financial projections that demonstrate the profitability and sustainability of your pharmaceutical company. Include a comprehensive analysis of your revenue streams, costs, and projected financial statements such as income statements, balance sheets, and cash flow statements. Consider factors such as research and development costs, manufacturing expenses, and pricing strategies.

Utilize the Dashboards feature in ClickUp to create visual representations of your financial data and track your progress towards financial goals.

By using the Business Plan Template for Pharmaceutical Companies in ClickUp and following these steps, you can create a comprehensive business plan that sets your pharmaceutical company up for success in the competitive industry.

Get Started with ClickUp’s Business Plan Template for Pharmaceutical Companies

Pharmaceutical companies can use the Business Plan Template for Pharmaceutical Companies in ClickUp to effectively outline their strategic goals and financial projections, as well as navigate the complex and highly regulated pharmaceutical industry.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a comprehensive business plan:

• Use the Topics View to organize different sections of your business plan, such as market analysis, product development, and financial projections
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do
• The Timeline View will allow you to set deadlines and milestones for each section of your business plan
• The Business Plan View provides a holistic overview of your entire plan, allowing you to easily navigate and make updates
• The Getting Started Guide View will provide step-by-step instructions on how to use the template and create an effective business plan
• Utilize custom fields like Reference, Approved, and Section to add additional information and categorize different sections of your plan
• Collaborate with team members to gather input, feedback, and revisions to ensure a comprehensive and well-rounded business plan
• Monitor and analyze the progress of each section to ensure your business plan is on track and meets the needs of investors and stakeholders.
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Pharmaceutical Company Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Medical and Healthcare » Pharmacy

Are you about starting a pharmaceutical company? If YES, here is a complete sample pharmaceutical business plan template & feasibility report you can use for FREE .

If you are pharmacist and you are certain that you have a winning formula when it comes to producing effective generic drugs; drugs / medicine that has been tested and proven to meet the requirement for such products, then you should consider launching your own generic pharmaceutical manufacturing company.

It is a business that is still pretty much open for investors to come and compete for the available market in the country you intend launching the business.

A Sample Pharmaceutical Company Business Plan Template

1. industry overview.

The Generic pharmaceutical and medicine manufacturing companies primarily develop prescription and over-the-counter drug products that are used to prevent or treat illnesses in humans or animals.

Generic drugs are produced and distributed without patent protection, and industry operators are not significantly engaged in the research and development of new drugs.

It is important to mention that the generic pharmaceutical manufacturing industry does not include manufacturers of nutritional supplements, cosmetic beauty products or similar products.

All over the world, the pharmaceutical industry is highly regulated. This is so because the devastating effect of fake drugs or drug abuse can’t be quantified.

As a matter of fact, there are several universal laws and regulations that govern the patenting, testing, safety, efficacy and marketing of drugs.

For example, in the united states, new pharmaceutical products must be approved by the Food and Drug Administration (FDA) as being both safe and effective before they can be allowed to go into the market.

Statistics has it that global spending on prescription drugs grew to a whopping sum of $954 billion in 2011 and The United States accounts for more than a third of the global pharmaceutical market, with an estimate of $340 billion in annual sales

The Generic Pharmaceutical Manufacturing Industry is a thriving sector of the economy of countries like India, China, united kingdom , Germany and the United States of America.

Statistics has it that in the united states alone, the industry generates a whooping sum of well over $66 billion annually from more than 1,203 registered and licensed generic pharmaceutical manufacturing companies scattered all around the United States of America.

The industry is responsible for the employment of well over 67,699 people. Experts project the industry to grow at a 4.1 percent annual rate from 2011 to 2016. Mylan Inc., Sandoz Ltd. and Teva Pharmaceuticals Industries Ltd. have the lion share of the available market in the Generic Pharmaceutical manufacturing industry in the United States of America.

A close study of the Generic Pharmaceutical Manufacturing industry shows that the industry is expanding rapidly. This is due to the demand for the industry’s products by the aging population with more chronic illnesses.

So also, with the regulatory provisions of the Patient Protection and Affordable Care Act expand consumer access to prescription insurance and provide increased opportunities for product development.

Going forward, the industry revenue growth is expected to outpaced revenue growth for the Brand Name Pharmaceutical Manufacturing industry.

A large number of brand name drugs manufacturers lost patent protection for blockbuster drugs beginning in 2010; demand for generics subsequently grew, as consumers demanded affordable versions of these high-profile products. These trends are expected to continue in the next five years.

A recent report published by IBISWORLD shows that the Generic Pharmaceutical Manufacturing industry has a low level of concentration, with the top four companies accounting for 30.2 percent of industry revenue in 2016.

Having a large operation as a generic manufacturer does not offer the same advantages as it does for brand name producers.

The report further stated that generic drug manufacturers can be smaller because the cost of research and development is significantly lower than it is for brand name companies; however, operators can still benefit from economies of scale through savings on administrative and capital costs.

Moreover, a company’s presence in both generic and brand drug markets can buffer company revenue against volatility in price or demand for any one specific drug.

The bottom line is that; the Generic Pharmaceutical Manufacturing industry is still very much open for new entrant; the competition within the industry is not as stiff as similar industry.

If your product is good, it can gain fair share of the available market in any country or region you intend launching the business.

2. Executive Summary

Harry Tancredo® Pharmaceuticals, LLC is a licensed and standard generic pharmaceutical manufacturing company that will be located in an industrial area in Concord – New Hampshire.

We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of a long-term renewal on an agreed terms and conditions that is favorable to us.

The facility has government approval for the kind of production business we want to run and the facility is easily accessible and we are deliberate about that because we want to facilitate easy movement of raw materials (chemicals and packaging containers) and finished products (drugs / medicines).

Harry Tancredo® Pharmaceuticals, LLC is in the generic pharmaceutical manufacturing industry to engage in developing and producing generic drugs, marketing and distributing generic drugs and gaining regulatory approval for generic drugs.

We will manufacture standard and effective pharmaceutical products such as mental health and lipid regulators, anti diabetics and respiratory, pain and antibacterial, nervous system disorders and antihypertensive, antiulcerants and thyroid, dermatological and hormonal contraceptives, and ADHD and anticoagulants.

We are also in business to make profits at the same to give our customers value for their money; we want to give people and businesses who patronize our pharmaceutical products the opportunity to be part of the success story of our brand.

We are aware that there are several big scale and small scale generic pharmaceutical manufacturing companies scattered all around the United States and Canada whose products can be found in every nooks and crannies of The United States and Canada, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that can easily accept our products and brand.

We ensured that our facility is easy to locate and we have mapped out plans to develop a far-reaching distribution network for wholesalers of pharmaceutical products all around Concord – New Hampshire and throughout the United States of America.

Much more than producing quality, effective and safe generic pharmaceutical products, our customer care is going to be second to none.

We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they purchase any of our product and also to become our loyal customers and ambassadors.

Harry Tancredo® Pharmaceuticals, LLC will ensure that all our customers (wholesale distributors) are given first class treatment whenever they visit our factory.

We have a CRM software that will enable us manage a one on one relationship with our customers (wholesale distributors) no matter how large the numbers of our customer base may grow to.

We will ensure that we get our customers involved when making some business decisions that will directly or indirectly affect them. Harry Tancredo® Pharmaceuticals, LLC is family business that will be owned by Harry Tancredo and his immediate family members.

Harry Tancredo who is the Chief Executive Officer of the Company is Graduate of Pharmacology and he holds a Master’s Degree in Business Management (MBA).

He has well over 12 years of experience working in related industry as a senior production manager prior to starting Harry Tancredo® Pharmaceuticals, LLC. He will be working with a team of professionals to build the business and grow it to enviably height.

3. Our Products and Services

Harry Tancredo® Pharmaceuticals, LLC is going to run a standard and licensed generic pharmaceutical manufacturing company whose products will not only be sold in Hartford – Connecticut but also throughout the United States of America and Canada.

We are in the generic pharmaceutical manufacturing industry to make profits and also to give our customers value for their money.

We will ensure that we do all that is permitted by the law in the United States of America to accomplish our business goal and objective. These are some of the products that we will be offering;

• Developing and producing generic drugs
• Marketing and distributing generic drugs
• Gaining regulatory approval for generic drugs
• Mental health and lipid regulators
• Anti-diabetics and respiratory
• Pain and antibacterial
• Nervous system disorders and antihypertensive
• Anti-ulcerants and thyroid
• Dermatological and hormonal contraceptives
• ADHD and anticoagulants

4. Our Mission and Vision Statement

• Our vision is to establish a standard generic pharmaceutical manufacturing Company whose products will be not only be sold in Concord – New Hampshire, but also throughout the United States of America and Canada.
• Our mission is to establish a standard and world class generic pharmaceutical manufacturing Company / brand that in our own capacity will favorably compete with leaders in the industry.
• We want to build a business that will be listed amongst the top 20 generic pharmaceutical manufacturing brands in the United States of America and Canada.

Our Business Structure

Harry Tancredo® Pharmaceuticals, LLC is a business that is established with the aim of competing favorably with other leading generic pharmaceutical product brands in the industry.

This is why we will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)

Production / Plant Manager

Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

• Machine Operators
• Accountants / Cashiers

Distribution Truck Drivers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization.
• Responsible for overseeing the smooth running of the pharmaceutical production plant
• Part of the team that determines the quantity and quality of pharmaceutical products that are to be produced
• Maps out strategy that will lead to efficiency amongst workers in the plant
• Responsible for training, evaluation and assessment of plant workers
• Ensures that the steady flow of both raw materials to the plant and easy flow of finished products through wholesale distributors to the market
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Ensures that the plant meets the expected safety and health standard at all times.
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Oversees the smooth running of the daily office and factory activities.
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Responsible for the purchase of raw materials and packaging materials
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Ensures that the organization operates within stipulated budget.
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Accountant / Cashier

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Receives parcels / documents for the company
• Distribute mails in the organization
• Handles any other duties as assigned by the line manager

Production Workers / Machine Operators:

• Responsible for preparing, blending, compounding and packaging pharmaceutical products
• Handle labeling of pharmaceutical products
• Operate machines used in the manufacturing mental health and lipid regulators, ant diabetics and respiratory, pain and antibacterial, nervous system disorders and antihypertensive, antiulcerants and thyroid, dermatological and hormonal contraceptives, and ADHD and anticoagulants
• Assist in packaging and loading pharmaceutical products into distribution trucks
• Assists in loading and unloading pharmaceutical products
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
• Assists the transport and logistics manager in planning their route according to a delivery schedule.
• Local-delivery drivers may be required to sell products or services to pharmaceutical stores and businesses on their route, obtain signatures from recipients and collect cash.
• Transports finished goods and raw materials over land to and from manufacturing plants or retail and distribution centers
• Inspect vehicles for mechanical items and safety issues and perform preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
• Collects and verifies delivery instructions
• Reports defects, accidents or violations

6. SWOT Analysis

We are quite aware that there are several generic pharmaceutical manufacturing companies both large and small in the United States of America and Canada which is why we are following the due process of establishing a business so as to compete favorable with them.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Harry Tancredo® Pharmaceuticals, LLC employed the services of an expert HR and Business Analyst with bias in start – up business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Harry Tancredo® Pharmaceuticals, LLC;

Part of what is going to count as positives for Harry Tancredo® Pharmaceuticals, LLC is the vast experience of our management team, we have people on board who are highly experienced and understands how to grow business from the scratch to becoming a national phenomenon.

So also, our state of the art machines and equipment, the wide varieties of pharmaceutical products that we produce, our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.

A major weakness that may count against us is the fact that we are a new generic pharmaceutical manufacturing company in the United States and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business especially when big names like Mylan Inc., Sandoz Ltd. and Teva Pharmaceuticals Industries Ltd. et al are already determining the direction of the market both in the United States and in the global market.

• Opportunities:

The opportunities available to generic pharmaceutical manufacturing companies with a wide range of products are enormous. This is due to the fact that almost all Americans and people from all over the world take drugs / medicine for different reasons.

As a result of that, we were able to conduct a thorough market survey and feasibility studies so as to position our business to take advantage of the existing market for pharmaceutical products and also to create our own new market. We know that it is going to requires hard work, and we are determined to achieve it.

We are quite aware that just like any other business, one of the major threats that we are likely going to face are economic downturn and unfavorable government policies . It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new generic pharmaceutical manufacturing company in same location where ours is located.

7. MARKET ANALYSIS

• Market Trends

A close study of the trends in the Generic Pharmaceutical Manufacturing industry shows that the industry is expanding rapidly. This is due to the demand for the industry’s products by the aging population with more chronic illnesses.

So also, with the regulatory provisions of the Patient Protection and Affordable Care Act expand consumer access to prescription insurance and provide increased opportunities for product development. Going forward, the industry revenue growth is expected to outpaced revenue growth for the Brand Name Pharmaceutical Manufacturing industry.

Lastly, the generic pharmaceutical manufacturing industry is the adoption of eco – friendly approach towards the production and packaging of its products. As a matter of fact, the industry’s adoption of eco-friendly practices will likely persuade environmentally conscious consumers to buy its products, while increasing operators’ efficiency.

8. Our Target Market

When it comes to selling pharmaceutical products, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who resides in our target market locations.

In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us. We are in business to engage in developing and producing generic drugs, marketing and distributing generic drugs and gaining regulatory approval for generic drugs. Hence our target markets are;

• Health Facilities
• Pharmaceutical Products Wholesalers
• Retail Pharmacy Stores
• Everybody in our target market location

Our competitive advantage

A close study of the generic pharmaceutical manufacturing industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiffer competition and we are well prepared to compete favorably with other generic pharmaceutical manufacturing companies in New Hampshire and throughout the United States and Canada.

Harry Tancredo® Pharmaceuticals, LLC is launching a standard generic pharmaceutical product brand that will indeed become the preferred choice of residence of Concord – New Hampshire and every city where our generic pharmaceutical product will be retailed.

Part of what is going to count as competitive advantage for Harry Tancredo® Pharmaceuticals, LLC is the vast experience of our management team, we have people on board who are highly experienced and understands how to grow business from the scratch to becoming a national phenomenon.

So also, our state of the art pharmaceutical production machines and equipment, the wide varieties of generic pharmaceutical products that we produce our large and far reaching national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups generic pharmaceutical manufacturing companies) in the generic pharmaceutical manufacturing industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Harry Tancredo® Pharmaceuticals, LLC is established with the aim of maximizing profits in the generic pharmaceutical manufacturing industry in both the United States of America and Canada and we are going to go all the way to ensure that we do all it takes to sell a wide range of generic pharmaceutical products to a wide range of customers.

Harry Tancredo® Pharmaceuticals, LLC will generate income by selling the following pharmaceutical products;

• Antiulcerants and thyroid

10. Sales Forecast

One thing is assured when it comes to generic pharmaceutical manufacturing company, if your products are well – packaged and branded and if your production plant is centrally positioned and easily accessible, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Concord – New Hampshire and every city where our generic pharmaceutical products will be sold and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the generic pharmaceutical manufacturing industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Concord – New Hampshire.

Below is the sales projection for Harry Tancredo® Pharmaceuticals, LLC, it is based on the location of our business and other factors as it relates to small scale and medium scale generic pharmaceutical manufacturing company start – ups in the United States;

• First Fiscal Year-: $250,000
• Second Fiscal Year-: $550,000
• Third Fiscal Year-: $950,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor manufacturing same generic pharmaceutical products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Harry Tancredo® Pharmaceuticals, LLC and also the kind of generic pharmaceutical products we will produce, we conduct a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market in our target market locations.

We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time and also for our products to favorable compete with other leading generic pharmaceutical manufacturing brands in the United States of America and Canada.

We hired experts who have good understanding of the generic pharmaceutical manufacturing industry to help us develop

In other to continue to be in business and grow, we must continue to sell our generic pharmaceutical products to the available market which is why we will go all out to empower or sales and marketing team to deliver our corporate sales goals.

In summary, Harry Tancredo® Pharmaceuticals, LLC will adopt the following sales and marketing approach to sell our generic pharmaceutical products;

• Introduce our generic pharmaceutical products brand by sending introductory letters to pharmacy stores, hospitals, residence, pharmaceutical merchants, retailers and other stakeholders in Concord – New Hampshire and other cities both in the United States of America and Canada
• Open our generic pharmaceutical manufacturing company with a party so as to capture the attention of residence who are our first targets
• Engage in road show in targeted communities from time to time to sell our products
• Advertise our products in community based newspapers, local TV and radio stations
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our generic pharmaceutical product brands
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

In spite of the fact that our generic pharmaceutical manufacturing plant is a standard one with a wide range of pharmaceutical products that in few years from now will favorably compete with other leading brands in the industry like Mylan Inc., Sandoz Ltd. and Teva Pharmaceuticals Industries Ltd.

We will still go ahead to intensify publicity for all our products and brand. We are going to explore all available means to promote Harry Tancredo® Pharmaceuticals, LLC.

Harry Tancredo® Pharmaceuticals, LLC has a long-term plan of distributing our generic pharmaceutical products in various locations all around the United States of America and Canada which is why we will deliberately build our brand to be well accepted first in Concord – New Hampshire before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for selling our products but to also effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Harry Tancredo® Pharmaceuticals, LLC;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our generic pharmaceutical product brand
• Install our Bill Boards on strategic locations all around major cities in the United States of America and Canada
• Engage in road show from time to time in targeted communities
• Distribute our fliers and handbills in target areas
• Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our products.
• Ensure that our products are well branded and that all our staff members wear our customized clothes, and all our official cars and distribution vans are customized and well branded.

12. Our Pricing Strategy

When it comes to pricing for products such as generic pharmaceutical products, there are two sides to the coin. We are aware of the pricing trend in the generic pharmaceutical manufacturing industry which is why we have decided to produce various sizes of pharmaceutical products as regulated by the industry.

In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our products are sold a little bit below the average prices of various generic pharmaceutical product brands in the United States of America.

We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our generic pharmaceutical product brands.

• Payment Options

The payment policy adopted by Harry Tancredo® Pharmaceuticals, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Harry Tancredo® Pharmaceuticals, LLC will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for generic pharmaceutical product purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for the purchase of our products.

13. Startup Expenditure (Budget)

Starting a standard generic pharmaceutical manufacturing company is indeed a capital – intensive business. This is so because the amount required in setting up a generic pharmaceutical production plant is not a piecemeal. The bulk of the start – up capital will be sent on leasing or acquiring a facility and also in purchasing mixing, blending, compounding and packaging equipment.

Aside from that, you are not expected to spend much except for purchase and servicing of distribution trucks, purchasing raw materials, paying of your employees and utility bills. These are the key areas where we will spend our start – up capital;

• The total fee for registering the Business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
• Marketing promotion expenses for the grand opening of Harry Tancredo® Pharmaceuticals, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
• The cost for hiring Business Consultant – $2,500.
• The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600.
• The cost for construction of a standard generic pharmaceutical production plant – $100,000.
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
• The cost for start-up inventory (mixing, blending, compounding and packaging equipment, raw materials, and packaging materials et al) – $80,000
• Cost for store equipment (cash register, security, ventilation, signage) – $13,750
• Cost of purchase of distribution vans – $60,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – $4,000.
• The cost of launching a website – $600
• The cost for our opening party – $10,000
• Miscellaneous – $10,000

We would need an estimate of $500,000 to successfully set up our generic pharmaceutical manufacturing company in Concord – New Hampshire. Please note that this amount includes the salaries of all the staff for the first 3 month of operation.

Generating Funds / Startup Capital for Harry Tancredo® Pharmaceuticals, LLC

Harry Tancredo® Pharmaceuticals, LLC is a family business that is owned and financed by Harry Tancredo and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings and sell of stocks
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of any business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Harry Tancredo® Pharmaceuticals, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our generic pharmaceutical products a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Harry Tancredo® Pharmaceuticals, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and construction of standard generic pharmaceutical production plant: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members and friends: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of the Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Establishing business relationship with vendors – pharmacy stores, hospitals, pharmaceutical products wholesale suppliers / merchants: In Progress

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• Retail Pharmacy Business Plan [Sample Template]
• Pharmaceutical Distribution Business Plan [Sample Template]
• Drug Prescription Delivery Business Plan [Sample Template]

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How to write a business plan for a pharmaceutical manufacturer?

Putting together a business plan for a pharmaceutical manufacturer can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.

We will explore why writing one is so important in both starting up and growing an existing pharmaceutical manufacturer, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.

Without further ado, let us begin!

In this guide:

Why write a business plan for a pharmaceutical manufacturer?

What information is needed to create a business plan for a pharmaceutical manufacturer.

• How do I build a financial forecast for a pharmaceutical manufacturer?

The written part of a pharmaceutical manufacturer business plan

• What tool should I use to write my pharmaceutical manufacturer business plan?

Having a clear understanding of why you want to write a business plan for your pharmaceutical manufacturer will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create a pharmaceutical manufacturer business plan.

To have a clear roadmap to grow the business

Running a small business is tough! Economic cycles bring growth and recessions, while the business landscape is ever-changing with new technologies, regulations, competitors, and consumer behaviours emerging constantly.

In such a dynamic context, operating a business without a clear roadmap is akin to driving blindfolded: it's risky, to say the least. That's why crafting a business plan for your pharmaceutical manufacturer is vital to establish a successful and sustainable venture.

To create an effective business plan, you'll need to assess your current position (if you're already in business) and define where you want the business to be in the next three to five years.

Once you have a clear destination for your pharmaceutical manufacturer, you'll have to:

• Identify the necessary resources (human, equipment, and capital) needed to reach your goals,
• Determine the pace at which the business needs to progress to meet its objectives as scheduled,
• Recognize and address the potential risks you may encounter along the way.

Engaging in this process regularly proves advantageous for both startups and established companies. It empowers you to make informed decisions about resource allocation, ensuring the long-term success of your business.

To get visibility on future cash flows

If your small pharmaceutical manufacturer runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your pharmaceutical manufacturer's future cash flows.

So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.

The good news is that your pharmaceutical manufacturer business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.

To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.

By diligently monitoring your pharmaceutical manufacturer's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.

To secure financing

Whether you are a startup or an existing business, writing a detailed pharmaceutical manufacturer business plan is essential when seeking financing from banks or investors.

This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.

Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.

Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.

To do so, they will be looking for evidence that your pharmaceutical manufacturer has the potential for healthy growth, profitability, and cash flow generation over time.

Now that you understand why it is important to create a business plan for a pharmaceutical manufacturer, let's take a look at what information is needed to create one.

Need a convincing business plan?

The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.

Writing a pharmaceutical manufacturer business plan requires research so that you can project sales, investments and cost accurately in your financial forecast.

In this section, we cover three key pieces of information you should gather before drafting your business plan!

Carrying out market research for a pharmaceutical manufacturer

As you consider writing your business plan for a pharmaceutical manufacturer, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your pharmaceutical manufacturer.

Your market research might reveal that consumers may be looking for more natural or organic pharmaceuticals, as well as ones that have fewer side effects. It could also suggest that there might be an increasing demand for medications that are easier to take, such as ones that can be taken in tablet or liquid form.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your pharmaceutical manufacturer.

Developing the sales and marketing plan for a pharmaceutical manufacturer

Budgeting sales and marketing expenses is essential before creating a pharmaceutical manufacturer business plan.

A comprehensive sales and marketing plan should provide an accurate projection of what actions need to be implemented to acquire and retain customers, how many people are needed to carry out these initiatives, and how much needs to be spent on promotions, advertising, and other aspects.

This helps ensure that the right amount of resources is allocated to these activities in order to hit the sales and growth objectives forecasted in your business plan.

The staffing and equipment needs of a pharmaceutical manufacturer

Whether you are at the beginning stages of your pharmaceutical manufacturer or expanding its horizons, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is vital to ensure your business's success.

To achieve this, both the recruitment and investment plans must align coherently with the projected timing and level of growth in your forecast. It is essential to secure appropriate funding for these plans.

A pharmaceutical manufacturer might incur staffing costs such as salaries for scientists, technicians, production staff, and administrative personnel. They might also incur equipment costs such as purchasing, leasing, and maintaining laboratory and production equipment, such as centrifuges, autoclaves, and manufacturing facilities.

To create a financial forecast that accurately represents your business's outlook, remember to factor in other day-to-day operating expenses.

Now that you have all the necessary information, it's time to dive in and start creating your business plan and developing the financial forecast for your pharmaceutical manufacturer.

What goes into your pharmaceutical manufacturer's financial forecast?

The objective of the financial forecast of your pharmaceutical manufacturer's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.

The four key outputs of a financial forecast for a pharmaceutical manufacturer are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

Your pharmaceutical manufacturer forecasted P&L statement enables the reader of your business plan to get an idea of how much revenue and profits your business is expected to make in the near future.

Ideally, your reader will want to see:

• Growth above the inflation level
• Expanding profit margins
• Positive net profit throughout the plan

Expectations for an established pharmaceutical manufacturer will of course be different than for a startup. Existing businesses which have reached their cruising altitude might have slower growth and higher margins than ventures just being started.

The projected balance sheet of your pharmaceutical manufacturer

The balance sheet for a pharmaceutical manufacturer is a financial document that provides a snapshot of your business’s financial health at a given point in time.

It shows three main components: assets, liabilities and equity:

• Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
• Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.

Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your pharmaceutical manufacturer's liquidity and solvency:

• Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
• Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.

Looking at the balance sheet can also provide insights into your pharmaceutical manufacturer's investment and financing policies.

In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).

The projected cash flow statement

A cash flow forecast for a pharmaceutical manufacturer shows how much cash the business is projected to generate or consume.

The cash flow statement is divided into 3 main areas:

• The operating cash flow shows how much cash is generated or consumed by the operations (running the business)
• The investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.)
• The financing cash flow shows how much cash is raised or distributed to investors and lenders

Looking at the cash flow forecast helps you to ensure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

It is also a best practice to include a monthly cash flow statement in the appendices of your pharmaceutical manufacturer business plan so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The sources and uses table or initial financing plan is a key component of your business plan when starting a pharmaceutical manufacturer.

It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).

This table helps size the investment required to set up the pharmaceutical manufacturer, and understand how risks will be distributed between the business owners, and the financiers.

The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.

Now that you have a clear understanding of what will go into the financial forecast of your pharmaceutical manufacturer business plan, let's have a look at the written part of the plan.

Need inspiration for your business plan?

The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.

The written part of the business plan is where you will explain what your business does and how it operates, what your target market is, whom you compete against, and what strategy you will put in place to seize the commercial opportunity you've identified.

Having this context is key for the reader to form a view on whether or not they believe that your plan is achievable and the numbers in your forecast realistic.

The written part of a pharmaceutical manufacturer business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Let's go through the content of each section in more detail!

1. The executive summary

In your pharmaceutical manufacturer's business plan, the first section is the executive summary — a captivating overview of your plan that aims to pique the reader's interest and leave them eager to learn more about your business.

When crafting the executive summary, start with an introduction to your business, including its name, concept, location, how long it has been running, and what sets it apart. Briefly mention the products and services you plan to offer and your target customer profile.

Following that, provide an overview of the addressable market for your pharmaceutical manufacturer, current trends, and potential growth opportunities.

Next, include a summary of key financial figures like projected revenues, profits, and cash flows.

Finally, in the "ask" section, detail any funding requirements you may have.

2. The presentation of the company

As you build your pharmaceutical manufacturer business plan, the second section deserves attention as it delves into the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide valuable insights into the legal structure of the business, the identities of the owners, and their respective investments and ownership stakes. This level of transparency is vital, particularly if you're seeking financing, as it clarifies which legal entity will receive the funds and who holds the reins of the business.

Moving to the location part, you'll offer a comprehensive view of the company's premises and articulate why this specific location is strategic for the business, emphasizing factors like catchment area, accessibility, and nearby amenities.

When describing the location of your pharmaceutical manufacturer, you could emphasize the potential benefits of its location. It may be situated in a region with access to a large population, which could open up opportunities for new customers. It might also be close to a major transportation hub, which could ease the process of shipping materials and products. Additionally, the area could have a robust pool of qualified workers, which could help ensure that your business is staffed with capable personnel.

Lastly, you should introduce your esteemed management team. Provide a thorough explanation of each member's role, background, and extensive experience.

It's equally important to highlight any past successes the management team has achieved and underscore the duration they've been working together. This information will instil trust in potential lenders or investors, showcasing the strength and expertise of your leadership team and their ability to deliver the business plan.

3. The products and services section

The products and services section of your pharmaceutical manufacturer business plan should include a detailed description of what your company sells to its customers. 

For example, your pharmaceutical manufacturer may offer research and development services to customers, such as creating new drugs for specialized treatments. It may also offer manufacturing services to produce the drugs in bulk. Additionally, the company may be able to provide quality assurance services to certify the drugs meet certain standards. These products and services can help customers to access the drugs they need and ensure they are of high quality.

The reader will want to understand what makes your pharmaceutical manufacturer unique from other businesses in this competitive market.

When drafting this section, you should be precise about the categories of products or services you sell, the clients you are targeting and the channels that you are targeting them through. 

4. The market analysis

When you present your market analysis in your pharmaceutical manufacturer business plan, it's crucial to include detailed information about customers' demographics and segmentation, target market, competition, barriers to entry, and any relevant regulations.

The main objective of this section is to help the reader understand the size and attractiveness of the market while demonstrating your solid understanding of the industry.

Begin with the demographics and segmentation subsection, providing an overview of the addressable market for your pharmaceutical manufacturer, the key trends in the marketplace, and introducing different customer segments along with their preferences in terms of purchasing habits and budgets.

Next, focus on your target market, zooming in on the specific customer segments your pharmaceutical manufacturer aims to serve and explaining how your products and services fulfil their distinct needs.

For example, your target market might include individuals who are aged 65 and over. These individuals are likely to require medication for multiple health issues and would benefit from long-term use or maintenance medications. Additionally, they may be unable to afford the medications or have difficulty understanding how to use them, thus providing a market for the pharmaceutical manufacturer to provide support and education.

Then proceed to the competition subsection, where you introduce your main competitors and highlight what sets you apart from them.

Finally, conclude your market analysis with an overview of the key regulations applicable to your pharmaceutical manufacturer.

5. The strategy section

When crafting the strategy section of your business plan for your pharmaceutical manufacturer, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.

The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.

For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.

In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.

Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.

Your pharmaceutical manufacturer could face the risk of a costly recall if a drug is found to be unsafe or ineffective. This could happen if a drug is improperly tested or if there is a manufacturing defect. In addition, your manufacturer may be exposed to potential lawsuits from patients who have experienced adverse reactions or from competitors whose products have been infringed upon. These risks could have a serious financial impact on your business, and may even put your reputation at risk.

6. The operations section

The operations of your pharmaceutical manufacturer must be presented in detail in your business plan.

The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).

You should then state the operating hours of your pharmaceutical manufacturer - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.

The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.

You may have key assets such as the research and development of new drugs and processes. This could include patents, trade secrets, and the know-how of the team that develops such products. Additionally, you might have intellectual property such as trademarks, logos, and designs associated with certain products or services. This kind of IP can help ensure that your products are identified and stand out from the competition.

Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).

7. The presentation of the financial plan

The financial plan section is where we will present the financial forecast we talked about earlier in this guide.

Now that you have a clear idea of what goes in your pharmaceutical manufacturer business plan, let's look at the solutions you can use to draft yours.

What tool should I use to write my pharmaceutical manufacturer's business plan?

There are two main ways of creating your pharmaceutical manufacturer business plan:

• Using specialized business planning software,
• Hiring a business plan writer.

Using an online business plan software for your pharmaceutical manufacturer's business plan

The modern and most efficient way to write a pharmaceutical manufacturer business plan is to use business plan software .

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Need a solid financial forecast?

The Business Plan Shop does the maths for you. Simply enter your revenues, costs and investments. Click save and our online tool builds a three-way forecast for you instantly.

Hiring a business plan writer to write your pharmaceutical manufacturer's business plan

Outsourcing your pharmaceutical manufacturer business plan to a business plan writer can also be a viable option.

These writers possess valuable experience in crafting business plans and creating accurate financial forecasts. Additionally, enlisting their services can save you precious time, enabling you to concentrate on the day-to-day operations of your business.

It's important to be mindful, though, that hiring business plan writers comes with a cost. You'll be paying not just for their time but also for the software they use, and their profit margin.

Based on experience, a complete business plan usually requires a budget of at least £1.5k ($2.0k) excluding tax, and more if revisions are needed after initial meetings with lenders or investors - changes often arise following these discussions.

When seeking investment, be cautious about spending too much on consulting fees. Investors prefer their funds to contribute directly to business growth. Thus, the amount you spend on business plan writing services and other consulting services should be negligible compared to the amount you raise.

Another aspect to consider is that while you'll receive the output of the business plan, you usually won't own the actual document. It will be saved in the consultant's business plan software, which will make updating the plan challenging without retaining the consultant on a retainer.

Given these factors, it's essential to carefully weigh the pros and cons of outsourcing your pharmaceutical manufacturer business plan to a business plan writer and decide what best suits your business's unique needs.

Why not create your pharmaceutical manufacturer's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a pharmaceutical manufacturer business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my pharmaceutical manufacturer business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating a pharmaceutical manufacturer business plan for some entrepreneurs, it is by far not the best or most efficient solution.

• Using business plan software is a modern and cost-effective way of writing and maintaining business plans.
• A business plan is not a one-shot exercise as maintaining it current is the only way to keep visibility on your future cash flows.
• A business plan has 2 main parts: a financial forecast outlining the funding requirements of your pharmaceutical manufacturer and the expected growth, profits and cash flows for the next 3 to 5 years; and a written part which gives the reader the information needed to decide if they believe the forecast is achievable.

We hope that this in-depth guide met your expectations and that you now have a clear understanding of how to write your pharmaceutical manufacturer business plan. Do not hesitate to contact our friendly team if you have questions additional questions we haven't addressed here.

Also on The Business Plan Shop

• How to write a business plan to secure a bank loan?
• Key steps to write a business plan?
• Top mistakes to avoid in your business plan

Do you know entrepreneurs interested in starting or growing a pharmaceutical manufacturer? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How to Start a Pharma Company in 10 Easy Steps

David Blok | Posted on September 19, 2023 | Updated on March 26, 2024

Introduction

Step 1: market research and pharmaceutical business ideas.

• Step 2: Creating a Business Plan

Step 3: Regulatory Compliance and Legalities

• Step 4: Team Building and Talent Acquisition
• Step 5: Location and Infrastructure

Step 6: Product Development

Step 7: clinical trials and approval process.

• Step 8: Manufacturing and Supply Chain Management

Step 9: Marketing and Sales

• Step 10: Scaling Your Business
• Frequently Asked Questions (FAQs)

Let’s face it: if you are reading this, you are one of two people: the entrepreneurial mind that dreams of building a business in an impactful industry, or you’re passionate about science and research and want to contribute to the better health of humanity.

Whether you envision yourself as a Pharma tycoon or simply long to casually drop ‘I make drugs for a living’ at dinner parties, the time has come for you to admit it – you want to build a Pharma company.

Why is a Pharmaceutical company a good investment?

Starting any company takes time, energy and money, but a Pharma business has even more to consider: it requires a combination of scientific expertise, business acumen, and regulatory knowledge. Whether you’re considering how to start a pharmaceutical business or exploring pharmaceutical business ideas you’re not just selling any products here, you’re impacting the health of people. I know what you are thinking: if it’s so difficult, why do people keep investing in Pharma?

Pharmaceutical manufacturing companies can be extremely profitable:

• These companies show resilience during market downturns, rising in R&D investments to stay competitive & flexible (Grand View Research Report, 2023).
• The industry has experienced significant growth during the past two decades, with Pharma revenues worldwide totaling 1.48 trillion dollars in 2022 (statista, 2024). Still don’t believe it? Check out this blog and discover India’s top Pharma Companies to find out h ow profitable pharma companies are in India.

Being such a lucrative market, it’s a natural good investment, especially if you have a good idea – which I’ll get to in the next chapter.

This brings us to our topic at hand, welcome to your comprehensive guide on how to make your venture a reality. In the upcoming sections, we’ll delve into the why’s and how’s of building a successful Pharma empire. Get ready for insights, anecdotes, and much more.

Let’s dive in!

The first step is always the hardest because there is nothing before it. On the flip side it’s a great opportunity to set the direction of your company. Your business is a blank canvas at this point, and you get to bring your vision to life, so the best way to set the wheel in motion is by understanding everything about the industry gap you are trying to fill, in practical terms, whether your idea is viable or not.

Before you dismiss market research as a formality, ask yourself: “Is there a chance my solution is old news compared to what’s already out there?”.

Unless you have the cure for cancer in your pocket, someone’s advancements in your field are worth taking a look at. At this stage, you should focus on two things:

• Understanding market trends and directions.
• Realizing if your big idea is profitable.

Market research will identify unmet needs within the healthcare system, such as patient preferences. By looking at emerging technologies, you can direct your research and development strategy.

Your company’s direction is in your hands at this point, and isn’t that exciting?

Where to start your research?

Start looking at insightful industry reports, academic journals, and the latest industry news, but remember to use credible and reputable sources.

The most important thing is to stay updated, especially on everything that concerns your big idea; market research will back it up. Staying on top of trends also ensures your product is aligned with market demand, and that you have a competitive edge, also called your unique selling proposition.

Step 2: Business Plan and Funding your Pharmaceutical Company

Once you’ve settled on an idea, it’s time to start shaping it into an actual enterprise. Welcome to a pivotal chapter: creating the blueprint of your operations, aka your business plan. Don’t have the faintest idea of what a business plan consists of? Pharmaoffer has got you covered.

Fundamentals of a bulletproof Business Plan:

• A market analysis – which you already did in Step 1.
• Outline of management and the company organization.
• All your products/services – which you probably already know.
• Customer segmentation.
• Marketing plan.

Pitch Perfect

Why is a detailed business plan crucial, you may ask? This plan isn’t just a formality; it’s your golden ticket. This single document is meant to convince stakeholders and investors that you’re not a risk; you’re a calculated and promising investment, which will increase trust and the chances of getting the funds you need.

So don’t be scared to dive deep into the big questions like who will benefit from your pharmaceutical innovations, and what makes it profitable. Paint the financial portrait of your venture with clarity—how will the funds be utilized, and what’s the return on investment? Venture capitalists, government grant applications, and loans are great routes to explore. Your business plan will prepare you to pitch your idea to the right people.

Okay, this is where it gets tricky, but it’s why pharmaceutical business entrepreneurship isn’t for everybody. You are too far along in this journey to stop now, so it’s better to keep going.

Regulating to triumph

We know that acronyms like FDA, GMP, and CEP may be scary, but like we said from the start of this journey: when it comes to the health of the population, you can’t risk it. Regulations ensure your company is ethical and safe. Dismissing them puts your entire operation at risk of getting a bad reputation, not to mention facing penalties later on. Oh, and besides, no funding without compliance is just not going to happen!

What is your business structure?

Now, let’s talk about how to set up and open a Pharma business. Should you go for an LLC (more partnership-oriented) or a corporation, and why does it matter?

The selection of a business structure is a crucial decision for a company because it impacts various aspects, including:

• Legal responsibilities.
• Liability protection.
• Ability to raise capital – we know this sounds like a broken record on this one, but money it doesn’t grow on trees, right?

Remember, it’s not just about paperwork; your business structure shapes the core of your company. Speaking of structure and shape, it’s time to shape your physical company.

Step 4: Building your A-team

You’re the mastermind behind this venture, but you don’t have to do everything yourself. Like a formula, it takes plenty of ingredients to make one solution. In this section, you’ll select the best people to represent and help grow your business.

The trick to knowing whom to hire is simple: point out the necessary fields for your business to run that you need to hire for, and find people who can excel at them. Think R&D, supply chain management, sales, and, of course, medical professionals. ´

Extra tip: remember that sometimes you don’t want to hire the best technical person, but someone who can complement your team’s attributes, like, for example, someone with a proven track record of adaptability and communication.

Step 5: Location, Location, Location

The perfect location is a no-brainer: it is the one closest to your potential partners. Places like research centers for experiments, hospitals for data, or universities for talent scouting are where you wanna be. Just think of how your idea can improve with these extra resources.

A place to call…office

Ideally, if you picture a creative and productive atmosphere, it won’t be a cramped space, poorly lit with bad chairs, that won’t cut it. Your facilities are the day-to-day of your operation, where some say, the real magic happens, so make sure your spaces are up-to code and optimized for the tasks at hand. Remember, a positive environment boosts morale and increases efficiency.

Admit it, you’ve been thinking of this since the very beginning of this adventure. After all, this is what you came here for. Whether it’s a new drug or medical device, the development phase is the fun, and most important part. Let your R&D work shine to bring your vision to life.

Trials and tribulations

Having a finished product means one thing, and one thing only in the Pharma world: clinical trials. Clinical trials aim to provide a scientific basis for advising and treating patients.

But don’t be discouraged if it doesn’t work out. Even when researchers don’t obtain the outcomes they predicted, the trials results can help point scientists in the correct direction of their research. Trials present their challenges, but as cliché as it is, every challenge is an opportunity in disguise and a testament to your team’s innovation capacities.

Think you heard enough about clinical trials? These are the final stages before your product enters the market, and needless to say, it won’t enter without the green light. How do you make sure it’s approved then?

• Rigorous protocol adherence.
• Collaboration with regulatory bodies.
• Scientifically proven efficacy and safety.
• Real-world testing for validation.

Extra tip: real-world testing is a good option to further validate and solidify product claims that may give you an interesting competitive edge.

Passing this frantic stage is a monumental milestone, and it’s one foot in the door of your Pharmaceutical business success. If you are in this stage, or just looking to dive deeper into the complexities of API’s clinical trials, check out our blog, API Clinical Trials: From Preclinical Trials to Post-Marketing Surveillance.

Step 8: Pharmaceutical Manufacturing and Supply Chain Management

Quality control isn’t just between your lab and office walls most of the time unless you manufacture everything in-house, but is that cost-effective?

We are not going to go into this question but leave it for a promising blog about the pros and cons of API in-house manufacturing or out-sourcing. This time we’re going to talk about the Pharmaceutical company’s supply chain.

As you need to make sure every substance you use is under the same quality control as your business, how can you be positive you are purchasing APIs from a qualified supplier?

We’re not gonna lie, unfortunately this step can be a dead end as many API manufactures aren’t registered in a public contact base.

You really need to know the business and ask around, a total nightmare. This is our mission statement: at Pharmaoffer we want to match the best certified API manufacturers with businesses like yours, so to provide resources for both and enrich Pharmaceutical business supply chain with qualified options.

Your supply ally

When choosing the right suppliers, the biggest worry is compliance standards, so make sure your supplier:

• Meets all compliance standards.
• Is up to speed with industry best practices.
• Has the means to make deliveries on schedule.

You have a finished product, your team is working and the place up and running, so it’s time to find some clients. We do this with a marketing and sales strategy.

What do people think of when they hear your company’s name? Do you have a logo? These are some of the questions you need to clear with the proper professionals.

Branding is understandably the last thing on your mind, but don’t make the mistake to overlook it indefinitely. Nowadays, if your business doesn’t look good it won’t be credible. Branding is how you present your company to the world. It’s your mission statement, your corporate culture, and your values. It will help you find your market and secure a strong position in it.

Getting the word out

Marketing is about business survival, there is no denying it. In this increasingly visual world it’s not enough to have a great product, you need to present it well to elevate it. The way you do so is with marketing tools.

Now don’t fall into cheap marketing tactics: in Pharma you can’t make any false claims, exaggerate benefits, or show dubious testimonials. This will kill your entire operation. Marketing in the Pharma sector demands a careful balance of awareness-raising and ethical considerations. Credibility is central, so keep it real, and let your amazing product and integrity attract customers.

Because we understand how complex marketing strategies can be, at Pharmaoffer we wrote you a startup guide to navigate online marketing in the pharmaceutical sector called Online marketing in pharma; where to start?   Feel free to take a look.

Step 10: Scaling Your Pharmaceutical Business

You finally have a Pharma company, congratulations and we take no credit for it. Now that you have a growing business, the question is: How big do you wanna get? We’ve seen how much does it cost to start a pharmaceutical company and remember that scaling and it isn’t just about growth, it’s about smart growth. Scaling is about expanding your operation, and it should be a calculated decision.

To make the right move you need to be on top of market demand, KPIs tracking, and consult your team to know when it’s the right time to do it.Bigger the business, bigger the challenge.

Bigger the business, bigger the challenge

A bigger business is a complex one. From staffing to resource allocation, be prepared to adapt your business strategies as you expand.

Extra tip: keep your staff informed and let them be a part of the change. It will make them more involved in your business success.

You made it to the end yay!

We saw how to start a Pharmaceutical company investment which is no small endeavor, but it’s a rewarding one for sure! You are building something of your own, following your heart and creative dreams and the best of all, you’re saving lives while you do it, how great is that?

Okay, it’s time to get to work, so roll up those sleeves, and get started if you haven’t already. We have no doubts that if you pay attention to these 10 steps, you have what it takes to build your successful Pharmaceutical company.

Needing further assistance to find the right API suppliers for your business? Fill in the form to contact Pharmao ff er and schedule a free meeting to take your business to the next level.

Is it hard to start a pharmaceutical company?

Yes, but it's also rewarding. Be prepared for regulatory hurdles and significant initial investment.

How long does it take to launch pharma company?

On average, it could take 1–3 years, depending on the business model, licensing, and other factors.

Can I start a pharma company without a medical background?

Yes, although you'll need a team of experts in medical and scientific fields. Your role may be more focused on business strategy and growth.

What are the biggest challenges in starting a pharma company?

Regulatory compliance, securing funding, and market competition are some of the biggest hurdles you'll face.

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• Industry Insights & Trends (11)
• Interviews & Case Studies (7)
• Market Analysis & Data (13)
• Medicines & Access (16)
• Regulations & Standards (18)
• Sales & Marketing (15)

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Pharmacy Business Plan

Many pharmacists dream of opening their pharmacies. But more often than not, the collection of funds and resources becomes an overwhelming and off-putting process.

But it doesn’t need to be. A pharmacy business plan can help you at every step of setting up your pharmacy business.

If you are planning to start a new pharmacy business, the first thing you will need is a business plan. Use our sample Pharmacy Business Plan created using Upmetrics business plan software to start writing your business plan in no time.

Before you start writing a business plan, spend as much time as you can reading through some samples of medical and health-related business plans .

Industry Overview

The pharmaceutical industry stood at a market value of 1.27 trillion dollars in 2020 and has shown remarkable growth in the past two decades.

The advancement of research and development in the medical field has played a significant role in the growth of the pharmaceutical industry. Also, better production and distribution have changed the way people get medicines.

From online pharmacies to home deliveries, the face of the pharmacy industry has changed and become more convenient.

Also, with the growth of access to information, it has become more competitive too. But if done the right way, the pharmacy business is an extremely profitable one as well.

Say goodbye to boring templates

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Things to Consider Before Writing a Pharmacy Store Business Plan

Check your legal requirements.

A pharmacy business requires a fair amount of licenses and permits. It is good to have a checklist of all the required licenses and to see if you have to get any of them.

Research what permits your state requires as well as the ones mandatory for everyone. It helps you stay on the good side of the law.

Pick a good location

A pharmacy setup requires a fixed minimum area. Also, a pharmacy that is easily accessible is more likely to succeed than one which is unreachable during emergencies. Hence, picking a good location is important .

Also, you can pick between starting a physical store or going online. Both business structures would have their pros and cons. You should pick the one that is the best for you.

Have a proper storage facility

Different medicines and formulas have different storage requirements. You’ll keep most of them in cool and dry places though. Bad storage can cost a pharmacy business dearly, even if you do everything else right.

Hence, it is important to have a good and ideal storage facility before you get started.

Check if your staff has the proper technical knowledge

You need technical knowledge and attention to detail to fare well as a pharmacist and so does your staff. As dealing with medicines is quite a critical job and can have consequences if not done right, it is important to find staff who know what they are doing and are well-trained and up to the job.

After you figure out some of the technical requirements, it is essential to figure out the business side of running a pharmacy. Planning, in the beginning, can save you from a lot of trouble later on.

Chalking Out Your Business Plan

A business plan helps you stay prepared for challenges, make better decisions, and formulate better business strategies. A pharmacy business takes a fair amount of legal procedures and competitive strategies, a pharmacy business plan can help you with that.

Reading some sample business plans will give you a good idea of what you’re aiming for. Also, it will show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample pharmacy business plan for you to get a good idea about how perfect a pharmacy business plan should look and what details you will need to include in your stunning business plan.

Pharmacy Business Plan Outline

This is the standard business plan outline which will cover all important sections that you should include in your business plan.

• Keys to Success
• Business Ownership
• Summary Chart
• Business Model Description
• Mail order customers
• Walk-in customers
• Target Market Analysis
• Target Market Segment Strategy
• Competitive Edge
• Marketing Strategy
• Sales Forecast
• Development Requirements
• Personnel Plan
• Important Assumptions
• Break-even Analysis
• Projected Profit and Loss
• Projected Cash Flow
• Balance Sheet

Let’s understand how you can write each section of the pharmacy business plan.

1. Executive Summary

The executive summary section forms the first page of your business plan. It summarises all that your business stands for.

The executive summary section consists of the following subsegments:

• Objectives : This segment consists of the reason you started your business in the first place. What is your idea behind it and what problem do you plan on solving with it?
• Mission : Your mission statement should reflect how your pharmacy business can help people, apart from providing them with medicines. It reflects how your idea can deal with a problem more optimally.
• Financial Summary : This section would consist of the funding requirements of your business, and how the said funds would be put to use. It serves the main purpose of the executive summary, which is to get your business funded.

As a pharmacy business, your executive summary would consist of the type and size of your pharmacy business, your team, your qualifications and licenses, and a summary of your financial plan.

2. Products and Services

This section consists of a description of all the products and services your pharmacy offers.

For example, apart from your general products, this section can also consist of services your pharmacy offers like home delivery of medicines, subscription packages, online orders, etc.

3. Market Analysis

Market analysis helps you understand what you are getting yourself into. It also helps you make sense of all the research you have done and how you can put it to use for your business.

It consists of the following subsegments:

• Market Segmentation : Through market segmentation, you separate your target audience from the rest of the market based on their age, gender, income, occupation, medical conditions, etc.
• Market Positioning : In this segment, you can add an analysis of where you stand in the current market. And what would be the best marketing strategy for you as per your position?
• Target Market Analysis : In this section, you’ll write down an analysis of your target market, and their tastes and preferences.

As a pharmacy business, you can list down the type of pharmacy you own, your target customer base, the kind of services they like, the location they’ll prefer, and how they buy their medical supplies.

4. Strategy And Implementation

After you carry out market analysis, the next step would be to create a marketing strategy based on the same. This section helps you promote your business to your target audience.

This section consists of the following subsegments:

• Competitive Edge : Include your competitive advantage in this section. Include how your product is better than your competitor’s and how you’ll use that to your advantage.
• Marketing Strategy : Your marketing strategy should speak to your target audience. Your campaign should show your customers how your business solves a pressing problem.
• Sales Strategy : A sales strategy should be formulated after surveying what works best for your specific industry.

As a pharmacy business, you can center your marketing around safe products, better service, and availability. According to various surveys, KAM, clinical sales force, and service rep model are three of the most successful strategies for pharmacies.

5. Web Plan

With everything going online, a website strategy is of utmost importance. With online pharmacies like mail, my prescriptions, and Amazon pharmacy coming up, having an online presence is crucial to being seen by your consumers.

Moreover, an eCommerce website can also serve as a good alternative if you don’t want to go through the hassle of owning a physical store.

Nonetheless, building your online presence can help you in getting noticed. It is also a good method of promoting your brand idea.

6. Financial Plan

This section would consist of everything about your company’s finances. From your financial history to your projected profits, your financial plan would cover it all.

A good financial plan helps your business survive and thrive.

This segment consists of the following subsegments:

• Financial Resources : This segment would consist of the investment you can put in your business, as well as other resources for meeting your funding requirements.
• Funding Requirements : This would consist of the funding requirements to set up your pharmacy and keep it going.
• Projected Cash Flow and Profits : This section would consist of your business’s expected cash flow and profits in the long term.

Download a sample pharmacy business plan

Need help writing your business plan from scratch? Here you go;  download our free pharmacy business plan pdf  to start.

It’s a modern business plan template specifically designed for your pharmacy business. Use the example business plan as a guide for writing your own.

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Pharmacy Business Plan Summary

In conclusion, though a pharmacy business might take a lot of work, you can make running your business a lot easier and smoother with a business plan.

A business plan helps you stay organized and updated as per market trends and changing environment of the industry.

After getting started with Upmetrics , you can copy this sample pharmacy business plan template into your business plan and modify the required information and download your pharmacy business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

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Pharmacy Business Plan

Start your own pharmacy business plan

The Discount Pharmacy

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

People need to be able to buy prescriptions at reduced prices. We make that possible by carefully maintaining efficiencies in our operations. So we can target a specific segment of the market – those customers who pay for their prescription medications themselves. They are poor, they are sick, they deserve the same care as those who can afford healthcare and full price prescriptions. 

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.

The Discount Pharmacy’s target market consists of two different groups, local customers or walk-ins, and mail order customers.

Competition

Competition takes many different forms in the pharmacy industry. They are: chain pharmacies, local pharmacies, mail in pharmacies, canadian pharmacies. 

The Discount Pharmacy’s we have 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.

Expectations

Costs will be minimized by maintaining only one pharmacist and filling the void with pharmaceutical techs. We expect to reach profitability by our third year and will generate substantial sales by year three

Financial Highlights by Year

Financing needed.

We will need $115,000 to start, we will be able to pay the investment back at the end of year 4

Problem & Solution

Problem worth solving.

People need to be able to buy prescriptions at accessible prices. We make that possible by carefully maintaining efficiencies in our operations. So we can target a specific segment of the market – those customers who pay for their prescription medications themselves. They are poor, they are sick, they deserve the same care as those who can afford healthcare and full price prescriptions. 

Our Solution

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.

Target Market

Market size & segments.

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.

Current Alternatives

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.

Our Advantages

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.

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

Marketing & Sales

Marketing plan.

The marketing strategy will be based on social media, mainly Facebook and Twitter, offering useful information and opinion while quietly 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.

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

Milestones & Metrics

Milestones table, key metrics.

Our key metrics are: 

• The # of customers that walk in to the pharmacy 
• The # of customers that choose to mail in 
• The # of reviews saying that people could go to our pharmacy 
• Facebook page views, Twitter retweets  and website shares 
• Total customer traffic on the website 
• Total customer traffic in and out of the store 

Ownership & Structure

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Management Team

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.

Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

Key assumptions: 

Of course our main assumption is legality. Regulations affecting our business can change very fast. 

People appreciate:

• The mail in order option for their convenience 
• Prescription at affordable prices 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

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.

Startup expenses – $24,100 listed as net earnings in dec 2017 

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

Sources of Funds

Planned Investment

Seed Funding $50,000

John $51,000

Friends and Family $82,100 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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Pharmacy Business Plan

Identify and study the market needs for pharmaceuticals.

• 1 Hospitals and clinics
• 2 Individual consumers
• 3 Long-term care facilities
• 4 Healthcare organizations
• 5 Pharmaceutical wholesalers
• 1 Strong competition
• 2 Changing regulations
• 3 Limited access to medication
• 4 Lack of awareness
• 5 Logistics challenges

Research on the regulatory requirements for setting up a pharmacy business

• 1 Complex licensing process
• 2 Cost of obtaining permits
• 3 Stringent security measures
• 4 Regular inspections and audits
• 5 Maintaining accurate recordkeeping

Prepare a business model and revenue plan

• 1 Prescription medications
• 2 Over-the-counter medications
• 3 Healthcare products and supplements
• 4 Consultations and services
• 5 Compounding medications

Create a detailed marketing and sales strategy

• 1 Digital marketing (website, social media)
• 2 Print advertisements
• 3 Radio and television ads
• 4 Direct mail campaigns
• 5 Partnerships with healthcare providers
• 1 Brochures
• 4 Business cards
• 5 Digital advertisements

Draft a detailed organizational structure

• 1 Pharmacist
• 2 Pharmacy technician
• 3 Front-end staff
• 4 Inventory manager
• 5 Marketing manager
• 1 Communication gaps
• 2 Staff turnover
• 3 Employee conflicts
• 4 Performance management
• 5 Training and development

Approval: Organizational Structure

• Draft a detailed organizational structure Will be submitted

Develop a business operation plan

• 1 Ordering and receiving medication
• 2 Storing and organizing inventory
• 3 Monitoring and restocking inventory
• 4 Managing expiration dates
• 5 Implementing quality control measures
• 1 Inventory shortages
• 2 Medication errors
• 3 Supply chain disruptions
• 4 Unforeseen emergencies
• 5 Staff scheduling conflicts

Research and decide on an ideal location

• 1 High rental costs
• 2 Limited availability of commercial spaces
• 3 Zoning restrictions
• 4 Competition from existing pharmacies
• 5 Accessibility issues for customers

Estimate initial setup and ongoing operating costs

• 1 Negotiating bulk purchase discounts
• 2 Energy-efficient lighting and appliances
• 3 Automation of manual processes
• 4 Staff cross-training for multi-functional roles
• 5 Optimizing inventory management

Identify potential sources for investment

• 1 Business plan
• 2 Financial projections
• 3 Market analysis
• 4 Legal and regulatory compliance documentation
• 5 Track record of the management team
• 1 Limited access to capital
• 2 Competitive investment landscape
• 3 Uncertainty in the healthcare market
• 4 Regulatory changes impacting investment decisions
• 5 Market saturation in the pharmacy industry

Approval: Investment Sources

• Identify potential sources for investment Will be submitted

Create a detailed risk management plan

• 1 Limited resources for risk mitigation
• 2 Complex regulatory requirements
• 3 Resistance to change from staff or stakeholders
• 4 Inadequate risk monitoring and reporting systems
• 5 Emerging risks in the healthcare industry

Draft a proposal for partnership with pharmaceutical suppliers

• 1 Price fluctuations in the pharmaceutical market
• 2 Dependence on a single supplier
• 3 Quality control issues
• 4 Supply chain disruptions
• 5 Maintaining competitive pricing for customers

Approval: Pharmaceutical Suppliers Proposal

• Draft a proposal for partnership with pharmaceutical suppliers Will be submitted

Develop a training plan for employees

• 1 Limited resources for training programs
• 2 High staff turnover impacting training effectiveness
• 3 Keeping up with changing regulations and industry standards
• 4 Practical application of training concepts
• 5 Staff resistance to training initiatives

Create a customer service and retention strategy

• 1 In-person interactions
• 4 Website chat support
• 5 Social media platforms
• 1 Long wait times
• 2 Communication barriers with non-native language speakers
• 3 Patient confidentiality concerns
• 4 Managing customer complaints and queries
• 5 Ensuring accurate medication information

Plan for the pharmacy layout

• 1 Accessibility for customers with disabilities
• 2 Space constraints
• 3 Ergonomic design for staff
• 4 Compliance with building codes
• 5 Effective utilization of retail space

Develop a digital strategy including e-prescriptions, home delivery, etc

• 1 E-prescriptions
• 2 Online ordering
• 3 Home delivery
• 4 Mobile app for medication reminders
• 5 Virtual consultations
• 1 Technological infrastructure requirements
• 2 Integration with existing systems
• 3 Training staff on digital platforms
• 4 Protecting customer information from cyber threats
• 5 Managing customer expectations and feedback

Outline a plan for future growth and expansion

• 1 Competitive landscape in new markets
• 2 Acquiring adequate funding for expansion
• 3 Managing increased operational complexities
• 4 Adapting to changing industry regulations
• 5 Maintaining consistent quality across multiple locations

Create a final draft of pharmacy business plan

• 1 Executive summary
• 2 Company overview
• 4 Marketing and sales strategies
• 5 Organizational structure
• 6 Operational plan
• 7 Financial projections
• 8 Risk management plan
• 9 Partnership and supplier strategies
• 10 Training and development plans
• 11 Customer service and retention strategies
• 12 Digital strategy
• 13 Growth and expansion plan

Email Subject: Final Draft of Pharmacy Business Plan

Approval: Pharmacy Business Plan

• Create a final draft of pharmacy business plan Will be submitted

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Step-by-Step Guide to Starting a Pharmaceutical Company

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AI Summary Beta

Starting a pharmaceutical company is a challenging but potentially rewarding venture. This summary will provide an overview of key considerations in starting such a business.

Introduction:

Starting a pharmaceutical company is promising but demands substantial time, effort, and resources. Success hinges on market understanding, regulatory compliance, and effective business models. With dedication and knowledge, anyone can embark on this journey.

Thorough research is critical. Dive into the industry, study competitors, and grasp relevant regulations. Analyze market trends, technological advancements, and your competitors’ strengths and weaknesses.

Understanding Regulations:

Pharmaceutical businesses are heavily regulated. Comprehend FDA and local regulations, and consider seeking expert guidance. Stay updated on legal changes, maintain industry standards, and document procedures to avoid legal complications.

Business Model:

Selecting the right business model is crucial. Options include contract manufacturing, retail, and franchising. Each has pros and cons, and your choice should align with your goals, start-up capacity, and customer service strategy.

Launching a pharmaceutical business requires substantial capital for equipment, research, marketing, staffing, and more. Seek funding through government grants, investors, loans, or personal savings, considering tax implications and potential incentives.

Inventory and Supply Chain:

Manage inventory based on business size and product type. Storage conditions and transportation must align with product requirements. Establish efficient supply chains to ensure timely product turnover.

Distribution:

Effective distribution networks are essential for reaching customers. Decide on distribution methods, whether through wholesalers, retailers, or online sales. Choose experienced distributors and continuously evaluate and improve distribution channels.

Technology:

Technology plays a crucial role in pharmaceuticals. Automation enhances efficiency and reduces errors. Invest in secure data storage, cybersecurity, and customer interaction technologies, like websites and social media, to build trust and competitiveness.

Operations:

Operational processes are the backbone of any business. Develop efficient protocols for inventory, production, quality assurance, and regulatory compliance. Quality assurance is paramount in pharmaceuticals.

Prospecting Strategies:

Marketing in the pharmaceutical industry must comply with strict regulations. Consider online advertising, networking, print ads, direct mail, and conferences. Tailor strategies to your target audience and budget.

Insurance and Security:

Protect your business with adequate insurance coverage, considering your company’s size and activities. Implement security measures like surveillance, data encryption, and biometric technology to safeguard assets and sensitive information.

Conclusion:

Starting a pharmaceutical company is a complex but achievable endeavor with careful planning, adherence to regulations, robust business models, and the right technology. Building a reliable distribution network and marketing strategy are vital. Ensure safety and security with insurance and security protocols. Regular monitoring and adaptation are key to success in this dynamic industry. Good luck on your journey!

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Table of Contents

Introduction to Starting a Pharmaceutical Company

A pharmaceutical company can be an appealing business venture, as it can offer the potential of substantial revenue growth and a meaningful impact on people’s lives. There is no doubt that starting a pharmaceutical company requires a great deal of time, effort, and resources. However, with the right knowledge and dedication, starting a pharmaceutical company can be a rewarding experience.

It is important to have a thorough understanding of the market, regulations, and business models in order to be successful in this field. With the right combination of research, planning, and dedication, anyone can start a pharmaceutical company and potentially reap the rewards of being at the forefront of medical innovation.

Doing the necessary research is a vital step to starting your own pharmaceutical company. It is important to dive deep into the industry, research potential competitors, and understand the regulations that may affect the business. Research will help establish a strong foundation for a successful business model.

It’s important to understand the current market and how it is evolving. This should include a review of any new trends and technologies that can be used to differentiate the company from its competitors. The research should also include studying the current players in the market, their strengths and weaknesses, and how your company can compete effectively.

Regulations are an important factor to consider when starting a pharmaceutical company. Regulations vary by country, state, and province, so it is important to become familiar with the relevant local regulations. Depending on the scope of the business, some of the regulations may include workplace safety, environmental standards, labeling requirements, etc. It is important to consult legal experts to make sure you remain compliant with the applicable regulations.

Understanding Regulations

Operating a pharmaceutical business can be a daunting task as regulations are placed on the industry. It is important to understand all regulations that can potentially affect the business, such as those put forth by the FDA and other governing institutions. Additionally, having knowledge of the specific regulations in the state where the business is located is essential for success.

Navigating regulations can be a tricky process and may require assistance from an expert. The laws vary from state to state, making it difficult for business owners to be knowledgeable of the specifics. Consulting legal representatives or industry experts can be very beneficial when trying to stay in compliance.

Additionally, keeping up-to-date with any changes in the law is also important. This will help ensure that the business remains compliant and not subject to fines or penalties. Familiarizing oneself with industry standards and proper documentation procedures can go a long way into protecting the business from any potential legal complications.

Business Model for Pharmaceutical Companies

When it comes to running a successful pharmaceutical company, having the right business model in place is essential. There are several different types of business models available for companies in the pharmaceutical industry, and it can be difficult to determine which one is best for you. In this section, we’ll explore the different options and discuss some key considerations you should keep in mind when choosing your business model.

One of the most popular business models for pharmaceutical companies is the contract manufacturing model. This model involves outsourcing the production of your products to an experienced third-party contractor. In this arrangement, the product will be developed and manufactured according to your specifications, and you’ll only have to pay for the manufacturing services. This type of model is great for companies that are just starting out and don’t have the capacity to manage their own production capabilities.

Another option is the retail model, where you manufacturer and sell products directly to customers. This type of model works well for companies with a wide variety of products that require specialized marketing strategies and customer service. However, it requires a significant financial investment upfront and a lot of time commitment from management.

Finally, there’s the franchise model, where you partner with a larger pharmaceutical company to share resources and expertise. This type of model is great for companies that want to benefit from the resources of larger companies without having to build out their own operations.

No matter which business model you choose for your pharmaceutical company, it’s important to do your research and make sure it’s the right fit for your needs. Consider factors such as start-up costs, operational efficiency, and customer service when assessing different models. Additionally, it’s important to weigh the benefits and drawbacks of each model to ensure you’re making an informed decision.

Finance – Funding Requirements and Sources for Starting a Pharmaceutical Company

Starting a pharmaceutical company is no small task. In the modern age, it requires a significant investment of money and resources. Understanding the financial aspects of a pharmaceutical business is essential for success.

In order to launch a successful pharmaceutical business, a tremendous amount of capital will be required. This money will go towards all the necessary steps to get your business up and running, including: production equipment, research and development, marketing, employees, etc. The exact amount of money needed can vary greatly depending on the size and scope of your operations, but it’s safe to say that the cost of starting a business in this industry can be quite high.

When it comes to finding the money for your project, there are several options available. These include government grants, angel investors, venture capital firms, bank loans, and personal savings. Each of these sources carries its own advantages and disadvantages, so it’s important to do the research to find the best option for your specific needs.

Additionally, you should consider the tax implications of each funding source. Not only are specific laws and regulations in place for different types of funding, but there may also be certain deductions or credits available.

Finally, you should keep an eye out for potential incentives and subsidies from the government. Depending on where you are located, there may be programs available to help startup businesses in the pharmaceutical sector.

Funding a pharmaceutical business is a complex process, but it’s definitely achievable. With the right research and preparation, you can be sure to secure the capital you need for success.

Inventory and Supply Chain Considerations for Pharmaceutical Companies

When starting a pharmaceutical business, it’s critical to understand the inventory and supply chain considerations that go into making a successful venture. The necessary inventory components will vary on the size of the business, the scale of operations, and the products. It is important to understand the needs for purchasing, storage, shipping, and distribution.

For smaller businesses, it is important to purchase inventory in small amounts. This will help manage expenses and prevent product expiration. It also helps create flexibility if products or terms are updated frequently. For larger businesses, having sufficient inventory on hand is critical. An efficient supply chain is required to ensure product turnover happens regularly and in a timely manner.

Storage is another key consideration. Depending on the type of products being sold, different environmental conditions may be needed. Temperature control, special packaging, and other considerations must be taken into account. Products must also be protected from theft or damage. Knowing which facilities to use for storage, and the cost of transportation are also key considerations.

Shipping and distribution are two more important components. Clients need to receive the products as quickly as possible. To ensure this, it is essential to select the appropriate methods for transport and to manage the process appropriately. This includes selecting carriers, providing tracking information, and handling returns. Distribution involves getting the product to the end user in a timely, cost-effective manner.

Successfully managing the inventory and supply chain for a pharmaceutical business requires both knowledge and experience with the various processes and components. Having an understanding of these considerations is vital for running a successful venture.

Distribution: The Key to Reaching Customers

Getting products to customers is a critical factor in running a successful pharmaceutical business. Distributors are necessary for a company to reach their target markets effectively. Distribution networks can be complex and challenging to set up, but they are essential for a company’s success.

Once customers have been identified, a company must decide how products will reach them. Companies that distribute internationally require more complex systems than companies that stay local or regional. Different options include using a wholesaler or a third-party distributor, distributing directly to retailers or selling online. Each option has its own advantages and drawbacks, and should be carefully considered when developing a distribution plan.

When selecting distributors, it is important to look for ones with an established reputation, experience in similar products, and a good track record with other customers. Additionally, relevant certifications, such as Good Manufacturing Practices (GMP) certification, need to be taken into consideration. Once selected, distributors must be given the necessary information and resources to effectively market and sell the products.

Finally, setting up distribution channels is not a one-time process – regular evaluations and updates are necessary to ensure maximum customer reach and satisfaction. Distributors must be monitored, and customer feedback should be incorporated into the process. This feedback can help a company improve their product and service offerings to better serve their customers.

In the pharmaceutical industry, technology is vital. As the expectations around quality and delivery continue to increase, organizations need to be equipped with the right technologies and systems. Technology helps ensure that pharmaceutical companies are meeting all regulatory requirements, as well as providing products and services that are reliable and of a high standard.

When it comes to technology for pharmaceutical companies, there are several areas that need to be addressed. The first is automation. Automation can help streamline processes, improve production, and reduce errors. It can also help with inventory management, ensuring that products are quickly and accurately tracked.

Another area of technology is security. Pharmaceutical companies need to ensure that their data is securely stored and kept confidential. They must also have systems in place to detect any unauthorized access attempts. Companies should also investigate cyber insurance policies to provide additional protection.

Finally, pharmaceutical companies need to invest in customer interaction technologies. Having an online presence is essential to developing relationships with customers. This might include a website, social media pages, or even an app. All of these tools can help reach customers and build trust in the company.

By investing in the right technology, pharmaceutical companies can become more efficient and offer better customer service. Technology can also provide a competitive advantage over other companies in the market.

Operations for a Pharmaceutical Company

Operational processes are the backbone of any business, and this is especially true for a pharmaceutical company. Without efficient and effective operational processes in place, a company may struggle to survive. This section looks at what operational processes need to be considered when starting a pharmaceutical company.

The most basic operational processes involve setting up protocols for ordering and receiving inventory, controlling inventory, producing products, dealing with customer service issues, and managing finances. These processes must be able to respond to changing needs and be able to support long-term growth. An effective operational process also allows the company to remain competitive and profitable.

An important part of any operational process is quality assurance. Quality assurance involves procedures that are designed to ensure the safety and effectiveness of products. A company should have qualified personnel to inspect, test, and verify the quality of every product that is produced or sold. Quality assurance is absolutely essential for a successful pharmaceutical company.

Another key operational process for a pharmaceutical company is regulatory compliance. Regulations provide customers and other stakeholders with assurance that a company is adhering to accepted standards of practice and is providing safe products. In order to remain compliant, a company must always keep up with changes in regulations and make sure that their processes adhere to those regulations.

Having an effective and efficient operational process in place is essential for any business, especially a pharmaceutical company. With the right processes in place, a pharmaceutical company can remain competitive and profitable in the long run.

Prospecting Strategies for a Pharmaceutical Company

Marketing and promoting a pharmaceutical company can be quite complex due to the high level of regulations in the industry. Therefore, it is important to find marketing strategies that fit within the legal framework while still providing the visibility required to reach customers. Prospecting strategies for a pharmaceutical company can include techniques such as online advertising, networking, print advertising, direct mail and attending conferences.

For companies just starting out, online advertising is often an ideal option. There are several platforms available, including the increasingly popular social media marketing. This strategy allows companies to gain visibility without spending large amounts of money on advertising and can be tailored to reach a specific audience. It is also a good way to monitor website traffic and gauge customer interest in the products.

Networking is another powerful tool for a pharmaceutical company. Creating partnerships with other companies, medical professionals and research organizations can be beneficial in a number of ways. These partnerships can lead to new contacts, exchanging of knowledge and shared resources. It is also a great way to promote the brand and differentiate it from competitors.

Print advertising and direct mail campaigns can be useful to reach potential customers, although they can be expensive. These methods have the advantage of being able to target a specific demographic and reach people who may not be active online. Attending conferences is also a great way to create visibility and network with relevant individuals or organizations.

Insurance and Security

Starting a pharmaceutical business means taking measures to protect the company and its operations, and this includes insurance and security. It is important to ensure that your business is protected from any unexpected events and that you are able to meet requirements for the industry.

When it comes to insurance, the types and amount of coverage you need depend on a number of factors including the size of the company, the specific products you are manufacturing, and the type of distribution network used. For example, if you are selling products in both domestic and international markets you may need to have additional coverage. Additionally, you may need to acquire product liability insurance, property insurance, and more.

In terms of security, you need to protect your business from any potential theft or vandalism. You may want to consider investing in a surveillance system that monitors the premises in case of break-ins. You should also ensure that any confidential information is stored securely and encrypted to prevent any data breaches. You can also consider using biometric technology to further secure the premises and store confidential information.

By putting the right insurance and security measures in place, you can ensure that your business is protected from any potential harm. A well-thought-out security plan will help you protect your business from unforeseen risks and allow you to focus on running the best possible pharmaceutical company.

Starting a pharmaceutical company can be a daunting task, but with the right research, understanding of regulations, business model, financing, inventory strategy, distribution network, use of technology, operational processes, and marketing tactics, there is no reason why it cannot be successful. The key to success in this endeavor is careful planning and dedication. By following the steps detailed in this guide, you should be well-prepared to begin your journey to starting a successful pharmaceutical company.

Before jumping into anything too quickly, it is important to do your research and be sure that you understand all of the nuances and complexities involved. Companies operating in the pharmaceutical industry are heavily regulated, so it is critical to be aware of and comply with all laws and regulations. Additionally, establishing a strong business model and sound financials is of utmost importance when launching a new venture.

Having the right technology in place is essential to running a successful pharmaceutical business. By incorporating technologies such as artificial intelligence, robotics, and machine learning into operations, companies can become more efficient, reduce costs, and improve customer service. It is also important to remember that building a reliable distribution network and marketing strategy are integral parts of the success of any pharmaceutical business.

To ensure a safe and secure environment for your business, make sure to purchase the necessary insurance and adhere to appropriate security protocols. Finally, don’t forget to regularly monitor the progress of your business and adjust as necessary.

By following the steps outlined in this guide, you should have the knowledge and tools needed to create a successful pharmaceutical company.

Good luck and enjoy the journey!

FAQs about Starting a Pharmaceutical Company

1. what are the benefits of starting a pharmaceutical company.

Starting a pharmaceutical company can provide an opportunity to make a meaningful impact on healthcare and research, by providing innovative treatments and medications for medical conditions. It comes with many advantages such as revenue potential, global reach, and advancing the knowledge and effectiveness of medicines.

2. What research needs to be done when starting a pharmaceutical company?

When launching a pharmaceutical business, research should be conducted to gain a relevant and detailed understanding of the industry. This may include studying the science behind drugs, reviewing the market trends, analyzing competitors, and researching the regulations within the chosen countries or regions.

3. How do regulations affect a pharmaceutical business?

Regulations are an important consideration when setting up a pharmaceutical company – due to the safety and health effects of the products the company manufactures. Depending on the location and type of product, additional tests or licenses may be necessary to meet various regulatory requirements.

4. What types of business models are suitable for a pharmaceutical company?

There are several different business models that a pharmaceutical company may decide to pursue, including wholesalers, generic drug manufacturers, independent virtual companies, and branded drug companies. The choice of which model to pursue depends on the company’s goals, mission, and resources.

5. What does it take to finance a pharmaceutical company?

Starting a pharmaceutical business requires substantial capital investments for activities such as product development, approvals, production, marketing, and hiring employees. Depending on the size of the business, financing may be sourced from personal funds, venture capital investors, loans, or crowdfunding.

6. What inventory strategies should be considered for a pharmaceutical company?

The inventory management strategies for a pharmaceutical business should prioritize safety and efficiency. Companies should ensure they have the right medicines to meet customers’ needs, while avoiding overstocking and expiry. It’s also important to have a reliable and secure supply chain in place to reduce stockouts and waste.

7. What strategies are available to promote a pharmaceutical company?

Promoting a pharmaceutical business requires finding the right channels to reach the target customer base. Strategies may include in-person marketing, digital approaches such as website SEO, social media, email campaigns, and referral programs. Advertising and public relations may also be used to raise brand awareness.

Great, Thank you!

Best Tips When Starting a Pharmaceutical Factory

• You should develop a thorough business plan that includes market analysis, industry trends, competition analysis, and financial projections.
• Developing an effective marketing strategy for your intended product lineup is crucial for success.
• Secure the necessary funding to launch your business with confidence.
• Discover highly skilled experts across various business domains, such as finance, research and development, and quality control management.

Starting a pharmaceutical factory can be an intimidating but rewarding venture. Considering the many factors involved in setting up such a complex business is important. Fortunately, with careful planning and research , entrepreneurs can ensure their business will succeed. Here are some of the best tips for starting a pharmaceutical factory that can help make this process easier.

Plan out your business

Planning your business is the key to success. Here are some tips on how to plan out your pharmaceutical factory:

Create a comprehensive business plan

Research and planning are essential steps in starting any business, especially in the pharmaceutical industry where precision and adherence to regulations are paramount. Creating a comprehensive  business plan  involves thoroughly understanding the target market, industry trends, competitive landscape, and financial projections.

It’s important for entrepreneurs starting a pharmaceutical factory to identify the specific needs of their customers and tailor their products to meet those demands. Market research helps to gather valuable insights about consumer behavior, such as purchasing habits, preferences, and pain points.

A solid business plan allows entrepreneurs to anticipate challenges and helps them stay on track to achieve their goals. By combining meticulous research with a clear plan of action, entrepreneurs can effectively navigate the complex landscape of the pharmaceutical industry and set themselves up for success.

Invest in the right equipment

Investing in the right equipment is essential for any business, but it is especially crucial when starting a pharmaceutical factory. The success of a pharmaceutical factory heavily relies on the quality of its equipment. When starting a pharmaceutical factory, one should prioritize purchasing high-quality, reliable, durable equipment.

One option is looking for a  high-quality stainless steel conveyor for sale . This conveyor’s purpose is to transport materials from one process to another, making it an essential component of a pharmaceutical factory.

This conveyor type is made from materials that satisfy stringent cleanliness requirements, ensuring a hygienic manufacturing environment. When investing in pharmaceutical production equipment, it is also important to consider other equipment, such as mixers, mills, and filling machines.

Outline the type of products you intend to produce

When starting a pharmaceutical factory, it is crucial to outline the type of products you intend to produce and develop an extensive marketing strategy for each one. An outline serves as a roadmap, guiding you through product development by setting milestones and clarifying goals and timelines.

A  marketing strategy , on the other hand, helps to identify target customers, understand their needs, and develop a plan to reach and convert them into loyal buyers. By creating a comprehensive marketing strategy for each product, businesses can differentiate themselves from competitors, communicate their value proposition more effectively, and ultimately increase sales and revenue.

Secure appropriate funding sources

When preparing to embark on a new venture, it is crucial to secure appropriate funding sources to get it off the ground. For startups in the pharmaceutical industry, obtaining loans or venture capital investments may be necessary for initial operations. It is essential to thoroughly research and understand the available options for financing, as well as their associated risks and benefits.

This process requires attention to detail and expert financial planning to ensure the business is properly capitalized for growth and sustainability.  Without the proper funding, a promising pharmaceutical startup may face insurmountable obstacles in achieving its goals and realizing its potential.

Find experienced professionals in the industry

When starting a pharmaceutical factory, finding and hiring experienced professionals in different areas of the business is crucial for success. These professionals can help manage finance, research & development, and quality control management.

It is important to enlist experts who have experience in the pharmaceutical industry and can offer insights and knowledge that would not be available otherwise. Hiring the right professionals ensures that the business is managed efficiently and effectively, with the potential to reach new heights in research, development, and profitability.

Develop strong relationships with vendors

Building and maintaining strong vendor relationships is a critical aspect when it comes to establishing a successful pharmaceutical operation. In particular, the effective management of sourcing and logistics for essential services such as lab testing and packaging services can be the difference between a smooth and efficient production process, or costly delays and quality concerns.

It is key for manufacturers to clearly understand their vendor needs, expectations, capabilities, and limitations and leverage their industry expertise to align incentives and negotiate favorable terms.  Creating transparent communication channels, regular feedback mechanisms, and a culture of partnership can go a long way in fostering trust and reliability between vendors and manufacturers.

Invest in digital technology solutions or software

In today’s fast-paced and dynamic world, embracing digital technology is vital for ensuring the success of any business. The same applies to pharmaceutical factories. Utilizing software solutions that streamline factory operations and improve overall efficiency levels across all departments is increasingly important.

A strategic approach toward investing in digital technology solutions can result in significant long-term benefits, such as reduced costs, increased productivity, and improved quality control. By embracing these innovations, pharmaceutical factories can gain a competitive advantage, ensuring that business operations are reliable, efficient, and cost-effective.

These are just  some of the tips for starting a pharmaceutical factory. With strategic planning, extensive research, and a proficient team, entrepreneurs can guarantee the triumph of their business.

About The Author

Sophie Reed

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Pharmacy Business Plan Template

Written by Dave Lavinsky

Pharmacy Business Plan

You’ve come to the right place to create your pharmacy business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their pharmacies.

Pharmacy Business Plan Example

Below is a sample pharmacy business plan and template to help you create each section of your pharmacy business plan.

Executive Summary

Business overview.

Healthy1 Pharmacy is a new independent retail pharmacy located in Charleston, South Carolina. The company is founded by Stephen Harris, a licensed pharmacist who has spent more than fifteen years working in the pharmacy industry. Stephen is confident that his strong communication skills combined with his keen attention to detail when preparing prescriptions will help him quickly grow a loyal customer base for his new pharmacy. Stephen has recruited a team of highly qualified professionals to help manage the day-to-day complexities of running a retail pharmacy including marketing, sales, customer service, financial reporting, and operations management.

Healthy1 Pharmacy will provide all of the products and services that are available at large retail chains, only with a better price and a small-town atmosphere. At Healthy1, sales associates and pharmacy technicians will get to know each customer by name and be able to offer a more personalized service not typically offered at larger pharmacies. Healthy1 Pharmacy will be a one-stop shop for any customer in need of a prescription, flu shot, OTC medication, and more.

Product Offering

The following are the services that Healthy1 Pharmacy will provide:

• Over-the-counter (OTC) medications
• Prescription medications
• Immunizations
• Travel medications
• Point-of-Care (POC) Tests
• Compounding

Customer Focus

Healthy1 Pharmacy will target all individuals in Charleston. The pharmacy will target multiple age groups from pediatric to geriatric. Healthy1 will also target patients needing prescriptions filled on a regular basis. No matter the customer, Healthy1 Pharmacy will deliver the best communication, service, and prices.

Management Team

Healthy1 Pharmacy will be owned and operated by Stephen Harris. He has recruited Emily Jackson, an experienced retail pharmacy manager to be his Store Manager and help to supervise the staff and run the day-to-day retail operations.

Stephen Harris is a licensed pharmacist with a Doctor of Pharmacy (PharmD) degree and more than fifteen years of experience working in the pharmacy industry. Stephen has been recognized by his former employer as a top performing pharmacist for five years in a row.

Emily Jackson has been a store manager at a local retail pharmacy for over a decade and has garnered a positive reputation for her exceptional organizational skills and leadership. Emily has worked in the pharmacy industry for so long, she understands all aspects required in running a successful retail pharmacy.

Success Factors

Healthy1 Pharmacy will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly qualified team of sales associates and pharmacy technicians who will assist customers, answer questions, and provide a personalized approach not found in larger pharmacies.
• Comprehensive array of products and services that includes everything you would expect from a large pharmacy, only with attentive customer service and lower prices.
• Healthy1 Pharmacy offers the best pricing in Charleston. The pharmacy’s pricing structure is the most cost effective compared to the competition.

Financial Highlights

Healthy1 Pharmacy is seeking $400,000 in debt financing to launch its new pharmacy. The funding will be dedicated towards securing the retail space and purchasing equipment, inventory, and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing costs. The breakout of the funding is below:

• Pharmacy and retail space build-out: $100,000
• Equipment, supplies, inventory, and materials: $100,000
• Three months of overhead expenses (payroll, rent, utilities): $160,000
• Marketing costs: $25,000
• Working capital: $15,000

The following graph below outlines the pro forma financial projections for Healthy1 Pharmacy.

Company Overview

Who is healthy1 pharmacy.

Healthy1 Pharmacy is a newly established independent retail pharmacy located in Charleston, South Carolina. Healthy1 Pharmacy will provide all of the products and services that are available at large retail chains, only with lower prices and a small-town atmosphere. At Healthy1, sales associates and pharmacy technicians will get to know each customer by name and be able to offer a more personalized service not typically offered at larger pharmacies. Healthy1 Pharmacy will be a one-stop shop for any customer in need of a prescription, flu shot, OTC medication, and more. Healthy1 Pharmacy will be able to provide Charleson customers with the experience of a friendly, neighborhood drugstore while ensuring each prescription is handled with the highest standards of quality and care. The team of pharmacy technicians and sales associates will be highly qualified and experienced in helping customers find the right over-the-counter solutions for their individual needs as well as ensuring each prescription is filled accurately and efficiently.

Healthy1 Pharmacy History

Healthy1 is owned and operated by Stephen Harris, a licensed pharmacist with over fifteen years of experience working in the pharmacy industry. Stephen has worked for a large pharmacy chain and managed a team of pharmacy technicians for several years. Stephen’s tenure with the pharmacy chain combined with his pharmaceutical education has given him the skills and knowledge required to start his own pharmacy.

Since incorporation, Healthy1 Pharmacy has achieved the following milestones:

• Registered Healthy1 Pharmacy, LLC to transact business in the state of South Carolina.
• Has a contract in place to lease the retail storefront he will use for his pharmacy.
• Reached out to numerous contacts to include experienced pharmacy technicians and sales associates to advise them of the upcoming opportunities at his new pharmacy.
• Began recruiting the management team members including a store manager, an accountant/bookkeeper, and a marketing director.

Healthy1 Pharmacy Services

The following are the pharmacy products and services that Healthy1 Pharmacy will provide:

Industry Analysis

The pharmacy industry in the United States is valued at $534.2B and is projected to grow to $862B by 2028. Major market drivers include a growing number of types of diseases, an increasing percentage of people with chronic illnesses, an aging population, and higher healthcare costs.

There are more prescription medications being developed, and the demand for more prescriptions is growing faster than ever before. In 2020, there were an estimated 860M medications prescribed by physicians and 336M prescribed by hospitals. This prescription demand is resulting in more pharmacies opening across the U.S. The National Council for Prescription Drug Programs (NCPDP) reports an estimated 20,400 independent pharmacies in 2010. This number has grown to over 23,000 by 2019, a 12.9% increase in the number of independent pharmacies for that time period.

Industry operators in the pharmaceutical market can benefit from providing above average customer service, lower prices than competitors, and products or services that aren’t being offered elsewhere.

Customer Analysis

Demographic profile of target market.

Healthy1 Pharmacy will target all individuals in Charleston, South Carolina. The pharmacy will target multiple age groups from pediatric to geriatric. Healthy1 will also target patients needing prescriptions filled on a regular basis.

The precise demographics for Charleston, South Carolina are:

Customer Segmentation

Healthy1 will primarily target the following customer profiles:

• Parents of pediatric patients
• Geriatric patients
• People taking medications on a regular basis
• People needing compounding services
• People looking for vaccines or immunizations
• People who need lab tests

Competitive Analysis

Direct and indirect competitors.

Healthy1 Pharmacy will face competition from other companies with similar business profiles. A description of each competitor company is below.

Charleston Care Pharmacy

Charleston Care Pharmacy provides a wide variety of pharmacy products and services including OTC medications, lab testing, and compounding. Located in a senior neighborhood, Charleston Care Pharmacy specializes in serving the geriatric population, but welcomes customers of all ages. Charleston Care Pharmacy’s promise is to deliver effective communication, honesty, and integrity in every transaction. Charleston Care Pharmacy’s team of experienced pharmacy technicians assures customers are well taken care of and prescriptions are filled quickly and correctly.

FeelBetterNow Pharmacy

FeelBetterNowPharmacy is a Charleston-based neighborhood pharmacy that provides a full suite of services including compounding, vaccines, lab testing, local delivery, and more. The owners of FeelBetterNowPharmacy are licensed pharmacists who have extensive experience working for independent retail pharmacies so they understand what customers are looking for in a neighborhood pharmacy. Customers who choose FeelBetterNowPharmacy can rest assured they are getting the best quality products at reasonable prices.

Care Better Pharmacy

Care Better Pharmacy is a trusted Charleston pharmacy that is known for providing superior customer service. They are able to provide a one-stop shop for customers looking for convenient OTC and prescription medications, durable medical equipment, vaccines, and immunizations. Care Better Pharmacy is also able to serve customers in need of compounding, recurring prescriptions, and lab testing. They have expert pharmacy technicians to provide information about each medication and answer all of their customers’ questions.

Competitive Advantage

Healthy1 Pharmacy will be able to offer the following advantages over their competition:

• Healthy1 Pharmacy offers the best pricing in Charleston. The pharmacy offers its customers low prices on all of its products and services compared to the competition.

Marketing Plan

Brand & value proposition.

Healthy1 Pharmacy will offer the unique value proposition to its customers:

• Highly-qualified team of skilled pharmacy technicians and sales associates will be able to provide personalized customer service and ensure all prescriptions are handled with care.
• Unbeatable pricing to its clients – Healthy1 Pharmacy does not mark up its products and services at a large percentage. The pharmacy will offer the lowest prices guaranteed. If a customer finds a cheaper price elsewhere, Healthy1 Pharmacy will give the customer a better price.

Promotions Strategy

The promotions strategy for Healthy1 Pharmacy is as follows:

Healthy1 Pharmacy will create and maintain a company website that is well organized, informative, and lists all the products and services that Healthy1 is able to provide. The website will also list promotions and discounts, informative healthcare articles, and pharmacy-sponsored community events.

SEO/Google Marketing

The company’s marketing director will manage Healthy1’s website presence with SEO marketing tactics so that any time someone types in the Google or Bing search engine “Charleston pharmacy” or “pharmacy near me”, Healthy1 Pharmacy will be listed at the top of the search results.

Social Media Marketing

Healthy1 Pharmacy’s marketing director will also manage the company’s social media presence on several platforms including Instagram, Facebook, Twitter, YouTube, TikTok, and LinkedIn. The goal of the social media strategy is to attract new customers while engaging with current customers to encourage referrals, reviews, and feedback.

Content Marketing/Email Marketing

The company will post blogs and other promotional content on a regular basis with informative health and wellness information to keep people coming back. Healthy1 will post informative content on the website, social media platforms, and through email newsletters.

Professional Associations/Networking

Healthy1 Pharmacy will become a member of professional associations such as the Independent Retail Pharmacy Association, the National Community Pharmacists Association, and the Tennessee Pharmacists Association. The company will focus networking efforts on expanding its customer base.

Print Advertising

Healthy1 Pharmacy will invest in professionally designed print ads to display in programs or flyers at industry networking events, in magazines, direct mailers, and in local newspapers.

The pricing will be lower than competitors so customers feel they receive value when they choose Healthy1 products and services.

Operations Plan

The following will be the operations plan for Healthy1 Pharmacy.

Operation Functions:

• Stephen Harris will be the Owner and Lead Pharmacist. He will oversee pharmacy technicians. Stephen has spent the past year recruiting the following staff:
• Emily Jackson – Store Manager who will oversee all retail operations, sales associates, supplier relations, and inventory management.
• Jessica Johnson – Staff Accountant/Bookkeeper who will provide budgeting, tax payments, and financial reporting.
• Tim Thompson – Marketing Director who will provide marketing and sales campaigns for Healthy1 Pharmacy.

Milestones:

Healthy1 Pharmacy will have the following milestones complete in the next six months.

9/1/2022 – Finalize contract to lease the retail space.

9/15/2022 – Finalize personnel and staff employment contracts for the Healthy1 Pharmacy team.

10/1/2022 – Finalize contracts with suppliers.

10/15/2022 – Network at industry events and initiate the marketing and promotional campaign.

10/22/2022 – Begin moving into the Healthy1 Pharmacy storefront.

11/1/2022 – Healthy1 Pharmacy opens for business.

Stephen Harris is a licensed pharmacist with a Doctor of Pharmacy (PharmD) degree and more than fifteen years of experience working in the pharmacy industry. Stephen has been recognized for his commitment to excellence in filling prescriptions accurately and efficiently as well as his communication skills and positive rapport with customers.

Emily Jackson has been a store manager at another retail pharmacy for over a decade and has garnered a positive reputation for her exceptional organizational skills and leadership. Emily has worked in the pharmacy industry for so long, she understands all aspects required in running a successful retail pharmacy.

Financial Plan

Key revenue & costs.

The revenue drivers for Healthy1 Pharmacy are the fees charged to customers in exchange for the pharmacy’s products and services.

The cost drivers will be the overhead costs required in order to staff a pharmacy. The expenses will be the payroll cost, rent, utilities, inventory, supplies, and marketing materials.

Funding Requirements and Use of Funds

Healthy1 Pharmacy is seeking $400,000 in debt financing to launch its pharmacy business. The funding will be dedicated towards securing the retail space and purchasing equipment, inventory, and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing costs. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of prescriptions filled per month: 2,000
• Average fees collected each month: $50,000
• Retail lease per year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, what is a pharmacy business plan.

A pharmacy business plan is a plan to start and/or grow your pharmacy  business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your pharmacy business plan using our Pharmacy Business Plan Template here .

What are the Main Types of Pharmacy Businesses?

There are a number of different kinds of self storage business , some examples include: Pharmacy, Home Care Pharmacy, Mail Order Pharmacy and Compounding Pharmacy.

How Do You Get Funding for Your Pharmacy Business Plan?

Pharmacy businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Pharmacy Business?

Starting a pharmacy business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Pharmacy Business Plan - The first step in starting a business is to create a detailed pharmacy business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your pharmacy business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your pharmacy business is in compliance with local laws.

3. Register Your Pharmacy Business - Once you have chosen a legal structure, the next step is to register your pharmacy business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your pharmacy business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Pharmacy Equipment & Supplies - In order to start your pharmacy business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your pharmacy business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

Learn more about how to start a successful pharmacy business:

• How to Start a Pharmacy Business

Where Can I Get a Pharmacy Business Plan PDF?

You can download our free pharmacy business plan template PDF here . This is a sample pharmacy business plan template you can use in PDF format.

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How to start a pharmaceutical company in 3 easy steps.

The pharmaceutical industry is booming. Scientific and technological advances are driving pharmaceutical innovation like never before. But what does this mean for you? It means there are more opportunities than ever for those looking to break out and start their own pharmaceutical distribution business.

Pharmaceutical distribution companies can most easily be described as the middleman between the drug manufacturing company and the retail pharmacy or end user. This industry is recession proof, making it an incredibly advantageous venture for any savvy entrepreneur. But it can be difficult to understand exactly how to start a pharmaceutical distribution company, navigating details right down to which pharmaceutical conveyors to use. That’s why we’ve put together a condensed, easy-to-understand guide for starting a safe pharmaceutical distribution business that can be successful long-term.

How to Start a Pharmaceutical Distribution Company

There are many steps and considerations involved when starting a pharmaceutical distribution company. The following is a brief overview:

• Hire a business consultant and determine your niche
• Research competitors
• Determine company structure
• Choose the right equipment
• Establish roles
• Conduct SWOT analysis
• Verify license requirements
• Establish your brand

Step 1: Stack The Deck In Your Favor

This is the first stage in planning your pharmaceutical distribution system and thus is twofold. This is when you build the true foundation of your company, which means having the right person (or people) in your corner and the right business in place.

• Start by hiring an experienced business consultant who fully understands the pharmaceutical industry. This person will be responsible for examining your overall business concept and determining if it would survive and thrive as it should.
• The second part is to thoroughly evaluate your business options. There are three routes you can take when starting your pharmaceutical distribution company:
• Begin a pharmaceutical business with a manufacturing unit
• Market medicines under your new brand name
• Team up with an established drug manufacturer

Keep in mind that whichever option you go with will fully depend on your overall budget and business goals.

Step 2: Create A Successful Business Plan

Once you’ve settled on the type of pharmaceutical distribution company you’re going to start, you need to create a business plan. While you can’t guarantee that it’s going to be a successful plan, you can set your business up in a smart way to better your chances of success.

Research Potential Competitors

Research is a key step in the process of setting up your business. Knowing your competitors will give you a good idea of where and why they excel — and what they could improve upon. By studying their business model, you’ll be better equipped to come up with something even better.

Identify Upfront Expenses

Crunch the numbers and determine the total investment that will be required to start a pharmaceutical distribution company. This includes deciding whether steps like manufacturing, trials or pharmaceutical distribution will happen in-house or will be outsourced. Plan out everything that will be needed, including (but not limited to):

• A production facility
• An office space or building
• Utilities (electricity, gas, water, Wi-Fi, etc.)
• Lab equipment
• Office supplies
• Employee wages
• Pharmaceutical industry conveyors
• Pharmaceutical conveyor belts

Choose the Right Equipment

As mentioned above, choosing the right equipment is vital to running a reputable pharmaceutical distribution company. That includes any manufacturing and packaging equipment, including the appropriate conveyor belts for pharmaceuticals .

The best pharmaceutical conveyors will not only help ensure safety but also enhance efficiency. For example, you can eliminate potential tracking issues with the Span Tech EZSpan Belt Conveyor system and sort and merge with ease with the High Speed Switch .

You’ll also need to ensure your equipment doesn’t damage your product. The MiniLink chain conveyor system was specially designed to move small, delicate pills or packaging with care. These and all of Span Tech’s conveyors were thoughtfully designed and can be fully customized to alleviate potential manufacturing risks while improving overall workflows.

Establish Roles And Responsibilities

Running a pharmaceutical distribution company is not something that can be done with just a handful of people. You’ll need a full staff of qualified, knowledgeable and enthusiastic employees who have the same vision for the company as you do. This needs to be factored into your business plan and your total investment. Some roles that are vital to starting your business include:

• A chief executive officer
• A human resources manager and/or department
• An inventory manager
• A purchasing manager
• A customer service executive and/or team
• An accountant or accounting department
• Various marketing and sales executives
• Floor manager(s)
• Floor employees
• Security guard(s)
• Truck driver(s)

It takes a lot of people to run a company. But by having the right team in place, you’ll alleviate a lot of the stress that can come with starting your own business.

Conduct SWOT Analysis

A SWOT analysis is where you take a hard look at your business plan’s strengths, weaknesses, opportunities and threats. In addition to completing a SWOT analysis of your own pharmaceutical distribution company, make sure to do one for each of your major competitors as well. This will give you a great overview and comparison of the market and where and how you fit into it.

Verify License Requirements

It’s vital when starting out that you research and acquire all necessary licenses for your city and state. The pharmaceutical distribution requirements will depend on your type of business but, in general, pharmaceutical startups are considered limited liability corporations. To find full listings of required licenses and permits, visit the U.S. Small Business Administration (SBA) website , the regional SBSA office and the Food and Drug Administration (FDA) website .

Step 3: Establish Your Brand

Once you’ve started your company, it’s time to take the proper steps to promote it by establishing a brand. Breaking into the pharmaceutical distribution industry and getting your products in front of the medical community can feel like a Herculean task. But by doing your research and investing in advertising and marketing, you’ll be one step closer to building a successful company. Advertising and marketing companies can help you create everything you need to get your name out there:

• A brand image
• A company mission
• A marketing campaign

If you have the budget for it, a PR agency or a designated marketing communications team can also be invaluable to your business in the long term.

Understand that building your pharmaceutical distribution business will take a lot of time, money and work. But by taking the right steps, hiring the right team and using the right equipment, you’ll be well on your way to running a successful company.

Start Your Company Off Right With Span Tech Pharmaceutical Conveyors

Span Tech’s proven pharmaceutical conveyors and components are used to safely transport medication, small vials, bottles, vial pucks, blister packs, tubes, bags, small cartons and more. Browse our entire selection of pharmaceutical conveyors and solutions to build your company for success. Have a question or need more information? Contact our customer service team today. Whatever your needs may be, we can help design a custom pharmaceutical distribution system that can help make your business a success.

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• Business Plans Handbook
• Business Plans - Volume 03
• Pharmaceutical Company Business Plan

Pharmaceutical Company

BUSINESS PLAN

PAIN AWAY LTD.

1117 High St. Poughkeepsie, NY 13495

The company described in this plan has moved beyond the initial start-up phase and is now seeking investors to finance its growth. Much of the plan, therefore, is geared toward persuading, explaining, and reassuring potential investors that the company (which produces a therapeutic, topical pain cream), is well-managed and stable. The in-depth analysis of the company's competitors is an outstanding feature of this plan, as is its market research.

EXECUTIVE SUMMARY/OVERVIEW

Competition.

• PROPERTY & FACILITIES
• PATENTS & TRADEMARKS
• RESEARCH & DEVELOPMENT

GOVERNMENT REGULATIONS

Insurance and taxes, corporate structure, risk factors.

• RETURN ON INVESTMENT AND EXIT
• ANALYSIS OF OPERATIONS & PROJECTIONS

FINANCIAL STATEMENTS

Type of business.

Non-prescription drug wholesalers; US SIC Code - 2834 Pharmaceutical Preparations.

Company Summary

Pain Away Ltd. is a going concern, a Delaware corporation formed in January 1995 to manufacture and sell its premier launch product Pain Away, a topical pain remedy using FDA-approved homeopathic ingredients developed for the simple purpose of relieving pain. The company was formed by its parent S-corporation, Peale, Inc. in order to market products nationally and internationally. Peale, Inc. was formed in February 1994 to complete the development of the launch product. The formation of the company was a significant step in a 9-year process of refining and testing a homeopathic formula first used by company founder and CEO Robert Peale to alleviate his pain from carpal tunnel syndrome. The R&D phase of this product began when Mr. Peale purchased the original formula, did a thorough study of homeopathy, and refined the formula to its present marketable state. From the beginning of R&D, Mr. Peale worked within FDA guidelines in order to secure FDA registration. Then, in February 1994, the company was formed to finally manufacture and sell the product. Starting with only a handful of customers, including some professionals, chiropractors, physical therapists, etc., only 19 months of operation have yielded 12,000 individual customers with an 80% reorder rate. The current customer base now includes medical doctors from different specialties, sports trainers, and athletes, both professional and amateur. The company expects to show a profit in 1996 and estimates that it will be very profitable in 3 years.

Mr. Peale is 49 years old and has a 25-year history in sales, sales management, and marketing for a tool distribution company. His deep study of homeopathic medicines started in 1985 and included studies in nutritional supplements. Mr. Peale has been invited to sit on a newly-formed FDA committee addressing the growing national interest in natural medicines.

Curtis Company president, Ms. Alana has 25 years of experience in retail and direct sales. She has been a senior sales director and sales trainer for Beautiful You Cosmetics, has owned and operated a retail sporting goods store, and has managed a 15 person, $1 million department for a major chain retailer. She also has some banking experience.

Vice-president of marketing, Ryan Lemon has 32 years of experience as production manager, buyer, sales manager, and marketing manager. He was director of marketing for Pilgrim Health and was responsible for their first launch into New Jersey which led to their first $18MM in sales (in 3 years). He has a BS degree in textile engineering and has also done independent marketing consulting.

Product and Competition

The R&D mission was to develop a greaseless, odorless, topical cream which was measurably more effective at relieving pain than any other OTC (over the counter) topical product. This mission has been accomplished. The company has collected anecdotal, testimonial, and uncontrolled medical study evidence that Pain Away is more effective than the leading topical analgesics such as Arthritin and others. The product's effectiveness in relieving pain is its most powerful benefit, besides the added benefits of it being greaseless and odorless. What distinguishes Pain Away from any other topical analgesic in this still-growing $402.1MM market is its advanced homeopathic formula - a refined blend of 11 FDA approved pure and natural ingredients. The typical OTC topical analgesic works to either block the sensation of pain or distract perception of deep pain by "counterirritating" another localized area near the pain. Pain Away's formula is different. Pain Away treats pain at its source. It stimulates improved circulation in the micro-capillary system in the ligaments and tendons, where most pain is felt. Pain-relief from Pain Away is the result of the body's own self-healing. It also can be applied several times a day because it is odorless and greaseless. The US pain management market ($15.2 billion by 1997) is a mature market with intense, established competition ("The Market for Pain Management Products in the US - Introduction, Drugs, Devices, Trends, and Market Structure," in FIND-SVP). With future pharmaceutical market growth dependent upon new and innovative product additions, Pain Away is entering the field at the right time. The company will distinguish itself and its market position by dedication to the development of only natural-ingredient products. Since its unique formula of ingredients already has FDA approval, the company aims to penetrate the OTC pharmaceutical market, where new products traditionally find success. Here Pain Away will compete with topical as well as internal analgesics, including aspirin, acetaminophin and ibuprofen. An estimated 4,000 people a year die from aspirin overdose. A condition known as "analgesic neuropathy" can result from extended or inappropriate use of analgesics. Medical studies linking heavy usage to health problems have affected aspirin, acetaminophin, and ibuprofen. Pain Away can be marketed as a substitute for (reducing overdose risk with internal analgesics), or as a supplement to (using Pain Away can reduce needed dosage of internal analgesics) internal analgesics when used for certain pain relief. Furthermore, Pain Away is not contraindicated for use with any other medication. This broad-based appeal is built upon the reliability of Pain Away's effectiveness in relieving pain, inflammation, and spasm associated with arthritis, bursitis, sciatic spasm, neck/back pain, tendonitis, tennis elbow, tension headache, achilles tendonitis, and carpal tunnel syndrome.

A second product, a natural anti-inflammatory nutritional support system formula known as "Pain Away Plus," will soon be marketed as a companion product to Pain Away. This multistaged formula is a combination of trace minerals, herbs, and a natural cartilage-derived substance. The company has long-term plans to develop more health-related products.

Funds Requested

Company principals have invested all available personal assets into the product development and operations to date. The need for capital is in the context of the readiness of the product for mass marketing. Management is seeking a $1,500,000 equity investment in exchange for a suggested 30% ownership of the company. All terms of financing are negotiable in order to meet the financial requirements of the investor.

Use of Proceeds

Advertising & promotion campaign - $1,200,000 (see below); Market research - $300,000. The company anticipates the need for follow-on financing after 24 months of business.

Financial History

Sales were first made in 5/94 under Peale Inc. ($143,881). As sales expanded nationally, Pain Away Ltd was formed in January 1995. All sales since then have been under Pain Away Ltd.

Financial Projections

With capital request accomodated, the company believes that Pain Away will jump in sales starting in 1996.

The company will attempt a public offering based on year 2000 earnings. If there is no public market and no prospect for a public market in the near future, then the company will offer to buy back the stock owned by the venture capitalist. A predetermined price could be set ahead of time, if desired by the venture capitalist.

The product effectiveness, evidenced largely through anecdotal evidence, personal testimonials, and repeat sales, has formed the basis for the future growth of the company. Together with a second, complementary product (nearly ready for market), the launch product will be aggressively mass marketed as a pain management system for the next five to ten years. Past and current sales have been to end-users, health professionals, and to some retail chains. The company and product are now poised for first stage expansion. Over 30 target wholesale markets have been identified. While the company uses its marketing strategy to enter these wholesale markets, simultaneous efforts will be made to develop research protocols. Management is confident that the anecdotal evidence and personal testimonials will be strengthened by controlled studies, designed to test the effectiveness of the product and demonstrate the physiological healing activity stimulated by the formula. With scientific credibility, the product will not only build its position in the $150 million homeopathic product category but will also strengthen its transition into the formidable mainstream topical analgesic category.

Future research is planned, based upon inquiry, in order to adapt the formula for animal use (Pain Away currently being tested on thoroughbred horses).

At the end of five years, the company intends to have at least one additional health product and should be able to go public off its revenues. The long-term goal for the company is to become an entrepreneurial leader in the development of natural products for various segments of the health care market. The company plans to capture enough share of the topical analgesic market to become either a viable joint venture partner or an acquisition candidate.

The product formula and delivery system are proprietary. The formula is uniquely advanced and is nearly immediately effective in relieving pain. Homeopathy and immunization have much in common, namely the principle of similars, which states that whatever a substance causes in a large dose, it can stimulate an immune response to defend against it in a small dose. It works by the principles of stimulation to the body's own self-healing mechanism and by the scientific balancing of its natural active ingredients through a dilution process called micro-dosing. Micro-dosing has given homeopathy its 200-year history of safety with no known side effects or toxicity. This self-healing process is in contrast to the majority of commercially successful topical analgesics, which contain counter-irritants, including the newer capsaicin-based products. These ingredients cause a superficial inflammation on the skin which masks pain by deadening the sensation of pain in the epidermal nerve endings only, or by distracting from the perception of pain by irritating an area near the pain source. The Pain Away formula has been developed with precision and balance and is a product that is effective and safe for use on all skin types. Pain Away's eleven active ingredients stimulate improved circulation in the micro-capillary system to ligaments and tendons, where most pain is felt. Pain relief is the result of the body's self-healing.

The manufacturing is sub-contracted out to a highly respected FDA-licensed manufacturer of homeopathic products.

An important unique feature of Pain Away which distinguishes it from other homeopathic remedies is that Pain Away is a topical treatment and is not a systemic treatment. As such, it requires little knowledge to use and is conducive to cross-merchandising in the mainstream analgesic category. Furthermore, since Pain Away is a formula of ingredients, it provides a broad spectrum of effects as compared to single remedies.

The personal commitment of the founder to relieve his own pain also adds a unique value to the story of this product - a story which can enhance marketability - to anyone who is in pain or anyone who knows someone in pain.

Although Pain Away is an homeopathic product, the company will position itself as a natural ingredients company - not necessarily homeopathic. All the company principals plan to engage both septics and advocates of complementary medicine by applying rigorous scientific standards equally across the board, for both conventional and unconventional treatments. Contacts have already been made with the National Institute of Health regarding future research.

Product Description

The product is a specialty consumer good carrying a suggested retail price of $19.95 for a 3.7 oz. jar (1.9 oz. jar also available at $12.95). The jar is designed with a medical appearance. The jar is easy to ship in multiples, is easy to stack on a shelf, is aesthetically pleasing, and has an easy-to-handle screw cap. The actual cream is greaseless, easy and pleasant to apply, and is odorless. Pain Away has, to date, largely been sold directly to end-users, and wholesale to retailers, distributors, and catalogues. The markets have supported the suggested retail price, which was arrived at by surveying market research supporting the $19.95 price along with the perceived value of the product compared to similar products at about the same price. This price also yielded a gross profit of $3.75 per jar and allowed for 100% markup from wholesale.

The eleven ingredients are readily available through top-quality labs which control for purity and authenticity. The cream is compatible with any medication being taken. The product carries a money-back 30-day guarantee.

Purchasers of the Product

Preliminary studies done by independent treatment professionals (no control group used) have shown that Pain Away has been effective for relieving the pain, inflammation, and spasm associated with arthritis, bursitis, sciatic spasm, neck and back pain, tendonitis, tennis elbow, tension headache, achilles tendonitis, and carpal tunnel syndrome. Anyone suffering these ailments, treating these ailments, or caring about anyone suffering these ailments is a potential purchaser of the product. A New Jersey hockey team uses Pain Away prior to workouts, competition, and for pain relief. The head trainer for the team says, "There's no product better for contusion of the quadriceps." He has reported shorter recovery times as a result of using Pain Away. Reports from athletes are that using Pain Away before and after workouts yields less cramping, fatigue, and soreness.

Top purchasers of TPR to date:

The total market for OTC internal and topical analgesics is estimated at $3.6 billion for 1995 and is projected to be $4 billion by 1997. With over 400 brands saturating this mature market, growth is still occurring through new products and product innovations. Driving this growth are:

• increasing use of pain management products for the over-50 population segment, whose numbers are increasing
• increasing awareness that pain does not have to be tolerated and can be treated
• price increases

Body/Muscle Pain Market

The market is dominated by internal analgesics:

Pain Away is a new product to this sizable OTC pain-relief market. It will enter this large arena riding on its effectiveness and coming from the new and growing alternative health care market segment. As a new OTC product, Pain Away has such a broad-based appeal that it will be sold to a large portion of the total OTC pain-relief market (both internal & topical), estimated to be 84% of all US adults and growing as the baby boom population ages and concerns regarding age-related ailments, such as arthritis, increase. Of this 84%, about 25% alone use pain-relief products for body/muscle pain for which Pain Away is especially suited. Just this one type of ailment offers a substantial market potential:

If only 40.3 million Americans (25% of 84% of adults) use an OTC pain-relief product three times a week for body/muscle pain alone, then the market potential is 6.3 billion uses of a pain-relieving product per year. Past use of Pain Away has indicated that a minimum of 3 applications per week would use about one 3.7 oz. jar per month. A conservative yearly estimate would be 10 jars per year, with consistent use. In order to reach a five-year sales goal of $50 million (6.7 MM jars), 667 MM consistent purchasers (10 jars/yr.) are needed. Product history has indicated a consistent 80% reorder rate, so at this rate, 833,000 original purchasers are required. This figure is 2.07% of just this one market segment. The company is very confident that it can capture 2.07% of this market segment within five years, especially considering that the roughly 40 million Americans who exercise on a regular basis, and who are aging, are included in this segment. Anecdotal reports from athletes who use Pain Away are that it can prevent injuries by "warming up" vulnerable muscles and joints prior to a workout. The product has wide applicability within this segment. The table below shows the percentage of the body/muscle pain market segment required to meet the next 5 years of sales projections.

These numbers are based upon a wholesale price of $7.50 per jar and a usage rate of 10 jars/year with a segment population of 40.3 million potential purchasers.

The prescription pain relief market is a distinct market which Pain Away will not attempt to penetrate. Pain Away can, however, compete directly with nearly all pain-relief products because of its unique identity of being both a substitute and a supplement to ail competing products. This uniqueness fits a projected market shift from internal to topical analgesic use as the population ages, and derives from 2 factors: 1) Use of Pain Away can reduce the needed dosage of any pain-relieving medication and 2) Pain Away is already part of a rapidly growing segment (25%-30%/year) of consumers who use alternative health care because of a disenchantment with OTC drugs and a concern about side effects with adverse reactions. Use of Pain Away can reduce needed dosage of other pain-relieving medications. As stated earlier, Pain Away's effectiveness is based upon the homeopathic principle of microdosing. While it promotes self-healing by stimulating blood flow to micro-capillaries, it remains safe for all skin types and with use of any other medication. Anecdotal evidence (from hospitals, some doctors, and occupational rehab center) has indicated that use of Pain Away alone has yielded positive results and use of Pain Away, along with other treatments, has seemed to accelerate recovery. As always, this kind of evidence will be scientifically studied. The salient point is that Pain Away can be a substitute and/or a supplement in pain management, and thereby reduce needed dosages of other medications.

Alternative Health Care Segment

Homeopathy, being an established (officially recognized by UK National Health Service) and significant alternative mode of treatment, is gaining increasing acceptance in mainstream American health care. The National Institute of Health has even awarded grant money for research in alternative treatments, including homeopathy. Drug retailers report that homeopathy may be the fastest-growing category in the trade class of drug chains. Since homeopathy is gaining acceptance as an alternative treatment, the market segments which are already embracing these alternatives will continue to be targeted in the company's initial expansion. These segments include people ages 25-elderly, who seek improved quality in life, and whose lifestyle values involve "newness." This segment includes most of the "baby-boomer" population, estimated at over 75 million. The market of alternative health care seekers is characterized by patients who can and will pay for their own care. As much as 70% of alternative medical treatments are still paid for by patients themselves rather than insurers. This kind of purchasing indicates a willingness to try an alternative product and continue purchasing based upon perceived value of the product's effectiveness. Company management has been encouraged by the consistent 80% reorder rate and knows sales will be sustained once initial purchases are made. The alternative health care market is of respectable proportion. According to the New England Journal of Medicine (1/28/93), 34% of Americans spend $13 billion/year on alternative treatments such as chiropractic, acupuncture, massage, and homeopathy. Pain Away is already marketed to all of these treatment specialties so it will reach the spectrum of alternative treatment. This 34% of Americans are familiar with the term "homeopathic," so there's a consumer predisposition to being further educated about homeopathy as a value-added natural ingredient alternative.

The company will build an early market position on the alternative health-care market and will join the growth of the homeopathic segment as it moves from the fringes to the mainstream of the OTC pharmaceutical market.

Alternative Market Potential:

If only about one third of Americans use an an alternative pain-reliever just twice per month, then the market potential is 2 trillion uses of an alternative pain-relieving product per year. Market indicators are that both the number of users and the frequency of use will increase as the population ages. The use rate of 2 times per month converts to 2 jars of Pain Away per year with consistent use. Again, in order to reach the 6.7 million jar sales goal ($50 MM), at the re-order rate of 80%, Pain Away would have to make 4.2 million initial sales in order to sustain 3.3 million consistent purchasers. This size customer base comprises 4.71% of the growing alternative health care market. The company believes that this sales goal is attainable within the next five years. The table below shows the percentage of the alternative health care market segment required to meet projected sales.

These numbers are based upon a wholesale price of $7.50 per jar and a usage rate of 2 jars/year with a segment population of 89.1 million potential purchasers.

Narrowing the Market Focus 2X

The market potential for pain relief products is huge. By narrowing the focus to product category sales, the potential becomes more exact. Pain Away's product category is within the topical analgesic market, estimated at $402.1 MM annually with a projected $522.7 MM market in 1996 (30% growth) and $692.6 in 1997 (32.5% growth). Starting with $522.7 as the base market volume, and with 30% growth per year for the next 5 years, Pain Away would have to capture 3.33% of the year 2000 market volume to make its sales goal of $50MM. Management believes that these goals are attainable.

The table below shows what percentage of the topical analgesic market will meet Pain Away's sales projections.

The focus can be narrowed further to the homeopathic product category, which is growing at a rapid rate at this time. The dollar volume of this segment is estimated at present to be between $150 million and $215 million and expected to grow at a rate of 25% to 30% a year. Some market-trackers say that retail sales haven't grown enough to support the existing number of homeopathic manufacturers and that a shakeout will consolidate sales in the hands of fewer manufacturers. The forseeable trend, however, is progressive growth from the fringes to mainstream markets, and at a rapid rate. The table below again shows percentages of this dollar volume required to meet sales projections.

These numbers are based upon a 1996 volume mid-point between the projected volume range of $150 MM and $215 MM. Growth rate is 25% a year. At first glance these percentages may seem daunting. However, the manufacturers supplying this niche are relatively few in number and therefore hold significant market shares A new player can get a reasonable market share with the right product and marketing plan. The mainstream merchandising of homeopathic products started in the early '90's and has been tested as a lucrative direction. Company management is very confident that Pain Away will gain enough share points to capitalize on the rapid growth of this product category. Pain Away will not remain in the homeopathic niche. Its effectiveness will make it competitive with mainstream topical angalgesics.

International Markets

The company will also develop an international market. A 10,000-unit order has already been received from a distribution company in Hungary and is awaiting final approval from the Hungarian State Department of Pharmacy. A small order was also sent to well-known sports figure in Spain. Discussions are underway for this individual to start large-scale distribution. The homeopathy market in the UK is estimated at 18M pounds and in Germany at 120M pounds, so European marketing could be strengthened by the homeopathic identity alone. In Germany, an independent division of the German Federal Health Agency publishes monographs on the safety and efficacy of herbal medicines. The company believes that Pain Away would fare excellently under such review and will carefully research and plan when and how to reach such markets.

There are many companies competing for shares of the 3.6 billion dollar OTC analgesic market. The major players are the internal analgesic manufacturers:

The balance of the OTC internal analgesic market is held by private label companies and "others." The major strengths of this level of competition are obvious in comparison to Pain Away's present market position. The major players have:

• a manufacturing cost advantage,
• sophisticated market knowledge and access,
• established sales capability,
• strong R&D capacity,
• and of course, brand name loyalty.

An important competitive strength of Pain Away is that it is topical - pain relief is accomplished without risk of overdose and consequent risk of serious side effects. This competitive strength derives from a previously noted shift in the market from internal to topical analgesic use. This shift in consumer preference, along with Pain Away's effectiveness, can position the product as a substitute/supplement among these large competitors. Management is ever mindful that mainstream pharmaceutical companies are watchful of the homeopathic market and will act accordingly should market share be lost to homeopathic remedies. Becoming a viable acquisition candidate to any one of its major competitors is a realistic goal. Pain Away management is committed to quality product development and is also open to strategic alliances which would enhance its market capability.

The competition in the topical analgesic market is head-to-head. The top competitors are:

The basis for the competitive analysis is Pain Away's most competitive feature:

• It doesn't have any of the aforementioned advantages held by the major, well-known players in this market - yet.
• It doesn't have widespread brand name recognition - yet.
• It doesn't have appreciable market share in topical analgesics, alternative health, or homeopathy - yet.
• It does have a unique formula of safe and effective ingredients which none of the above products have.

All topical analgesics contain counter-irritants, including camphor, menthol, methyl salicylate, eucalyptus, wintergreen, and even the popular capsaicin. These ingredients, even when blended, act primarily to cause a superficial inflammation on the skin. This inflammation serves to hide the pain by deadening pain receptors in the skin.

What distinguishes Pain Away from all of the above products is that the eleven active homeopathic ingredients stimulate the blood flow in the body's micro-capillaries and act synergistically with the body tissue. This stimulates the body's own self-healing. Pain is treated at its source. Company management believes that the unique effectiveness of Pain Away will give it competitive clout. The issue then becomes how to compete.

Although Pepperub (Pepper) and Vapol (Athens) enjoy the largest market share, they are vulnerable to new product introductions. Menthol Plus (Lucia) held the top position in this category last year until Pepperub was re-packaged and relaunched with line extensions. That relaunch along with a relaunch of Zanprin boosted sales of both brands and put Pepperub back on top. Pepperub, Vapol, and Mentholplus are all menthol-based products. Zanprin is a capsaicin-based product and has boosted usage of its relatively new ingredient. Other relatively new capsaicin products are Capcreme (Bioderm) and Capthol (Men-Thol Co.).

Company management believes that Pain Away is generally more effective than Pepperub and Vapol. However, these venerated brand names, large advertising budgets, and consumer loyalty are formidable competitive advantages. Pain Away will focus on other competitors in order to gain a market position.

The key competitors are Menthol Plus, made by Lucia and Zanprin, made by Skin Care Corp.. Menthol Plus is a menthol-based product which Pain Away has encountered head to head in the sports market. Menthol Plus has a retail price advantage in the mass market, selling for $4 for a 2 oz. tube. This price difference is of little concern because Pain Away will promote itself as a high value product. The topical analgesic, alternative health, and homeopathic markets all support pricing based on perceived product value. Menthol Plus' manufacturer has reduced the advertising budget for this product (about $2 million) recognizing from a 21% decrease in 1994 sales that the product has matured. The company plans to acquire other brands (no topical analgesics) and extend its other lines in order to generate sales growth. The company sells another topical analgesic which is doing well in sales but has not reached the same position as Menthol Plus. Pain Away will monitor the life cycle of Menthol Plus and move to gain any market share it might lose.

Zanprin, made by Skin Care Corp., is gaining market share because Zanprin (.025%) and Zanprin- X (.075%) are capsaicin-based products. Capsaicin, derived from cayenne peppers, has created a new segment in the market and is very popular. Other companies are making capsaic in products but Skin Care Corp. attracted market attention by relaunching Zanprin as an OTC consumer product. It had been marketed for seven years to physicians and kept behind the counter, carrying the credibility of a prescription product. In early 1995, the product was re-packaged for shelf space and supported by TV ads. Despite commanding premium prices ($19.95/2oz of Zanprin-X), the product has done dramatically well.

Skin Care Corp. claims that Zanprin is the "only brand with physician endorsement and specific clinical support." This is a credible claim, cultivated for seven years, and obviously contributing to sales of the product.

Skin Care claims to be the first in the industry to develop their highly purified version of capsaicin for a pharmaceutical base. Zanprin distinguishes itself by promoting controlled clinical studies which have supported its effectiveness. Skin Care claims that such clinical trials don't apply to other, less pure, capsaicin formulas. This scientific feature enhances product credibility among physicians and pharmacists.

The management of Pain Away Ltd. recognizes the effective marketing strategy used by Skin Care because it is similar to their own strategy. Advertising and promotion expense is critical. With proper capitalization, Pain Away can compete because the Pain Away homeopathic formula is unique and effective. Many capsaicin users, including Zanprin users, have complained about the burning sensation caused by capsaicin. Pain Away will stand up to any topical analgesic on the market and do very well with comfort, safety, and effectiveness. The company needs to get this message out. The seven-year product life of Zanprin, supported by unique and heavy TV advertising, gives Zanprin quite an edge. Zanprin is now a "new" growth product and Pain Away can grow behind it, by comparing ingredients and effectiveness at every turn. Pain Away is also in the same price range as Zanprin, doing slightly better with $19.95 for a 3.7 oz. jar or $12.95 for a 1.9 oz. jar.

Zanprin is not the "only brand with physician endorsement and specific clinical support." Pain Away has been cultivating health professional support since the R&D phase. The product is heavily endorsed, and more medical support is developing. Many of Pain Away's sales to date have been to health professionals. Regarding clinical support, Skin Care's success with this strategy underscores the strategic importance of Pain Away's plans for controlled clinical studies.

Speaking of "highly purified" formulas, Pain Away can compete strongly with any formula on the market, especially capsaicin-based. The company wants to discuss purity of ingredients and formula and will do so in all promotional efforts.

The remainder of the products listed in the top competitor list have of course the same advantages that any established company with significant market share has. Beyond these immediate competitive advantages, Pain Away can compete, again, on the ingredient effectiveness basis.

Aspratin, an odorless rub which contains Salycin, sold well when it was introduced in 1992. It held third place among topical analgesics at the end of 1993. It has since been surpassed by capsaicin-based Zanprin. Bioderm developed Capcreme and lowered its price when Zanprin was relaunched.

Capthol was recently developed by the long-established Men-Thol Co. and is a capsaicin-menthol blend designed to compensate for the sometimes delayed pain relief when using capsaicin alone.

Salicreme is a methylsalicylate product which has shown flat growth and has lost market share.

Lyptum was a rapid-growth product in 1990-1991 but has since lost market share. Besides the well-established brands like Pepperub, the products which are gaining in this market are the capsaicin-based. This product category is known to be affected by product innovation and development. With proper support, Pain Away will take a respectable market share.

Homeopathic Competition

The competition takes place in the drug chain arena. Homeopathy may well be the fastest-growing category in the trade class of drug chains (20% of all homeopathic product sales). Among the growing number of drug chains which are giving shelf space to homeopathic products are: Walgreens, Medicine Shoppes International, Thrifty Payless, Eckerd Corp., Edgehill Drugs, Genovese and FEDCO, a California supermarket chain. Research published in the Journal of Clinical Pharmacy and Therapeutics states that 27% of US pharmacists consider homeopathic medicines helpful while only 18% consider them useless. The crossover of homeopathy from health food stores, where sales are still strong, to mass markets is gaining momentum.

As mentioned earlier, there are relatively few companies supplying homeopathic products to the mass market. There are five major producers/distributors of homeopathic products.

Health System, Homeopathic Co., and Life-Right pioneered the distribution of homeopathic products to chain drug stores in the early 1990's and are now market leaders, although more companies are entering this lucrative market. Health System Products now has about 40% market share. Homeopathic Co. and Del Sol are aggressively developing the crossover into mass marketing with line development and heavy TV advertising.

All the topical analgesics listed above are arnica-based, with few other ingredients. Arnica Montana is the premier homeopathic medicine for the treatment of shock and trauma to the muscle. These formulas come the closest to Pain Away's because they contain some of the essential homeopathic pain-reducing ingredients. Pain Away's formula, however, blends more ingredients than any other homeopathic topical analgesic on the market. This more inclusive formula gives the product wider applicability. Price-wise, Pain Away is more expensive than most of the competing homeopathic products, where prices are in the $5-$10 range for 2oz.-4oz. sizes. But, this is a value-priced market, so price is not a critical variable. Since Pain Away is very competitive on an ingredient/effectiveness basis, the critical factor is having the resources to promote the product.

Future Competition

As has been noted, the topical analgesic category, including natural ingredient, is rapidly influenced by new clinical studies and product innovations. There are three main sources of new competition:

• New ingredients and/or new innovations of existing ingredients. Examples are new products which employ the medicinal benefits of ammonium compounds. These products are designed to provide pain relief without the objectionable training room smells, burning sensations and stinging of abraded skin that are often caused by the majority of topical analgesics that contain menthol, methyl salicylate or capsaicin as active ingredients. Pain Away's formula has solved this sensation problem and is a less "high-tech" product, for which consumers are showing a preference.
• Companies currently in this market who could increase market share and become major players. Pain Away Ltd. is in this category.
• Chain drug companies may produce their own private label homeopathic products and corral a significant share of this growing market - much as they did in the non-homeopathic analgesic market. This scenario is more likely to happen as homeopathic companies expand the sales volume in this market and there are share points to be taken away by private labeling.

Pain Away Ltd. can be very competitive with the right promotional support.

Marketing Strategies

Increase market share by reducing market share of competitors. This strategy will capitalize on the market development to date and capture a share of markets held by existing pain-relieving topical applications. The key benefit is that conventional pain-relievers mask pain while Pain Away stimulates the body's own healing ability to directly battle an ailment. Another benefit is that homeopathic remedies have no known side effects while many pain-relievers, especially those ingested, have side effects. Neither will Pain Away interfere with any medication. This strategy requires extensive advertising in mainstream media, including infomercial, QVC (Pain Away already under review), 60 second commercial, cable TV, interactive TV, direct mail, independent sales reps, POP displays, and educational inserts/newsletters. One objective of planned controlled studies on the effectiveness of Pain Away is to use scientific evidence to help bridge the narrowing gap between natural and conventional medicine. Product studies will support this marketing strategy. In this context, the company will pursue preliminary inquiries from a favored vendor to use Pain Away in the workplace to study any reduction of lost work time and/or medical costs precipitated by repetitive stress injuries.

Expand a growing new market for alternative health care by positioning to lead this growing market. This strategy involves specialty catalogues (placed in 5 currently), placement on retail shelves of health food stores, educational product inserts/newsletters, media appearances discussing product, and independent sales reps. This strategy addresses the 89.1 million users of alternative health care.

The company has already been approached by two large Multi-Level Marketing companies. This strategy would involve creating private labels for a large customer. Of utmost consideration with this strategy is product identity and how this channel of distribution would affect it. This channel of distribution usually requires more price mark-up than the product would tolerate.

The company will create its own "competition" by developing private labels and/or separate companies to market to different niches.

Keep capital outlay to a minimum by licensing/franchising Pain Away to a brand-name company. This strategy would add value to the product in the form of brand name loyalty, manufacturing strength, and a strong sales/service force already in place. The company envisions its role in this type of strategic alliance as conducting scientific studies to increase the credibility of TPR and in developing new products. This strategy remains an option which could preclude other strategies under mutually acceptable terms.

Building on an initial order from a health product distribution company in Hungary, Pain Away Ltd. will penetrate the European market by targeting England and Germany, where homeopathy is an accepted form of treatment. This strategy would be developed only after a US market position was established.

Marketing Plan

The company is moving from start-up stage into its first growth stage. Market strategy to date can be succinctly described as selling "one jar at a time." Direct personal selling has been the mainstay in sales growth. This strategy has targeted any end-user willing to try the product. These early customers were reached through health care professionals and direct selling through state/county fairs, shopping mall space, health food store chains, and most recently lifestyle catalogues. As the company moves away from direct selling, a strategy which proved to be an excellent market test, into mass-marketing, identified market segments are being matched with appropriate distribution channels. The plan now is to expand and concentrate more on helping the consumer develop product preference by heavy advertising of the brand name, the benefits of the product, the ease of use, and the guarantee. Company expectations are that all advertising will be enhanced by results of controlled studies of product effectiveness.

The company intends to expand regionally, based on existing markets and consumer profiles (e.g., households from the South are likely heavy users of analgesics). The national market will only be tested by placement in catalogues with a distribution of 200 million. As regional sales grow and as the product gains recognition, then a national marketing strategy will take shape. Company management have begun discussions with a major marketing communications agency (Fortune 500 client list) who themselves approached Pain Away. The marketing and sales outline is as follows.

Marketing Function

• A complete review and analysis of the topical analgesic market.
• Utilization of Triad Groups conducted with the professional community and general consumers. Purpose is to identify professional and consumer preferences.
• Based on research, create a product identity.
• From product identity, establish professional and consumer strategic directions, which would affect product design, packaging, advertising, consumer promotion, and product publicity.
• Test both professional and consumer strategic direction via two more Triad Groups.
• Develop launch marketing plan with all elements and budget for both professional and consumer.
• Actual implementation of the plan to include product design changes, packaging, advertising, consumer promotion, display, and product publicity.

Sales Function

Utilize a sales organization enabling direct-call coverage on the top 25 customers, which generally account for 80% of retail sales, and broker-managed coverage for the remainder. Launch plan would include a national sales meeting and all necessary materials.

Professional

Concentrate on the pharmacist community via co-op direct mail. Pharmacist recommendation at the purchase counter does affect sales.

The production process takes place in a standard homeopathic laboratory where raw materials are blended. There are no significant health or safety risks involved. Production orders are processed by purchase order for finished product. Some raw materials are usually on hand but more are ordered against purchase order requirements. Jars are ordered from a separate manufacturer and sent to the homeopathic laboratory to be filled, packaged, and shipped to Pain Away Ltd., where fulfillment is done.

The homeopathic laboratory has the capacity to fill all projected orders. As orders increase, Pain Away management will consider using a fulfillment service and more drop-shipping to wholesale customers. Cost of goods is estimated at 18% of gross sales. This figure has been consistent throughout production to date and is based on the complete production cycle.

There is no backlog.

Production Characteristics

The production process does not require any specialized or proprietary machinery. The critical factors in the production process are the highest quality of raw materials and the incubation process, which assures a stable finished product. Water is added to a base of vegetable/plant emollients. The eleven active ingredients are then mixed into the emulsion, which incubates for about 48 hours in large vats, while monitored for any fungal invasion. The finished product is then lab-tested for potency, which is done by lot number (the company gets lot samples). Filling is currently done by gravity-feed. The manufacturer might advance to computerized filling. One batch is 500 gallons. Lead time from order to packaged product is 4 weeks. Only a skilled and experienced manufacturer can produce the formula. Even other homeopathic manufacturers not familiar with a cream-based product would have difficulty with the production process. General topical analgesic manufacturers would need to become familiar with the raw materials and the production process in order to blend Pain Away's eleven active and ten inert ingredients. The company currently has one back-up manufacturer, which has never been used.

Labor Force and Employees

The company administrative staff consists of 5 people (recently reduced by 3) including the 3 officers. The two employees are paid an hourly wage. The staff are not unionized and there is no expectation of such. The labor supply in the region is more than sufficient to meet all future staffing needs. The sales force is comprised of independent agents who are paid on commission.

Currently, the laboratory procures all production materials. There are no shortages of key components, and multiple sources are available.

Subcontractors

All production is sub contracted out. Only fulfillment and shipping are done in-house. The company has formed a strong working relationship with Herbal Laboratories, which is the key subcontractor. Although management has selected a back-up manufacturer, the existing relationship with Herbal Labs has been more than satisfactory, so no change is foreseen. Other subcontractors supplying jars, labels, and boxes are used based upon price and service and can be replaced.

Standard office equipment is used for administrative functions. All production equipment at Herbal Laboratories is new and there is nothing that would cause production to be stopped for any appreciable time.

PROPERTY AND FACILITIES

The company facility is a single-story 1,950 square foot, cement block structure on about a two-acre cleared lot that is leased in one-year increments. The facility is located in northern Dutchess County, NY. All necessary commercial and industrial infrastructure is in place. The facility is easily accessible from major thoroughfares. The general area has been and is recovering from the closing of 2 large industrial facilities, so there's been anoticeable decline in property values. There is, however, a regional effort to re-direct the area to rely more upon small and entrepreneurial business. Management plans to purchase the building in order to add an appreciable fixed asset and to reduce expenses. The structure is easily expandable, so the company will not have to move during its critical growth stage.

PATENTS AND TRADEMARKS

Active homeopathics are not patentable. Management is exploring establishing a trademark and a formula patent.

RESEARCH AND DEVELOPMENT

The three principals have invested collectively $100,000, which has been capitalized. Plans for the immediate future include forming a research alliance with a university, hospital, or research group in order to develop a protocol for applying the "rigorous scientific standards" against which the effectiveness of Pain Away can be proven. Management has projected R&D expenses at $ 30,000 for the next 12-month period. These expenditures are intended for controlled studies proving effectiveness, and for continuation of developing applications for animals. Management is sales-marketing oriented and does not want to develop only a research lab. Any R&D will be designed to enhance sales and profits. Company management is currently investigating an SBIR grant.

There are no particular federal, state or local laws/regulations that affect the conduct of business. The manufacturer meets OSHA requirements, as does the Pain Away administrative facility. The FDA regulates homeopathy as an OTC non-prescription medicine. Pain Away's ingredients are in total compliance with FDA standards. Mr. Peale cultivated a working relationship with FDA representatives during the initial research and wisely intends to sustain such.

Product liability insurance is underwritten. A buy-sell agreement among officers exists but is not yet backed by insurance. Key employee insurance is also yet to be written.

All taxes are current. The company pays standard payroll, Social Security, and corporate taxes. The product is sales tax exempt in many states.

Company principals first formed an S-corporation under the name Peale Inc. The realization of the likelihood of international sales prompted management to form Pain Away Ltd. as the operational company. Peale Inc. serves a limited partnership which was formed to attract investors. Both companies are run by the same management team. All R&D is done through Peale Inc. There is comingling of funds. This proposal seeks financing for Pain Away Ltd. Return on the investment will derive from the sale of the product Pain Away itself and any other products which the company sells.

Pain Away Ltd. is a member of the Homeopathic Manufacturers Association. The officers were invited to participate in an annual meeting of the newly formed FDA committee on natural medicines. This committee works on the bases for regulations, compliance, and claims for the natural ingredient industry, covering vitamins, herbs, and homeopathy.

Management subscribes to the following publications:

• Homeopathy Today
• Natural Foods Merchandiser
• American Health
• Prevention Magazine
• Let's Live
• New England Journal of Medicine letter

Directors and Officers

A board of directors will be developed in the near future. There is interest from the medical, nutritional, and professional sports communities, as well as from a local bank. Officers are:

Robert Peale - CEO Alana Curtis - President Ryan Lemon - Vice-President, Marketing

Profit and loss responsibilities are shared by the officers.

The officers are primary key employees (backgrounds in executive summary). Other key employees include:

Key Employees

Leslie Ottaviani - bookkeeper and office manager - known by management for 5 years and described as "a dedicated innovator with a true grasp for details." She has experience supervising 20 employees in the accounting department of Worldwide Airlines and has worked as an independent bookkeeper for several companies in Hudson Valley, NY.

Julia Allen - administrative assistant - known by management for 6 years and described as "having people and problem-solving skills and works incredibly well under pressure." Her background includes sales in a successful business which included business consulting.

Remuneration

Accountant and Banker

All other fees paid on an ad hoc basis. Different attorneys have been used on an ad hoc basis (finance closing fees will be paid by the company).

Principal Shareholders

Proposed Financing

Management is willing to negotiate any structure which suits the investor. The company is seeking an equity investor. Management will provide a seat on the company's board of directors. Ongoing reports of key ratios, profit-loss statements, balance sheets, and annual audits would be provided to the investor. It is management's intent that the investor will enjoy returns on investment in excess of that of alternative investments, as a privately held company, while providing investor liquidity of his investment by taking the company public at its earliest opportunity.

Capital Structure

The existing capital structure includes a $50,000 unsecured line of credit with Poughkeepsie National Savings Bank. This line of credit was just brought to maturity in 1/96 for a 30-day period, at which time the line was renewed. If the current financing proposal is accomodated, then the line of credit can be increased.

Additional financing to date has derived from the sale of limited partnerships offering $.01 per 3.7 oz. jar royalty for every $1,000 invested. Each limited partner has been given the right to convert his/her capital investment into common stock when the company goes public, or, to receive back his/her original capital investment when the company goes public. Total amount of financing raised through the limited partnership is $100,000.

As mentioned earlier, officers have collectively invested about $100,000 in the company, mostly through the R&D phase. Officers' "sweat equity" is immeasurable.

As stated in the executive summary: Advertising & promotion campaign - $1,200,000 (see below); Market research - $300,000. The company anticipates the need for follow-on financing after 24 months of business.

Management intends to preserve cash flow by factoring much of the receivables. With the current lead time of 4 weeks, however, some capital may be used to increase merchandising inventory in order to fulfill initial large orders. It is hoped that any follow-on financing can and will be debt financing, serviced by cash flow.

The following table sets forth the capitalization of Pain Away Ltd. as of 12/31/95 and as adjusted to reflect the proposed sale of common stock.

Dilution: The net tangible book value of the company as of 12/31/95 was minus $1,673 per share. Without taking into account any other changes in such net tangible book value after 12/31/96, other than to give effect to the sale of 60 shares (proposed 30% equity share) hereby, the pro forma net tangible book value of the company on 12/31/95 will be $5,827 per share, representing an immediate dilution of $13,597 per share to new investors.

Management recognizes that this proposed financing implies a large premium value on the existing equity and so will negotiate any other conditions which would induce the investor to make the investment.

At the time of the company's IPO, limited partners who opt for common stock will receive their shares from the officers' share of owned stock. The negotiated ownership held by the investor will not be further diluted.

Investor Involvement

Management seeks a close working relationship with the investor. The investor will be given one seat on the board of directors. Management would solicit consultations (for a fee) on financial matters, or any other area of investor expertise (e.g., planning, management development), but voting power is not an option. Fees will also be paid for any future financing and/or profitable business connections arranged by the investor.

Limited Operating History

Even though management feels that the company is at first-stage expansion, it is definitely still an early-stage company. Two obvious risks inherent in early-stage companies are undercapitalization and poor liquidity. Management has capitalized the business operations to date well enough to have developed the product and identified penetrable market segments. The current proposed financing will provide enough capital to handle the anticipated growth.

Limited Resources

Management believes that it has the resources to continue at the present pace of business. An anticipated increase in sales through advertising media such as QVC , regional/national catalogues, retail outlets, and some European distribution can be financed by factoring. These "bootstrapping" approaches have sustained the company to date and will accommodate slow growth. Management believes, however, that more rapid expansion is desirable in order to penetrate its identified market segments. More rapid expansion requires more resources.

Limited Management Experience

All officers have successful backgrounds in marketing. Additional experience in manufacturing/distribution has been gained in the past nine years of product development. Management has consistently shown a willingness to leverage themselves with accomplished professional consulting relationships. The company culture is one which reinforces sharing of expertise with mutual benefit to all concerned.

Market Uncertainties

Any consumer product business is subject to the changing preferences of the marketplace. As presented in the marketing section of this proposal, the target markets are showing substantial growth, which limits uncertainty. There is currently a growing consumer preference for homeopathic topical remedies. More uncertainty is evident when considering competition, but can be made tolerable by on-going research and analysis.

Production Uncertainties

The only uncertainty at present is whether or not the lead time (4 weeks) from purchase order to finished product can consistently be reduced. This uncertainty is of material concern as sales increase. Herbal Laboratories is a sound company with a promising long-term future and has always been customer-friendly, so no more serious uncertainties exist at present. Management believes that vertical integration of manufacturing is feasible in the long-term but is not practical in the near-term.

Liquidation

In the event that liquidation becomes necessary, management believes that the most value could be realized from the sale of the product formula itself. The formula is not patented, so valuation remains uncertain. However, the sales history, along with the testimonials attesting to the effectiveness of this "ready-made" product, should determine value. Office equipment would yield limited value, and unless the company building was purchased prior to liquidation, no value would be realized. Management believes that the company can and will generate increasing value in the near future, evidenced by increasing sales.

Dependence on Key Management

At present, CEO Robert Peale is considered the primary key manager/officer. His knowledge of the product ingredients, his history of public appearances promoting the product, his increasing recognition by the health community as an expert in natural medicine, and his charisma as a business professional highlight his key role. Managerially, the other officers are thoroughly competent and could manage the company and market its products without Mr. Peale. At this critical early stage, however, the product needs an identity and a market position before the loss of any key managers could be overcome. Once the premier product is securely launched and the product line is expanded, the loss of any officer could be absorbed by continued proper management of the company. Management believes that such a development is not far off, once the company is properly capitalized. Until such time, key person life insurance will be purchased.

What Could Go Wrong?

Upgraded advertising campaigns could not lead to any substantial increase in sales. This problem can be avoided by using experienced advertising/marketing consultants who have familiarity with the targeted markets. Furthermore, properly designed test runs on any advertising campaign would provide objective indicators of expected returns. Capital investment in advertising should be gradual and progressively based upon certain expected levels of return.

Stronger competition could capitalize on and stall Pain Away's early success by replicating the product and its marketing strategy. This problem can be solved in two ways: First, with proper capitalization, Pain Away can make an entry into targeted markets rapidly and with enough strength to grab market share. Keeping market share can be easier than getting it. This market requires extensive advertising. Increasing market share could mean an increasing advertising budget. An increasing advertising budget can easily reduce profit margin, so strategic planning is required. The second way to solve the competition problem is in the formula itself. Management will seek to patent the formula. The nature of the homeopathic ingredients is likely to inhibit any mainstream non-homeopathic company from replicating the product. Acquisition of a homeopathic company would make more sense. Narrowing the competition, then, to other homeopathic companies gives Pain Away more of a fighting chance, since its formula is more sophisticated and user-friendly than any homeopathic topical analgesic on the market.

Governmental controls could conceivably impede sales. This problem is unlikely because the ingredients are already FDA-approved. Furthermore, management's participation in the FDA committee to develop regulatory standards for the natural medicine field would provide early warnings of any such prohibitory controls.

The company could be controlled by non-investor stockholders. This problem is not likely to develop because the management team would hold a majority. Management is dedicated to the principles of increasing value and profits and is confident that its efforts will be in concert with those of the investor.

RETURN ON INVESTMENT ANDEXIT

Public offering.

Management plans for an IPO in 5-7 years. The investor's shares would be sold to provide the targeted return on investment. Should there be no public market, then a buy back would occur.

Management will negotiate a buy back formula with the investor and will target milestones in planning for this possibility. Management aims for returning 6 times the original investment in five years.

ANALYSIS OF OPERATIONS AND PROJECTIONS

The business has not shown a profit since sales activity began in May 1994. This lack of profit is not unusual for an early-stage company. Losses were incurred in the start-up phase, where the objective was to get consumers to try the product. Gross profit margins have remained stable, however. Management focus was targeted on getting professionals and consumers to try the product in order to collect anecdotal evidence and testimonials of its effectiveness. Not enough focus was on asset management, as evidenced by a low return on assets ratio (p.32). Now that the product has gotten some recognition, especially in professional circles, the focus will shift toward mass marketing. Management intends to improve inventory management by using factoring of receivables in conjunction with JIT inventory control. As sales volume increases, drop-shipping from plant to wholesale customer, will also be arranged.

Balance Sheet

Monthly Income Statements 1995

Income Statement - 12/31/95

Key Ratio Analysis

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Projected Cash Flow

Projected Annual Financial Statements

Assumptions

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Planning and Designing a Pharmaceutical Facility: A Process Designer's View

Pharmaceutical Technology Europe

Planning manufacturing capacity in the pharmaceutical industry is not for the faint-hearted. How can process designers help their clients to overcome some of the problems they face when planning to introduce new capacity? This article sets out to explain some of the techniques that are being employed in the early stages of project development.

Planning for new manufacturing capacity in the pharmaceutical industry is notoriously difficult. New potential blockbuster compounds are discovered that are predicted to have a big future, yet can fail at the last hurdle. Older products coming 'off patent' may unexpectedly get a new lease of life meaning that existing production capacity must be increased. Consequently, many production facilities are built as multiproduct or general purpose manufacturing units to cater for the wide variety of compounds, processing characteristics and volumes required.

This article discusses the need for site master plans that form the basis for future manufacturing development, and addresses some of the early stage process development activities that influence the fundamental basis of the project. Methods employed in the later stages of project execution will form the basis of a second article, which will be published in the future.

This first article discusses some of the ways in which experienced external service providers can add value to the early stages of pharmaceutical facility planning and design by providing

• an independent and objective viewpoint
• methods and experience to analyse the process as a whole
• modelling and simulation tools
• benchmarking data
• methods and procedures to formulate a robust basis for the project to proceed.

Site Master Planning

Despite the high-tech image of pharmaceutical facilities, many of today's manufacturing plants are over 20 years old and have developed in an unstructured manner. Support services will often have been provided individually on a project-by-project basis where, with hindsight, a more holistic approach would have been more cost-effective. Time pressures on new projects may have resulted in new facilities being located in the most convenient position rather than the best location for the overall site development.

Consequently, many companies have identified the need for a more structured planning approach to their future site developments, involving

• rationalization of existing site facilities
• reduction in operating costs in support services
• surveying and census of newly acquired facilities
• upgrading for good manufacturing practice (GMP), environmental health and safety (EHS) or to incorporate new technologies
• improvements in flows and departmental relationships.

Each pharmaceutical company understands its own business better than any other organization and in this respect the site master plan is best undertaken by the company's own resource. However, an external services provider can often add value by

• bringing an independent and objective approach
• providing census techniques, questionnaires and workshops
• providing industry benchmarking
• offering specialist knowledge in key technology areas
• providing resources to enable the study.

The resulting master plan will provide the cornerstone for future development of the manufacturing site and a framework within which, each future project can fit. The illustration provided in Figure 1 gives an overview of the entire process.

Figure 1: Development of the site master plan.

Process Design

Once a new candidate active compound has been identified, a pharmaceutical company sets out to develop the manufacturing process. Almost without exception this results in the generation of a batch process though it is well understood that continuous processes are more efficient and cost only a fraction of the equivalent batch process. Speed-to-market and concerns over validation of the process have meant that a pharmaceutical company's approach to process development is conservative. From a process engineer's point of view, it seems that the end result of a huge amount of engineering effort simply produces a scaled-up version of the laboratory plant.

Pharmaceutical manufacturing processes are typically developed by a team of chemists, each of whom are individually responsible for small parts of the overall process, and typically use simple laboratory glassware and equipment. Recently, however, operators are questioning why they constrain the kinetics, thermodynamics and fluid mechanics of pharmaceutical processes to the limited confines of a stirred tank. This is where the experienced process contractor, if involved early enough, can add value to the process development process. Analysed in a methodical manner, the specific characteristics of each process become evident and alternative processing methods then identified.

One of the best methods available has been developed by Britest Ltd, a nonprofit company founded in 1998, whose members include AstraZeneca, GlaxoSmithKline and Foster Wheeler. Britest's objective is to deliver major competitive benefits to chemical and pharmaceutical companies by designing the best processes and manufacturing strategy for each member, using a set of proprietary tools, known as the Britest tools. Utilizing Britest methodology encourages the user to develop a greater understanding of the process as a whole, resulting in radically different options being considered. These tools are a time-effective way of starting the development process and determining all the potential (and unfeasible) process options.

Process Modelling and Simulation

Once the process is available, the next stage of its development is to analyse and refine the design. This is where modelling and simulation provide invaluable aids to the decision-making process. With the computer model, numerous design alternatives can be investigated quickly and easily, enabling the capital cost of the facility to be minimized. Demand for resources and debottlenecking can be determined (Figure 2) as well as confirmation of production rates and illustration of manufacturing schedules. In addition to equipment-focussed process modelling for debottlenecking and utility analysis, the operational aspects of a facility can be modelled and analysed.

Figure 2: Simulation of utility demand versus time.

The computer model adds value at all stages of the design process from early conceptual design through to the ultimate operation of the facility. There are a number of different modelling methods available to the engineer. Both static and dynamic simulation packages are available such as Witness and Super Pro Designer. Effort put in at this early stage of the process development will be handsomely rewarded over the lifetime of the facility.

Operability modelling and simulation, which include capacity modelling, enables the designer to

• plan labour (number of operators, operator position, etc.) and simulate operating procedures to ensure satisfactory operations
• demonstrate movements to optimize layouts, eliminate cross-contamination and determine numbers of intermediate containers required
• optimize dispensing points, use of intermediate containers and buffer storage
• optimize utilities and services. The benefits of operability modelling include reduced capital cost and reduced operating cost, resulting from increased efficiency, improved use of labour and reduced inventory.

Early Estimates

To develop the new project concept it is important to have an early realistic appreciation of the magnitude of the required facility in terms of scale and cost.

Senior management must appreciate the likely cost of the final manufacturing facility and have a good understanding of the size of the project to consider the sites where it may be located. In many cases the new process may be accommodated within an existing manufacturing facility on a campaign basis with little need for plant modification.

Larger and more complex processes may involve a significant revamp to an existing facility. Many pharmaceutical companies now have significant capacity throughout their worldwide operations and the requirement for new greenfield project capacity is now less than it has been in recent years. However, there will always be a number of new facilities required if only to replace the ageing nature of existing capacity.

Specific process chemistry, more toxic compounds, specific physical forms and increasing levels of GMP will also add to the requirement. Costs of new facilities or revamps are often preset by early discussions where a rough cost is first mentioned. Often this number is based on little more than a guess or estimate, yet it can often live with the project throughout. An experienced contractor can provide useful early guidance if given a significant database of information. Past project data, when analysed and reported in a consistent manner, provides relatively accurate information from a minimal amount of information. The graph in Figure 3 illustrates one of the many types of correlations that are available. In this example, for a primary active pharmaceutical ingredient (API) batch manufacturing facility, the overall reactor capacity is the prime factor plotted against the total installed cost of the facility.

Figure 3: Process building cost versus reactor capacity.

The scale or the size of a new facility is also an area that can be estimated at an early stage from minimal information. The size of a manufacturing facility is something that has generally required a reasonable amount of design work to be executed before reasonable information has become available. However, the experienced designer can provide very early guidance on the scale of a new facility if it has analysed and correlated a number of previous designs. The analysis requires the definition of different areas of the facility, which must be clearly understood to make use of the relationships generated. In the example illustrated in Figure 4 the relationship between floor area and reactor capacity for differing manufacturing scale can be seen. With a minimum of process knowledge a good estimate can be made of the new plant area requirements.

Figure 4: Relationship between process footprint and reactor capacity.

Given an early appreciation of cost and size of facility the planning and design process may continue to the early stages of conceptual design.

Concept and Scope

Pharmaceutical plant design is often heavily influenced by the user. It is unusual for a client to make use of repeat designs, instead requiring bespoke design solutions. For example, a comparison of a variety of API pharmaceutical pilot plants finds all manner of different plant arrangements and detail for what are essentially the same process equipment configurations. In time, this approach will no doubt diminish as clients become increasingly focussed on minimizing overall project costs and time to build.

As with other industries a greater degree of standard or repeat engineering designs will prevail as manufacturers face stiffer competition in the marketplace.

For the moment, however, bespoke design is still an important factor in determining and fixing the user requirement and, therefore, the scope of the project. Engineering contractors generally have a key role at this stage of the process development in undertaking the conceptual study. At the early stage of a project it is essential that a common understanding of the project is appreciated by all parties. A series of questionnaires and workshops is useful in ensuring that all aspects of the project are fully covered and that all parties fully understand the project scope. The outputs from these workshops must then be captured in an overall plant user requirement specification (URS) and plant design basis documents.

The initial concept study will focus on plant arrangements and aim to provide a workable and efficient layout that satisfies the needs of the user and provides sufficient detail to enable a cost estimate to be developed. All of the high-level philosophy documents should be drafted and agreed at this stage to provide a firm foundation for the ensuing engineering efforts. New ideas and cost saving options should be tabled at this early stage of the project; the value of cost saving ideas considered during the concept study can lead to major savings. The accepted approach is to open up all avenues of discussion during the concept design stage. Once the project moves into front-end engineering the opportunities to rethink will become more and more limited as the momentum of the project picks up. As indicated in the illustration (Figure 5) there is an early project stage where the focus of the project is opened up; beyond concept stage this focus closes down rapidly.

Figure 5: Recognized relationship between cost and risk of change.

Some designers are now implementing a value management approach. A key feature of this approach is the definition of cost-saving objectives early in the project. These objectives are discussed with the specialty engineers and the cost achievement is analysed with the designers when the project cost estimate is ready. The cost objectives should then be reached by a focussed design effort and not as a result of a 'shock' cost-cutting exercise.

This first article has discussed some of the ways that external service providers add value to the early stages of pharmaceutical facility planning and design. Different techniques are required in later stages to deliver the project on time and within cost. These techniques will be discussed in my second article.

David Ainsworth is a principal consultant in Foster Wheeler's pharmaceutical division, UK.

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Business Plan for Pharmaceutical manufacturing, requirements, machinery and equipment

Starting Pharmaceutical manufacturing company is high investment and time consuming process. It can be successful only when if you have proper business plan. Before starting you need to work out at number of aspects. Premises area and machinery/equipment are one of first priority aspect before going in process of starting manufacturing unit.

Pharma manufacturing plant could have number of sections depend at investment and coverage. You can start with one or more of sections. Common sections that could be a part of manufacturing unit are:

• External Preparation section
• Liquid/Syrup Section
• Tablet Section
• Capsule Section
• Parenteral Section
• Powder Section
• Ophthalmic preparation section
• Inhaler preparation section
• Suppositories section
• Surgical dressing section

In this article, we will know about minimum area required and machinery required to start own manufacturing unit in pharma sector. Few machinery could be used for more than one section i.e. packaging, mixer, driers, weighing machines, granulator, sifters etc. You will need only one equipment in that case for many sections.

Read:  Layout and Challenges for pharmaceutical manufacturing plant

REQUIREMENTS OF PLANT AND EQUIPMENT

External Preparations Section:

External preparation i.e. Dusting powders, creams, lotions, ointments, topical solutions etc requires following minimum requirements and equipments to get approval from drug department for manufacturing of these products:

• Mixing and storage tanks (stainless steel),
• Jacketted Kettle (steam, gas or electrically heated),
• Mixer (electrically operated)
• Planetary mixer
• A colloid mill or a suitable emulsifier.
• A triple roller mill or an ointment mill.
• Liquid filling equipment (electrically operated).
• Jar or tube filling equipment (electrically operated)

Area Required:  For ancillary area, minimum of ten square meter area is required. Note: For formulation area for external and internal use should be separate to avoid mixing.

Liquid Preparations for Oral Use:(Liquid Section)

Most commonly used are Syrups, Elixirs, Emulsions, suspensions etc.

• Jacketted Kettle / Stainless steel tank (steam, gas or electrically heated).
• Portable stirrer (electrically operated)
• A colloid mill or suitable emulsifier (electrically operated)
• Suitable filtration equipment (electrically operated)
• Semi-automatic/automatic bottle filling machine
• Pilfer proof cap sealing machine.
• Water distillation unit or deioniser
• Clarity testing inspection units.

Minimum Area Required: Thirty sq. meter for basic installation and for ancillary area minimum of 10 sq. meter is recommended.

Solid Dosage Form (Tablet Section)

Partition Required:

• Mixing, Granulation and Drying section.
• Tablet compression section.
• Packaging section (strip/blister machine wherever required).
• Coating section (wherever required).

Equipments Section wise:

Granulation-cum-Drying section

• Disintegrator and sifter
• Powder mixer
• Mass mixer/Planetary mixer/Rapid mixer granulator.
• Thermostatically controlled hot air oven with trays (preferably mounted on a trolley)/Fluid bed dryer.
• Weighing machines.

Compression section.

• Tablet compression machine, single/multi punch/rotatory.
• Punch and dies storage cabinets.
• Tablet de-duster
• Tablet Inspection unit/belt.
• Dissolution test apparatus
• In-process testing equipment like single pan electronic balance, hardness tester, friability and disintegration test apparatus.
• Air-conditioning and dehumidification arrangement (wherever necessary)

Packaging section.

• Strip/blister packaging machine.
• Leak test apparatus (vacuum system)
• Tablet counters (wherever applicable)
• Air-conditioning and dehumidification arrangement (whereever applicable)

Area Required for above mentioned sections is a minimum area of sixty square meters for basic installation and twenty square meters for Ancillary area is recommended for un-coated tablets.

Coating section,

• Jacketted kettle (steam, gas or electrically heated for preparing coating suspension).
• Coating pan (stainless steel)
• Polishing pan (where applicable)
• Exhaust system (including vacuum dust collector)
• Air-conditioning and dehumidification arrangement
• Weighing balance

For coating section, minimum of thirty square meter area is required for equipment installation and ten square meter for ancillary is recommended. All process is done in separate area with separate equipments and process i.e. mixing, granulation, drying, compression etc.

Powders Section:

Equipments Required:

• Disintegrator
• Stainless steel vessels and scoops of suitable sizes.
• Filling equipment (electrically operated).

Required Area is minimum of thirty sq. meter for basic installation. For actual blending, an extra room should be available.

Capsules Section:

Capsule section should be suitably air-conditioned and dehumidified with airlock arrangement.  

• Mixing and blending equipment (electrically or power driven)
• Capsules filling units (preferably semi automatic or automatic filling machines)
• Capsules counters (wherever applicable)
• Disintegration test apparatus
• Capsule polishing equipment
• Air conditioner and De-moisturizer 

Required area is twenty five sq. meter for basic installation and ten sq. meter for ancillary.

Surgical Dressing Section:

Equipments:

Dressings other than Absorbent Cotton Wool, namely:-

• Rolling machine
• Trimming machine
• Cutting equipment
• Folding and pressing machine for gauze
• Mixing tanks for processing medicated dressing
• Hot air dry oven
• Steam sterilizer or dry heat sterilizer or other suitable equipment
• Work tables/benches for different operations

Minimum Required area is thirty sq. meter for basic installation for medicated and non medicated separately.

Ophthalmic Preparations Section:

Fully air locked, sterile and enclosed area is required for Ophthalmic products.  

• Thermostatically controlled hot air ovens (preferably double ended)
• Jacketted kettle/stainless steel tanks (steam, gas or electrically heated)
• Mixing and storage tanks of stainless steel/Planetary mixer
• Colloid mill or ointment mill
• Tube filling and crimping equipment (semi-automatic or automatic filling machines)
• Tube cleaning equipment (air jet type),
• Tube washing and drying equipment, if required
• Automatic vial washing machine
• Vial drying oven
• Rubber bung washing machine
• Sintered glass funnel, Seitz filter and filter candle (preferably cartridge and membrane filters).
• Liquid filling equipment (semi-automatic or automatic filling machines)
• Autoclave (preferably ventilator autoclave)
• Air conditioning and dehumidification arrangement (preferably centrally air conditioned and dehumidification system)
• Laminar airflow units

Minimum Area required for ophthalmic products is twenty five sq. meter for basic installation and ten sq. meter for ancillary. Area for external and internal preparation should be separate to prevent contamination.

Pessaries and Suppositories Section:

Equipments are:

• Mixing and pouring equipment
• Molding equipment
• Weighing devices

Required area is twenty sq. meters for basic installation

Inhalers and Vitralle Section:

• Mixing equipment
• Graduated delivery equipment for measurement of the medicament during filling
• Sealing equipment.

For Repacking of Drugs and Pharmaceutical Chemicals:

• Powder dis-integrator
• Powder sifter (electrically operated)
• Stainless steel scoops and vessels of suitable sizes
• Weighing and measuring equipment.
• Filling equipment (semi-automatic / automatic machines).
• Electric sealing machine.

Parenteral Section:

Partitions in Parental Section:

Parenteral preparations in glass containers Water management area: this includes water treatment and storage

• De-ionised water treatment unit
• Distillation (multi-column with heat exchangers) unit
• Thermostatically controlled water storage tank
• Transfer pumps
• Stainless steel service lines for carrying water into user areas

Containers and closures preparation area: This includes washing and drying of ampoules, vials, bottles and closures

• Automatic rotary ampoule/vial/bottle washing machine having separate air, water distilled water jets
• Automatic closures washing machine
• Storage equipment for ampoules, vials, bottles and closures
• Dryer/sterilizer (double ended)
• Dust proof storage cabinets
• Stainless steel benches/stools

Solution preparation area: This includes preparation and filtration of solution

• Solution preparation and mixing stainless steel tanks and other containers
• Portable stirrer
• Filtration equipment with cartridge and membrane filters/bacteriological filters

Filling, capping and sealing area:

• Automatic ampoule/vial/bottle filling, sealing and capping machine under laminar air flow workstation.
• Gas line (Nitrogen, Oxygen, Carbon dioxide) wherever required.
• Stainless steel benches / stools

Sterilization area

• Steam sterilizer preferably with computer control for sterilization cycle along with trolley sets for loading/unloading containers before and after sterilization)
• Hot air sterilizer (preferably double ended)
• Pressure leak test apparatus

Quarantine area

• Storage cabinets
• Raised platforms/steel racks

Visual inspection area

• Visual inspection units (preferably conveyor belt type and composite white and black assembly supported with illumination)

Packaging area

• Batch coding machine (preferably automatic)
• Labelling unit (preferably conveyor belt type)
• Benches/stools

Minimum area required for parental preparation is one hundred and fifty sq. meter for the basic installation and one hundred sq. meter for ancillary activities.

Read here: Documentations and procedure for applying pharmaceutical manufacturing license

Hope above information was useful to you…

For any query and suggestion, mail us at [email protected]

4 responses to “Business Plan for Pharmaceutical manufacturing, requirements, machinery and equipment”

A very usefui input for a beginer.Thanx.Hope to receive all information and guidence in stat\rting a Pharneutical Manufacturing Venture.

Dear Sir/Ma’am, We are in need of : – Acetaminophen/Paracetamol powder pure white BP EP USP 500 Kg – Hydroxychloroquine sulfate 99.0% 175 Kg Could you please help me source that? Thank you

Hi Ajay, I am looking to set up a comprehensive Pharma manufacturing plant in Chennai and I need to have an approximate idea of the costs that will be required for creating the infrastructure in terms of land and building, machinery, fixtures and fitting and ongoing working capital for 2 years. Also, I need to understand from your experience the sectors that will show strong growth. I look forward to hearing from you. Thanks Jagan

We’ve provided general price ranges for our CPAP machine picks. Prices can fluctuate and vary between suppliers. The cost will also depend on your insurance coverage.

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Caring for health we create the future!

Manufacturing

Jsc avexima.

The total production capacity of JSC Avexima is over 1.5 billion packages of finished products. JSC Avexima is also the largest manufacturer of active pharmaceutical ingredients in the Russian Federation with a capacity of around 450 tons / year.

The manufacturing facilities of the company are represented by 3 state-of-the-art factories for the production of medicines that are in line with the up-to-date Good Manufacturing Practices requirements (GMP) and ISO 9001.

LLC "Avexima Siberia"

Location: Kemerovo region, Moscow Anzhero-Sudzhensk

Production and storage area: 8 200 m 2

Number of employees: over 450 highly qualified employees

• In 2018 - the conclusion of the Ministry of Industry and Trade of the Russian Federation "On compliance of the manufacturer of medicines for medical applications with the requirements of Good Manufacturing Practice (GMP)" No. GMP-0096-000322 / 18 dated 30.10.2018.
• License of the Ministry of Industry and Trade of the Russian Federation for the production of medicines No. 00021-BOS dated 29.05.2018.

OJSC "Irbitsky Chemical-Pharmaceutical Plant"

Location: Sverdlovsk region, Irbit

Production and storage area: 21 500 m 2

Number of employees: over 870 highly qualified employees

• 2019 conclusions of the Ministry of Industry and Trade of the Russian Federation "On the compliance of the manufacturer of medicinal products with the requirements of Good Manufacturing Practice (GMP)" No. GMP 0058-000348 / 19 and No. GMP 0058-000343 / 19.
• License of the Ministry of Industry and Trade of the Russian Federation to carry out the production of medicines No. 12653-LS-P dated October 18, 2013

Moscow Endocrine Plant, MEZ Endopharm

"Moscow Endocrine Plant" works in the field of circulation of medicines. The company occupies a strong position in the pharmaceutical market, and our products are recognizable and in demand. The company is developing dynamically, its equipment meets the necessary international standards.

2023: Creation of a factory for the production of pharmaceutical substances for 30 billion rubles

In July 2023, it became known about the start of the project for the construction of a plant for the production of active pharmaceutical substances in the Bryansk region. We are talking about the enterprise FSUE Endopharm, where it is planned to create about 1000 jobs.

The investment project is being implemented jointly with. Ministry of Industry and Trade The volume of investments is about 30 billion. rubles The project implementation period is no more than two years. We have already carried out all the necessary preliminary work, in the near future they will begin to select contractors for construction and installation work and purchase equipment, the Vkontakte governor of the Bryansk region wrote on his page in "" Alexander Bogomaz on July 7, 2023.

In turn, the press service of FSUE Endopharm reports that in the Pochep branch, the state-owned enterprise organizes "modern high-tech large-tonnage production of at least 60 items of domestic active pharmaceutical substances obtained by chemical or biotechnological synthesis, as well as from animal and vegetable raw materials."

Obtain GMP Compliance Report

FSUE Moscow Endocrine Plant (FSUE Endopharm) received a conclusion on compliance with the GMP requirements of the Eurasian Economic Union for the Production of Veterinary Drugs. The conclusion confirms the compliance of the products with the established international safety and quality criteria. This was announced on November 22, 2022 by the head of the Department of Investment and Industrial Policy of Moscow, which is part of the Complex of Economic Policy and Property and Land Relations of the capital , Vladislav Ovchinsky .

GMP (Good Manufacturing Practice) is an international standard that establishes requirements for the production and quality control of medicines for humans and animals.

The drug has already been launched on the Russian market and is used as a complex therapy as an analgesic. It is used for moderate and severe pain syndrome in the postoperative period, for injuries, diagnostic or therapeutic manipulations, including dental , and other non-communicable diseases. The manufacturer plans to bring injectable veterinary medicine for general anesthesia to the market by the end of 2022.

The head of the department recalled that in 2016, the Moscow Endocrine Plant was assigned the status of an industrial complex, which allows you to receive tax breaks and invest the saved funds in the development of production.

In addition, according to the offset contract that the city signed with the company in 2021, the investor must localize the production of 20 drugs in the city within two years: anti-glaucoma, antibacterial, analgesic, as well as antidepressants and antipsychotics. Moscow, in turn, guarantees the purchase of drugs for 1.1 billion rubles in eight years.

Start-up of veterinary product production

FSUE " Moscow Endocrine Plant" (FSUE "Endopharm") launched the production of the first veterinary drug in its assortment. The first batch has already been launched on the Russian market. This was announced on September 14, 2022 by the head of the Department of Investment and Industrial Policy of Moscow, which is part of the Complex of Economic Policy and Property and Land Relations of the capital, Vladislav Ovchinsky .

The drug is used as a complex therapy for dogs and cats as an analgesic for moderate and severe pain syndrome in the postoperative period, for injuries, diagnostic or therapeutic manipulations, including dental , and other non-infectious diseases accompanied by pain syndrome.

The city provides comprehensive support to the manufacturer. Since 2016, the company has the status of an industrial complex, which allows it to receive tax breaks and direct the saved funds to expand production and scientific developments.

In addition, in 2021, the city signed an offset contract with the Moscow Endocrine Plant. The volume of investments in it is a billion rubles . Under the contract, the investor must localize the production of 20 drugs in the city within two years: anti-glaucoma, antibacterial, analgesic, as well as antidepressants and antipsychotics. Moscow, in turn, guarantees the purchase of drugs for 1.1 billion rubles in eight years.

Permit to Expand and Upgrade the Laboratory Facility

The Moscow Endocrine Plant (FSUE Endopharm), subordinate to the Ministry of Industry and Trade of Russia, announced on August 31, 2022 that it had received permission to expand and modernize three floors of its laboratory complex in the Southeast administrative district of the capital. This will improve the quality of the company's products and expand the list of manufactured drugs.

The reconstruction project provides for the replacement of ceilings, the installation of ventilation and fire systems, equipping laboratories with high-tech equipment, the deputy mayor added.

In 2016, the company received the status of an industrial complex, thanks to which it began to receive tax breaks from the city and direct the saved funds to expand production and scientific development. For enterprises with special status, the regional part of income tax is 13.5 percent instead of 17, property tax is half as much and land tax is reduced by 80 percent.

In June 2022, the plant opened the Center for the Development of Biotechnological and Innovative Medicines in the Lefortovsky branch in the Sokolinaya Gora area. In August 2022, they are working on improving production technologies for more than 60 active pharmaceutical substances, as well as on the creation of three drugs.

The pharmaceutical manufacturer continues to receive support from the city . So, in February 2021, the Moscow Endocrine Plant and the Moscow government signed an offset contract.

From July 1, 2022, the requirements for the conclusion of offsets were simplified. The minimum investment under such contracts decreased by 10 times - up to 100 million rubles. In addition, it became possible to sign offsets together with two or more constituent entities of the Russian Federation with a total investment of at least 400 million rubles.

Opening of the Center for the Development of Biotechnological and Innovative Drugs

At the end of June 2022, a center for the development of biotechnological and innovative drugs was launched in Moscow . It was launched on the basis of the Moscow Endocrine Plant (MEZ) in the Lefortovsky branch. Read more here

2021: Investment of 1.2 billion rubles in the creation of a laboratory and warehouse building

On March 1, 2021, it became known that the Moscow Endocrine Plant will invest 1.2 billion rubles in the creation of a laboratory and warehouse building. The building with a total area of ​ ​ 15 thousand square meters. m will appear on Novokhokhlovskaya street and will be associated with existing buildings, according to the official portal of the capital's mayor.

As the chief architect of Moscow , Sergei Kuznetsov, explains, by the beginning of March 2021, it is planned to build, reconstruct and technically re-equip an industrial complex for the production of drugs on the basis of the Moscow Endocrine Plant. The production itself is waiting for modernization, and the emergence of this laboratory and warehouse complex is one of its stages, he added.

The construction and reconstruction of the industrial complex on the basis of the Moscow Endocrine Plant will take place in three stages. Technical re-equipment and reconstruction of the laboratory complex of the enterprise, as well as the site for the production of soft dosage forms is provided.

The corresponding project was agreed by the Moscow Architecture Committee . Glavgosexpertiza of Russia approved it on February 17, 2021.

The Moscow City Hall allocated a land plot to the Moscow Endocrine Plant for the construction of a laboratory-administrative-warehouse complex back in 2016. It is planned to put the facility into operation in 2022. By March 1, 2021, the project is in the "active stage," according to the portal of the mayor of Moscow. [2]