Expanding Your Footprint as a Pharmacy Owner

When a pharmacy is doing well, it’s not uncommon for owners to start thinking about opening a second location and expanding business in a different city or another part of town. But pharmacists shouldn’t just jump into that decision because if not fully prepared, it could cause trouble for both the new and original pharmacy.

Jarvis Francis, PharmD, director of market health and wellness for all Walmart Pharmacies for the Atlanta-metro market, noted that a pharmacist shouldn’t be opening a second store until the pharmacy fills at least 2000 prescriptions per week.

Jonathan Marquess, PharmD, CDCES, FAPhA, co-owns 15 community and long-term care pharmacies in Georgia along with his wife, is also well-versed in what it takes to expand a pharmacy’s footprint. “When [pharmacies] expand, it can be a real benefit—for a lot of reasons,” he said. “One is the agreement with a wholesaler concerning payment terms…and discount medication.”

Before considering making a move like this, Marquess cautioned that the first store needs to be running on all cylinders with an excellent staff; owners should not attempt to open a second store if every day is full of problems and the day is spent putting out fires.

“You need to have all your ducks in a row with all regards of the business, from financing to staffing to a wholesaler to your loans,” he added. “All of that needs to be clicking together before you should think about that second store.”

When owners do finally take the step to open a second store, a key first step is ensuring that each location has top-notch staff—even if it means pulling a leader from the original location. “We usually run a 6-person team,” Marquess said. “You want to have a great pharmacist in charge.”

When you expand the number of pharmacies, there are also some economies of scale at play. “You can have one marketing person, you can have a singular person who works on IT, and one person can handle HR,” Marquess says.

According to Francis, the key to making a second store successful is word of mouth.

“We opened a store in Orlando, Florida. I put on my lab coat and I walked around neighborhoods spreading the word,” Francis said. “We were in a prime location where there were 6 new developments, and I just went door to door.”

He also suggested that employees “kill [customers] with kindness” when they walk through the door, in hopes that the customer tells 2 friends, who tell another 2 friends, and so on. “We all know that marketing and advertising dollars is an expensive avenue,” he explained. “This is a great way to get people in without having to spend that money.”

Shahida Amar-Choudhry, PharmD, owner of Palms Pharmacy in Tampa, Florida is looking to open a second pharmacy in 2023 after 6 years of success at her first location.

“We had opened just to deal with new moms, but we have evolved to doing a lot of concierge service, [nonprescription medications, and] assisted living facilities. We strive to better [our customer’s] overall quality of life,” she said. “The new [pharmacy location] has a different concept: We’re going to concentrate on diabetic consumables like [continuous glucose monitoring] products.”

Although she has considered opening a second location for years, the decision was finally made because Amar-Choudhry noticed a changing market, with many of smaller independents closing over the last 2 years.

“We have patients all over the state of Florida, and we deliver to the whole state. It was time for us to do this to meet the demand,” she said. “My partners in the second pharmacy are in the [endocrinology] space and have relationships with endocrinologists that will bring us business.”

And with growing customer and provider relationships on the other side of town, Amar-Choudhry knew that she could replicate the success she has seen with her first store. “We found a great location and we’re ready to make it happen,” she said. “It’s in a high-traffic area, parking is great, and it’s close to providers, so it makes things easier for patients.”

For pharmacists considering a second location, numerous resources exist to help make the transition smoother. Professional organizations, wholesalers, and banks can also typically lend a hand with advice and help get that second store financed, licensed, and operating.

Amar-Choudhry was able to get some help from the McKesson RxOwnership program, which supplied her with a research analysis of the area. She also received assistance from some consultants in the area, who helped with licensing and insurance.

“I knew what to expect since I had done this already, but having a consultant helped me work everything out,” she said. “There are a lot of juggling parts…but it’s totally worth it.”