How to start a pharmacy business in London

Pharmacy business owner London
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    Are you a professional pharmacist looking to start a pharmaceutical company in London? Keep reading for AudTax’s helpful guide.

    Opening a pharmacy in London can be an exciting career step, offering more flexibility, financial freedom, and endless possibilities. However, it also requires careful consideration. Having a solid plan in place and professional financial support will give you the best chance of success.

    Steps to starting a pharmacy business in London:

    1. Research your market and competition
    2. Start from scratch or buy an existing pharmacy business
    3. Choose the correct business structure
    4. Ensure tax compliance
    5. Get the correct licence and insurance
    6. Enlist the help of a specialist accountant for pharmacists

    Of course, as with all entrepreneurial ventures, there’s much to consider before jumping in and opening a pharmacy. The experts at AudTax expand on these points, providing practical advice to pharmacy technicians and medical experts looking to start their own pharmacy business in London. We cover all basic, legal and financial considerations, helping you start your pharmacy journey with the right knowledge.

    Looking for financial advice? We offer a wide range of accounting services tailored to pharmacists across London. As specialist accountants in the pharmaceutical sector, we understand the industry and the specific financial challenges that pharmacy owners face. Contact AudTax today to discuss your needs and gain quick advice for starting your pharmacy business on the right foot.

    Thinking of starting your own pharmacy?

    If you’re an aspiring pharmaceutical entrepreneur looking to take the next big step in your career, you may consider starting your own pharmacy business in London.

    According to Statista, the number of community pharmacies in England has slightly decreased since 2018, with recent numbers dropping to 11,414 in 2023.

    With the growing demand for NHS services in England, the government is now instilling more power in pharmacists and dental therapists, enabling them to supply medicines. And with London being a bustling location for many start-ups, it’s no wonder starting a new pharmacy business may sound appealing.

    While starting a pharmacy can be an exciting business move, it is essential to do your due diligence. Think about every possibility and work with experienced professionals who can help you succeed.

    What should you consider when starting a pharmacy business?

    Before opening the doors to your new pharmacy, you’ll need to take many steps and consider all aspects of setting up the business to help you prepare for the challenges and risks involved.

    London is the capital of England and is home to some of the largest pharmaceutical manufacturers in the country, including GlaxoSmithKline. In 2023, there were 1,863 community pharmacies in London, making it one of the top regions for offering community pharmaceutical services. While this shows there is high demand for new pharmacy businesses, it also means there is likely to be greater competition in the area.

    Researching the competition and deciding how you want your company to stand out is key to planning a successful pharmacy business.

    What type of pharmacy do you want to run? Try to find a gap in the market. If you notice a higher demand for NHS pharmacies, then this may be the route for you. But, if you’re set on opening a private firm, offering NHS services could create more opportunities for your business.

    You should also consider what type of products and essential services you want to offer, such as a collection and delivery service, NHS prescriptions, retail pharmacy products or locally commissioned services from NHS England.

    It usually comes back to data and finances. You need to make sure that your business plan is profitable. So, once you have thorough information about your competition and the current pharmacy market, you should consider your financial plan. Working with a specialist accountant for pharmacies will help you better understand the sector and can provide expert guidance for a successful start-up.

    Are you buying an existing pharmacy or building one?

    There are benefits to both purchasing an existing pharmacy and building your own business from the ground up. Some benefits may seem obvious, like the fact that buying an existing company could be less risky, whereas starting from scratch provides more flexibility and choice.

    An existing pharmacy comes with authority and (if well maintained) should have a backlog of data to help you understand areas that are successful and any areas that require more work. You may be able to gain access to pharmacy sales and income projections.

    There is a lot to think about here, and both ventures will likely incur high start-up costs, so you really need to consider what works best for you.

    Is it better to set up a pharmacy business as a sole trader or limited company?

    Before determining whether running your new pharmacy business as a sole trader or limited company is best, let’s first look at what each of these business structures are.

    A sole trader is essentially a self-employed business, where you and the business are seen as one legal entity and all finances are tied to one another. A limited company, on the other hand, means that you are a separate legal entity from your business, and all finances are separated.

    When setting up your pharmaceutical business, deciding whether to run as a sole trader or limited company is important. It can help you be more tax-efficient in the long run. There are lots to consider, though, such as profitability and tax considerations, administration work involved, and the level of financial reliability.

    What are the advantages of being a sole trader?

    Running your pharmacy as a sole trader means you and your business operate as one.

    Here are some of the main advantages of setting up your pharmaceutical company as a sole trader:

    • Less administrative work
    • Typically requires less start-up costs
    • You get to keep all profits after tax and business expenses
    • You have full control over your pharmacy business

    What are the disadvantages of being a sole trader?

    There may be some drawbacks to consider, including:

    • Your personal assets could be at risk if you face financial difficulties
    • All responsibility falls to you, meaning less time for other priorities

    What are the advantages of being a limited company?

    Running your pharmacy as a limited company means you are completely separate from the business, which can offer a number of benefits.

    Here are some of the main advantages of setting up your pharmacy as a limited company:

    • Your personal finances are safe from financial difficulties
    • It can be more tax efficient due to Corporation Tax rates
    • With more credibility, you may find it easier to invest, expand or get a loan

    What are the disadvantages of being a limited company?

    There may be some drawbacks to consider, including:

    • It comes with more paperwork and accounting demands
    • Profits do not solely belong to you
    • You may have less flexibility and control over business decisions

    Starting a pharmacy business in London

    Starting a pharmacy business checklist

    There you have it. Hopefully, this article has provided some helpful insights about how to start a pharmacy business in London. We have compiled a handy checklist to refer back to when you’re ready to take the leap and start your own pharmacy.

    1. Decide what pharmacy services you want to provide.
    2. Research your competition and the London pharmacy market.
    3. Find a suitable location for your pharmacy premises.
    4. Create a business plan that includes your market audience, goals, financial projections, and funds.
    5. Choose your preferred business structure and register your business with Companies House (we can provide expert guidance with registering your business correctly).
    6. Register the pharmacy premises with the General Pharmaceutical Council.
    7. Secure the correct insurance for your new business.
    8. Source inventory such as computers, weighing scales, storage and products.
    9. Develop industry relationships with future suppliers and potential staff.
    10. Launch your business and consider growth prospects.

    Get accounting advice from our pharmacy accountants today!

    We work with start-ups and established organisations to meet their every need. Our expert tax and accounting specialists can assist with various tasks, including choosing your pharmaceutical company structure, maintaining bookkeeping, registering for VAT and ensuring accurately prepared annual accounts.

    Looking for a tax and accounting specialist in London to help your pharmaceutical business grow? Get in touch today for more information about our bespoke accountancy packages.

    Frequently asked questions about starting a pharmacy business in London

    How much does it cost to open a pharmacy in London?

    As with any new business, starting a pharmacy in London can be costly, with many different financial aspects to consider. The start-up cost will vary depending on location, type of business, and whether or not you decide to start from scratch or acquire an existing business.

    It’s a good idea to research all the costs associated with setting up a pharmacy, including the pharmacy premises (which will likely be expensive), any specific equipment or stock (medication storage, measuring tools, and medication stock), registration and licensing fees (including NHS contract fees), and insurance.

    Working with specialist accountants like AudTax can help you understand your financial situation and budget for the upfront and ongoing costs of opening a pharmacy.

    Can I open a pharmacy without being a pharmacist?

    A pharmacy premises must legally be registered by a pharmacist or a partnership of pharmacists in order to operate. You may be able to open a pharmacy as a limited company, but you must appoint a superintendent pharmacist to manage all pharmaceutical services and activities.

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    Picture of Shahood Ahmed BSc, FMAAT, AFA MIPA

    Shahood Ahmed BSc, FMAAT, AFA MIPA

    Shahood is a fully qualified accountant, and holds UK memberships in numerous accounting bodies. Having worked in many accounting roles, he decided to set up his own practice to provide clients with the best accounting services, offering sound business advice.

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