Khata Book Udhar Bahi Khata, Credit Ledger Account
Medical stores are usually unaffected by economic changes. It makes the industry an evergreen business. Also, speciality hospitals are increasingly becoming popular in India. It has resulted in increasing scope in the pharmacy and healthcare business in the country. If you have sufficient capital for investing apart from space, then setting up a medical store in India is a great option. However, it is essential to note that you must plan properly before starting a medical store to succeed in the business.
The documents are almost the same for most states. However, some states may require some extra documents and information. Given below is a suggestive list of some of the important documents that would be required to be submitted to the Drug Control Department of the state to set up a medical store:
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The first step is to decide what kind of medical shop you want to set up. You can choose from the below-given options.
Hospital pharmacy, a chain pharmacy, and township pharmacy are usually established under a larger corporate entity or hospital, i.e., generally, a company. The standalone pharmacies usually are set up as sole proprietorship businesses or partnership firms. Once the decision about the type of medical store to be set up is made, the next step is to fulfil the necessary government requirements.
1. Pharmacy Licence
The first requirement before Medical Store registration is a degree in Bachelor of Pharmacy or Master of Sciences of Pharmacy. If the person starting this business is not a qualified pharmacist, he must employ a pharmacist with a pharmacy degree.
The pharmacist's qualification proof, be it owner or employee, is required to acquire a Medical Store License for starting a pharmacy.
2. Land Registration
The next step before applying for a Pharmacy license is to secure land registration. The minimum store area required for setting up a retail, medical shop, pharmacy or wholesale outlet is at least 10 square meters. In case you are looking to start a combined wholesale and retail business under the same roof, then an area of at least 15 square meters is necessary.
Now, the decision to buy or rent comes into the picture. Depending on the budget, you can choose to buy a shop or take a rented shop. In the case of a rented shop, a copy of the rental agreement has to be submitted.
On the other hand, if you decide to buy the shop, you must submit a copy of the sale deed. If necessary, you should get legal help. Also, an application for a loan to start a medical store may be taken from banks.
3. Registration of Pharmacies
All the Medical Stores or Pharmacies present inside the country must be registered as per The Indian Pharmacy Act, 1948. The Act provides that a person who is wishing to apply for registration of the medical stores must submit the required documents to the state's government with all the details. After submission, the registration tribunal set up under the act may grant registration if all the conditions are fulfilled. They shall also decide on any other matter about its registration.
The owner should determine the medical store business model. If a person wishes to open a stand-alone medical store, he may opt for a proprietorship business or a partnership firm. Limited Liability Partnership (LLP) has also become popular in recent times. This is mainly because LLP offers some additional benefits to the partners. However, the Hospital Medical Stores, Chain Stores, and Township Pharmacies are preferably set up as a company.
4. Registration of business
Registering the business as a sole proprietorship, partnership firm, or private limited company is significant as it is required for obtaining a drug license. The following options are available to choose from depending on the model preferred to operate the business:
5. Establishment Registration
Depending upon which local body the store is to be located in, the owner must get its shop registered as per the local body rules to run the store.
6. Tax Registration
To operate any business in India, Goods and Service Tax (GST) registration is required if it exceeds the specified turnover. Operating a medical store is no exception to this. The limit as specified by the GST Council is Rs.40 lakhs for all states other than special category States where the threshold limit is Rs.20 lakhs. Check the limits specified by your state before you proceed.
7. Registration for Drug Licence
The last legality before beginning operations is that every medical store, be it big or small, will require a drug license irrespective of its turnover. The responsibility for issuing below mentioned two major drug licenses is entrusted to the Central Drugs Standards Control Organization (CDSCO) and State Drugs Standard Control Organization (SDSCO),
An integral point to consider before you start is to choose a great location. This is not as easy as you think. It would be best if you considered several factors. It is essential to select a place without many medical stores to keep away from the competition. Also, if the medical store is near a hospital or private clinic of any doctor, it would ensure a regular flow of potential customers. If you do not choose a good location, it will be tough for your shop to do well and sustain.
2. Contact the local wholesaler or manufacturing company
Contact a medicine manufacturing company or the local wholesaler to get the products for your shop. Going in for direct company supply will give you better profit margins, but it’s important to keep in mind that they would want a higher order quantity. If you’re starting and minimising risk, it’s better, to begin with, a medicine stockist.
3. Tie-up with a doctor
An informal tie-up with a clinic or doctor will help your business in a big way and increase your chances of doing well.
4. Purchase a franchise
Purchasing a franchise is another great way of doing well in this kind of business as the franchise provider will take care of most of the things for you.
5. Hiring skilled personnel
Though it’s not mandatory for a person starting a medical store to be a pharmacist, some requirements are prescribed by the Drug Control Department that need to be fulfilled. One of those requirements is that if you are not a pharmacist yourself, it is important to employ a registered pharmacist for your drug store.
6. Storage Facility
Your drug store must be equipped with a refrigerator and air conditioner. This is important since labelling specifications require certain drugs like insulin, liquid antibiotics, vaccines, and other medications to be stored at lower temperatures. Cupboards and drawers are also an important requirement to store different drugs and other products in your shop, so business can be carried out faster, easier, and more organised.
7. Promote your Medical Business
You can start promoting your business by giving advertisements in the local newspapers or distributing pamphlets in your store's area or nearby places. Some great value-added services like online order systems and home delivery service make it more attractive. It would be appreciated not just by the elderly customers but also by others who would find such offers helpful. Offering discounts on the maximum retail price of the medicines can also help with your shop's promotion. Another way to go about it is by giving promotional gifts for a certain amount of purchase.
8. A computer for the medical shop
Without technology, managing business activities like accounting, billing, inventory, bookkeeping, bill-generating and stock-updating become challenging. It can also result in a lot of inefficient manual work. Hence, a computer is a necessity to run a business. Further, GST implementation is much easier with the help of software rather than calculating manually. Also, the use of technology reduces the chance of error.
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The healthcare industry has shown tremendous growth over these years and is expected to continue in the future. If proper steps are taken, and above stated important points are followed before starting your business venture, the medical store business will succeed.
Is there any special license for selling Ayurvedic, Unani, and Homoeopathy medicines?
Yes, a license from the Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy (AYUSH) Ministry must be obtained to sell Ayurvedic, Unani and Homoeopathy medicines.
Is any special license required for selling dietary supplements?
Yes, you require the Food Safety and Standards Authority of India (FSSAI) registration and license to sell dietary supplements in the store.
Can a doctor or a nurse run a pharmacy?
No, doctors or nurses aren't officially permitted to run a medical shop (based on Medical Ethics). Any Drug licenses for the hospital are allotted in the name of a Pharmacist and not the Doctor or even the Hospital owner.
Khata Book Udhar Bahi Khata, Credit Ledger Account