Y&A Framework: Pharmacy

We have worked on dozens of businesses and want to present our thoughts, to help you better navigate your business adventures

GETTING STARTED

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Purchase vs Development?
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Business Plan
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License & Permit

RUNNING YOUR BUSINESS

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Business Incorporation
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Bookkeeping: QuickBooks
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Accounting Calculator
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Corporate Taxes

TREND & STRATEGIES

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TREND & STRATEGIES
  1. GETTING STARTED

    Quick Tips: In School Still??? Let’s get you thinking!!!

    Gateway Enrolment
    Enroll in Pharmacists' Gateway Canada and receive a National ID number
    Language Proficiency
    English or French language proficiency may be completed at any time, prior to applying to the pharmacy regulatory authority
    Academic Qualification and Knowledge Assessment
    Successful completion of the Pharmacy Examining Board of Canada (PEBC) Document Evaluation ($650) and Evaluating Examination ($615)
    Successful completion of the PEBC Qualifying Examination Parts I and II ($2525)
    Licensure/Registration
    Application for registration as a pharmacist in Ontario ($75)
    Pharmacist New Registrant Annual Fee ($600 per year); pro-rated after August 31 ($300)
    Must maintain professional liability insurance
    Bridging Program
    Mandatory completion of the Bridging Program for IPGs (International Pharmacy Graduate Program) offered by the University of Toronto.($13,650)

    If you are seriously considering of becoming a pharmacist or switching majors, here are steps to become a licensed pharmacist in Canada:

    1. A bachelor's or doctor of pharmacy degree from one of 10 Canadian universities
    2. complete a national board examination through the Pharmacy Examining Board of Canada (PEBC) (except Québec)
    3. Practical experience through an apprenticeship/internship program

    What you need to know about the Framework for Pharmacy Services

    A patient-centered pharmacy services in Canada emphasize services that are cost-effective and based both on the needs of Canadians and value to the health care system. In relation to this, there are three services that are offered by pharmacies:

    1. Core Dispensing Services
    2. Enhanced Medication Related Services
    3. Expanded Patient Care Services

    What you need to know about the Framework for Pharmacy Services

    1. Core Dispensing Services
      • Provision of prescribed medication (appropriate, safe, effective, accurate)
      • Assess for adverse drug events, interactions, allergies
      • Assess for accessibility (e.g., formulary coverage, affordability)
      • Patient dialogue
      • Patient call-back
      • Prescription-focused
      • Reimbursement: professional fee per Rx
      • Workflow driven
      • Impact of pharmacy technician regulation
    2. Enhanced Medication-Related Services
      • Additional prescription intervention if required:
        1. Adapting Rx
        2. Therapeutic Substitution
        3. Renewing Rx for continuity of care of chronic medications
        4. Pharmaceutical Opinion
        5. Refusal to Fill
        6. Emergency Prescribing
        7. Adherence monitoring and compliance programs
      • Personal medication record – medication reconciliation
      • Medication injection
      • Workflow adjustment required
      • Reimbursement: Fee-for-Service
      • May lead to referral to other healthcare professionals (HCP)
      • Toolkit required – to facilitate implementation
    3. Expanded Patient Care Services
      1. Comprehensive Medication Management (CMM)
        1. Assessment
        2. Drug-related problems (DRPs) identified & resolved
        3. Care Plan developed
        4. Monitor & follow-up
      2. Management of Minor Ailments
        1. Assessment
        2. Triage/Referral
        3. Treatment
        4. Monitor & Follow-up
      3. Health Promotion – Disease Prevention
        1. Immunization
        2. Disease screening
        3. Smoking cessation
        4. Wellness – lifestyle
      • Appointment based
      • Workflow adjustment required
      • Interprofessional collaboration and documentation
      • May lead to referral to other healthcare professionals (HCP)
      • Reimbursement: Resource Based Relative Value Scale (RBRVS) & Fee-for-Service
      • Toolkit required – to facilitate implementation

    Getting Started Right: Before you even start here are the questions you should think about, you could contact us to help you along in the process.

    Franchise or Independent?

    Getting a Franchise or taking over an existing pharmacy could be an easier option because you’ll have help getting started and have a brand name that people recognize. Estimated investment would be $200,000.00 to $500,000.00 CAD, the cost of the franchise can vary significantly from one company to the next. If you want to start from scratch, it is less expensive and the business will be something that you can nurture from the beginning.

    Create a Business Plan

    A business plan is vital to helping you get finance; you'll need to show banks and investors why they should invest in your business. Lenders and investors will only risk their time and money if they're confident that your business will be successful and profitable. A complete, thoughtful business plan is one of the most valuable tools in helping you reach your long-term goals. It gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible bumps in the road. A good business plan that serves as a blueprint for your venture in the pharmacy business, should have the essential components that we will break down in this section:

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      5 Ps in Marketing – Product, Price, Place, People, Promotion (feasibility report)

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      Management Reports

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      Services to be rendered by the pharmacy

    5 Ps in Marketing - Product, Price, Place, People, Promotion (feasibility report)

    A crucial aspect in your business plan is a feasibility report on the 5 Ps in Marketing. This helps you direct your focus and capture the business environment you are about to enter. To create a sound feasibility report, here are the details that you need to focus on:

    In order to properly assess which location is suitable for your new business, you need to think about the following questions:

    1. Is there enough foot traffic?
    2. Are there nearby businesses that will provide constant flow of potential customer?
    3. Will people be able to see your pharmacy?
    4. Is there plenty of parking, drive thru window?
    5. Can your business grow in this location?

    HINT: Retailers such as Starbucks and McDonald’s conduct extensive research before settling on a location, so having one of those nearby can be a good sign.

    Management Reports

    In terms of the financial aspect, you need to create a projected cashflow. Pharmacy is a unique business, you need to anticipate the delayed payment of prescription refill which usually takes 30 to 45 days. one of the biggest reasons new independent pharmacies fail is undercapitalization.

    Understanding your financial needs will help you grow your business, Y&A can help you determine whom to approach for a business loan

    Services

    Have a think on what kind of services you will provide. The service offerings should be in harmony with the 5 Ps in Marketing Feasibility Report. As an example, here are some services that your pharmacy may offer

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    Mobile Health Apps

    • digital tools that foster good therapeutic behaviors.
    • A patient is rewarded for using the pill reminder function on their app.
    • health and wellness on the front and back end.
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    Medication Simplification & Delivery

    • Custom-made packaging for each patient - all prescription needed for 1 month gets delivered.
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    Screenings

    • Once a month - 12 hour fasting.
    • Total cholesterol $2
    • Blood sugar (glucose) $2
    • Complete lipid profile $8
    • Thyroid (TSH) $5
    • A1-C tests (offered in January, April, July and October) $10
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    Immunizations

    • Influenza Vaccine, Inactivated
    • Pneumococcal Conjugate Vaccine
    • Pneumococcal Polysaccharide Vaccine
    • Hepatitis A Vaccine
    • Hepatitis B Vaccine
    • Meningococcal Vaccines
    • Tetanus/Diphtheria/Pertussis (Td/Tdap) Vaccine Zoster (Shingles) Vaccine
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    Loyalty Rewards

    • Sample point system. 1 point per $10, 100 points for $10.00

    License and Permits

    Before a new pharmacy can open to the public it must be accredited by the Ontario College of Pharmacists. You must meet all of the criteria set out in the Drug and Pharmacies Regulation Act (DPRA) and its regulations.

    1. Application for Certificate of Accreditation as a Pharmacy
    2. Application fee of $1412.50 (incl. HST) / Acquisition and amalgamation will cost $847.50 – an additional fee of $565.00 required if the pharmacy will also operate a Remote Dis pensing Location.
    3. A Director of a Corporation Declaration of Good Character for every pharmacist director of the operating corporation
    4. A copy of the articles of incorporation for the operating corporation
    5. A copy of the share certificates issued for the operating corporation

    Other activities that go into opening a pharmacy is scheduling an inspection and becoming a licensed pharmacist.

    Scheduling an Inspection

    Once an application has been approved, a community practice advisor will contact the Designated Manager of the pharmacy to schedule an inspection prior to the proposed opening date.

    The Inspection

    Issuance of a Certificate of Accreditation is subject to approval of the application and a satisfactory inspection of the pharmacy.

    Once a community practice advisor has completed their inspection and is satisfied that the operation is safe and the public is protected, notification will be sent to Ontario Drug Benefit (ODB) confirming the pharmacy has been accredited. The pharmacy will then be activated and have a profile on the College’s Find a Pharmacy or Pharmacy Professional tool.

    Want to Start a Business without living in Canada?

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      If you’re a Canadian Citizen

      Yes, starting a non-resident business in Canada is possible. All you need is a Canadian address (not a Post Office box, but a real Canadian address). If you personally have or establish a Canadian address and are a Canadian citizen or a landed immigrant, you can register your business as a sole proprietorship (or as any of the other permitted forms of business in Canada).

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      If you’re Not a Canadian Citizen

      If you're not a Canadian citizen or landed immigrant, One of your options is to form a partnership with a Canadian living in Canada; then you can use his/her address for starting your business in Canada. Another approach is to start an incorporated business. You would still need a Canadian address to enjoy the tax benefits of having a Canadian Controlled Private Corporation.

    The federal statute requires that 25 per cent of the directors be resident in Canada. In case there are fewer than four directors, then the CBCA (Canada Business Corporations Act) requires that one director be resident in Canada. Each province has different residency requirements and an investor wishing to incorporate in Canada should consider this issue.

    Existing foreign corporations can register to operate in Canada by either

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      Opening a branch office - To do this the foreign corporation must make an application for registration as an Extra-Provincial or Foreign Corporation in each province where the business intends to operate.

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      Incorporating a Subsidiary - a subsidiary is a Canadian corporation whose shares are held by the foreign parent company. A subsidiary can be incorporated federally or provincially. Compared with a branch office, incorporating a subsidiary gives the parent company limited liability from the actions of the subsidiary.

  2. RUNNING YOU BUSINESS

    Let’s Make it Official, and get your Business Registered

    You could run your Pharmacy in 2 Ways: Take our Quiz to see which one is appropriate you! Sole Proprietorship or a Corporation: One highlighted difference is Corporation is a separate legal entity, which provides you limited liability. We would recommend starting a corporation!

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    Business Incorporation / Articles of Incorporation – LLC, S-Corp, LTD, etc. $360.00 Tax Advantage - Corporations in Ontario is taxed at 15.5% on revenues after expenses

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    Harmonized Sales Tax number Payroll Account and Workplace Safety & Insurance Board Account

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    Certificate of Occupancy ($250.00) - a document issued by a local government agency certifying a building's compliance with applicable building codes and other laws

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    Signs - Portable on Private Property - $80.00 This permit is required to erect a portable sign for a specified period on private property.

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    Completion of Jurisprudence Exam - knowledge and ability to apply laws, standards, and policies in the practice of pharmacy.

    Book-Keeping : Book-Keeping is all about keeping track of your Business

    QuickBooks software can help you record your business transaction at ease. This is the perfect software for small and medium businesses and Y&A can help you start up. Here are sample features that you can take advantage of:

    1. Tracking income and expenditures
    2. Online Banking
    3. Industry Specific Financial Reports
    4. Inventory Management
    5. Payroll Processing and Tax Management
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    Tracking your items could be a headache, correcting them if there are losses or breakages could be challenging, well, QuickBooks Adjust Quantity/Value on Hand lets you fix that in 3 easy steps.

    1. Enter the new Quantity of the item or the New Value.
    2. Assign an adjustment account for the correction.
    3. Verify the total adjustment value and save it.

    The user friendly interface lets you easily maintain your inventory count accurate, Correction process is effortless.

    Accounting: Is all about Analyzing your Business

    As a pharmacy owner, you likely have a number of tasks on your plate each day in order to help the company stay successful. Aside from selling prescription, you can increase your sales by offering personalized services to your clients, like running a health screening.

    Profit Margin & Markup Analysis

    Profit Margin & Markup Analysis is a formula that helps a business determine the profit, the profit margin and the markup percentage for a product or a group of products sold.

    Here is a sample accounting calculator that can help you determine how profitable your SKU’s are.

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    Give your partners at Yogi & Associates a call to help file your Tax Return

    1. Every business needs to file their corporate taxes, whether they were actively engaged in business or not.
    2. Sometimes, there’s an advantage to being the little guy—Canadian owned and controlled small businesses may be eligible for the small business deduction, bringing the tax rate down to 10.5%. The business limit on receiving the small business deduction is $500,000, meaning that corporate income up to the amount of $500,000 is eligible for the small business deduction.

    Penalties

    Failure to file your T2 taxes on time will result in penalties. These penalties amount to 5% of the amount owing on your taxes, plus an extra 1% for each full month that your tax filing is late. The late penalty for filing may jump to 10% if the CRA sends a demand to file, when there has also been a failure to file in any of the three previous tax years.

    If you are doing your Own Payroll/Book-Keeping

    By completing the following steps you will ensure all documentation you expect to claim on your return is accounted.

    1. Organize your expense receipts by month
    2. Sort all bank and credit card statements by month
    3. Attach receipts to corresponding monthly bank or credit card statement

    Tax reporting agencies require you to keep books at a minimum level that tracks income and expenditure. But if you have the drive and interest, you can take your accounting processes to an entirely different level, and use them to create a smarter and more financially viable business.

  3. TRENDS & STRATEGIES

    We love being aware of what is happening with each industry, to provide your insight not just from an accounting perspective but also with our business hat.

    1. Prescription Drugs for Senior Citizen

      The fact that Canada's aging population continues to create an increasing demand or prescription drugs. These drugs continue to be perceived by consumers as relatively low cost due to the entrenched public health care system and the existence of private health insurance coverage plans.

    2. Pharmacies will benefit from continued government efforts to move the delivery of basic health services

      Pharmacies will benefit from continued government efforts to move the delivery of basic health services to less expensive delivery channels, such as flu shots, inoculations, etc. that can now be administered at the pharmacy level. That means revenue streams that are predictable and non-cyclical – attractive traits for a business owner.

    3. Prevention and wellness programs

      Patients all around the world are growing more interested in better ways to manage and improve their own health. Ex: wearable health-tracking devices, behavioral and lifestyle coaching and counseling, Health apps, etc.