NATIONAL OPEN UNIVERSITY OF NIGERIA

HAPPINESS PHARMACY BUSINESS PLAN

PREPARED BY

EKANEM, INEMESIT EPHRAIM

MATRIC NUMBER: NOU181057430

DEPARTMENT: COMPUTER SCIENCE

FACULTY: HEALTH SCIENCE

SEMESTER: 2021/2

LEVEL: 400

INCUBATION CENTRE: SOUTH SOUTH

STUDY CENTRE: UYO STUDY CENTRE

EMAIL ADDRESS: [email protected]

PHONE NUMBER: 08134804623

 November, 2021

PRESENTED IN PATIAL FULFILMENT FOR PASSING

GST 302 – BUSINESS CREATION AND GROWTH

1.0 EXECUTIVE SUMMARY

The Happiness Pharmacy's main goal is to provide quality prescription medications

for our esteem customers at the lowest prices on the market. We have positioned
ourselves as a firm with a drive to ensure patient are able to get their prescription with
easy access. These accessible features will allow patients, get genuine drugs
irrespective of their geographical locations. To attract the patronage of patients, apart
from the easy accessibility of drugs, we will be able to sell drugs at reduced price to
both online, post-mail and walk - in customer by carefully maintaining efficiencies in
our operations, we are opened to customers with insurance policy both post - mail
order customer and those walk - in customers, based on those under insurance policy.
The Happiness Pharmacy will operate on central store and later expand her branches
nationwide that will both serve online, post-mail order customer and those who visit in
person. We will thrive by employing friendly and knowledgeable personnel, which,
along with our great prices. With inflation, we expect that the price of medications to
continue in an upward trend. Our advertising, mainly through ads in magazines, TV,
radio, internet art, and our target will be those who are looking to save money on a
pricey but unnecessary and regular expense. The Happiness Pharmacy will be led and
manage by seasonal professionals with experience in the pharmaceutical industries at
our central office while our satellite branches will be administered by pharmaceutical
techs. We expect to reach profitability by our second year and will generate
substantial sales by year three.

1.2 Objectives

The objectives for the first three years include:

 Exceed customer expectations with superior pricing

 Increase the number of customers by more than 30% per year
 Develop a business that survives off its own cash flow
1.3 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

1.4 Mission

The Happiness 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 by providing effective, efficient, and convenience in our
operation ensuring customer satisfaction is adhered.

1.5 COMPANY SUMMARY

The Happiness Pharmacy will be in Uyo and will offer prescription medications at

discount prices to our senior citizens customers, by mail order or at the store front.

1.6 COMPANY OWNERSHIP

The Happiness Pharmacy will be established as a limited liability company owned by

Mrs. Inemesit Ekanem (BNSc.) and manage by health specialist with a qualification in
pharmacy industry, with 8years experience and the pharmacist with 6years experience

1.6.1 Start-up Summary

The Happiness 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.
 Telecom system(telephone)
 Storefront build-out.
 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.

1.6.2 Table: Start-up

Start-up

Requirements

Start-up Expenses N 5,000,000

Legal N 250,000
Rent N 200,000
Utilities N 400,000

Telecom System(phone line) N 100,000

Insurance N 300,000
Storefront Build-out N 500,000
Expensed Equipment N 50,000
Website development N 50,000
Total Start-up Expenses

Start-up Assets
Cash Required
Start-up Inventory N 5,000,000
Other Current Assets
Long-term Assets
Total Assets N 5,000,000

Total Requirements N 10,000,000

1.6.3 Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund 1,000,000

Start-up Assets to Fund 5,000,000

Total Funding Required 6,000,000

Assets
Cash Requirements from Start-up 6,000,000
Additional Cash Raised 3,000,000

Cash Balance on Starting Date

Total Assets 8,000,000

Liabilities and Capital

Liabilities
Current Borrowing 0
Long-term Liabilities 0
Accounts Payable (Outstanding
0
Bills)

Other Current Liabilities

0
(interest-free)
Total Liabilities

Capital
Planned Investment
Seed Funding
ALEX BLAKK 4,000,000
Friends and Family
Total Planned Investment 4,000,000

Loss at Start-up (Start-up

(10,000)
Expenses)

Total Capital 4,10,000

1.6.4 PRODUCTS

The Happiness Pharmacy offers a wide range of prescription drugs to patients

naturally. Both generic and name brands are offered drugs from different
manufacturing companies to our customers , In order for customers to purchase this
said drugs, Happiness Pharmacy will provide a platform, where post-mail order
customer will fill in their personal details through our online platform, and also scan
their medical history and upload it on our platform, or test carryout concerning the
said illness, it will also enable us to know the actual drugs a customer need to take for
the said illness. The Happiness Pharmacy will be able to survive on lower margin due
to operating efficiencies gained through our post-mail order operations, by accepting
insurance policy drugs plan, which we be an added advantage for Happiness
Pharmacy, if a customer has questions regarding drugs, the pharmaceutical technicians
and the pharmacist will provide the answer. Generally, the accompanying printed
literature will answer the question.

This mode of saving costs by not providing unlimited access to the pharmacist will be
successful because the majority of customers will be customers who have been taking
said drug for a while as opposed to a new prescription. They are interested in The
Happiness Pharmacy as an inexpensive and genuine product offers.

With each order, a printout will accompany the medications providing directions on
how to take the medications, other drugs that should be avoided concurrently, and
other useful information. The Happiness Pharmacy will be using computer print outs
from industry to reduce the cost of providing this information.

2.0 SWOT Analysis

Strengths

 Much like medical practices, pharmacies tend to remain profitable at all times given
the simple fact that people are going to continue to need medication.
 Additionally, pharmacies receive a substantial amount of their income from publicly
and privately funded by healthcare system, our strength will also be on our mood of
operation and quality product render with a friendly pricey.
Weaknesses:

 The cost of operating a pharmacy are extremely high.

 The cost of good sold usually consist of 70% to 80% of the revenues generated.
 Additionally, the ongoing political risk with operating a pharmacy such as legislation
pertaining to the affordable Care Act, Medicare, as such pharmacies need to maintain
a very lean operation to remaining pricing competitive

Opportunities:
The biggest opportunity to pharmacies comes when new pharmaceuticals that are prescribed
by doctors are released into market. This substantially boost the revenues of most pharmacy
operations; pharmacy businesses can easily expand by developing additional retail locations.
Lastly, we can increase our income by offering compounding services.

Threats:

The primary threat faced by pharmacies is the regulatory issues which can substantially
change the way that these this business conducts their operations.
It’s also noted that large scale pharmacy chain has become substantial competitive issue for
many independently owned individual stores and chains and it has continued to be substantial
issue for pharmacist that are trying or seeking to develop their own business.

2.1 Market Analysis Summary

The Happiness Pharmacy's target market consists of two different groups, local

customers or walk-in’s customers, and mail order customers. 

The Happiness Pharmacy will employ two different strategies to reach these two
diverse market segments.

2.2 Market Segmentation

The Happiness Pharmacy's customers can be classified into two different groups
mainly, mail order customers and walk-in customers:

 Mail order customers. Are group of customers ‘who orders their medication
through the mail in an effort to save money. Generally, the mail order
customers are older in age, typically over 40. In general, elderly customers
consume more medication relative to younger people. The mail order customer
will typically purchase medications for an ongoing ailment that requires regular
treatment. This group of customers will also be more likely to purchase several
months of medication at once.

 Walk-in customers. This group of customers are also looking for the lowest
prices but genuine drugs for their medication. However, they tend to purchase
medications monthly at their local pharmacy, often at a higher price. There is
no common demographic for this group of people, other than living in the
metropolitan area. Some of these customers will pay for the medications out of
pocket and some will submit a claim to their insurance company for
reimbursement at a later date.

2.3 Target Market Segment Strategy

The Happiness 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 (>35) who regularly need medication
and are aware in advance of their needs. Walk - in customers will be targeted through
advertisements in the local new paper, Ads will raise awareness for Happiness
Pharmacy.

2.4 Competitors

Competition takes many different forms in the pharmacy industry.

 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 like The Happiness
Pharmacy. Happiness Pharmacy we also operate as local pharmacy but have
different operation and provide discount for children between 0-5 years, as well
as senior citizens and disabilities.

2.5 Strategy and Implementation Summary

The Happiness Pharmacy will use their website to develop visibility and disseminate
information.

2.6 Competitive Edge

The Happiness Pharmacy’s competitive edge is superior pricing and, in our operation,
and the quality of product. To do that we must maintain our position as the low-cost
provider by painstakingly ensuring that costs are kept low through operating
efficiencies but that does not mean we will sell our drugs lesser than what we bought,
we will provide excellent customer care, well-groomed management team, having
wide range of product.

3.0 Marketing Strategy

The marketing strategy will be based on targeted advertisements, appealing to the

customer's sense of value, and the easiest operation Happiness Pharmacy offers,
efficient delivery of service for online purchase, high quality, and regular availability
of drugs at fair price, distributing fliers and handbills. The marketing campaign's goal
will to be increase awareness of The Happiness Pharmacy with their target market.

3.1 Sales Strategy

The sales strategy will be based on generating long-term relationships with customers.
To facilitate that, we will provide medications at superior prices and quality product
for our esteem customers, we will make sure that we have medicines in stock for both
the mail customer and walk - in customer and provides 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 Happiness 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.

3.2 Sales Forecast

During the first month we will focus on setting up the store front and generating both
local and national visibility. Sales activity will begin in month two. Sales during
months three through five there will mainly consist of local business through the store
front. In month six we expect to see a jump in sales from mail order. Sales will grow
steadily from month six on.

3.3 Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3

Sales
N
Walk-in customers N 1,000,000 N 2,000,000
3,000,000

N
Mail order customers N 3 00,000 N 3,000,000
4,000,000

Total Sales N 1,300,000 N 5,000,000 N 7,000,000

Direct Cost of Sales Year 1 Year 2 Year 3

Walk-in customers
N 2,000,000 N 2,000,000
 N 2,000,000

N
Mail order customers N 3 00,000 N 1,000,000
3,000,000

Subtotal Direct Cost of N

N 2,300,000 N 3,000,000
Sales 5,000,000

3.4 Milestones

The Happiness Pharmacy will have several milestones early on:

 Office/business set up.

 Establishment of the first strategic relationship.
 Profitability.

Web Plan Summary

The website will be used for the dissemination of information as well as a mechanism
for email communication. Initially there will be no ordering through our website since
we do not expect that method to be widely used and trusted by our target customers at
the beginning.

Development Requirements

The Happiness Pharmacy will hire a web programmer with major in computer science
to complete and maintain our simple website. This will keep costs down.

Management Summary

Happiness Pharmacy will be mange by an experience personnel in pharmaceutical

industry, with experience in major drugs pharmacy, we will also employ an
experience drug representative.
Personnel Plan
The Happiness Pharmacy will employ the following people:

 Sales agent’s/phone representatives: two at month three, an additional person at

month sixth.
 Pharmaceutical technicians: two at month two, a third at month six.
 Pharmacists: month two.
 Order fulfillment agents: two for month five, a third for month eight.
 Counter person/phone representative: one at month three.

Table: Personnel

personal plan
Year 1 Year 2 Year 3
Manager N 100,000 N 100,000 N 100,000
Pharmacist N 70,000 N 70,000 N 70,000
Pharmacist technician N 50,000 N 50,000 N 50,000
Pharmacist technician N 50,000 N 50,000 N 50,000
Pharmacist technician N 50,000 N 50,000 N 50,000
Sales agent N 30,000 N 30,000 N 30,000
Sales agent N 30,000 N 30,000 N 30,000
Sales agent N 30,000 N 30,000 N 30,000
Counter person/phone
N 20,000 N 20,000 N 20,000
rep.
Counter person/phone
N 20,000 N 20,000 N 20,000
rep.
Total Payroll N 450,000 N 450,000 N 450,000

The following sections will outline important financial information.

Important Assumptions
The following table details important financial assumptions.

Table: General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month
Current Interest Rate 20.00% 20.00% 20.00%
Long-term Interest Rate 25.00% 25.00% 25.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
Projected Cash Flow

The following chart and table display the projected cash flow

Table: Cash Flow

Pro Forma Cash

Flow
Year 1 Year 2 Year 3
Cash Received

Cash from
Operations
Cash Sales N 2,000,000 N 2,000,000 N 3,000,000
Subtotal Cash from
N 2,000,000 N 2,000,000 N 3,000,000
Operations

Additional Cash
Received

Sales Tax, VAT, N50, N50,00 N50,00

Received 000 0 0
New Current
N 0 N 0 N 0
Borrowing
` New Other
Liabilities (interest- N 0 N 0 N 0
free)
0 New Long-term
N 0 N 0 N 0
Liabilities
Sales of Other
N 0 N 0 N 0
Current Assets
Sales of Long-term
N 0 N 0 N 0
Assets
New Investment
N 0 N 0 N 0
Received
Subtotal Cash
N 4,050,000 N 4,050,000 N 4,050,000
Received
Expenditures Year 1 Year 2 Year 3
Expenditures from
Operations
Cash Spending N 200,000 N 200,000 N 200,000
 Bill Payments N 300,000 N 300,000 N 300,000
Subtotal Spent on
N 500,000 N 500,000 N 500,000
Operations
Additional Cash
Spent
Sales Tax, VAT, N 0 N 0 0
Principal
Repayment of N 0 N 0 N 0
Current Borrowing
Other Liabilities
Principal N 0 N 0 N 0
Repayment
Long-term
Liabilities Principal N 0 N 0 N 0
Repayment
Purchase Other
N 0 N 0 N 0
Current Assets
Purchase Long-
N 0 N 0 N 0
term Assets
Dividends N 0 N 0 N 0
Subtotal Cash
N 500,000 N 500,000 N 500,000
Spent

Net Cash Flow N 3,000000 N 3,000000 N 3,000000

Cash Balance N 3,500,000 N 3,500,000 N 3,500,000

Break-even Analysis
The Break-even Analysis calculates what will be needed in monthly revenue to reach
the break-even point.

Table: Break-even Analysis

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even N 4,000,000

Assumptions:
Average Percent Variable Cost N 0.

Estimated Monthly Fixed Cost N 4,000,000

Projected Profit and Loss

The following table and charts present projected profit and loss.

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales N 3,000000 N 4,000000 N4,000,000
Direct Cost of Sales N 0 N0 N0
Other Production
Expenses
N4,0
Total Cost of Sales N 3,000000 N 4,000000
00,000

Projected Balance Sheet

The following table shows the projected balance sheet.

Table: Balance Sheet

Pro Forma Balance

Sheet
Year 1 Year 2 Year 3
Assets

Current Assets
Cash N 3,000,000 N 3,000,000 N 3,000,000
Inventory N 4,000,000 N 4,000,000 N 4,000,000
Other Current
N 0 N 0 N 0
Assets
 Total Current
N 3,000,000 N 3,000,000 N 3,000,000
Assets

Long-term Assets
Long-term Assets N 0 N 0 N 0
Accumulated
N 0 N0 N 0
Depreciation
Total Long-term
N 0 N0 N 0
Assets
Total Assets N 0 N0 N 0

Liabilities and
Year 1 Year 2 Year 3
Capital

Net Worth N 3,000,000 N 3,000,000 N 3,000,000

Business Ratios
Business ratios for the years of this plan are shown below.

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 pharmacy
Profile
Sales Growth n.a. 118.93% 10.82% 11.07%

Percent of Total Assets

Inventory 27.42% 34.60% 11.84% 36.78%

Other Current Assets 0.00% 0.00% 0.00% 26.80%

Total Current Assets 90.54% 95.85% 95.13% 90.26%

Long-term Assets 6.46% 2.15% 0.87% 9.46%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 30.89% 20.10% 11.62% 45.28%

Long-term Liabilities 0.00% 0.00% 0.00% 14.93%
Total Liabilities 30.89% 20.10% 11.62% 60.21%
Net Worth 69.11% 79.90% 88.38% 39.79%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 60.00% 60.00% 60.00% 14.44%
Selling, General & 93.39% 44.47% 42.20% 2.35%
Administrative Expenses
Advertising Expenses 1.28% 0.50% 0.45% 0.38%
Profit Before Interest and -19.54% 17.21% 20.53% 1.99%
Taxes

Main Ratios
Current 3.03 4.87 8.53 1.74
Quick 2.14 3.15 7.51 0.86
Total Debt to Total Assets 30.89% 20.10% 11.62% 63.63%
Pre-tax Return on Net -118.78% 87.98% 64.11% 5.59%
Worth

Pre-tax Return on Assets -82.09% 70.29% 56.66% 15.37%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -19.54% 12.05% 14.37% n.a

Return on Equity -118.78% 61.59% 44.87% n.a

Activity Ratios
Inventory Turnover 10.34 6.99 6.70 n.a
Accounts Payable 8.52 12.17 12.17 n.a
Turnover
Payment Days 27 25 31 n.a
Total Asset Turnover 4.20 4.08 2.76 n.a

Debt Ratios
Debt to Net Worth 0.45 0.25 0.13 n.a

Liquidity Ratios
 Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.24 0.24 0.36 n.a

Sales/Net Worth 6.08 5.11 3.12 n.a

Dividend Payout 0.00 0.00 0.00 n.a

CONCLUSION

Sometimes reports used only to acquire financing from the financial institutions and
having no particular use. But this report is prepared from the viewpoint of reality and
will use for creating and maintaining a retail pharmacy store. So this plan has a real
good prospect in its real life application.