How Do You Get Onto the Pharmacy Business Ladder? The Honest Routes In
So you’re a pharmacist and you want to get into the pharmacy market. What should you be thinking about? Start with the uncomfortable truth: the market is regulated — you could fairly say closed. That doesn’t mean there’s no way in. It means the ways in are few, specific, and punish the unprepared. Here they are, honestly.
The honest summary
- Route one: the PNA. Every area publishes a pharmaceutical needs assessment — search “your town + pharmaceutical needs assessment” and see if a need exists.
- The old exemptions are gone — 100-hour pharmacies, distance-selling routes: those little doors have largely closed.
- Route two: buy — but many pharmacies are overpriced. Even accountants and lenders are saying so.
- Run the locum comparison: £7–8k/month locally without stress, versus £10–12k at ~10% net with all the risk. The gap is smaller than the asking prices pretend.
- Value on EBITDA, and buy income streams — services, online, private work — not just a dispensing contract.
This is the written companion to my video on the same question. If you’d rather hear it from me first, watch it, then read on for the detail.
Route one: the pharmaceutical needs assessment
To get onto the NHS pharmaceutical list, the front door is the pharmaceutical needs assessment. Every area has one — a public document setting out what pharmacy provision exists and where the gaps are. Go and look at yours: type, say, “Manchester pharmaceutical needs assessment” into a search engine and read what your area says it needs. If there’s a genuine unmet need you can build an application around, that’s one real way in. (I’ve written before about why you can’t simply open a pharmacy — the PNA is the reason.)
It used to be easier. There were exemptions — the 100-hour pharmacy, the distance-selling pharmacy — little ways in that entrepreneurial pharmacists used well. Now it’s trickier: those doors have largely been closed. Which pushes most people to the second route.
Route two: buying — and the overpricing problem
If the PNA route isn’t open to you, your realistic option is to buy a pharmacy. And here I’ll say what I’ve always wondered out loud: some pharmacies are priced so high you have to ask — are they really worth that much?
Think it through honestly. If you work full-time locally, could you earn £7,000–£8,000 a month, without the stress of ownership? Some of you genuinely could. Now look at what an expensive pharmacy hands its owner: perhaps £10,000–£12,000 a month. At roughly 10% net profit, that’s not a lot — not for the risk, the responsibility and the hours. (Full numbers in how much an owner actually makes.)
I was speaking to an accountant recently who said exactly that — and funding is increasingly refused on inflated deals. When the bank won’t believe the price, neither should you.
What a pharmacy is actually worth
Value it the way any business is valued: on its earnings — a multiple of EBITDA — not on the seller’s sentiment. To be fair to pharmacy, there is something real behind the price: a regulated, regular income stream, backed by the government. That stability is genuinely worth paying for. But it’s worth paying the right price for, and no more.
| Question | Wrong answer | Right answer |
|---|---|---|
| What’s it worth? | What the seller is asking | A defensible multiple of EBITDA |
| What am I buying? | A dispensing contract | A platform for multiple income streams |
| Benchmark? | “Pharmacies always sell for this” | Your locum alternative: £7–8k/month, no risk |
| Who agrees? | The agent | Your accountant — and the lender |
Think out of the box: buy income streams, not a counter
If you do get in, don’t run it the way it’s always been run. Think out of the box: services, online, private work — all the extra income streams — not one revenue line from dispensing. That’s how you get into the pharmacy space and actually make it pay: a tidy pharmacy with several engines, not an overpriced one with a single capped engine. (I’ve broken the engines down in the four income streams.)
So it’s tough — but money is out there. Spend it wisely. And remember, life is short: make the most of it. If you’re weighing up a purchase and want an honest second opinion on the numbers, get in touch.
Frequently asked questions
Why is it so hard to open a new pharmacy in the UK?
Because the market is regulated — some would say closed. Entry to the NHS pharmaceutical list is controlled through each area’s pharmaceutical needs assessment (PNA), which sets out whether there’s an unmet need for pharmacy services. No demonstrated need, no new contract. The old workarounds — 100-hour pharmacies, distance-selling exemptions — have largely been closed off.
What is a pharmaceutical needs assessment and how do I check mine?
Every area publishes a pharmaceutical needs assessment describing the pharmacy services it has and where gaps exist. It’s public: search your town plus “pharmaceutical needs assessment” (for example, “Manchester pharmaceutical needs assessment”). If it identifies a need you can build an application around, that’s one genuine route to a new contract.
Are pharmacies overpriced right now?
Many are. I’ve always wondered how some pharmacies justify their asking prices — and I’m not alone: accountants and even lenders are increasingly saying the same, refusing to fund deals at the asked price. A pharmacy returning roughly 10% net profit has a knowable value; pay beyond it and you’re buying yourself a stressful job, not an asset.
Is owning a pharmacy better than working as a locum?
Run the honest comparison. Working full-time locally, some pharmacists can earn £7,000–£8,000 a month without ownership stress. An expensive pharmacy might hand its owner £10,000–£12,000 a month at around 10% net — for far more risk and work. Ownership wins when you buy at the right price and build income streams beyond dispensing; it loses when you overpay for one capped revenue line.
How should a pharmacy be valued?
On its earnings — as a multiple of EBITDA — not on sentiment or asking price. If the multiple implied by the price doesn’t stack up, lenders will tell you the same when you seek funding. The advantage you’re paying for is a regulated, government-backed income stream; that’s real, but it only justifies a price the earnings can support.
Comments
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