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The Discount Pharmacy

Executive Summary



People need to be able to buy prescriptions at reduced prices. We make that possible by carefully maintaining efficiencies in our operations. So we can target a specific segment of the market – those customers who pay for their prescription medications themselves. They are poor, they are sick, they deserve the same care as those who can afford healthcare and full price prescriptions. 


The Discount 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.


The Discount Pharmacy’s target market consists of two different groups, local customers or walk-ins, and mail order customers.


Competition takes many different forms in the pharmacy industry. They are: chain pharmacies, local pharmacies, mail in pharmacies, canadian pharmacies. 

Why Us?

The Discount Pharmacy’s we have superior pricing. To do that we must maintain our position as the low cost provider by painstakingly ensuring that costs are kept low through operating efficiencies.



Costs will be minimized by maintaining only one pharmacist and filling the void with pharmaceutical techs. We expect to reach profitability by our third year and will generate substantial sales by year three

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

We will need $115,000 to start, we will be able to pay the investment back at the end of year 4


Problem & Solution

Problem Worth Solving

People need to be able to buy prescriptions at accessible prices. We make that possible by carefully maintaining efficiencies in our operations. So we can target a specific segment of the market – those customers who pay for their prescription medications themselves. They are poor, they are sick, they deserve the same care as those who can afford healthcare and full price prescriptions. 

Our Solution

The Discount Pharmacy’s main goal is to provide prescription medications for our customers at the lowest prices on the market. We will be able to sell prescriptions at reduced prices by carefully maintaining efficiencies in our operations and by targeting a specific segment of the market – those customers who pay for their prescription medications themselves. By focusing on this segment it gives us additional efficiencies – we avoid disruptions in cash flow often associated with insurance payments and we can eliminate unnecessary services for the type of knowledgeable, repeat customer taking maintenance-type medication.

The Discount Pharmacy will operate from one store that will serve both mail order customers and those who visit in person. We will thrive by employing friendly and knowledgeable personnel, which, along with our great prices, will drive the repeat business that we will rely upon. We only expect that as the price of medication continues to skyrocket, The Discount Pharmacy will appeal more and more to the customer’s sense of value and convenience.

Target Market

Market Size & Segments

The Discount 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 (>55) audience who regularly need medication and are aware in advance of their needs. For example, one of the main advertising vehicles will be the A.A.R.P monthly newsletter.

Walk-in customers will be targeted through advertisements in the local paper, "The Oregonian."  Ads will raise awareness for the The Discount Pharmacy and our low prices.


Current Alternatives

Competition takes many different forms in the pharmacy industry.

  • Chain pharmacies. These are state or national chains such as Rite-Aid.  The advantage to these chains are better prices through economies of scale, as well as personalized service.  The personalized service takes the form of the chain having a record of your medication purchases as well as any allergies that you have disclosed to them.
  • 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 similar to The Discount Pharmacy.
  • Canadian pharmacies. These pharmacies are located in Canada where the cost of drugs is lower than in the U.S.  These pharmacies can be accessed through mail order, the Internet, or via travel.  Recently there has been the trend for trips arranged for senior citizens in Northern States to travel up to Canada for the day to pick up their medicines.

Our Advantages

The Discount Pharmacy’s competitive edge is superior pricing. To do that we must maintain our position as the low cost provider by painstakingly ensuring that costs are kept low through operating efficiencies.

We will be able to do that by eliminating some of the services traditionally offered by pharmacies. For example, we will employ only one pharmacist and use pharmaceutical technicians to fill the void. As long as a pharmacist is on site during the hours of operation, we can use the pharmaceutical techs for all other capacities where other pharmacies use pharmacists. Other efficiencies are created by having only a small store front and conducting most of our business through mail order.

Finally, The Discount Pharmacy is not designed to hold the patient’s hand during their purchase. We expect that the vast majority of our customers will already be informed of how to take the medication, and any side effects or drug interactions that should be avoided. We will simply provide each patient with a print out of all the relevant information for consumption of the medication.

Keys to Success

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


Marketing & Sales

Marketing Plan

The marketing strategy will be based on social media, mainly Facebook and Twitter, offering useful information and opinion while quietly appealing to the customer’s sense of value. The marketing campaign’s goal will to be increase awareness of The Discount Pharmacy with their target market.

Sales Plan

The sales strategy will be based on generating long-term relationships with customers. To facilitate that, we will provide medications at superior prices, have medicines in stock for both quick shipment and store front pick up, and provide 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 Discount 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

Milestones & Metrics

Milestones Table

Milestone Due Date
Office Setup
Jan 02, 2020
First Key Relationship
Jan 16, 2020

Key Metrics

Our key metrics are: 

  1. The # of customers that walk in to the pharmacy 
  2. The # of customers that choose to mail in 
  3. The # of reviews saying that people could go to our pharmacy 
  4. Facebook page views, Twitter retweets  and website shares 
  5. Total customer traffic on the website 
  6. Total customer traffic in and out of the store 



Ownership & Structure

The Discount Pharmacy is an Oregon limited liability corporation. The majority stock holder is John Reeleaf.


Management Team

John Reeleaf has experience working with a major drug manufacturer, Eli Lilly, as a drug representative. He was able to see first hand the profitability associated with the prescription drug industry, as well as the inefficiencies with which most companies are plagued.

John graduated with an MBA from the University of Oregon’s innovative entrepreneurship program. While there he was awarded a $50,000 no interest loan through a business plan competition. That seed money will be parlayed, along with some other investments, into start up expenses for The Discount Pharmacy. John received an undergraduate degree in chemistry from the University of Oregon.

Personnel Table

2020 2021 2022
Owner – John $48,000 $48,960 $49,939
Pharmacist (0.97) $44,000 $48,000 $51,000
Sales Technician (1.89) $50,000 $61,200 $62,424
Pharmacist Technician (1.94) $61,600 $68,544 $69,914
Counter/ Phone Person (1.89) $40,000 $48,960 $49,940
Order FullFillment (0.94) $20,000 $24,000 $26,000

Financial Plan


Key Assumptions

Key assumptions: 

Of course our main assumption is legality. Regulations affecting our business can change very fast. 

People appreciate:

  1. The mail in order option for their convenience 
  2. Prescription at affordable prices 

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year


Use of Funds

The Discount 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 for shipping.
  • Telecom system.
  • Storefront build-out.
  • Start-up inventory.
  • 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.

Startup expenses – $24,100 listed as net earnings in dec 2017 

Start-up Expenses

Legal $1,000

Rent $2,000

Utilities  $400

Telecom System $400

Insurance $300

Storefront Build-out $15,000

Expensed Equipment $4,000

Website development $1,000


Sources of Funds


Planned Investment

Seed Funding $50,000

John $51,000

Friends and Family $82,100 


Projected Profit & Loss

2020 2021 2022
Gross Margin $264,860 $320,210 $397,700
Operating Expenses
Salaries & Wages $263,600 $299,664 $309,217
Employee Related Expenses $18,400 $19,392 $20,188
Sales Expenses $8,400 $8,400 $8,400
Utilities $3,600 $3,600 $3,600
Insurance $3,600 $3,600 $3,600
Rent $24,000 $24,000 $24,000
Interest Incurred
Depreciation and Amortization $850 $850 $850
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $703,590 $820,296 $942,155
Net Profit ($57,590) ($39,296) $27,845

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $140,500 $87,016 $45,597 $74,292
Accounts Receivable $0 $0 $0
Inventory $10,000 $76,798 $95,384 $95,383
Other Current Assets
Total Current Assets $150,500 $163,814 $140,980 $169,675
Long-Term Assets $8,500 $8,500 $8,500 $8,500
Accumulated Depreciation ($850) ($1,700) ($2,550)
Total Long-Term Assets $8,500 $7,650 $6,800 $5,950
Accounts Payable $70,054 $85,666 $85,666
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $70,054 $85,666 $85,666
Long-Term Debt
Long-Term Liabilities
Paid-In Capital $183,100 $183,100 $183,100 $183,100
Retained Earnings ($24,100) ($24,100) ($81,690) ($120,986)
Earnings ($57,590) ($39,296) $27,845

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit ($57,590) ($39,296) $27,845
Depreciation & Amortization $850 $850 $850
Change in Accounts Receivable $0 $0 $0
Change in Inventory ($66,798) ($18,586) $1
Change in Accounts Payable $70,054 $15,612 $0
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt
Change in Long-Term Debt
Cash at Beginning of Period $140,500 $87,016 $45,597
Net Change in Cash ($53,484) ($41,420) $28,695