Pharmaceutical companies are generally classified into two types- Pharmaceutical Manufacturing Company, which is responsible for the production of the drugs and medicines to be sold in the market, and the other is, Pharmaceutical Marketing Company, whose responsibility includes distribution, promotion, and advertisement of the goods manufactured so that they reach the market where they are most accessible to the consumers. The Manufacturing Pharma Company does provide promotional material to the marketing company for promotional activities. The PCD Pharma franchise falls into the second category of the pharmaceutical companies as mentioned above. The amount and area of investment for both the manufacturing and marketing Pharma companies vary greatly.
A manufacturing company mainly invests in areas like land, world-class infrastructure, machinery, equipment, raw materials for production and other packaging materials, etc., which requires an investment in crores. Whereas, the investment of a marketing pharmaceutical company, also known as, PCD franchise is relatively low and largely comprises investments in buildings or renting, licensing and registration, transportation, doctor’s expenses, and promotional expenses.
There are broadly three types of investment in any kind of business model. These three types of investments are- Fixed Capital Investment, Operating Capital Investment, and Inventory Investment.
Fixed Capital Investment is the one-time investment that is done to set up the business infrastructure at the very beginning of the establishment of the company. It is called fixed capital investment because it is used to procure the fixed assets of the company.
Operating capital investment, also known as the working capital investment is the second type of investment. It is a recurring investment that is done to ensure the smooth running of the business.
The third kind of investment is the Inventory Investment that refers to the cost for the procurement of the goods or services that are to be provided by the company to the consumer with the intention to make a profit.
Fixed Capital Investment
In the PCD for the Propaganda Cum Distribution Pharma franchise, the fixed capital investment is relatively low as compared to most of the businesses of this scale. In the PCD franchise business, only space for office, office furniture, and accessories, computer and electronic equipment, investment at licensing and documentation are the investments in the name of fixed capital investment.
The cost of land (if applicable) highly depends on the area but the area needed is quite small so it should not cost much. The cost of office and furniture accessories are to be decided by the owner.
A computer is a necessary investment but to cut the cost a second-hand laptop can also be used. And other electronic equipment that would be essential is a printer. if there are not multiple uses of the printer then it is advised to buy a black and white printer instead of a colored one as they are more durable and require less maintenance. a laser printer is generally recommended but if the budget is low you can also go for Dot Matrix printer. A printer can cost between ₹5,000 to ₹8,000.
In the electronic field, one other fixed capital investment would be billing software. It is required to keep the records up-to-date and calculations. Marg is the most recommended software for the PCD Pharma franchise business. Do it is a little costly but it is articulate and accurate in its working. At the time of installation, it may cost around ₹10,000 to ₹12,000 but it is negotiable and totally depends on you to manage a rate stable for yourself. After the one time installation, the software also required annual renewal.
Another kind of fixed capital investment is the cost of licensing and documentation. The PCD Pharma franchise business mainly requires the GST number and wholesale drug license.
Operating Capital Investment
After the fixed capital investment comes the working or operating capital investment. In the PC Pharma franchise business, this category of investment includes- transportation, rent (if applicable), staff wages, and promotional and marketing expenses.
Rent of the office or working area (if not owned by the franchise) depends on the area and varies from place to place. Another investment is the transportation of goods. This transportation cost and the medium should be fixed at the time of the deal with the pharma company. It is dependent on the medium and distance.
Another recurring cost is the wage or salary of the staff hired by the franchisee. The promotional and marketing activities cost is also one of the recurring expenses that need to be incurred in order to expand and make the business more profitable.
Inventory Investment
the last kind of investment is the inventory investment which is the cost of the product stocked for sale. In the PCD Pharma franchise business, this cost depends, firstly, on the pandit number and amount of products that you have ordered and want to deal with, and secondly, on your negotiation skills. the price of the products and the promotional material are highly negotiable and it requires you to bargain at your best to make a good deal out of it.
It is also suggested to the newcomers in the business to start with a minimum investment after negotiating the best price for the minimum investment. there are Pharma companies that are ready to provide PCD franchise at a very low initial investment of even ₹10,000 to ₹20,000 and you can start the business with as low as only three products.
We hope this article gave you a fair idea of the initial investment for starting a PCD Pharma franchise business.