Risk factors involved in opening a pharma franchise - Vivaceutical

What Risk Factors Are Involved In Opening a Pharma Franchise?

You will be surprised to know that the Indian pharmaceutical industry stands at the 3rd position worldwide for production by volume. In fact, India is known to be the pharmaceutical capital of the world. From the above stats, it is quite clear that the pharmaceutical industry is one of the growing and popular sectors. Over a few years, the pharma sector has grown leaps and bounds in the global medicine space and is not going to stop anywhere soon.

Are you a budding entrepreneur thinking to invest in the pharma industry but short on thriving business ideas? Well, the pharma franchise business is an ideal option for anyone who wants to kickstart their success journey in the pharma industry. The pharma franchise business can help you make earning profits in no time. However, risks and returns go hand in hand.

Whether small or big, no matter the size, every industry is prone to uncertainties. The pharma franchise business is no exception. However, before we discuss in detail the risks associated with starting a pharma franchise business, let’s first understand what exactly it is.

An Overview of the pharma franchise business

A pharma franchise is a popular business model in which a renowned pharma company offers marketing and selling rights to its franchise holders, including retailers and suppliers.

In other words, the pharma franchise business permits a pharma company to work with franchise partners and allow them to market or sell their products under the name and trademark of the parent company.

An agreement known as the Propaganda cum Distribution (PCD) is signed between the pharma company (franchiser) and the business buying the franchise. The agreement allows the franchise holder to use monopoly rights with minimal interference from the parent company.


pharma franchise business


Some of the benefits of investing in a pharma franchise business are

  • Great career option that requires minimum investment and one can start with a limited number of products as per their convenience.
  • Profitable and booming business ideas that require minimal hard work.
  • Flexibility to work anywhere on your terms and conditions.
  • Get the advantage of an extensive product range while investing in a well-known pharma company.
  • No pressure to meet any monthly or annual targets.

However, when starting a new venture, it is very normal to face un uncertainties. The same rings true for the pharma franchise business. Keep reading the blog to know the various risks associated with starting a pharma franchise.


Also Read: How to Start a PCD Pharma Franchise? A Step-by-Step Guide


Risks Involved in Opening a Pharma Franchise

Though there is a minimum number of risks involved when opening a pharma franchise, getting aware of the potential potholes is always better.

Herein, we have painted some risk factors that you may have to face in your pharma business career.

1. Risk of choosing a wrong pharma franchise company

With a myriad of pharma franchise companies available in the market, it can be easy for you to choose the wrong company. However, working with a company that doesn’t have much experience and knowledge about the industry can take a big toll on your financial health. So, before you choose a pharma franchise partner, make sure to check the company’s background, customer reviews, and certifications to name a few. Done your research skills and look for a company that has a good reputation in the market, established itself as a trustworthy brand, years of experience, great marketing and promotional material and the wealth of knowledge.

Apart from that, make sure to check if there are any legal allegations or issues associated with the company you want to work with.

Last but not the least, work with a company that is professional, reliable, trustworthy, certified, and genuine. Please note inadequate knowledge and improper research can make you vulnerable to making wrong decisions.

2. Financial risks

The phrase “Money makes the mare go” fits well in the pharma franchise business also. No matter the type or size of the business, money is an important resource to keep everything going. Though low investment is needed to start a pharma franchise business, adequate funds can help you earn large profit margins and big turnovers.

However, when it comes to investing and stocking up on pharma products, one must be very careful. Every product comes with an expiry date. Overstocking products can result in unused or unsold medicines which can eventually drain your hard-earned savings down the road.

Both spending too must or too little can be fatal for your business. So, make sure to stay within your budget and spend wisely to meet all your expenses and future needs.

Moreover, keep a record of every expenditure else you may have to face serious consequences.

3. Market Conditions

Although the pharma franchise business is one of the profitable business opportunities, factors like weather, location, and government policies can even destroy a successfully running business.

For a new entrepreneur, it might be very easy to overlook the market conditions. However, this is a big mistake. The pharma franchise business is not all about marketing and selling medicines. It is equally important to understand the target audience, customer needs, and ongoing trends.

India is one of the most populated countries in the world. The demands for medicines can range from moderate to extremely high.
Plus during peak season there can be an increase in sales and profits while at a low peak, the tables can turn upside down. So, it’s better to get in-depth knowledge of market conditions like customer demands, economic situation, and ongoing trends to stay in a competitive race.

4. Compatibility challenges

Before investing in the pharma franchise business, make sure to choose wisely the team members, pharma category, location, product range, and marketing strategies.

The motive is to have a balanced business compatibility level. This is possible if you work with a franchise company that stands with you in all ups and downs of the business.

Having compatibility issues can shut down your business in no time.

Let’s Wrap Up

A successful business is an outcome of risks and failures. No business can flourish without challenges and hardships. However, one must be ready to face risk elements and must have a contingency plan to make the most of their pharma franchise business opportunity. Knowing about the risks in advance can help you save a lot of money, time, and effort.

If you are interested in starting a pharma franchise business in India, approach Vivaceutical—the best pharma company in India. The team assists and guides you throughout the process from start to finish in the best way possible.

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