Three Important Aspects of Buying an Independent Pharmacy
For many pharmacists, the ultimate goal is to own an independent pharmacy. Reasons for owning a pharmacy include the joy and pride of owning a business; opportunity to practice pharmacy the way you want to practice; and freedom to offer top notch pharmacy services and patient care. Pharmacist entrepreneurs who want to own a pharmacy often will have to buy an existing pharmacy business. If you are interested in buying a pharmacy here are some tips that will set you on the pharmacy ownership path the right way.
First, understand the capital required for buying a pharmacy. The purchase price of an independent pharmacy is $1.2 to $1.4 million on average. You will need cash as well as good credit to close the acquisition. Typically, buyers pay 15% to 20% of the purchase price in cash at closing. This means that to make an acquisition a buyer will usually need $200,000 or more in cash and will need to be able to secure a loan for the rest. You also need to consider some of the tax implications and operating costs of owning a business.
Ensure that the deal makes sense for you. Ask yourself some very tough questions. For example, will you be able to pay down debt, retain key employees and pay yourself a decent pharmacists income? Be clear about what you want and set up criteria to use to thoroughly analyze the deal and to guide yourself during the transaction. Buying a business can be like buying a house or a new car. It is an exciting and emotional process and it is easy to lose focus and get carried away. Referring to your criteria will prevent you from getting carried away and ending up with a deal that turns your dream of owning a pharmacy into a nightmare.
Consider whether the pharmacy is a good fit for you. Once you decide to buy an independent pharmacy, have secured the necessary finances and have established that the deal makes sense for you, the final step is checking the other variables. This is the most subjective part of the process, but it is extremely important. These variables include the location of the business, the current employees, the workplace culture and history of the store, and the impact change in ownership will have on employee performance and customer retention. Considering these variables and having a plan to address them is critical to the success of your pharmacy.
Buying an independent pharmacy is a rewarding entrepreneurial venture for pharmacists who want to be independent and reap the rewards and joy of owning a business. Like all business ventures, having insight and preparing for possible challenges will greatly increase the chance for success.
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If you need support in owning a pharmacy visit RxOwnership.com for a free online resource for owners to think through the key issues.