Starting a Pharmacy-Should I build or Should I Buy
Should I build or should I buy?
Last week we discussed this question and in our blog we told you we would do a five part article on the plusses and minuses of building or buying a pharmacy.
Here is the first in the series.
Week One – “The industry wisdom”, advantages of buying an existing Pharmacy
Buy-Advantages, let’s take the conventional wisdom first. If you can find a good pharmacy to buy, you are way ahead of the game and the main reason the conventional wisdom says “buy”. Chances are this pharmacy has a good following and has withstood many of the industry fluctuations. Some of the positives we see:
1. Established Revenue Stream. It is easy to predict what salary the store can support. How much money should be coming in and if the store will be able to pay the debt service from the investment.
2. Known Reputation is critical for someone investing in a business, especially if you are not known in the area. A known reputation of the pharmacy in the community will provide you with sufficient time to get to know the clients and to begin building your own rapport with your customers.
3. Management Procedures in place. Next to the fear of losing your investment, this is probably the second most challenging part and the area where most pharmacists have anxiety. We often hear, “I know how to run a good store once it is up and running but how do I get started. Having the management procedures in place is a relief for many pharmacists. In fact many pay more than the real value of the pharmacy just to be able to walk in and begin running the pharmacy and not having to deal with setting up the management and business functions.
4. Knowledgeable Employees could stay in place. This is critical to purchasing a pharmacy. Knowledgeable employees provide two critical functions that cannot be brought with you. (No matter how good former employees are).
a. Their knowledge and relationship with the customers will “buy” you time for your customers to get to know you. Friendly employees, with great rapport with your customers can really help the customers get to know (and like) the new owner.
b. “They know where the bodies are buried” !Obviously (and certainly hopefully) this is an expression. Remember, you bought this business and was very happy that the management systems were in place, right? You and I also know that two weeks after you come in, on the first day you are there without the previous pharmacist, on your heaviest prescription day, you will get a visit from the Board of Pharmacy or the DEA. or both! You will be very thankful that you have someone who knows where everything is filed. Dean A. Pedalino RPh., CPh, FASCP
Next week - I didn’t see that pothole”- the disadvantages of buying an existing pharmacy
Last week we discussed this question and in our blog we told you we would do a five part article on the plusses and minuses of building or buying a pharmacy.
Here is the first in the series.
Week One – “The industry wisdom”, advantages of buying an existing Pharmacy
Buy-Advantages, let’s take the conventional wisdom first. If you can find a good pharmacy to buy, you are way ahead of the game and the main reason the conventional wisdom says “buy”. Chances are this pharmacy has a good following and has withstood many of the industry fluctuations. Some of the positives we see:
1. Established Revenue Stream. It is easy to predict what salary the store can support. How much money should be coming in and if the store will be able to pay the debt service from the investment.
2. Known Reputation is critical for someone investing in a business, especially if you are not known in the area. A known reputation of the pharmacy in the community will provide you with sufficient time to get to know the clients and to begin building your own rapport with your customers.
3. Management Procedures in place. Next to the fear of losing your investment, this is probably the second most challenging part and the area where most pharmacists have anxiety. We often hear, “I know how to run a good store once it is up and running but how do I get started. Having the management procedures in place is a relief for many pharmacists. In fact many pay more than the real value of the pharmacy just to be able to walk in and begin running the pharmacy and not having to deal with setting up the management and business functions.
4. Knowledgeable Employees could stay in place. This is critical to purchasing a pharmacy. Knowledgeable employees provide two critical functions that cannot be brought with you. (No matter how good former employees are).
a. Their knowledge and relationship with the customers will “buy” you time for your customers to get to know you. Friendly employees, with great rapport with your customers can really help the customers get to know (and like) the new owner.
b. “They know where the bodies are buried” !Obviously (and certainly hopefully) this is an expression. Remember, you bought this business and was very happy that the management systems were in place, right? You and I also know that two weeks after you come in, on the first day you are there without the previous pharmacist, on your heaviest prescription day, you will get a visit from the Board of Pharmacy or the DEA. or both! You will be very thankful that you have someone who knows where everything is filed. Dean A. Pedalino RPh., CPh, FASCP
Next week - I didn’t see that pothole”- the disadvantages of buying an existing pharmacy
Labels: Build a Pharmacy
posted by HCC Pharmacy Solutions at
1:45 PM
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