If you have been working at someone’s pharmacy, chances are, you want to move out and start your own. Many people open their independent pharmacy because they want the freedom to run it as they deem fit. When you choose to go down this path, you need to remember to buy a pharmacy that will bring a return on your investment. There are several things to consider to ensure this happens. They include:
Have a Plan
The first thing you need to do if you want to own a pharmacy is to make a plan. Your plan will act as a guiding point on which pharmacy you will buy and its price. Just because a pharmacy is on sale does not mean you have to buy it. You need to know what you should look out for to ensure you buy the right one. This helps you to come up with an estimated budget and considerable choice on the pharmacies to consider.
Choose a Pharmacy
The locality of a pharmacy is essential. Choose one that is in a strategic area where you can get customers. You need to carry out a pharmacy valuation to determine if it will be a profitable venture or a sinking ship. While you might decide to start a pharmacy from the beginning, various things could go wrong. Most businesses take about a year or two to begin bringing back profit.
A pharmacy that has been in operation, on the other hand, has the advantage of you gaining clients, suppliers, and even employees. Put all these factors into consideration before you settle on what you feel would work for you. If you are in doubt, it is recommended that you consult with a financial advisor. They will help you look at all the factors that come into play and help you figure out the right path to follow.
Carry Out a Valuation
While a pharmacy might look like it is doing well on the outside, financial records are what will show you the truth. Before making an offer on a pharmacy, there are various things you have to consider. Knowing about them ensures you make an extensive checklist. Here are some of the things you will look at during a valuation:
- The profits the business makes
- The expenses it incurs
- Their filed taxes for the past 1-3 years
- How the revenue is trending
- Any long-term care contracts the pharmacy has
- Opportunities you have for cost-saving
Have Financing Options
Buying a pharmacy will not be cheap, and often, you might not be able to buy it out of your savings. You have to look around for financing options you have before you start negotiating with the seller. You can look into various loan options if you cannot pay for the pharmacy out of pocket. They include:
- A loan from family or friend
- A business loan
- A loan from a pharmaceutical seller
Explore all your options and settle for one that works for you and your business.
Make an Offer
Once you have everything in order, it is time for you to start negotiations with the seller. Submit an offer on the pharmacy and see what the seller has to say about it. A counteroffer might meet the offer that you submit. Do not get disheartened. The one thing you need to do is ensure that the offer you make is within your budget range, and any counteroffer will not be too high for you. It is also important to compare prices from other areas to determine whether your offer is reasonable enough.
Draw Up a Contract
Once you are done negotiating, you must draw up a contract with the seller and have a closing date. A contract helps you to defend yourself in case of disputes that arise on issues about ownership. Some health plans and pharmacy benefit managers might require you to re-enroll your pharmacy when you change hands. Although this might be disorienting at first, you can request to operate under the previous owner’s license before you re-enroll.
The best thing you can do when buying a pharmacy is to have the right people advise you on the steps to take. Doing this ensures you avoid any loopholes that might come your way.
