Time to Buy or Sell? Keep it in the (independent) family.
Owning a pharmacy is complicated. You are responsible for delivering the highest level of patient care. You are running a business in one of the most tumultuous and competitive markets the industry has ever seen. And, you are responsible for representing the voice of independent pharmacy both in your community and in your local, state, and national legislative bodies.
When it comes time to sell your pharmacy—or to add one to your existing roster of businesses—that complexity increases. But don’t worry if you haven’t mastered every aspect of the transition process. Here are a few things to keep in mind whether you are buying or selling:
Plan ahead. Whether it’s the stock market or real estate, the key to maximizing return is always to buy and sell at the right time, not because you are being forced to do so. Granted, the unexpected happens—still, preparation is key. There are a few things that you can stay atop in your pharmacy to make preparation for a transition smoother, among them: maintaining a clean and modern facility and retaining well-organized documentation.
Ask for help. Understanding what drives value is critical for both buyers and sellers. Hiring an accountant who can help standardize reporting is a good investment. Your documentation should include your top payers and drugs, your ratio of generics to brand, and the balance of new prescriptions to refills along with prescription count, gross margins, and typical profit and loss reports, and your accountant should help you untangle discretionary expenses to provide the clearest possible picture of ROI for the buyer. You may also need help finding a buyer and structuring a deal that will not just net you the best price but the best deal overall, taking into consideration tax consequences and other “soft” impacts, like the continuity of the business in your community. And on that note, a final word:
Honor the legacy. If you talk to independent pharmacists for very long, it becomes apparent that the work is at least as much mission as it is a business. They spend whole careers seeking to provide the best possible, not-just-a-number, personalized care to their patients and community as possible. That’s certainly the case for many of our members and has been so for three generations of our company’s ownership. So, it’s highly surprising that, when it comes time to transition ownership, many consider selling to a chain instead of finding other mission-driven independent owners in the marketplace. Maybe the prospect of selling, or buying, is too daunting. With the right partner in place—and there are many, including AmerisourceBergen Pharmacy Ownership Services—it needn’t be.
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