• LATEST PHARMACY NEWS AND EDITORIAL

    LATEST PHARMACY NEWS AND EDITORIAL

Our latest thoughts and inspirations on buying a pharmacy, starting a pharmacy, and ongoing pharmacy operations

Owen BonDurant, President: Owen is 2nd generation (his Dad is part owner in a 9 store pharmacy chain) in the pharmacy business and has worked in independent pharmacies since before he can remember. He has worked in almost every role a small pharmacy has to offer from cleaning the bathrooms, working as a pharmacy technician, marketing, starting and running a durable medical equipment company and managing employees. Owen graduated from Miami University of Ohio with a degree in marketing and a minor in management information systems (MIS). After graduating he briefly worked for Western and Southern Financial Group before deciding he wanted to return to the pharmacy industry where he started medical equipment business for a chain of 9 independent pharmacies. From there he moved to Chicago and started working for Experian QAS and for the last 7 years has been selling software to major retail organizations along with managing the Midwest sales team. Recently the itch to come back to the pharmacy industry, as it truly is all he knows, and Independent Rx Consulting was born.

Don't Forget the Paper Towels When Opening a Pharmacy

Remember the Paper Towels when you start a pharmacy?

You are starting a pharmacy, no starting a business. You have put your life savings into the business, put up your house to secure a loan and you quit your high paying pharmacist job at the chain. As such you have meticulously reviewed every item that needs done, picked an accountant, choose a pharmacy system created a brand, ordered drugs, gained licenses etc, etc. You open the first day spill coffee all over the drop-off counter and have no paper towels to clean it up. You had that feeling in the back of your head that you were forgetting something. That’s because you were and that is okay. It’s the first time you have ever done this. The first time you rode a bike you probably crashed or fell over. It’s hard not to make a mistake the first time you do something because you have no experience.
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Buying a Pharmacy? Think Like the Seller

Think like the pharmacy owner/seller when buying a pharmacy.

Imagine spending 40 years creating something, having it be what you are known for, having it be your social outlet, having it be the cause of many sacrifices in your life, having it support your family and then BOOM one day it is taken away. How would you feel? Well this is the feeling many community pharmacy owners have when they sell their pharmacy.

It is very important when buying a pharmacy to take the sellers perspective into consideration throughout the acquisition process. Remember the seller/pharmacy owner has probably owned that pharmacy for 30 plus years and maybe even started it from scratch or the pharmacy has been part of their family for 80 years. It may be there life work and what they are known for. The employees are not just people who work for them but friends. It is not easy to let go and when you go to buy a pharmacy from someone it is really important to think like your seller.
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Pharmacies - Are you Compliant with the Affordable Care Act?

Are you compliant with the affordable care act? 

The Affordable Care Act requires employers to provide employees with a notice of the availability of the Health Insurance Marketplace (the “Exchange”) that will be available Jan. 1, 2014. This is a requirement of all employers, regardless of size.

Employers were required to distribute the notice by October 1, 2013. If you have not yet done so, you should discuss it with your financial advisor or insurance agent. There are two model notices (depending on whether or not the employer offers a health plan) which can be found on the Department of Labor website under the “Notice to Employees of Coverage Options” section.
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Ideal Demographics for an Independent Pharmacy

What are the ideal demographics for a pharmacy?

This is a greatly debated subject within the pharmacy industry. I am not sure anyone can give you the formula for the exact demographics that will drive sustainable pharmacy business. However we can provide you with the demographics for pharmacies we have been involved with and maybe those match what you are looking at. The information below was compiled by examining pharmacies we both own and of pharmacies we have helped start or buy. All the pharmacies examined are profitable and have been for at least 1 year.

Population (based on the city pharmacy located) – we saw an average population of 15,651 with the smallest city having a population of 1,620 and the largest being 48,133.
Percent of population over 65 was 15.62% on average with no pharmacies having a percent below 14%
Percent of population under 18 was 25% on average with no pharmacies having a percent below 20% or over 30%.
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Pharmacy Accounts Receivable - What They Tell You

What is Your Accounts Receivable Balance Telling You?

To effectively manage your pharmacy business, you must understand what your accounts receivable data is telling you. Poor management of your accounts receivable can result in cash flow problems. Successful accounts receivable management includes a process to review your accounts receivable on a weekly or monthly basis.

The first step in reviewing your accounts receivable is to obtain an aging report from your accounts receivable software. This is a report that lists all your accounts receivable and shows the aging of each receivable (current, 30 days, 60 days, 90 days, 120 and over). In reviewing this report, you should be focusing on all accounts 60 days and over. Once accounts age 60 days, it is important to start making calls. You may need to call the customer to ensure the insurance information in your system is correct, or you may need to call the insurance company to ensure the prescription was billed correctly. If phone calls do not produce a result, friendly reminders by letter are the next step. Once all your efforts are exhausted, it is time to turn the account over to collections.

Another quick way to monitor the overall health of your receivables is through ratios. These should be examined monthly.
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