• 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

Working Capital - the Key to Pharmacy Ownership Success

You have heard the expression CASH IS KING. Nothing could be truer when you buy or start a community pharmacy. Below we have outlined the working capital needs for both starting and buying a pharmacy.

Starting a Pharmacy
The number one reason for a startup pharmacy to fail is not having enough cash in the first couple of years of business. On average in the first 6 months of operation a pharmacy will have approximately $75,000 in expenses per month. Day one you have $0 dollars of revenue. In month one you may have sales of $25,000.
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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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