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.
What do we mean by think like your seller? Why donâ€™t we tell you a story. We had a friend who was attempting to buy a pharmacy. He felt the pharmacy listing price was too high and it may have been, so he sent a letter of intent that was much lower than the listing price. What he didnâ€™t think of was this pharmacy had been in the ownerâ€™s family for 70 plus years and was the social, business and financial center of his family and his extended family for the past 70 years. His family did not want him to sell and when the low offer came in the owner was offended and shocked. In the end he ended up selling the pharmacy to another buyer. What could have our friend done to prevent this? We have found by calling or setting up an in person meeting with the owner you can provide them your thoughts on what the pharmacy is worth to you and how you came up with that dollar amount. What this does is start an open conversation about the ownerâ€™s feelings/needs and your particular needs and requirements. He may need a certain dollar amount to retire or will not sell below a certain price due to sentimental reasons. You may need it at a certain price to be profitable due to a loan or because you are not going to be the pharmacist which adds costs. Once you both know each otherâ€™s perspective then you are able structure the agreement to work on both sides.
Another example is employees and pharmacy reputation. We once had a buyer who purchased a pharmacy and had agreed with the owner to keep all the employees which was very important to the seller. At first the buyer wanted to keep the employees to provide stability for the customers. However, once the buyer took over they discovered the pharmacy could not run with the wages the technicians were being paid. The buyer explained this to the employees and offered them a lowered salary but did promise them a job. Well two of the employees resigned. People in the community started telling the former owner the pharmacy is not the same and Betty and Jane are gone, etc. The owner starts getting upset and calls the new owner and it becomes a big problem. The buyer could have handled this prior to the sale and explained our goal is to keep all employees but will have to evaluate each one along with their salaries and then do what is best for the pharmacy. They will all will get a fair chance and I can promise they will get several months of working with me prior to any decisions being made. Getting this out on the table allows you the chance to explain your business model and get the owner thinking like a business person. He in turn is able to explain this to customers when asked and it is good for all parties.
In summary we suggest sitting down thinking like the seller and listing all the things that may be concerning him or her. Then have an open conversation with the owner about each item to ensure all the issues are on the table. You will find the sale is more efficient and all parties are happier. In addition it may eliminate any competitive buyers because the owner feels like they can work with you!