Should I start a pharmacy or buy a pharmacy?
Whether you are a first time owner looking to become an entrepreneur or a current owner looking to grow through expansion this is a tough question. We can’t give you an exact formula to know which is best but there are a few important items to think about.
1. What is your financial position? – Buying a pharmacy in most cases is more expensive than starting a pharmacy. However buying an established operation typically will result in a faster return on investment and have less cash flow concerns.
2. In your community what are the options?
Is there an established community pharmacy that is selling? – Whether the pharmacy is selling to a chain or if you have the option to buy, it may be a great opportunity to buy or start. If you can buy you basically can take over the operation improve margins and do well quickly. If they sell to a chain then all the customers and employees who were loyal to a community pharmacy now are forced to a chain so you may have an opportunity to sweep in and win these customers.
Does your community have a couple of chains and no community pharmacy? – This might be a great opportunity to start a pharmacy as if there is enough business for 2 or more chains there is probably enough for a community pharmacy. Of course do your due diligence by research demographics, traffic, population trends and speaking to doctors prior but it is a sign that you may have found a great location.
3. Is the specialty market under serviced in your community? – By this we mean is compounding not serviced well or is long term care poor or are the hospitals requesting pharmacy services? You can find this out by researching who services this in the community. Are they far away, is there very few of them? And secondly talk to the long term care, doctors and hospitals to find out if they would want another vendor. Doing this will allow you to determine if you should start one of these pharmacies.
4. What are you best at? – Starting a pharmacy requires a different skill set than buying a pharmacy. Neither is easier than the other but taking over an existing pharmacy requires one to reduce employee costs, implement change and negotiate. Where as starting a pharmacy allows you to create a culture you want but will require great sales and marketing skills to drive business to the store.
Read more about community pharmacy at http://www.independentrxconsulting.com/pharmacy-news
