Most Good Neighbor Pharmacy owners have at least thought about selling their business. The Good Neighbor Pharmacy Ownership Program can help turn those thoughts of selling into reality.
“We are dedicated to preserving the future of community pharmacy through sale and acquisition of independent pharmacies,” said Charlie Le Bon, Director of Pharmacy Ownership for AmerisourceBergen. “About two-thirds of independent health-care practitioners are nearing retirement age, and pharmacy is no different. Our goal is to help owners who are ready to sell to create an exit plan and transition their pharmacy to another independent owner.
“There is a tremendous number of young entrepreneurial pharmacists who are eager to buy a pharmacy. But they don’t know who is ready to sell any more than older pharmacists know who is ready to buy. The Pharmacy Ownership Program can help both.”
Le Bon will explore the ins-and-outs of pharmacy sales during a special ThoughtSpot 2017 education session, “For Sale or Fire Sale? The Elements of a Successful Pharmacy Transition.” Nearly every pharmacy owner buys a store with the help of a detailed business plan in order to maximize the value of their purchase. Relatively few pharmacists create a similarly detailed exit plan to help maximize the value of their sale.
“With the proper planning and blueprint for selling your business, you can maximize the value of the pharmacy, maximize the proceeds and keep your pharmacy independent,” he said. “Building an exit plan means you are not limited to either closing the doors one day or selling to the chain. The Pharmacy Ownership Program walks you through a five-step plan to maximize the value of your pharmacy and maximize your proceeds by putting you together with the most appropriate potential buyers.”
First, allow for at least two to three years to plan and execute the sale, Le Bon advised. Savvy owners start planning their exit when they buy a pharmacy, but it is more common to spend a year or two thinking about selling before taking the first step. Building an exit strategy begins with evaluating the business value of the pharmacy and the factors driving value.
Step two is to define the reasons for selling. Most sellers are ready to retire. Some are tired of keeping up with new technology and ever-thinner margins. Others may need to move quickly due to health or family considerations. All have different degrees of flexibility in timing the sale.
Step three is improving the financial curb appeal of the pharmacy. Just as painting a house can improve the curb appeal and boost a residential sale, brightening the business side of pharmacy operations can help boost sales appeal.
“Our business coaches analyze the business from the inside,” Le Bon said. “They pull prescription data, look at financials, and benchmark the pharmacy against its peers. And they recommend steps that will improve the financial appeal to potential buyers.”
Then comes lining up potential buyers, agreeing on a price, and closing the deal.
Potential buyers follow a similar blueprint. Location is key for most pharmacy buyers, he said. While there are 20,000 independent pharmacies in the United States and up to 900 change ownership each year, the universe of pharmacies for sale in any given locale is much more limited.
The Pharmacy Ownership Program works with banks that are dedicated to pharmacy financing and that understand the business of independent pharmacy. The final sales price depends on multiple factors. The most common pricing formula is a multiple of net income before taxes, depreciation, and amortization, Le Bon said.
“We see a lot of successful younger pharmacists who understand today’s wave of innovation, know how to implement outcomes-based practice, and know how to utilize technology to improve service and streamline operations,” Le Bon said. “We know the future of pharmacy is going to be different and we are confident that it is going to profitable and sustainable for independent owners. The Pharmacy Ownership Program is our way to ease the transition.”