Finance and lending experts weighed in on key first considerations for embarking on pharmacy ownership.
In a recent webinar, finance and lending experts from Sykes & Company PA and First Financial Bank (FFB) offered insights into where to begin when buying or starting a pharmacy.
Ollin Sykes, CPA, CITP, CMA, president of Sykes & Company, PA, along with Bob Graul, RPh, MBA .consultant and past managing director at FFB and Bo Garmon, pharmacy loan specialist at FFB, shared their rich experiences in successfully taking the first steps toward pharmacy ownership.
Graul pointed to an annual survey from the National Community Pharmacists Association (NCPA), which highlights the unique opportunities available – not only in terms of the prospect of purchasing or starting a pharmacy itself, but also in its odds for success.
According to the survey, independents provide better service to their patients than the chains. In a comparison between independent and chain pharmacies, 53% of independents knew their customers by name, compared with 15% of chains. Although only 9% of chains suggest more affordable drug options, 21% of independents do the same.
Independents therefore have a meaningful place in medication delivery and health care, and one that chains are unable to usurp, according to the experts at Sykes & Co. and FFB. “Keep all of this in mind in your marketing plan and social media strategy,” Graul counseled.
There are also plentiful openings for acquiring your own independent pharmacy or pharmacies, if you know where and how to look. The NCPA survey noted that approximately 1000 stores in the US change hands each year. “I think what that really tells you is that there’s a lot of opportunity out there,” Graul said.
Garmon recommended several places to search for a pharmacy to buy, including:
In addition to these tactics, Gormon highlighted visiting local independent pharmacies yourself and gauging their interest in selling. Graul mentioned his own experience in his local store, in which major chains often dropped in to make him an offer. “So, going out and dropping in on stores and taking a look around and seeing if they want to sell? I think that’s an excellent way to do it, especially if you want to stay in that particular community,” Graul said.
Sykes seconded this approach to finding a store. “In fact, I think that’s one of the best ways to do it: just get some [business] cards and hit the road every 60 days and drop them off,” he suggested.
Broadening horizons in terms of the pharmacy’s location is also key, according to the experts. “You have to be open to where the opportunities are, so just keep in mind that it might not be in the block that you live in, you may have to widen your search a bit,” Graul said.
One of integral choices a future pharmacy owner must make is whether to buy an existing store or create a start-up business. Of the 2 options, Sykes, Graul and Gormon all lean toward buying a pharmacy. “Buying a pharmacy is usually a better proposition than doing a start-up,” Graul said. “I say usually, that’s a generalization. But the fact is that return on invested capital is much quicker with a purchase than it is with a start-up.”
Though they tend to recommend purchasing an existing store, Graul, Gorman, and Sykes all work with start-ups and know that they can be very successful as well. That being said, those interested in a start-up should be confident in their business plan and location before moving forward. Graul suggested that those interested in owning a pharmacy should look for a store for sale first, and “keep start-up in your back pocket as your back-up plan,” he said.
For more tips on succeeding in pharmacy ownership, listen to the Over the Counter podcast episode with Bob Graul and Drew Hegi from FFB.