What makes a pharmacist want to buy his or her own independent pharmacy In a word, freedom. You want to practice pharmacy on your own terms. And you want to do more for the health of your patients. But where you are now might not give you enough time or opportunity to do that.
The art of buying a pharmacy is the personal side of your decision. This is about you and your patients. Are you going to move to the same town as the pharmacy Can you commute to the pharmacy from where you live now Is this where you want to raise your family Is there community support for the pharmacy Are there other businesses in town that help support the pharmacy Is this where you want to spend most of your time
Consider working with an expert in Pharmacy Brokerage and Valuations like PRS Pharmacy Services. As the only broker endorsed by NCPA, with more than 38 years helping independent pharmacies, we know how to ensure that the process of buying a pharmacy goes smoothly and with as little stress as possible. There are many companies claiming to be experts in pharmacy brokerage but our reputation and endorsements can give you the peace of mind you need that a true expert will walk you through the entire process.
We are pharmacist owned and operated so we understand how pharmacies work. We know that there are thousands of independent pharmacies in the world and every single one is unique. Our specialists can help you every step of the way whether you are just starting to plan an acquisition, beginning to look at a location to build a new pharmacy or you already have an existing pharmacy ready to buy.
We are a diverse pharmacy consulting firm with expertise in pharmacy valuations and feasibility studies and specializing in pharmacy brokerage services such as buying, selling, transitions and start-ups. We are an accredited broker and fully licensed.
Scott is a registered pharmacist and an Accredited Business Intermediary. His education and decades of experience working in and helping independent pharmacies would be invaluable to any new or existing pharmacy owner and a must have for any non-pharmacist business owner looking to buy a pharmacy. He is the current VP of Pharmacy at PRS and conducts seminars for numerous trade organizations and groups every year. Scott has successfully assisted hundreds of pharmacy owners over his 30+ years with PRS.
Billions of prescriptions were issued during 2020/21 due to the COVID-19 pandemic and 75% of pharmacy sales were to new buyers who looked to secure a more stable future for themselves following furloughs and uncertainties.
When buying a pharmacy, you become accountable for its profit and must ensure it has enough cash flow to pay outgoings as a minimum. This is in addition to perhaps the most vital question: how will you fund your purchase
An independent pharmacy for sale should be able to issue the last three years of their annual accounts as well as the FP34 statements for the last 12 months. The FP34 statement deals specifically in NHS income, while the annual accounts will help you understand the profits/losses of the business and get an idea of its trajectory, so you can make the best decision about whether this is the right pharmacy sale for you.
The information they look for is about ascertaining the viability of their investment. If they fund you, will you have the experience/qualifications/knowledge to make it a stable investment This means looking at your qualifications, your own capital contribution, your experience in the pharmacy and/or management sectors, your financial profile and background assets and information about the pharmacy itself.
The level of due diligence done for your pharmacy purchase may vary, but we would always recommend working with advisors who can assess all areas of the business including assets and liabilities and identify dangers/risks. This means assessing areas such as:
Like any limited company, you need a strong business plan when buying a pharmacy so you can support your finance application and appear as favourable as possible to lenders. Beyond securing funding, business plans also help you ensure that the pharmacy is the right decision for you and your situation.
Including all of the information above will help result in a business plan that gives lenders more confidence in their investment. When ultimately their choice is based on the perceived risk, a robust business plan helps them see how responsible you have been about the opportunities and threats to your pharmacy purchase.
The due diligence process is what helps you arrive at a realistic valuation and will be more reliable than any indication a Sales Agent can provide. Pharmacies are traditionally valued using a pence in the pound calculation which functions like a percentage. For example, a business with a turnover of 600,000 worth 60p in the pound would be valued at 360,000.
Once that valuation is done and due diligence comes back in a satisfactory manner, both parties can draft the Sales Purchase Agreement (SPA) - the document that sets out what you are acquiring, what the rights of each party are and how transfer of business and assets to the seller will work.
The SPA will contain warrants such as a seller warranting there are no claims or litigation against the pharmacy. It will also outline the provisions deadline with the transfer of business assets and the property itself - using standard property solicitor terms known as Standard Commercial Property Conditions (SCPCs).
So now you know how to buy your first pharmacy. While the steps in this guide may vary, the main elements are doing research, securing funding with a specialised loan for pharmacists, and having a strong business plan. However, many people who want to buy a pharmacy overlook the importance of third-party lenders and specialist financing teams who may be able to help you in a more suitable fashion than a high street bank.
For first time operators looking to take a step up in their pharmacy careers and begin reaping the profits available for running successful pharmacies, Rangewell can help provide specialist assistance for your financing decisions without any cost to you.
A part of employment law which applies during business mergers or acquisitions. A TUPE measures letter must summarise the intentions of the purchase in relation to current employees of the seller - such as opening hours and policies/remuneration.
Rangewell helps UK firms, partnerships and sole traders along with their advisors to find, compare and apply for business finance. Rangewell do not provide finance ourselves, we introduce businesses to business finance providers based on what they tell us their financing requirements are as well as their what they tell us about their circumstances, future plans and creditworthiness. It is important to build the confidence of lenders by providing as much information as clearly and completely as possible. For this reason, information that you provide to us via telephone or our website for the purposes of Rangewell helping you to find, compare and apply for business finance should be complete and accurate as we will use this information when discussing your case with our panel of Lenders. Please be aware that Rangewell records telephone calls (facilitated by aircall.com) and video calls including the video screen(s) you share during the video call (facilitated by wingman.com) for compliance and audit purposes and full details of their respective GDPR, Privacy and Data policies can be found on their websites. For this reason, and for general confidentiality reasons, please do not discuss or share details or data that you are not authorised to disclose to third parties. All communications with Rangewell are handled in full compliance with both the Data Protection Act 2018 (DPA 2018) and the EU General Data Protection Regulation (GDPR) full details of which can be found on our website (and is updated from time to time). Terms and conditions apply and guarantees and Indemnities may be required by the finance providers we introduce.
The prospect of buying a pharmacy is enticing to pharmacists for a variety of reasons. The items at the top of the list are; freedom and responsibility of ownership, the chance to practice pharmacy on your own terms, do more to improve the health of your patients, and improve your earning potential. These are all realistic goals when you have your own location, however, the process of purchasing can be complicated and lengthy regardless of how well prepared you are.
Opening a pharmacy is an expensive undertaking, and it could take over six months or a year to see a positive cash flow. Failing to handle the cash flow crunch is one of the leading reasons new independent pharmacies fail. Every time you fill a prescription, the customer only pays a portion of the cost and you must wait a few weeks to receive the rest of your money. Planning for this delay in cash flow can mean the difference between failure and success for a new pharmacy. You also have to worry about paying employees and payroll taxes every two weeks. This is where having a good line of credit between $400,000-$500,000 can keep you afloat. Start now, if you are in the planning stage, to establish a line of credit. You may even consider working with your bank to increase your line of credit to account for those first six months or so.
Pharmacy ownership can bring you freedom and responsibility, and is rich with rewards. We are here to bring you tools and resources you need to plan for the successful acquisition of your own pharmacy.
Pharmacy ownership can seem daunting at first. Our team of advisors has the experience to guide you through the necessary steps to open the doors of your pharmacy. How you approach the beginning of this process will influence your success as a pharmacy owner.
Understand the economic landscape through analysis of financial trends in the industry, evaluating your personal financial status and talking to current independent pharmacy owners. Start thinking like an entrepreneur and gain general business knowledge. View our Business basics page to get started. 59ce067264