Except for the people living under a rock for the past 30 years, most have heard the saying "no need to recreate the wheel" or "learn from other's mistakes." There is a tremendous amount of wisdom in these sayings if you can apply them to your situation. The great news is that they can be applied to pharmacy junior partnerships.
The Pharmacists First Guardian
Our team of advisors at Waypoint has many years of experience helping pharmacy owners with pharmacy junior partnerships. We have even helped a few pharmacy owners that started as a junior partner complete the circle of pharmacy life by successfully executing their own junior partnership.
As many of you know, we recently attended the NCPA National Conference in Orlando. We learned and experienced many different things while there. We even were blessed to see former President Clinton speak. After time to decompress from all the information, we concluded that there were three important insights we needed to share from the conference.
I was recently reflecting on a speaking engagement I had for pharmacy students at the Medical University of South Carolina. To summarize, I remember walking into the room and seeing all the young faces in the crowd. Some were immersed in the presentation of the speaker before me, while others were more focused on their smart phones.
Pharmacy junior partnerships can be great opportunities for increasing the chances of your pharmacy surviving long after you are enjoying an inspired life after pharmacy. However, many community pharmacy owners think simply finding a junior partner is all it takes. The fact is, finding one is just the beginning.
The whole idea of succession planning and exit strategies is becoming almost a cliche in our economic environment at this point. The reason for this is the transition occuring with the baby boomers. They are slowly beginning the to retire and sail off into the sunset. This is being compounded by the state of the economy in the world right now as well. The pharmacy world is no different and the beginning of a huge transition is starting to happen. Below are some extremely unique tips that we think can help you being executing your exit strategy.
There are numerous ways a pharmacist can exit his or her pharmacy. They range from bringing in a pharmacy junior partner to, as we say in the south, going out with your boots on. No matter which path is chosen, there are some common issues that need to be planned for before a pharmacy exit strategy can be executed. The tips below are designed to address some of these common issues.
Determine the correct definition of money - money means different things to different people. Waypoint believes that money equals life energy. If you believe this, then you can start to determine how much life energy you want to spend building wealth. Then you can determine how much is enough and come up with a game plan to achieve that.
Don't be like Lucy from Peanuts - the story of Lucy consistently fooling Charlie Brown by pulling the football back as he is about to kick it is a great analogy to what happens with pharmacy exit strategies. You must prepare yourself mentally and financially to exit your pharmacy. If not, you will get to the day you have in your mind and nothing will happen. We have even heard stories recently from some young pharmacists about the senior pharmacists not living up to their promises. These young pharmacists feel like Charlie Brown when this happens.
Money doesn't grow on trees - there is a great commercial out right now depicting a guy made of money riding a motorcycle across the country. The catch line says since no one is actually made of money, call us today and we can save you some. You must work with the person looking to buy your pharmacy. Almost all pharmacy transactions have some form of owner financing component built into the transaction. You may be the lucky one that doesn't have to do this, but you must be prepared.
Often I speak with pharmacists who have gone the route of bringing in a pharmacy junior partner to eventually take over the pharmacy and things did not go well with it. This typically leaves a poor taste in the pharmacy owner’s mouth about this potential succession route.
There are many issues and concerns involved with implementing a successful pharmacy junior partnership. However, there are a few primary issues. One of the main primary issues is the lack of communication between the senior pharmacist and the junior partner candidate. The following story plays out time and time again when we ask about potential junior partnerships.
Many years ago we ran a marketing campaign titled "When is an independent community pharmacy like a penguin?" The thought process behind this was that many community pharmacists have a patented response when asked what makes their pharmacy different and successful. They all say "We treat our patients better than anyone else." This is why we chose penguins as a metaphor for this issue. They all look exactly alike and it is almost impossible to pick one out from the others. We actually issued what we call "The Penguin Challenge" because it is imperative for community pharmacists to know what makes their pharmacies uniquely successful.
While our team has seen almost every possible type of succession plan and the resulting outcomes during 30 years of helping independent community pharmacists make the most of their financial opportunities, a quick accounting of strategies chosen by clients who have successfully moved beyond life in pharmacy, and those who are actively working towards doing so, shows that two out of three plans include selling to junior partners.