The Pharmacists First Guardian
To find out what really works for community pharmacy owners, we frequently conduct interviews with well-established and successful community pharmacy owners. This is the third of many that we will be sharing over the next year.
Tags: community pharmacy owner, community pharmacist, pharmacy exit strategy, pharmacy succession, pharmacy junior partner, pharmacy junior partners, profitability, pharmacy value, exit planning, independence, summerville, asheville
We just arrived home from the Pharmacy Growth Conference in Orlando last weekend and the first two days back brought two significant snow storms. As I woke up the morning of the second storm, I told my wife that I would love to just go out and play in the snow all day without having to worry about work. It made me realize that one day I would want to have the option of working or not. If that's the case, then I better start working on my exit strategy. Speaking of exit strategies...
Pharmacy exit strategies are being discussed more and more in today's pharmacy world than ever before. The reason is a tremendous transition has begun to take place in the pharmacy world. In our 30 plus years of work of helping community pharmacists navigate their life in pharmacy, we have heard many ideas and goals for life after pharmacy. There are a few lessons that we have observed and community pharmacists have learned (sometimes the hard way).
Dwight D. Eisenhower once said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” This concept is very important as it pertains to owning and operating a community pharmacy (and executing an exit strategy).
There are three primary options for a pharmacy exit strategy. They are sell to an insider, sell to an outsider or liquidate. Each one of these options has its positives and pitfalls. An insider could be family members in the business, a junior pharmacist or another employee/employees. An outsider could be another independent pharmacist, family members not in the business, a chain store pharmacist looking for independent direction, a conglomerate of pharmacies/pharmacists or a chain store
The Waypoint team recently took a trip to San Diego and the weather was out of this world. It inspired a discussion on what the advisors' lives would be like after working at Waypoint. One of our advisors mentioned that he would love to be able to travel to places like San Diego without having to worry about being on a budget. Another one of our advisors said he would love to sit on his back porch, watch the sunset and eat boiled peanuts. The third advisor mentioned that he had no idea what he would do when his working life ended.
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.
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.
When you go to any theme park these days, outside the more thrilling rides there is always a sign. It says something like, "Please do not ride this ride is you currently have a heart condition." The same can almost be said about owning a pharmacy in today's economic environment. Owning a pharmacy can be a rollercoaster ride with many ups and downs. However, it also can be one of the most rewarding decisions people can make.
When it comes to exiting the pharmacy, there is no shortage of options. These range from transitioning to a pharmacy junior partner to selling to a chain store. Most community pharmacists would rather keep the pharmacy independent, so selling to the chain typically is the last option chosen. This article will be focused on the pharmacy junior partner and the benefits associated with them. If executed properly, transitioning to a junior partner can be extremely positive for the pharmacy, current staff of the pharmacy, and the surrounding community. This is such a viable option that the National Community Pharmacists Association is actively promoting this as an option for exiting a pharmacy.