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.
There are really only a few ways someone can enter into ownership of an independent community pharmacy. One option is to buy a pharmacy outright from a pharmacist looking to sell. As the baby boomer pharmacists begin to look at transitioning out of their pharmacies, more and more are becoming available. Therefore, now is a great time for someone looking to buy. This strategy is being used by pharmacists that own multiple stores.
Another option is to enter into a pharmacy junior partner relationship. This strategy is great for someone looking to buy his or her first pharmacy. This blog post is going to explore this option further.
The benefits of being a junior partner in a pharmacy are extensive. Only two will be addressed here. The first benefit is customer loyalty is more easily transferred to a junior partner (some consider this the most important benefit) than an outside buyer. He or she will be perceived as and extension of the senior partner and can build the trust necessary to keep the patients coming to the pharmacy after the senior partner completely transitions out. Note: Many senior partners consider this vital to their legacy for the community because it enhances the probabilities of survival of the pharmacy after they are gone. The second key benefit is that the junior partner can learn what makes the pharmacy successful from the inside. He or she can learn the systems of the pharmacy and get a good understanding of the people that make the pharmacy work. This is almost impossible if a store is bought outright.
When evaluating both options discussed above, being a junior partner can really enhance the chances of survival in an uncertain environment.
The following are three things a potential pharmacy junior partner should know:
How to write a business plan - most pharmacy owners will require the potential junior partner to write a business plan to describe how the business will survive into the future. It is imperative that the potential junior partner be familiar with this process because this can be a roadblock in the process.
How to interpret the financials of a pharmacy - understanding how to read these numbers can help the junior partner determine the health of the pharmacy. This is more important than ever in the current environment with shrinking reimbursements and higher costs of drugs.
Where to go for help - there are many resources available to an independent community pharmacist. Understanding that going about this alone will, with almost 100% certainty, result in the pharmacy not succeeding is important for the long term success of the practice of community pharmacy.