A WaypointRx Company
When it comes to succession planning, most people have no clue where to begin. The first rule for developing a succession plan that really works is to acknowledge that your ability to run your business will not last forever and you will eventually have to turn it over to someone else.
The second rule is to realize that it’s never too soon, or too late to start succession planning. This means it doesn’t matter if it is 20 years from now or two months away, developing a plan will help you enjoy a much more satisfactory transition.
At TransitionsRx, we recommend you start by asking yourself the following 8 questions. Once you are confident you have the right person identified as your successor, use these questions in a conversation with them to create even greater certainty – for yourself and your successor – that you are both on the right path.
- Are we in it for the same reason?
It is important to establish that you and your successor are on the same page. You both need to be clear about your intentions, to avoid any unpleasant interactions during the transition. We recommend that you each establish goals for the company moving forward and talk through what is best for the company, and the team. - What is it that he or she brings to the table?
There are actually several questions to review when asking what your successor brings to the table. For example; Why are we hiring them? Do we have a place or are we making a place? What do you expect from them and their level of commitment? What affect will this have on other employees? - What are their thoughts on future equity?
Be careful about this discussion and promises. We have found this to be a big point of differentiation when talking with current owners and their successors. It is important to discuss this in detail and lay out exactly who will be owning what and make sure both parties are agreed on the terms. If necessary, include an impartial third party to act as a mediator. - What do we do if this does not work out?
Always have a plan B, C, D and E. Too often we see pharmacy owners in the process of transferring to a successor and the plan falls through. This is especially hard on those owners who are looking to retire and become stuck working when they don't want to.
Even if you do not yet have an apparent candidate for succession, it is a good idea to develop your
plan based on the type of successor you think is most desirable and most likely to take over your
business. Your choices are:
• someone from within your family
• someone from within your pharmacy (e.g. junior pharmacist)
• another independent pharmacist
• a corporate pharmacist who wants to become independent
• a corporation - What is their risk tolerance?
When it comes to owning and running a business we all know that there is a certain amount of risk involved, and it is important that your successor knows the risks to start with to ensure they are willing to assume it. We occasionally run into the issue where a successor is all ready to move forward, but end up backing out due to the increased risks and their unwillingness to assume it. If you are looking at a successor who is not likely to take risks, they may not be the successor for you. - What will his or her role be?
Who will be the operations manager? Who will track and manage inventory? Who will be responsible for drafting a vision and goals for the pharmacy? Who will the compliance officer be? Who will be in charge of researching new products and services to implement? These are just some of the questions to clarify with your successor - especially if you plan to stay in the pharmacy for a time before handing it off. Additionally, deciding who does what if there are going to be multiple successors (such as family members). BE AS SPECIFIC AS POSSIBLE AND PUT IT IN WRITING! - How will he or she be evaluated?
Discuss how often will job evaluations be held and any changes in pay and raises. - How will we keep our personal life and professional life separate? (Vital if insider is family member)
Develop a set of rules, guidelines and a code of conduct and ask all members of your team to know it, and commit to it. Succession planning is hard enough, and if you have conflicting ideas on the rules it can become even more difficult to ensure a smooth transition.
For questions or help getting started on the path to leaving your pharmacy, feel free to contact us today.
We have also developed several tools to help you prepare yourself, your team, and your store. Click on the Visit The WaypointRx Store button to download the tools.
At TransitionsRx (a WaypointRx company), it is our mission to ensure you enjoy the greatest possible personal, ownership, and financial success. As champions of independent pharmacy ownership across America, we have amassed a tremendous amount of experience along with the most comprehensive toolbox of resources and solutions you can imagine. Our Inspired Independence Program has helped hundreds of pharmacy owners take full advantage of all their opportunities inside, outside and after their life in pharmacy.
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