Most pharmacists spend the early years of their career working as an employee for an existing pharmacy. However, there comes a point when many of them want to work on their own account, and acquire a pharmacy of their own.
Going down this route isn’t for everyone, but for those who choose to take the purchase path, it is useful to plan ahead and to be clear on what steps are required to become your own boss.
Finding the Right Pharmacy
Once you have a particular location and price range in mind, you can start your search. You will undoubtedly consider a number of factors in your search, including whether the pharmacy is in an area where population increase is likely (eg where new homes are being built nearby), whether the pharmacy has close links to individual GP practices, and so on.
Some find a pharmacy through word of mouth and professional connections. That can be an ideal outcome for a purchaser, as it keeps the pharmacy off the open market and avoids getting into a competitive situation with other potential purchasers. However, the seller will sometimes look for a price premium to agree to sell without marketing.
More common is to find a pharmacy being marketed by one of the selling agents. We would tend to recommend that you register as a potential purchaser with all of the agents, so that they will let you know if a suitable pharmacy comes to the market.
You should also think about whether you want a pharmacy with a property which is owned (in which case the total value will be higher) or leased.
Getting into Pole Position
Finding a suitable pharmacy is the first step, having an offer accepted is another. In recent years, in particular, competition for pharmacies has been significant. This has even led to some being sold via a closing date, similar to when some houses are sold. That has certainly had an upwards impact on goodwill prices, which isn’t helpful to potential buyers. However, there are individual purchasers who are successful, so don’t be put off by that.
Funding
Once you have found the ideal business, the next step is to secure the necessary funds to achieve your dream. You should ideally have looked at finance, in principle, prior to your search so that you can have some confidence that the money will be available.
You may be lucky enough to have some capital behind you by way of savings, or perhaps another source of finance, such as from family members. If so, that is great, and will certainly help. Most purchasers need to look to banks for purchase finance. The Thorntons Pharmacy Team has contacts with all of the healthcare teams within the banks and are happy to make introductions where required. Alternatively some use finance brokers who can search for suitable finance for any given purchaser.
Banks continue to be keen to fund the right pharmacy and the right purchaser, and so hopefully you should be able to secure the necessary funds.
Getting the right advice
Once you have the pharmacy and the finance, you can start to progress the purchase along with your professional advisers. The timescale from start to finish will vary from one pharmacy to another, but in most cases it will take 3 or 4 months to reach the completion date. There are a number of legal and other steps in this process, a subject in its own right, and one which we will cover in future articles.
One very important point is that you will need accountancy and legal advice on the acquisition, and ideally you will consult advisers who have experience in buying pharmacies. Whilst a pharmacy is a business like many others, there are specific issues around pharmacies which need to be addressed when purchasing.
An adviser experience in acting for pharmacy owners will be best placed to keep you right on a number of aspects of the due diligence required in acquiring a pharmacy.
Achieving your dream
Having gone through all of these essential steps, you should at the end of the road reach the stage where completion can take place and you can start to run your own pharmacy, making your own decisions and benefitting from the value which the business generates.
The effort involved in buying a pharmacy shouldn’t be underestimated, but with the right advice and good preparation, it should be possible to achieve your dream of becoming your own boss, and taking the first steps on your journey as a pharmacy owner.
