Pharmacy ownership is an exciting yet challenging journey, no matter what stage you’re in or what path you take. Whether you’re interested in starting your pharmacy or are looking to sell, there’s one thing that remains constant: It pays to plan ahead. To deliver the best care possible and see financial success, you need thoughtful strategies to help you get there. Use the strategies below to make the most of each stage of pharmacy ownership.

1. Starting your own pharmacy

Whether pharmacy ownership is a family affair or you simply want to strike out on your own, starting your own pharmacy is an exciting prospect. To see the best clinical and financial results for your new pharmacy, it’s important to plan ahead. In “Starting an Independent Pharmacy,” Christopher Cella, national vice president of RxOwnership, discusses the initial steps you should take to start your own pharmacy.

Five steps Cella recommends are:

  • Consult peers and colleagues. Talk to other pharmacists who have been in your shoes. It helps to learn from their successes and challenges. You can also join a group like the National Community Pharmacists Association.
  • Develop a business plan. This should include how you’ll improve the overall health of your patients beyond filling prescriptions. (There’s more on exactly what you should include in the next section.)
  • Assemble a team of advisors. You need a team of people to get your pharmacy up and running. This should include accountants, attorneys, financial advisors and insurance agents.
  • Research and choose a location. Research potential locations where your pharmacy could compete and succeed.
  • Weigh your financing options. Your financial advisor can help you decide what’s best for you, from a bank loan to a loan from the Small Business Administration.

Your business plan is perhaps the most important step to starting a pharmacy. Let’s dive a little deeper into what a strong pharmacy business plan includes.

2. Writing a pharmacy business plan

In “Tips on Writing a Pharmacy Business Plan,” we discuss some of the basic points to include in your plan. Investors want to see your business plan before they offer financial support. But it also helps you set clear goals and prepare for the realities of pharmacy ownership. You can consult your team of advisors, including an attorney and financial advisor, to help you with certain sections. Here are some basics to include:

  • Mission statement. What do you want to achieve with your pharmacy? How will it serve the greater good of the community?
  • Ownership structure. List whether your pharmacy will be a sole proprietorship or a partnership.
  • Financial plans and projections. Include details on real estate costs, cash flow projections, initial inventory costs and more.
  • Demographic analysis. What are the demographics (age, income, etc.) in your pharmacy’s location?
  • Competitive analysis. Draw up a SWOT (strengths, weaknesses, opportunities, and threats) analysis. This helps you see how you stack up compared to the competition. What gaps will your pharmacy fill in the market?
  • Specific planned offerings. From disease state management to vaccines programs, added offerings give you an advantage.
  • Your retail inventory. List which products you plan to sell besides medication, from cleaning supplies and toiletries to beauty products.
  • Marketing plan. Plan from the beginning how you’ll announce your opening to the community. Consider using a freelance marketer to help you with this part.

Your pharmacy business plan doesn’t need to stay fixed forever. Instead, treat it like a living, breathing document. Update it as you refine your vision and if your goals evolve.

3. Purchasing an existing pharmacy

If you don’t want to start from scratch when it comes to opening a pharmacy, you may choose to purchase an existing one. When you’re looking at prospective pharmacies, there are a few important steps to take before signing on the dotted line. In “How to Buy Your Own Independent Pharmacy,” Christopher Cella discusses what to do to be financially and clinically successful.

  • Valuation. To make sure you’re getting a fair price, identify the pharmacy’s current value and project its future value. Prescription volume, market share, property value and more can all affect this.
  • Negotiation. If you and the seller aren’t on the same page about price, explain how you came up with your number and ask the seller how they did the same. Either party may have missed something that affects the price. You can then talk about it and come up a number that’s acceptable to both of you.
  • Contracting. Some health plans and pharmacy benefit managers (PBMs) require a pharmacy to re-enroll with them if it comes under new ownership. Re-enrolling can hurt your cash flow, but plans and PBMs won’t pay you until you’re re-enrolled. Your sales agreement should allow you to operate under the previous license until you complete those re-enrollments.
  • Financing. When it comes to financing, work with your financial advisor and accountant to pick the option that works best for you.
  • Closing. The last step is the close and ownership transfer. You will need to transfer the previous owner’s reimbursement contracts, supplier agreements and licenses to yourself before the pharmacy is officially yours.

With thoughtful planning, buying a pharmacy can be a financially viable option that lets you create your own business in an existing facility.

4. Selling your pharmacy

Whether you’re approaching retirement or have decided that selling your pharmacy simply makes financial sense, there are a few things to consider. In “Selling an Independent Pharmacy,” Jim Springer suggests selling your pharmacy when it’s still financially viable—not two to three years after you’ve started thinking about it. Springer is the regional vice president of Rx Ownership. He includes five other things to consider as part of a successful sale:

  • Tax consequences. Work with an accountant to decide whether you need to hold any money from the sale to cover tax liabilities or other expenses. Looking into this ahead of time can save financial worries later on.
  • Financial records. You should ideally have 3-4 years of audited financial statements, profit and loss statements and balance sheets. Make sure these records are ready to be shared with potential buyers.
  • Physical appearance. Take stock of your pharmacy’s physical appearance and cleanliness. Make sure inventory is up to date.
  • Contracts and licenses. All reimbursement contracts with third-party payers should be current and available. The same should be true for all local business licenses, building permits and state pharmacy licenses.
  • Prospective buyers. Decide who you’d prefer to sell to based on type of owner, price or other criteria. The buyer could be a national pharmacy chain, a local pharmacy chain, or another independent pharmacy owner. Discuss your options with a financial advisor. You should get the best price possible and a deal that suits your timeline and specific needs.

When done right, selling can create benefits for you, the pharmacy’s community, and the new pharmacy owner.

No matter what stage of the pharmacy ownership process you’re involved in, it pays to plan. Just remember that you don’t have to do everything yourself. Your team of trusted advisors—from legal advisors to accountants—can help you at different stages of the process. A little planning ahead of time can make sure you see the most financial and clinical success from pharmacy ownership.

Related: Learn more about McKesson’s pharmacy ownership consulting services

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