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Buying A Pharmacy Sean Thurston PharmD. Personal Background May 2000 - Bachelors of Science in Chemistry, University of Puget Sound May 2000 - Bachelors.

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Presentation on theme: "Buying A Pharmacy Sean Thurston PharmD. Personal Background May 2000 - Bachelors of Science in Chemistry, University of Puget Sound May 2000 - Bachelors."— Presentation transcript:

1 Buying A Pharmacy Sean Thurston PharmD

2 Personal Background May Bachelors of Science in Chemistry, University of Puget Sound May Bachelors of Science in Chemistry, University of Puget Sound Traveled, Fly Fishing Guide Traveled, Fly Fishing Guide Drug Research Drug Research May PharmD, WSU College of Pharmacy May PharmD, WSU College of Pharmacy May 2010 – Employed At Elk Drug/Dayton General Hospital, Dayton Wa May 2010 – Employed At Elk Drug/Dayton General Hospital, Dayton Wa April Purchased Drug Store April Purchased Drug Store

3 Motivations to Own a Pharmacy Lifetime Interest In Owning a Business Lifetime Interest In Owning a Business Previously Employed By Small Business Owners Previously Employed By Small Business Owners NCPA Business Plan Competition NCPA Business Plan Competition Retirement Plan/Asset Acquisition Retirement Plan/Asset Acquisition

4 Advantages of Purchasing a Pharmacy Low Risk Low Risk Know What To Expect Know What To Expect No Profit Lag No Profit Lag Obtain Customer Shopping Habits Obtain Customer Shopping Habits Goodwill Already Established Goodwill Already Established

5 Disadvantages of Purchasing a Pharmacy Must Purchase Goodwill, Which May Be Overpriced Must Purchase Goodwill, Which May Be Overpriced Higher Overall Price Higher Overall Price Used Or Worn Inventory And Fixtures Used Or Worn Inventory And Fixtures Inherit Undesirable Inherit Undesirable Personnel Personnel Policies Policies Business Lines Business Lines Customers Customers

6 Finding a Pharmacy Pick A Place You Want To Live Pick A Place You Want To Live Research Business Trends Research Business Trends Network With Current Owners Network With Current Owners Search Classifieds/Internet Search Classifieds/Internet Ask Sales People/State Organizations Ask Sales People/State Organizations Business Brokers Business Brokers

7 How to Buy a Pharmacy No Right Or Wrong Way To Purchase A Pharmacy No Right Or Wrong Way To Purchase A Pharmacy Each Deal is Unique Each Deal is Unique The Final Purchase Will Be Determined By The Capabilities And Intentions Of Both Buyer and Seller The Final Purchase Will Be Determined By The Capabilities And Intentions Of Both Buyer and Seller

8 Establish a Price Business Must Make Payments And Turn A Profit Business Must Make Payments And Turn A Profit Determine What Will Be Included Determine What Will Be Included Inventory, AR, Fixtures, ext Inventory, AR, Fixtures, ext Establish Type of Purchase Establish Type of Purchase Stock vs Asset Purchase Stock vs Asset Purchase Determine Market Value Determine Market Value Compare to Similar Sales in the Area Compare to Similar Sales in the Area Hire A Company To Help Hire A Company To Help Use A Number Of Equations To Find An Average Use A Number Of Equations To Find An Average NCPA Blue Book Value Calculator NCPA Blue Book Value Calculator

9 Purchase Options Junior Partnership Junior Partnership Equity Earned By Buyer Over Time Equity Earned By Buyer Over Time Third Party Funding Third Party Funding Private Or Bank Loan Private Or Bank Loan Owner Carries Contract Owner Carries Contract Owner Is The Bank And Buyer Makes Monthly Payments To Owner Owner Is The Bank And Buyer Makes Monthly Payments To Owner

10 Write a Business Plan Definition: Detailed Description Of A Business Operation And Documents Past Performance, Current Status, Future Goals And Means Of Achieving Those Goals Definition: Detailed Description Of A Business Operation And Documents Past Performance, Current Status, Future Goals And Means Of Achieving Those Goals A Business Plan Is A Tool Used By A Potential Or Current Business Owner To: A Business Plan Is A Tool Used By A Potential Or Current Business Owner To: Secure Third Part Investment Secure Third Part Investment Reassure Business Partners Reassure Business Partners Have An Organized Plan To Follow Have An Organized Plan To Follow

11 Establish A Timeline Be As Organized As Possible Be As Organized As Possible Set Dates Set Dates Make Lists Make Lists Delegate Tasks Delegate Tasks Build Flexibility Into Timeline Build Flexibility Into Timeline Closing The Deal Will Take Longer Than Expected Closing The Deal Will Take Longer Than Expected

12 Items For The Final “To Do List” Inventory And Inspections Inventory And Inspections Finalize Closing Documents Finalize Closing Documents Change Over Licenses Change Over Licenses Notify Third Party Payers Notify Third Party Payers New Contracts With Suppliers/Wholesalers New Contracts With Suppliers/Wholesalers Notify Providers Notify Providers Notify Patients Notify Patients

13 Start Building Your Team Early You Will Most Likely Need Assistance You Will Most Likely Need Assistance Accountant: Assess Profitability Of The Business, Important In Valuation Accountant: Assess Profitability Of The Business, Important In Valuation Attorney: Structure The Deal With Your Best Interests In Mind Attorney: Structure The Deal With Your Best Interests In Mind Experienced Pharmacy Owner: Mentor You In The Whole Process Experienced Pharmacy Owner: Mentor You In The Whole Process Banker, Insurance Agent, Buying Group, Professional Organizations Banker, Insurance Agent, Buying Group, Professional Organizations

14 Writing a Business Plan For the NCPA National Competition Create A Team Create A Team Chose Wisely, You Will Be Spending A Lot Of Time Together Chose Wisely, You Will Be Spending A Lot Of Time Together Individual Strengths Are Important Individual Strengths Are Important Equal Commitment Equal Commitment Agree On A Business Model Agree On A Business Model Include Something Innovative And Creative Include Something Innovative And Creative Keep It Realistic Keep It Realistic

15 Writing a Business Plan For the NCPA National Competition Seek Out Help And Experience Seek Out Help And Experience Previous/Current Pharmacy Owners Previous/Current Pharmacy Owners Professors/Faculty Professors/Faculty Other Students Other Students Create A Realistic Purchase/Start Up Plan Create A Realistic Purchase/Start Up Plan Most New Grads Have Little Cash/Collateral Most New Grads Have Little Cash/Collateral

16 Writing a Business Plan For the NCPA National Competition Work Together Work Together Mission Statement Mission Statement Vision Statement Vision Statement Goals Goals Divide And Conquer Divide And Conquer Description Of The Business Description Of The Business Marketing Plan Marketing Plan Financials Financials Supporting Documentation Supporting Documentation

17 Writing a Business Plan For the NCPA National Competition Do Your Research Do Your Research Sell Your Idea Sell Your Idea Stick With What Works Stick With What Works Prepare To Defend Your Plan Prepare To Defend Your Plan Top 3 Teams Present At The NCPA National Convention Top 3 Teams Present At The NCPA National Convention Learn As You Go Learn As You Go

18 Questions? Good Luck! Good Luck!


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