Buying A Pharmacy Checklist ((LINK))
But when you buy an independent pharmacy, there are more dimensions to understand about each of these elements. They involve additional evaluation, regulation, legal and financial guidance to determine what may or may not be a good buy for you. Below is a guide to some things to consider as you make your plans.
buying a pharmacy checklist
- And more importantly, who are their PBMs? Which PBM agreements does the pharmacy currently have in place? Which ones should the pharmacy have in order to optimize the opportunity to attract new clients?
What makes a pharmacist want to buy his or her own independent pharmacy? In a word, freedom. You want to practice pharmacy on your own terms. And you want to do more for the health of your patients. But where you are now might not give you enough time or opportunity to do that.
The art of buying a pharmacy is the personal side of your decision. This is about you and your patients. Are you going to move to the same town as the pharmacy? Can you commute to the pharmacy from where you live now? Is this where you want to raise your family? Is there community support for the pharmacy? Are there other businesses in town that help support the pharmacy? Is this where you want to spend most of your time?
Then, research local, state, and federal permits and licenses for pharmacy operation and pharmacist requirements if you plan to practice in your own location. Though they may vary by location, these generally include:
There are many different ways to finance a new pharmacy. Having a financial advisor on hand to help you narrow down your choices can save time and money in the long run. Whether you pursue a traditional bank loan, Small Business Administration (SBA) funding, or investment sources, most potential backers will want to see:
If you are happy with the answers to the above, you will more than likely require finance for the purchase. It is advisable to see a financier who has pharmacy lending experience to ensure the whole application process goes as smoothly as possible, and within your desired time-frame.
While you are organising the financial and legal arrangements, consider the ownership structure of the pharmacy. Will you set up as a sole trader or partnership, and is it appropriate to set up a service entity? This is very important as it can be costly to change the ownership structure once it has been established. A good business adviser will be able to help you make the best decision for you based on your requirements and goals.
Does this sound like a lot to set up on your own? BLG Business Advisers have a strong understanding of the pharmacy industry, with many long-term clients that we provide real support for, whether to set up or improve their businesses. Take this opportunity to get in touch with us online or call (02) 4229 2211 today.
It's an intensive two-day event for pharmacists considering pharmacy ownership or current owners looking to polish their management skills. It's a soup-to-nuts crash course on pharmacy ownership, whether you're starting from the ground up, purchasing an existing store, or expanding to become a multi-store owner.
Our team of experts answer the nitty-gritty questions about the loan approval process, licensure agreements, creating a start-up checklist, writing a business plan, designing an effective store layout, and much more .
The Following Sample Legal Instruments of Sale Contained Herein Are Provided for Discussion Purposes Only Related to the National Community Pharmacists Association (NCPA) Ownership Transition Business Tools Website and Do Not Constitute Legal Advice from Brown and Fortunato Law Firm or NCPA. Contact a qualified business attorney to help you navigate the process of selling your pharmacy.
If the seller receives a letter from the buyer describing intention to purchase the pharmacy assets, the seller should send an acknowledgment letter. While the letter essentially serves as a receipt, it also tells the buyer the next steps to be taken regarding the asset purchase. The letter should begin with an acknowledgment of the receipt of the document in question and should advise the buyer what action will be taken on the document The acknowledgment letter communicates to the buyer that the document is being taken seriously and being acted on with all due urgency. The deeper aim of the letter is to build goodwill and trust for the company on the part of the client.
The bill of sale is the binding legal agreement, which is used when selling the pharmacy business assets, such as prescriptions, inventory, furniture, fixtures and equipment. Contracts, agreements, and leases relating to the purchase assets to which the seller is a party or by which the seller is bound are agreed to be assumed by the buyer.
In a Stock Purchase, all of the outstanding shares of stock of the pharmacy business are transferred from the seller to the buyer. The buyer in effect steps into the shoes of the seller, and the operation of the business continues in an uninterrupted manner.
One of the first and most important steps in purchasing a pharmacy is conducting financial and legal due diligence. Whilst most pharmacist purchasers are aware of the importance of completing financial due diligence, the significance of legal due diligence is sometimes overlooked. The extensive requirements contained in the law and regulations governing pharmacy transactions make it especially important to complete legal due diligence before purchasing a pharmacy.
Whilst there is generally an existing lease in pharmacy transactions, in some cases a new lease will need to be entered into as part of the transaction. In such instances, we strongly recommend having a legal professional review the proposed lease, as the terms of this document may have significant impacts upon the future of the business.
Legal due diligence is just as important as the financial due diligence when purchasing a pharmacy business. Engaging a pharmacy lawyer early in the process of buying or selling will ensure that there are no hidden surprises which may compromise the transaction.
As pharmacies operate in a highly regulated landscape, it is important to work with a highly experienced attorney with industry knowledge to guide a potential buyer of any pharmacy. In this article, we highlight some of the key areas of focus when purchasing a pharmacy.
Once a buyer identifies a potential pharmacy for purchase, it is important to understand the underlying basis of the sale, particularly as it may affect the ultimate viability of the pharmacy once purchased. For example, if the pharmacy owner is seeking to sell because of decreasing financial profit and the inability to sustain the continued operation, then a buyer should consider how business can be improved after closing before deciding whether, and if so, how to proceed.
Considering the many nuances involved in a pharmacy transaction, it is important for buyers to consult with an experienced pharmacy transaction attorney who can guide them through the structuring of the purchase agreement, assist in the due diligence process, and advise them of any potential risks with proceeding with the transaction and properly documenting the transaction to minimize risks and protect against potential hidden liabilities. Buyers frequently make misguided pharmacy purchases without having conducted sufficient due diligence and consulted adequate legal counsel. This not only affects the pharmacy that was purchased but could also affect any other pharmacies owned by the buyer at the time as well as future acquisitions.
If you are considering the purchase of a pharmacy, the attorneys at Frier Levitt experienced in transactional and regulatory pharmacy law are available to assist you. Contact Frier Levitt to speak to an experienced pharmacy lawyer to discuss your options.
A valuation is important to be sure that the price you are negotiating falls in line with what the pharmacy is actually worth. It is also used by lenders to help determine the amount of the loan they would be willing to offer.
The valuation of a pharmacy will depend on its latest accounts and up-to-date trading figures. However, other factors will also come into play, for example, how close it is to health centres / GP surgeries, the general needs of the population in the area and wider economic factors (a pharmacy in a condensed area in Central London could be more expensive than one in rural Dorset).
The valuation should also consider and examine certain financial risks the pharmacy faces. These can come in the form of staffing costs, high rent (or a short lease with an imminent renewal which is likely to see the rent increase), and how much of the business comes from care homes and what percentage is generated from over-the-counter sales.
You should negotiate an exclusivity period, which would essentially give you the comfort of knowing that the seller is not offering / negotiating the sale of the pharmacy to any third-party buyers whilst your solicitors are conducting due diligence. Sellers often require a holding deposit in exchange for securing the exclusivity period. Although a seller may insist otherwise, the holding deposit should be refundable, in case your advisors come across any issues with the pharmacy during the due diligence process which results in you wanting to pull out of the transaction.
Where the pharmacy operates from a leasehold property, it is vital that the lease is reviewed to ensure that you are aware of the rent, frequency of payment, rent review provisions, length of the term and other key conditions in order to assess whether they are viable to you (and your lender if applicable).
One of the key features of the purchase agreement will be the inclusion of warranties. Warranties are contractual promises given by the seller and which are documented to provide the purchaser with certainty on specified matters relating to the pharmacy. 041b061a72