There’s an old adage that goes “He who is his own lawyer has a fool for a client.” The point of the proverb is obvious: Get help. Don’t go it alone. And if ever this was true it is true when making the decision to buy or build your own pharmacy. For many pharmacists, this is a dream they are eager to pursue, but they simply don’t feel they have the financial experience to make such a significant purchase without the help of an expert. Thankfully such help is available, and with that in mind I reached out to my friend Owen BonDurant, President of IndependentRxConsulting to share with us something about the services they offer and the help they can provide.
1) Owen thanks for taking the time to talk with us here at The Honest Apothecary. Could you tell us a little about yourself and your career?
I have a business and technology background. My father, Mark BonDurant, and our partner, Tim Clark, are pharmacists and also own a chain of 9 community pharmacies. Due to this I have been working in a pharmacy all my life. I have done it all from taking out the trash, working the cash register, marketing, to starting and growing the durable medical equipment business.
2) Can you tell us why Independent Rx Consulting got started?
A few years ago, my father and partner, decided start growing their business through new start-up locations and acquisitions. We sought a consulting firm to assist with this process. All we could find were companies looking for the next transaction (buy/sell) or specialization (compounding) when we wanted a partner. Because we are entrepreneurs we saw the gap in services available as opportunity and Independent Rx Consulting was born.
3) How would you describe the services you offer?
We provide consulting services to individuals and businesses looking to start or buy a pharmacy. We provide two distinct packages, one for start-up pharmacies and the other for acquisition. We differentiate ourselves by being a partner rather than a company that connects buyers and sellers. Though we do connect buyers and sellers but our goal is to be a partner and work with our clients throughout the process including business plans, obtain financing, working with wholesalers, finding a location and after opening/buyout reviewing financial reports and creating operational efficiency.
4) What sorts of things should a pharmacist consider when thinking about purchasing an existing pharmacy?
There is more to think about than we can outline in this interview but a few of the key elements include:
- How long can you sustain having no to minimal income while the business builds cash and you pay off loans? You want to ensure the business is cash-flow positive as soon as possible and the best way to do that is for the new owner to forgo their salary.
- What is the exit strategy for the pharmacy you’re going to buy? Buying a business is a long-term investment but one day you will need to get out of the business. Having some idea of the possible exit plans should be part of your planning as it may be a significant factor as to whether you buy or pass on an opportunity.
- Is there room for improvement at the operation you want to purchase? If you closely review financial documents, processes, marketing practices, billing and other items you have an increased chance of finding inefficiencies that can quickly increase profit and cash-flow. It may also tell you that the pharmacy is not a poor opportunity.
5) What advice would you give a pharmacist who wants to open a brand new pharmacy?
Similar to buying a pharmacy there is more to consider than we can outline here but the following must be considered every-time:
- Has a chain purchased the main community pharmacy in the target market? It is very hard to open a pharmacy from scratch without knowing if there is opportunity. However if an established independent has left due to a chain buyout the opportunity is clear, no more independent.
- How long can you go with no to minimal income? This is even more important in a start-up than in a buyout because you have no established clients. Typically it will take 1 to 2 years to turn a positive cash-flow.
6) Pharmacy school is much more about “pharmacology” than business. But a successful pharmacy requires strong business skills too. How can a pharmacist prepare himself/herself to learn the business side of this industry?
The best way is to get experience. Work for an independent, they have no choice but to have their pharmacists be part of managing the business. If that is not possible begin networking with NCPA, wholesalers and attend trade-shows like NCPA or your local state associations to learn about how an independent operates. Lastly read business books, take some business classes because in the end a pharmacy is a business.
7) Can you tell us about a recent successful pharmacy purchase or start-up that you were involved with?
Sure, we just worked with a small chain to expand via new start-up. They actually recognized that a regional chain was bought out in another state and that quite a few towns were going to be left without a pharmacy. We worked with them to secure the former independents pharmacist and some of the technicians, negotiate leases, secure financing, build out the stores and market the store opening. They have quickly grown and turned a profit within 6 months at two separate stores.
8) On a personal note (I’m a father of 4) how do you like being a dad?
It is the most rewarding thing I have done or will ever do. I have a 16 month old boy and expecting our second later this year. My favorite part is to see how he gets so much joy over the smallest activity and everyday seeing him learn something new.
9) How can my readers contact you to get more information about your services? We have many ways:
I can be contacted directly at: email@example.com
Visit our website at www.independentrxconsulting.com
Via social outlets at:
Owen, thank you kindly for taking the time to share about your work and business with us here at The Honest Apothecary. I sincerely encourage my readers to reach out to Owen with your questions about pharmacy ownership!
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