Buying a Pharmacy? You’ll Need This Checklist.

The pharmaceutical industry is one of the most profitable businesses in today’s market. According to Statista, the industry generates almost $1 trillion USD of revenue on a global scale. Successfully getting your foot in the door of the pharmacy industry can seem overwhelming, but it is certainly possible. If you’re interested in buying a pharmacy and joining this massive industry, prepare yourself with this checklist.

Are you buying a pharmacy that is franchised or independently owned?

Though finding franchise opportunities for pharmacies may be harder than looking within other fields, there are some smaller franchise options. Typically, investing in a franchised business will help take some of the decision-making off of your shoulders. One of the best benefits of joining a franchised pharmacy is that you’ll always have a reliable source to turn to with any questions or concerns you may encounter along your way. If you’re interested in franchised pharmacy opportunities, consider this list of three major franchises in the US.

Starting a pharmacy business from scratch offers its own unique benefits. As an independent pharmacy owner, you’ll have complete freedom with everything in regards to your business. You can take this opportunity to examine your competitors and develop your own niche for serving the community in a way that puts you above the competition. It’s important to note that you may initially spend more money as an independent owner, but budgeting and financing effectively can keep the spending at bay. To get a more in-depth understanding of independent pharmacies, find one near you here.

Consider your finances.

By nature, entering the pharmaceutical industry is more expensive than most other business avenues. Because of this, it’s crucial that you have your finances in order. Be prepared to invest at least 20 percent of your personal money into your pharmacy. Most lenders and banks will not consider granting you a loan if you don’t contribute this amount. Also, with the added factor of customers’ insurance policies, plan to wait several days before receiving the entire payment for a prescription.

The financial aspects of entering the pharmacy business involve a bit more planning than others. To help your sale go smoothly and ensure you’re making a wise investment, work with a trusted advisor to analyze the pharmacy’s financial statements and cash flow, as well as the average monthly expenses.

Is it the best time to buy a pharmacy?

In this day and age, the reliance on technology is rapidly increasing. Several online pharmacy options exist for consumers who seek convenience in getting their prescriptions. This doesn’t mean your pharmacy won’t be successful, but you should consider how much these online options might hinder a traditional pharmacy’s success. As a starting point, decide on the area in which you want to open your pharmacy. Then, carefully weigh the odds of your company’s success based on the current pharmaceutical options available.

How much is the pharmacy you’re interested in purchasing worth?

The pharmaceutical industry is unique in many aspects, but the valuation process is similar to most other businesses. Before you agree to any terms of your purchase, ask the party selling the pharmacy how they arrived at their asking price. It’s always best to contact a professional to conduct an accurate valuation if the seller hasn’t already contacted one. Obtaining an accurate appraisal places you in the most optimal position for negotiations and to receive a fair purchase price.

If you’ve decided buying a pharmacy is your next business move, contact a Sunbelt Business Broker! Not only can we help you find your ideal drug store or pharmacy for sale, but we can also help you identify financing options, draft a letter of intent, negotiate a deal, and close the pharmacy sale.

This article was updated on November 4, 2019.