Exit strategies in any business are a critical requirement. Every business owner needs to think through and document exactly what their plan is regarding selling their business when it reaches a certain level or it’s perhaps time for them to finally retire. Perhaps this is even more critical to do if you own an independent retail pharmacy than in most other businesses. Recently we discussed how the opening of new retail community pharmacies and specialty pharmacies was dramatically on the rise across the nation. Yet a review of recent pharmacy related news stories over the past several weeks also reveals that numerous small independent pharmacies were closing, shut down or suddenly went out of business at an increasing and alarming rate.
Pharmacies Suddenly Closed and Shut Down
- In Oklahoma during the first week of December, both of The One Source Pharmacies that were operating in Caddo, Oklahoma and Calera, Oklahoma abruptly were shut down without warning. At the Calera store, there was simply a sign letting patients know that the pharmacy had closed its doors for good (and that all the prescriptions had been transferred to another local drugstore). No warning was given and a neighboring physician stated that the pharmacies simply didn’t have enough business or fill enough prescriptions to be run profitably.
- In Kasson, Minnesota the Shopko Hometown Pharmacy abruptly closed their doors and shut down. The owner’s cited that an extremely low Rx count was the primary cause and they realized that they were losing money and could not expect to become profitable in 2018.
- The Olmos Pharmacy in San Antonio, Texas shut down for good after over of twenty years of servicing local residents as an independent retail community drugstore. Also closing down its diner & soda fountain, a sign simply saying “Closed Permanently” was posted on the locked doors.
- In Coleman County. Texas, Tyson Pharmacy is closing down after fifty years of operating as one of the only two independent community pharmacies available to the local population. The store was originally opened in the late 1890’s and was taken over by Robert Tyson who started working there in 1962 as a pharmacy intern. Mr. Tyson is 76 years old and retiring, but he’s shutting the drugstore down for lack of being able to find a buyer for the business.
- In Marion, North Carolina, the Right Aid is permanently shutting their doors. Located there since the early 1970’s, the store was closed for good. Interestingly enough, the shutdown coincides with Walgreens announcing that they had purchased 1,900 Rite Aid stores nationwide.
- In Elkton, Maryland, the Lyons Pharmacy closed their doors for good after an amazing 142 years in business. The owners told reporters that the Rx volume had caused “financial pressures” and that they simply could not continue to stay open and operate the pharmacy profitably anymore.
Exit Strategies For Pharmacy Owners
Having an exit strategy is a must for all pharmacy owners. The very best business plans when a company or corporation is initially being started includes a strategy regarding exiting the business. Issues and situations obviously can change, however the exit strategy can change right along with them. Every pharmacy business owner should be asking the following questions:
– Will I be able to sell my my business to a third party when I retire?
– How can I project what my business will be worth?
– Should I periodically have an outside third-party perform a valuation of my business?
– Will my wife and/or children be able to run my business if something should happen to me? Am I (and them) prepared for such an occurrence?
– Should I hire a 3rd party to take an objective review of my pharmacy operation and efficiency to give me an unbiased opinion and perhaps get some constructive feedback?
– Do I want to expand my business and if yes, what are the best ways to accomplish that?
– Do I want to consider employee ownership for my valued and key staff members?
– What do I need to upgrade to make my business more attractive to a buyer?
Most pharmacy owners love what they do and work hard everyday to best service their customers and patients and make their business a success. Yet as an owner of a business we strongly urge you to plan ahead and consider developing an exit strategy for your pharmacy enterprise.
How Should A Pharmacy Owner Best Proceed?
A successful exit strategy takes considerable thought and planning. The fact is that the sooner you plan and document your possible exit strategies, the more prepared you will be and the more you will be able to focus on the actual running of your business. A good way to think of an exit strategy is to look at it like you would a map. You know where you want to travel to and eventually end up, but how will you get there? A person would never drive a long distance without consulting a map for the best route (plus their navigation system to see the current conditions on their proposed route), so why would a business owner not “map out” their “business journey”. As noted above, the best plans and strategies are always flexible and able to respond to changes, and the practice of pharmacy is perhaps one of the fastest changing environments there is when compared to most other businesses.
Healthcare Consultants Pharmacy Staffing Has The Experience To Help You
If you are considering selling your pharmacy business in the future,or simply want to prepare and explore your options, we strongly urge you to get in touch with us today for a free consultation. We offer you the support of an experienced staff who have been through the process many times and know the business inside and out! With 28+ years of pharmacy consulting experience, HCC helped hundreds of business owners (pharmacists and non-pharmacists alike) get prepared by evaluating their business and exploring their possible exit strategy options. Contact us on line or call us today at 800-642-1652 for a Free Consultation to find out how we can help you too.