How can young pharmacists with desire, motivation and management skills get into ownership? These days it is very difficult for a young pharmacist to get an opportunity to buy their first pharmacy. Even if they have the financial capabilities or family support that is not enough as there are many more active buyers in the market than opportunities which are often snapped up by the large groups or those owners with multiple stores looking to expand further.
From my experience I would say that flexibility and a willingness to look at all areas even if it means relocating yourself for the right opportunity will increase your chances 10 fold. A go anywhere attitude is a big advantage, I can give you many examples of young pharmacists who have succeeded by taking this approach. Another approach that has worked for many ambitious young pharmacists is the old ‘if you cannot beat them join them’ approach. By that I mean, starting their ownership journey by considering a junior partnership within a large group or with current owners who are actively looking to acquire more stores has some real advantages. (I can provide examples and testimonials, just ask me.)
Listed below are some of the advantages as I see them for young pharmacists who are open to the option of a junior partnership as a pathway into pharmacy ownership.
Pharmacists can register as interested in buying into a pharmacy as a junior partner by visiting the AP Group website www.apgroup.com.au and complete the extra details when registering as a buyer.
- Financial support with lending and dealing with banks (never a free ride)
- Expertise and experience available from the other partner/s or group.
- Lowers the financial risks and importantly makes it more affordable to buy a share in a larger business.
- If the pharmacy is part of a larger pharmacy group or the owners have multiple stores your purchasing power will be improved, get better deals.
- If the pharmacy is part of a larger group there is likely to be a head office that performs admin activities like marketing, HR and payroll. This gives you more time to focus on your business, developing your staff and implementing programs to build sales and customer loyalty.
- Mentors to further your development and learning.
- Do an excellent job and other opportunities may come your way if your partners continue to seek out new opportunities; you could find yourself having a share or ownership in multiple stores over time. I know a number of young pharmacists that started with say 25% share in one store but now they are a partner in 3 or more pharmacies.
Advantages for the Owner/Majority Partner in bringing on a junior partner.
- If the current owner is not actively working in the pharmacy the introduction of a working managing partner should see the performance of the pharmacy progressively improve. Hence why the buy in price must be fair based on a bank valuation when the junior starts working in the pharmacy so both parties will ultimately win.
- Improve staff motivation and engagement.
- Attention to key KPI objectives and day to day operations of the pharmacy should improve with a managing junior partner in store.
- Better implementation of strategy and action steps.
- Share work load and hours in the store, time to work on the business not always in the business.
- Consistent pharmacist to build relationships with the customers and local doctors.
Main disadvantage of a junior partnership option.
- It is the owner’s equity in the pharmacy that is providing security for the incoming partners purchase. The disadvantage of the equity partnership it exposes both partners and the risk needs to be clearly understood. Need for a good partnership deed.
Quotes from young pharmacists who have taken up opportunities to buy into pharmacies as junior managing partner.
“Great way to build equity, your return on investment is the same whether you have 30% of a large pharmacy or 100% of a small pharmacy with less risk.”
“Helps build your confidence and experience before taking on larger pharmacies or building up your share of the business.” (Kinjal Patel – Moranbah Priceline Pharmacy)
“It is helpful and assuring that when day one of ownership arrives you aren’t on your own.”
“I had all these ideas of changing how different aspects of the pharmacy was run and having someone who has been around and seen the evolving environment of pharmacy helped to distil my thoughts towards what was important and what wasn’t.” (Andrew Brown –Bushland Beach Pharmacy)
“Challenge – some pharmacists like change and want a more challenging role than just dispensing or dispensary management. So the challenge to make big decisions and manage (stock, procedures, workflow, etc.) and staff the way you want it to be.”
“Increases self confidence that you have the knowledge and ability to make decisions and can make the most of the profession financially and professionally especially when most other pharmacists are unhappy just working for others and doing the same thing day after day.” (Anshil Chand)
– Ian Fedrick, Partner and QLD Sales Manager at AP Group
