Post-Acquisition Priorities: How to Make Your New Pharmacy Your Own
Nearly a thousand independent pharmacy acquisitions take place every year, and many of those transitions involve new owners who started out as pharmacists. Undoubtedly, you’re confident in your abilities as a pharmacist when it comes to delivering personalized care to your community; however, you’ll also need to think like an entrepreneur to run a store and strengthen its viability over the long run.
Once you’ve completed your due diligence on a pharmacy purchase, finalized the deal, and actually been handed the keys, things will get real in a hurry. If you don’t have an organized approach for what to do after buying a pharmacy, you could end up falling short when it’s time to pay the bills, especially in this challenging new era of independent pharmacy.
You may already be thinking through overarching plans for pharmacy renovation and improving pharmacy workflow, but in the beginning it’s important to drill down first. Paying attention to the following areas during the first several months of operation will lay the foundation for future growth.
Pharmacy ownership doesn’t happen in a vacuum. Despite all good intentions, you can’t possibly work every hour of the day nor make every single decision. New owners need help.
Your most urgent matter should be keeping pharmacy employees through an ownership transition — the people who have already established the store’s identity in the marketplace and will carry out your vision of how it should evolve in the future. In some cases, negotiations with the seller will reveal key employees who will be instrumental to that effect; in fact, acquisition can sometimes be contingent upon the retention of those staff members.
If you aren’t able to keep the existing staff on board, strive to make first-hand determinations within the initial few months of ownership about who is best suited for your team. You want to surround yourself with trustworthy individuals who are willing and able to help you make meaningful adjustments in your new pharmacy. Counting on the wrong people won’t get you anywhere.
Concentrate on retaining pharmacy staff — the best of the best — and hiring additional workers who will support and enrich your journey toward a profitable future.
Branding and marketing
Is the store already properly positioned in the marketplace or will you have to steer things in a new direction? Perhaps you’re motivated to be known as the neighborhood source for convenient vaccinations or the pharmacy with in-depth disease state management services. It’s up to you to make that call from the outset and communicate it to staff through group meetings and day-to-day interactions.
When you implement a new marketing plan, it’s essential to measure the initiative’s effectiveness (e.g., by tracking relevant metrics such as script count or number of new immunizations). Look at the store’s historical performance gathered during sale negotiations and then set a baseline for your new program. After a few months, you’ll begin to see if the plan is having a demonstrable impact outside of normal ebbs and flows.
From the very first day of ownership after your pharmacy acquisition, focus on what goes into your profit-and-loss (P&L) statement. Key activities that affect the P&L are budgeting for payroll, managing income from third-party reimbursements and customer purchases, and allocating funds to acquire inventory. It boils down to generating sufficient cash flow to cover your bills when they come due.
Additionally, as you get established over time, it’s smart to build up a cash cushion large enough to cover operations if you encounter a major business disruption like another pandemic shutdown. Keep a constant eye on your P&L and gradually work toward having at least a month’s worth of cash flow available for emergencies.
The pharmacy industry is becoming increasingly reliant on technology, in areas ranging from prescription notifications to accounting software to digital advertising. While it’s still possible to compete in the marketplace without a solid technological foundation, that window is quickly closing. Tech-savvy competitors are moving ahead on all fronts. Consider how emerging technology can help you implement new revenue-generating initiatives and improve pharmacy workflow, especially if your newly acquired business is an older, more traditional establishment that hasn’t progressed as quickly as the rest of the world over the years.
What’s your vision for the business? And what services can you develop that will not only bring that vision to life, but also generate fresh revenue streams as a result? Refine your plans by studying what’s already available in your community and identifying unmet needs. Possibilities may include offering immunizations, compounding, 340B prescriptions, pet medications, or even CBD products as alternatives to pain medications.
Ultimately, as a new independent pharmacy owner, you have a great opportunity to differentiate your store from the competition by thoughtfully evolving the previous owner’s mode of operation. When you get started on the right foot and focus on the right things, you’ll have a much easier time making your pharmacy your own and providing the best care possible to your community.