Closing the Deal on Your Pharmacy
Becoming an independent pharmacy owner is quite a process. Once you have figured out why to do it, if it is still possible, which pharmacy to buy or where to establish your own new pharmacy, how to finance it based on your due diligence and business plan, etc. you'd think the worst should be over. But it is at this point where you need to keep all your focus and attention on the innumerable details still needed to close the deal. Many races are won or lost on that crucial home stretch. This is how to survive that last mile, which always feels the longest!
The short and long term success of a pharmacy can depend on what happens just before and shortly after closing the deal. That is not the moment to still have loose ends. By then, you want everything arranged so that you can fully focus on your end goal: owning and successfully managing your own pharmacy. Having expert assistance makes a huge difference.
Being specialist pharmacy brokers, Aventine Group can assist you with all the issues associated with that crucial time when victory is in sight, but still out of reach.
Our checklist includes:
- Keeping up to date with the rules and regulations specific to your state or area so that we can help you interact with all the other regulatory authorities related to running a pharmacy.
- Get the following numbers essential to running your new pharmacy:
- Federal, state and local tax numbers for identification, sales and unemployment. This is often arranged through your accountant and/or attorney.
- Pharmacy operating licence from the State Board of Pharmacy.
- DEA number from the Drug Enforcement Agency to be able to order Schedule II pharmaceuticals.
- NABP number issued by the National Association of Boards of Pharmacy, in order to bill third party payers.
- Notify and/or (re)new contracts with third party payers. Over 87% of all prescriptions in an average pharmacy are paid for by a third party, so it is essential to arrange this in advance. Obtaining a new State Medicaid provider number can take much longer than you would expect.
- Ensure continuity of the pharmacy dispensing computing system and other contracts the seller had with outside vendors.
- Get your name on everything related to the pharmacy, from the lease to a (new) bank account, from the utilities to any services shared with other users of the building. You could use this as an opportunity to introduce yourself and chat to locals about any future changes that might affect your business.
- Meet with the sales rep and perhaps the credit manager of the full line wholesaler and other key suppliers. Margins are short and credit is tight, you need them on board, so don't take that for granted. We'll transfer any direct accounts if possible and try to maintain any special or franchise supplier arrangements.
- Decide if you want to make any changes at the moment of takeover, or if you want to maintain status quo for a while first. For instance, will you change opening hours, business name, non-medicinal offerings, delivery service, etc? Remember to take inventory on or shortly before the day of closing. Agree with the seller who will do this and when exactly it will be done. Usually this cost is split between seller and buyer. How will the value of the inventory be determined, and what will be done with any expired merchandise found? As necessary, Aventine Group can guide you on this and many other points, based on industry best practices.
- You need to meet and involve key employees: find out what they do and what benefits they get, and who will remain under which conditions. Dealing with the staff is essential to ensure a smooth transition.
- Discuss what role (if any) the seller will have. Do they stay on, for how long, doing what, at what cost? Perhaps they plan to relocate or go on an extended vacation. How do you reach them in case some unexpected item was not sufficiently covered during handover?
Filling that first prescription as proud new owner of your own pharmacy has to wait until everything else is organized. There are a lot of details to be done after the sale process has been started before you can call yourself an owner. Let the experts at Aventine Group help you to stay organized. We will support you from the sidelines, cheering you on every step of the way!