Do you dream about the possibility of owning your own pharmacy?
Pharmacists thinking about advancing their careers have many choices. However, one option often overlooked by pharmacists is the possibility of owning their own neighborhood community pharmacy. Independent pharmacy ownership is, in the opinion of this author, still a viable option for the right person with the right plan. While there are undoubtedly challenges, there are also significant rewards.
I haven’t owned an independent pharmacy myself. My friends have. And I have worked for an independent pharmacy and managed another. Additionally I have provided consulting services to independents including the development of business plans and marketing strategies. After 25 years of working in various community pharmacy settings I am persuaded that independent pharmacies can and often do succeed.
The sheer number of community pharmacies in the U.S. may be greater than you thought. Currently there are around 22,000 such pharmacies spread across the country comprising about 36% of the retail pharmacy marketplace according to data from The National Community Pharmacists Association (NCPA).
Pharmacists considering ownership should consider carefully some of the options available to them. One of the biggest decisions is whether to open a new store from scratch or to buy an existing pharmacy. Approximately 1000 independent pharmacies switch owners every year, so the opportunity to buy an established pharmacy is real. Maybe you want to work for the owner for a while with the understanding that the option to purchase would develop as the current owner looks to his/her retirement. Of course, starting from scratch gives the pharmacist the freedom to design and build every aspect of their pharmacy from the ground up, which may be attractive to some.
Capital is a significant concern. I once spoke to a loan specialist who worked primarily with independent pharmacy purchases. He said that the biggest mistake new owners make is not borrowing enough money to provide sufficient cash flow for their business as they wait for it to grow. At that time, several years ago, he recommended that most brand new stores would need a loan in the area of $500K and that purchasing an existing store could require borrowing two or three times that amount.
Experience in running and growing a pharmacy business is another major concern for pharmacists today. Thankfully many resources are available to help new owners learn about the process and develop strategies for success. A good place to start is with one of the big pharmacy wholesalers like AmerisourceBergen, McKesson or Cardinal. They each have their own programs to help new owners start or grow a business. Additionally, there is NCPA, your own state independent pharmacy association and numerous conferences that go on around the country every year to help pharmacists learn the skills to succeed as owners.
The primary reason pharmacists look at ownership is for the chance to make a real difference in the lives of their patients. They want to get involved in their communities and offer services like Medication Adherence programs, home delivery, compounding, nursing home care, disease state management, or other services which may not be available in their communities. Most of these pharmacies exist in small or rural population areas of under 50,000 people. Chains may not find these areas sufficiently profitable, but an independent pharmacy can often do very well in a community of this size.
But ownership is not for everyone. And, if we are honest, many such pharmacies don’t make it. Some suggest that up to 83% of new pharmacies go out of business in under 3 years. That may be a frightening enough statistic to keep you from thinking about this idea any more. There are lots of great career path options for pharmacists that don’t involve the risks and capital of ownership. But for those who put together the right plan and the right team, the dream of ownership can still become a reality!