Im looking to purchase this existing pharmacy and I need a little help

[punkajk]

The pharmacy that Im looking at is about 2000 sq feet and has been established for many years. I believe that they do 1.8 mil in revenue. The rent is approx $4000 a month. they have other expenses of approx 60k/yr. They don't do any Long term care. I think I can come in an do decent job of updating and modernizing but I not confident if I can generate more revenue. It seems to me that it has reached its peak potential. The owner is asking for 835K. Is it worth it? With such low reimbursement rates I don't know if Ill ever recoup...

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[kvl1027]

The pharmacy that Im looking at is about 2000 sq feet and has been established for many years. I believe that they do 1.8 mil in revenue. The rent is approx $4000 a month. they have other expenses of approx 60k/yr. They don't do any Long term care. I think I can come in an do decent job of updating and modernizing but I not confident if I can generate more revenue. It seems to me that it has reached its peak potential. The owner is asking for 835K. Is it worth it? With such low reimbursement rates I don't know if Ill ever recoup...

What is the script count? How does the seller justify the selling price? Cash Flow? Etc.

 

[Unchained]

I personally would not own a pharmacy or purchase an existing one. If you think about it a business major would view a pharmacy as a nightmare scenario. There are shrinking margins, constant political uncertainty, heavy regulations, economic uncertainty and heavy competition. That being said it can be done if you offer something the chains don't such as compounding, delivery, and dme. Kvk1027 could give you solid advice as he is a successful owner. I would invest money in a much more simple business such as a burger or pizza place. Maybe buy some real estate rental units.

 

[kvl1027]

I personally would not own a pharmacy or purchase an existing one. If you think about it a business major would view a pharmacy as a nightmare scenario. There are shrinking margins, constant political uncertainty, heavy regulations, economic uncertainty and heavy competition. That being said it can be done if you offer something the chains don't such as compounding, delivery, and dme. Kvk1027 could give you solid advice as he is a successful owner. I would invest money in a much more simple business such as a burger or pizza place. Maybe buy some real estate rental units.

Not, completely untrue. It is definitely becoming more and more difficult to survive with the insurance reimbursements as well as mail-order pharmacy requirements. Personally I think that buying someone out with an already existing pharmacy is the only way to go right now, unless you have a lot of capital and you can afford to keep your business open for at least 3-5 years including paying yourself enough to live.

The restaurant business is hit or miss and statistically 95% of new restaurant ventures fail and often times it is due to being cheap or going cheap on important overhead items. However, there are good franchises out there that are almost guaranteed to succeed, but they are not cheap to get into.

He in the states a McDonald's is practically guaranteed to thrive, but I think a turn key McDonald's is going to cost someone several million dollars to start. Now the minute you open the damn thing in an area without one and you are going to be doing solid business from day one and you will start to turn a profit in 3-5 years.

Unchained: BTW, I am not an owner, but hope to be one soon. I run an independent pharmacy for an owner, who is rarely around. I pretty much do everything except sign the checks, so I have a learned a lot about the business.

 

[Unchained]

Kvk1027 I think the best route is a Junior Partnership. This is where you are trained by an owner for 2 years then buy from them. There is a website where they list pharmacies for sale nationwide and will list you as a potential Junior Partner. The site is www.pcapartners.com. They will also analyze a pharmacy for sale to see if is a good investment. I spoke with Emil Veltre at this company.

 

[kvl1027]

Kvk1027 I think the best route is a Junior Partnership. This is where you are trained by an owner for 2 years then buy from them. There is a website where they list pharmacies for sale nationwide and will list you as a potential Junior Partner. The site is www.pcapartners.com. They will also analyze a pharmacy for sale to see if is a good investment. I spoke with Emil Veltre at this company.

This is one way that can work out really well, but be careful. I have heard some horror stories about Jr Partners getting burned in the end. I know someone who was a Jr partner and the owner wound up selling to CVS, because he decided to get out of the game early and the Jr. Partner could not come up with the financing to buy in such a short notice. There was a contract that stated the partner had first right to buy, which happened, but it was way earlier than expected and the financing just wasn't there so CVS got the bid.

I think most independent owners have a good deal of integrity, but you always have to be careful.

 

[Nelcovp]

The pharmacy that Im looking at is about 2000 sq feet and has been established for many years. I believe that they do 1.8 mil in revenue. The rent is approx $4000 a month. they have other expenses of approx 60k/yr. They don't do any Long term care. I think I can come in an do decent job of updating and modernizing but I not confident if I can generate more revenue. It seems to me that it has reached its peak potential. The owner is asking for 835K. Is it worth it? With such low reimbursement rates I don't know if Ill ever recoup...

If the business is being sold and you found it in an advertisement, this is a huge red flag. This means that there isn't a single person within the seller''s network willing to touch the place at $835k. If its a good deal, he will sell it to someone he knows. If there are no takers, its probably a bad deal, then he will sell it to you. There is too much info missing from your post. Have you seen the books? The tax returns? Have you sat outside to see if anyone ever goes there? At best, you'd be buying yourself a meager salary with all the headaches of business ownership. Better off working for someone and getting **** on. At least you don't have to take that home.

 

[504poboy]

dont answer to idiots that say how many scripts they do they do....are u kidding me?!?!..as an independent you want to know the average amount of margin you do per script not the number of scripts....you can do 10 scripts and make 80 dollars on each prescription but do like 100 scripts and make 3.50 on each prescription...keyword look at the margin!!

 

[504poboy]

4000 is too much for rent....find something for less than a 1000 and get smaller square footage...and deliver the medicine for free...