Owning your own pharmacy

[shaq786]

I'm really thinking about buying a pharmacy that is up and running and try to take advantage of a successful pharmacy for which an owner is retiring.

My employer already pays me 128k in yearly wages.

Just as an estimation, (playing with numbers) how many scripts would I have to do at my own pharmacy to exceed this 128k income?

Also, in your opinion, is it possible to just own a pharmacy and staff it so you don't have to work as much? I know a lot of owners put in 50 to 60 hours a week, but I was wondering if you can just cash checks.

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[anewmanx]

I'm no expert on it, but I've read a few threads on here that tell you how to value a pharmacy. You should search for those. Usually something to do with the words "independent" and "pharmacy."

I suppose there is some kind of service out there to appraise a business. Moreso, I would think it's a requirement for the bank.

Expect to put down 20-30% of the purchase price.

You're going to make far more than he's paying you right now, if you choose to, or you can dump the money into paying off your business loan. Either way, ten years from now you will be thanking yourself that you purchased.

 

[MountainPharmD]

More than 128k? Absolutely possible...quite easily.

As long as the pharmacy has three years of positive financials it will not take 20% to 30% down to buy a pharmacy.

 

[n64bomb]

you would need to put down 15% on a conventional loan, maybe less

Thats what I could get from my portfolio lender. That doesnt account for the fact that some independents dont know their pharmacy's true value (either way over or way under) and that you can manipulate noi bigtime when taking over a pharmacy (ie cut tech hours 20%+ when you takeover, increasing profit)

You might be able to find a lender to cover more of the loan, but they would want more collaterol(ie you put more assets on the line), a higher rate, or you show that you have professional experience managing a pharmacy (ie lower risk for the bank)

Its all about the risk the bank is taking on. For higher risk, they want more collaterol or to see you have experience with the asset class you are purchasing, or will jack the rate up to compensate!

 

[BidingMyTime]

Pharmacies are like any other small business.....there is a big risk of failure and bankruptcy. Yes, you could end up making BIG money, but you are more likely to end up bankrupt. It's not just about the number of scripts you are doing, it depends on whether those scripts are medicare/Medicaid/cash/private insurance because your profit margin on all of those will be different. The real question is, how do you feel about risk, are you willing to lose everything you currently have & more for the slim chance of getting much richer than you are now?

 

[Unchained]

The trends against pharmacy and business generally in the US are very negative. Pharmacy is now a low margin business. It's highly regulated. Insurers, manufacturers and distributors are taking more of a cut. Health insurance costs are going up. Taxes are going up. You have to carry a large inventory. Insurance auditors are more aggressive. Local and national gov't are broke and looking to take more and give less. Our gov't believes more in redistribution of wealth rather than wealth creation. Let someone else work 70hrs a week and lose sleep. Work your 40hrs per and collect that 128k. You'll have a better quality of life and likely live longer.

 

[southpharmindy]

If you do 100-150 a day you can triple what the average pharmacist makes per year. Not to mention I only work Mon-Fri and closed on weekends. Work 9-6 on weekdays. Off on holidays.

Its our profession. The chains need us. We don't need them.