| If you have no experience in producing these, consider employing an accountant who has; money well spent here will give your case a much better chance of success. The significance of this figure is that while you may put a premium value on working in a Cornish fishing village, the banks will probably not and will consequently lend a percentage of the true value, not your perceived value. |
If you have no experience in producing these, consider employing an accountant who has; money well spent here will give your case a much better chance of success. |
Our special feature this month looks at the practical, financial and legal aspects of buying a pharmacy business Mr Holland-Brown is Chairman of Orridge Business Sales Limited Although there is risk inherent in buying a pharmacy, it can be minimised by taking appropriate advice and doing plenty of research before making a final decision on what to buy. Essential small pharmacies In order to qualify as an essential small pharmacy (ESP), a pharmacy must be at least one kilometre from the nearest pharmacy with a National Health Service contract, so they tend to be in rural locations or residential areas. |
Since you are unlikely to have a track record with suppliers, you will have to rely on a bank reference and possibly character references, so strike up a good relationship with your bank as soon you can. |
| Your agent will be able to tell you which schemes are on offer and which banks are currently keen to lend. By reorganising or refitting the premises it might be possible to attract more OTC sales. |
These are normally highly attractive to purchasers because they will dispense upwards of 5,000 prescription items per month and are often sold to those with one or two local pharmacies or, if large enough, to multiples. |
The number of pharmacies that agents can advertise is limited by the size of their advertisements, so browse through the websites, where you will find brief details of all of the businesses they have to sell, with the exception of those where advertising is restricted by the vendor. From a total of 100 sales effected by Orridge Business Sales Ltd in 2002 and, so far in 2003, prices seem to be holding up remarkably well. |
Also in this group will fall pharmacies adjacent to or within a health centre. |
| Also in this group will fall pharmacies adjacent to or within a health centre. |
Buying a pharmacy will be the largest and most complicated transaction in which a prospective purchaser will ever have been involved Plenty of good advice is available at all stages of the transaction — especially in connection with finding and financing the business and completing the legal formalities. Some vendors restrict their agent from advertising their pharmacy details, so the only way you will obtain information about these businesses is to speak to the agent. |
Property When you have found your preferred pharmacy there is a lot of research that needs to be done before you reach the offer stage and here you may need to consult professional advisers. |
You will need details of the past performance of the business (which should be available from the vendor's agent), together with profit and cash flow forecasts. If the premises are leasehold, ensure that the lease offers enough security of tenure to satisfy your financier. |
| Those in suburbia are usually less attractive to multiples because of their secondary positions and, therefore, offer good value opportunities to independents. Essential small pharmacies In order to qualify as an essential small pharmacy (ESP), a pharmacy must be at least one kilometre from the nearest pharmacy with a National Health Service contract, so they tend to be in rural locations or residential areas. |
You will need details of the past performance of the business (which should be available from the vendor's agent), together with profit and cash flow forecasts. The main reason for these changes appears to be because true profits have increased over the period. |
Agenda for 2003 The Pharmaceutical Journal Vol 270 No 7246 p578-580 26 April 2003 This article Reprint Photocopy PDF * 130K Features Buying a pharmacy: A guide for the first-time buyer By Nick Holland-Brown, FCIS, FCMI Buying and managing their own pharmacy business is something that recently qualified pharmacists sometimes aspire to, but knowing where to start is often a problem. Some vendors restrict their agent from advertising their pharmacy details, so the only way you will obtain information about these businesses is to speak to the agent. |
For example, you may be tempted to buy one of the pharmacies offered for sale privately, but unless you seek independent advice you will not know whether it is correctly valued. |
| True value The true value of a business was referred to above. |
It is likely that buying a pharmacy will be the largest and most complicated transaction in which a prospective purchaser will ever have been involved, so choosing one's advisers carefully is essential. Our website ( www. |
Alternatively another look at the classified section of The Journal may be helpful. |
These schemes are offered by the major wholesalers, but do not forget to talk to the local independent wholesalers as well because they may be just as keen to do business with you.
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| It is important that they have a local knowledge of your particular area and that you can strike up a good working relationship with them. Assess your staffing requirements for when you have acquired the business, being aware that under the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), you will be taking over the existing employees, complete with all of their employment rights, including redundancy pay, sick pay, holiday pay, notice rights, etc. |
The significance of this figure is that while you may put a premium value on working in a Cornish fishing village, the banks will probably not and will consequently lend a percentage of the true value, not your perceived value. |
Our special feature this month looks at the practical, financial and legal aspects of buying a pharmacy business Mr Holland-Brown is Chairman of Orridge Business Sales Limited Although there is risk inherent in buying a pharmacy, it can be minimised by taking appropriate advice and doing plenty of research before making a final decision on what to buy.net ) has, on average, details of about 100 pharmacies currently on the market, for example. |
These schemes are offered by the major wholesalers, but do not forget to talk to the local independent wholesalers as well because they may be just as keen to do business with you. |
| Reach an agreement over the treatment of such items and ensure that the stocktaker in charge is notified on the day. |
A quick look at the classified advertisement section of The Pharmaceutical Journal will identify a selection of agents of all sizes and in various locations. |
You will probably be taking an assignment of a lease and will therefore need references for the landlord. Do not underestimate the potential liabilities you will inherit. |
600,000 available to first- and second-time buyers.
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| As a rule of thumb, clearing banks will probably lend in the region of 80 per cent of the true value of a business and possibly also the value of the stock, provided you have security. |
Sales agency A first-time buyer would be well advised to make contact with an established and reputable specialist pharmacy sales agency. |
If there are clauses in the lease with onerous repair covenants you would be well advised to have a professional survey carried out to ensure you are not taking on any unforeseen liabilities. |
By reorganising or refitting the premises it might be possible to attract more OTC sales. Choose carefully, ensuring that you find one with experience of commercial transactions and preferably conversant with the sale and purchase of pharmacies. |
| Reach an agreement over the treatment of such items and ensure that the stocktaker in charge is notified on the day. |
It is likely that buying a pharmacy will be the largest and most complicated transaction in which a prospective purchaser will ever have been involved, so choosing one's advisers carefully is essential. |
(Such pharmacies are potentially unsaleable unless they can obtain consent for a relocation or a competitor is prepared to buy the business and close it down. Profit margins To understand the different profit margins you will encounter during your search, it is essential to consider the turnover split. |
The significance of this figure is that while you may put a premium value on working in a Cornish fishing village, the banks will probably not and will consequently lend a percentage of the true value, not your perceived value. Although the first three months of 2003 have probably been the most uncertain I have known in my 35 years at Orridge, it is interesting to look at the statistics for that period and compare them with 2002 and prior years, remembering that in 2002 we were all aware of the impending OFT report. |