| This will ensure you get relevant advice and will probably save you money on legal fees. |
Pick ones that cover the geographical area in which you are interested (some operate nationally) and telephone them for a chat. If you are unfamiliar with employment legislation, you will be well advised to consult a specialist employment lawyer. |
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. |
A pharmacy which qualifies for an ESP allowance will receive an additional payment over and above its other NHS remuneration and will, therefore, achieve a considerably higher gross margin on dispensing turnover. |
| Your agent should be pleased to explain the basic principles of pharmacy valuation. |
Sales agency A first-time buyer would be well advised to make contact with an established and reputable specialist pharmacy sales agency. |
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 best of these are usually close to a doctor's surgery and also have a thriving OTC trade. |
Apart from the usual chores of notifying the utility companies and dealing with VAT registration, you must give proper notice to the Royal Pharmaceutical Society and the local health authority. |
| These businesses are often easier to finance than smaller ones and it is not unknown for businesses with annual turnover in excess of . Try to ascertain how much interest in the business there is in order to help you pitch your offer at the correct level. |
If you are in doubt, a reputable agent will value a private business for you for a modest fee and could save you several thousands of pounds and a lot of wasted time. |
Business plan No matter from whom you will be borrowing, a proper presentation of your business plan will make your task much easier. 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. |
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. 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.
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| When you are ready, make your offer (subject to contract) through the agent acting for the vendor. |
net ) has, on average, details of about 100 pharmacies currently on the market, for example. ESPs have not been popular with purchasers, but they should definitely be considered by first-time buyers on the grounds that they tend to be cheap to buy, offer a secure, if not enormous, NHS income, are capable of providing a good overall income and are frequently situated in pleasant surroundings. |
Multiples and regional groups with between two and 40 premises, rarely look at businesses with turnovers of less than . When both parties have agreed the terms, exchange of contracts is usually followed immediately by simultaneous completion. |
Ascertain when the rent reviews take place and, if a review is imminent, try to find out, by talking to neighbouring shop owners and local estate agents, what the new rent is likely to be. |
| 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. Your agent should know of several that have dealt with previous sales and purchases in an efficient manner and the right choice will help ensure a fast and smooth transaction. |
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. Several types of pharmacy fall within this group with plenty of choice of urban and suburban locations. |
A prospective purchaser should consider whether the shop could benefit from longer opening hours. The trend we found particularly interesting is that after a small drop in the number of pharmacies being sold over the whole period, compared with previous years, the number of sales currently in solicitors' hands and due to complete in the second quarter of 2003 is the highest of the last six quarters. |
It could be possible to stay open while the doctor's surgery remains open or to stay open at lunch time. |
| 300,000 sell, although at Orridge we do occasionally manage to find a buyer. |
Profit margins To understand the different profit margins you will encounter during your search, it is essential to consider the turnover split. |
This is not compulsory but it shows good faith on your part, which could help to fend off any late offers in excess of yours. |
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. Choose carefully, ensuring that you find one with experience of commercial transactions and preferably conversant with the sale and purchase of pharmacies. |
| The relationship between dispensing and over-the-counter turnover is an important one to understand because it not only determines the profit margins that the business will make but, particularly with small businesses, has a bearing on its future security. |
ESPs have not been popular with purchasers, but they should definitely be considered by first-time buyers on the grounds that they tend to be cheap to buy, offer a secure, if not enormous, NHS income, are capable of providing a good overall income and are frequently situated in pleasant surroundings. |
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. |
Our website ( www. In recent years, larger businesses have become available to first-time buyers due to the support offered by wholesalers. |
| The best of these are usually close to a doctor's surgery and also have a thriving OTC trade. In order to complete as swiftly as possible after your offer is accepted, you will need to have chosen a solicitor to act on your behalf. |
pharmacysales. |
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. |
Sales agency A first-time buyer would be well advised to make contact with an established and reputable specialist pharmacy sales agency. |
| 700,000 and, the larger the turnover, the greater the competition and the more likely for a premium price to be achieved. As the Office of Fair Trading has made us all too aware, nothing is guaranteed for ever. |
The best of these are usually close to a doctor's surgery and also have a thriving OTC trade. |
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. |
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. |
| In recent years it has become commonplace for the purchaser's solicitor to set the ball rolling by drafting the sale and purchase agreement. |
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. |
Your agent will be able to tell you which schemes are on offer and which banks are currently keen to lend. |
Do not underestimate the potential liabilities you will inherit.
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