| Assuming you have chosen your geographical area, you will need to consider the various types of business on offer. |
This will ensure you get relevant advice and will probably save you money on legal fees. 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. |
They must also have a low level of dispensing. |
| Finally, make sure you are present during the stocktake so that you can agree with the vendor how to treat any problem stock that the stocktakers identify. |
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. |
The agent will be able to advise you of potential sources of finance and how much you are likely to be able to borrow. |
| 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. |
When both parties have agreed the terms, exchange of contracts is usually followed immediately by simultaneous completion. |
Multiples and regional groups with between two and 40 premises, rarely look at businesses with turnovers of less than . You will probably be taking an assignment of a lease and will therefore need references for the landlord. |
There may be potential to obtain additional dispensing from nursing homes, or by offering a collection and delivery service.
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True value The true value of a business was referred to above. 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. |
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. |
| These businesses are often easier to finance than smaller ones and it is not unknown for businesses with annual turnover in excess of . |
700,000 and, the larger the turnover, the greater the competition and the more likely for a premium price to be achieved. Finally, make sure you are present during the stocktake so that you can agree with the vendor how to treat any problem stock that the stocktakers identify.
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Your agent should be pleased to explain the basic principles of pharmacy valuation. |