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Despite many dreary forecasts about the future of independent pharmacy, plenty of young pharmacists dream of owning their own pharmacies?and for good reason. ?There is still enthusiasm for community pharmacy ownership among students,? said Stacey Swartz, director of management and educational affairs for the National Community Pharmacists Association (NCPA). ?Owning a pharmacy allows pharmacists to be invested in their own business and to use the skills they have been trained to provide.?
The problem is that while young pharmacists have the energy and ideas that can make a business successful, they may lack the funding needed to purchase a pharmacy. A junior partnership arrangement can help make the dream of ownership a reality.
Under the arrangement, the sale of the pharmacy occurs over a specified period of time, with the junior partner increasing his stake in the business as he takes on a greater share of the management. The senior partner trains the junior partner to take over the business, leading to a smoother transition in management and ownership.
While the NCPA does not have a formal program that matches current businesses with potential owners, the organization often puts 2 parties in touch. ?We are particularly interested in keeping independent pharmacies open,? said Swartz. ?Our membership demographic is [older than] 50 [years old], and it is best for owners to start thinking about an exit plan 10 years ahead.?
Swartz recommends that pharmacists work at the pharmacy as a resident or intern before committing to a junior partnership. ?It is a good idea for partners to work together for awhile,? said Swartz. ?I have had some people say that a junior partnership is like a marriage, so it is important that the 2 partners work well together.? In many cases, the senior partner becomes an invaluable mentor.
Chad Shedron, owner of Family PharmaCare in West Lafayette, Ind, began with the pharmacy as a resident. ?The owner, Dennis McCallian, had given a lecture at Butler University when I was a student about new ways of practicing community pharmacy, and I was very interested. I liked the idea of having long-term relationships with patients, so the residency appealed to me.?
Shedron was teaching at Butler part-time, but increasingly found community pharmacy appealing. ?I believe it is good for the profession to have as many pharmacies as possible run by pharmacists who are in control of their own destiny and choose their locations,? said Shedron. ?When you think of pharmacists, you think of the person in the white coat around the corner who you went to when your kid had a 103[-degree] temperature. I want to be that person.? Thanks to the junior partnership arrangement, he is.
In 2001, Shedron decided not to teach anymore. Coincidentally, Mc- Callian was interested in returning to academia. A junior partnership developed. ?We laid out a time frame and a purchase price for the pharmacy,? said Shedron. ?We were really on the same page. It all happened a little ahead of my schedule, but with Denny?s financial and professional assistance, I was able to do it.?
A mentor?s guidance meant a lot to the success of the business. ?I do not think you can teach ownership in a classroom,? said Shedron. ?Everything I learned about how to run a pharmacy, I learned from Denny. I still go to him with questions.?
Shedron says the first few years of ownership were hard work, but the effort has paid off. ?During the first 4 years I owned the store, I was there every minute the store was open,? he said. ?Over the last 2 years, I have been able to make my hours more flexible.?
Family PharmaCare filled 85 prescriptions a day when Shedron purchased the pharmacy. ?Last year, we filled 120 prescriptions a day, and this year we filled 220 [per day].We have seen a few pharmacies in town close, including one that had a durable medical equipment business, so now we are in that business,? he said. ?We have really grown.?
The decision, said Shedron, was definitely the right one for him. ?I had a customer the other day who came in looking for Denny because he wanted his advice. Following in Denny?s footsteps is a big job, but if I retire and people still come in looking for my advice, that would be the highest compliment I could get.?
Lonnie Meredith, owner of The Drug Store in Haskell, Tex, was working as a community pharmacist at an independent pharmacy in Dallas when he began looking for an opportunity to practice in a small town setting.
?When I moved to Haskell, it was with the intention of owing a pharmacy,? he said. ?When I interviewed for the position at The Drug Store, I discussed potential ownership with Doyle High, the owner. Doyle knew he needed an exit plan and was looking to the future, so it made sense for both of us.?
Meredith said that the junior partnership worked well. ?It can take hundreds of thousands of dollars to buy a pharmacy outright, and younger pharmacists often do not have the funding,? he said. ?With a junior partnership, you do not have to come up with all of the cash upfront, and you have a mentor to learn from without the pressures of owning the pharmacy alone.?
He also learned how important mentorship can be.While he brought management skills to the partnership, his financial skills were underdeveloped.
Over the 9 years he worked with High, Meredith learned a lot about running a pharmacy and benefited from High?s 30 years of experience. ?I was pretty comfortable with pharmacy management,? said Meredith, ?but I learned that it takes a lot of time to get comfortable with the financial aspects of owning a pharmacy.?
It took about 5 years from the day Meredith began getting a percentage of the business until he was able to complete the purchase of the pharmacy. The store is a success and is expanding. ?The pharmacy is doing quite well,? he said. ?We fill about 330 prescriptions a day.?
Meredith and High have opened another pharmacy together and have taken on a junior partner at that location. ?Soon after I opened the pharmacy, a young pharmacist approached me with the prospect of becoming a partner in a pharmacy nearby. I had just become the owner of this store, and it was all I could handle, but Doyle said he would participate if I would,? he said.
The 2 partners are grooming their junior partner for outright ownership when she is ready. ?Three generations are involved in running that pharmacy, and our skills all complement one another,? said Meredith. ?Doyle is the big picture guy, and he handles the financing. I am strong on management, and our junior partner has strong clinical skills.?
The approach is one Meredith recommends. ?The older partner provides experience, while the younger partner provides more elbow grease,? he said. ?It is really an ideal situation, because young people are enthusiastic and want to work hard.? Pharmacists who are looking to slow down can hand the business over in a controlled way that can ensure a win-win situation for both partners.
Meredith cannot imagine practicing in any other setting. ?When you work for yourself, you are only limited by your imagination?.When you own the pharmacy, you can try anything you want?the only thing that limits you is yourself.?