Independent Pharmacy Ownership Provides an Attractive Career Choice
As a pharmacy student assessing career options, you may think that employment with one of the major chains is the best, or even the only, viable path.
As a pharmacy student assessing career options, you may think that employment with one of the major chains is the best, or even the only, viable path. However, choosing to own an independent, community-based pharmacy can provide a rewarding choice—both financially and professionally—for many students.
In fact, independent pharmacies are a robust part of our industry. Today, more than 20,000 independent pharmacies play an integral role in our health care system. These businesses represent about 40% of all retail pharmacies—and $80 billion of a $200 billion market.
Yet many students are not aware of the opportunities offered by pharmacy ownership. Independent pharmacies tend to be concentrated in rural or urban areas rather than the suburbs where many people grow up today. In addition, few pharmacy schools offer a focus specific to community pharmacy ownership.
Is Owning a Pharmacy Right for You?
In working with independent pharmacists across the United States, I have observed several core values they tend to share. First and foremost, they value the opportunity to have a meaningful impact on the lives of their patients. They are individuals who are determined to chart their own courses, control their own destinies, and run their pharmacies in ways that will best meet the needs of their communities.
If that sounds like a good fit for you, there are a variety of benefits to owning an independent pharmacy. For instance, community pharmacists typically have more one-on-one interaction with their patients. They build relationships, which help them become a trusted asset in the community.
It’s also financially rewarding. Initially, you will earn a pharmacist’s salary while the profits from the business are used to pay off the bank loan. After the bank loan is paid off, every dollar of pharmacy profit is yours to determine the best way to operate the business, pay yourself and employees, or reinvest in the business. Depending on the financial success of the pharmacy’s operations, total annual earnings, including your salary, could be $200,000, or higher for a pharmacy filling 200 prescriptions per day.
Of course, a variety of challenges also exist. In addition to serving as a pharmacist, you will need to wear many hats to manage and operate your store. As with any career choice, there is a learning curve. But if the idea of owning your own business ignites your passion, the benefits far outweigh the downsides.
Pathway to Pharmacy Ownership
Once you finish school, you will probably need to work full time for at least a couple of years at either a chain or independent pharmacy. This experience will establish your credibility with lenders as a potential business owner and enable you to save some money for a down payment. When you are ready to buy your pharmacy, lenders will evaluate you—your experience, expertise, and performance—as much as the financials of the business you seek to purchase. Your first few years in the workforce are very important in positioning yourself for future success.
While you are in school, take extra-curricular business classes such as finance, accounting, and marketing to prepare yourself for the diverse roles you will need to play as a business owner. While you may hire employees and consultants to focus on certain parts of your business, you will need a broad understanding of the full gamut of skills required to manage a pharmacy successfully.
In addition to coursework, begin establishing a team of mentors and guides who can help you lay the groundwork for acquiring your business. Your professors are teaching you how to be a great pharmacist. You also need advisors and business owners who can share their insights and experience.
For instance, Cardinal Health’s Pharmacy Transition Services team can help you find the resources you need even while you are still in school. Our dedicated team of experts works with both buyers and sellers to help meet objectives. We maintain relationships with independent pharmacy owners across the country, so we can help you connect with mentors who can provide guidance as you explore your options.
As part of this effort, our Women in Pharmacy program provides connections and inspiration to help more women make the leap to pharmacy ownership. Today, women represent more than half of all pharmacists in the United States—and that number is expected to reach two-thirds by 2025. Yet there remains a gender gap in ownership of independent pharmacies. With many pharmacy owners are nearing retirement, there will be many opportunities for women to step forward to acquire these businesses.
Through Women in Pharmacy, we support aspiring female entrepreneurs with coaching and other resources to help them build the business skills they will need to buy, own, and operate successful independent pharmacies. For instance, we organize an annual Pharmacy Ownership Boot Camp for pharmacy students, pharmacists, and new pharmacy owners. Participants receive a top-to-bottom overview about what is required to prepare financially, approach potential sellers, design, and operate a store and enhance profitability.
Keys to Success
It’s never too soon to start planning if you think owning an independent pharmacy offers an attractive career path for you. Here are 3 keys to success:
- Identify your priorities. Think about the values and vision for pharmacy ownership. What’s important to you about pharmacy practice? About patients and customer service? About your role in the community and leading your staff? By defining your vision, you can narrow your purchase options to identity the best fit for your approach.
- Prepare yourself financially. While loans will cover most of the purchase price, you will need to invest some cash. How much do you have available through savings accounts, 401(k) investments available for rollover, assistance from family members and partners, and other sources? In addition, the seller may be willing to act as a secondary lender to a bank to help you get started.
- Build a team. Assemble a group of trusted advisors who can help you develop the best possible strategy for becoming a successful business owner. For instance, our Pharmacy Transition Services team maintains many strategic partnerships, such as Small Business Administration lenders, certified planners, accountants, attorneys, and more. Since 2008, we have facilitated more than 600 independent pharmacy transitions. Explore any relationships you may have with existing independent pharmacy owners who can mentor you. Seek out the right pharmaceutical distributor and other key partners to find out what tools and solutions you can use to drive margins and revenues.
As a pharmacy student, you have many exciting options as you build your career. Every year about 1000 independent pharmacies transition to new owners. Someday, one of those pharmacies might be yours to nurture and grow in serving a community’s health care needs. Start planning now to build the foundation for your future success as an independent pharmacy owner.
Dave Ellis is the Vice President of Pharmacy Acquisition Services at Cardinal Health.