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Offering solutions for pharmacists along the ownership journey
From business development and business strategy to financial planning and networking, Cardinal Health is dedicated to being a strategic partner on the path to community pharmacy ownership. From students to current owners to new owners ready to buy, sell or franchise a community pharmacy, Cardinal Health offers solutions designed to help at each stage of the ownership journey. Drug Store News sat down with three key Cardinal Health leaders driving community pharmacy ownership initiatives to learn more.
DSN: What are the keys to entering/exiting pharmacy ownership?
Dave Ellis, VP of pharmacy transition services at Cardinal Health: The biggest key for a successful transition of ownership is having a plan that is thoughtful and executable. Part of the planning process for sellers includes having the right timeline for the transition, understanding the potential buyers of the business and the necessary steps to ensure a smooth transfer of ownership. It’s important to understand the value of the pharmacy and to make sure the financial statements are reported accurately to attract the best possible price from potential buyers.
When you are developing an exit strategy, having a solid succession plan and identifying who will continue the legacy of the pharmacy business will make this process more rewarding.
DSN: Any advice for potential buyers?
Ellis: Buyers also need to be prepared as they look to purchase a pharmacy business, which includes having a business plan, financial projections and a location that is right for them and their vision. When preparing for ownership, it is important to think through what type of pharmacy practice is going to be rewarding and generate the necessary income needed. Starting early in the process with a team of trusted advisers will help develop the best possible strategy for becoming a successful owner. These advisers will help establish the value of the pharmacy in consideration, what financing structures will be most advantageous and leverage many years of experience with the transition process. It is also encouraged that buyers find mentors that are current pharmacy owners who will be able to share their experiences and be a resource during this process.
DSN: What are the considerations owners looking to retire should take into account when looking for options?
Ellis: It is equally important for owners to have a plan for their retirement years and one critical component of this plan includes financial goals and needs. Owners can work with their CPA or financial planner to prepare their strategy for retirement, consider if they will remain working in the pharmacy and if the new buyer will accommodate them and their staff after the transition. When planning the sale of the business, it can be beneficial to engage a tax consultant to help understand the taxes associated with this transaction. The legacy of this business also will impact the patients in your community; selling the business to an owner that will provide the same level of care and have the ability to impact the overall well-being of the community is something to consider when identifying potential buyers. The most profitable and efficiently run pharmacies generate the highest prices and will be more attractive to potential buyers. Only the pharmacy owner can decide who continues his/her legacy and what’s best for his/her family, employees and community.
DSN: How does Cardinal Health help facilitate that relationship?
Ellis: Cardinal Health has a dedicated team of experts in pharmacy transition services that work with both buyers and sellers to help meet the goals and objectives within the ownership process. The team has many years of experience analyzing pharmacy financial metrics with over 300 pharmacy valuations performed each year. The team also offers expertise during the transition from the seller to buyer; supporting over 100 store transitions this year.
The Pharmacy Transition Services team has the expertise and resources to assist with planning an exit strategy, positioning a pharmacy to sell, buying a pharmacy, matching buyers with sellers, guidance with structuring the deal and providing financing for the acquisition. The PTS team also has many strategic partnerships, including preferred SBA lenders, certified financial planners, CPAs and attorneys that can assist with the transition of ownership. The team is available to help through every step of the process.
DSN: In honor of the upcoming fifth annual Pharmacy Boot Camp, what are the five factors women should take into account when considering ownership?
Eden Sulzer, director of Marketing at Cardinal Health: Five factors that women should take into account include:
- Understand your financial position — Financing a pharmacy is a major piece of the ownership equation. Whether you are buying a pharmacy or starting one up, either scenario will require access to capital. You need to have a firm grasp on your financial position, such as your credit score, personal expenses and income requirements.
- Figure out the right path for you — There are multiple paths to pharmacy ownership, from start-up to acquisition, franchise to junior partnerships, and each has pros and cons. Factor in your level of risk tolerance, as well as your ability to relocate for the right opportunity.
- Develop a business plan — Planning in the early stages of the ownership process will accelerate your progress. Your business plan should take into account your store location, patient demographics, competitive landscape and more.
- Know your niche — Understand what your specialty or service will be to differentiate you from your competition. Will you provide compounding services? Disease state management? Weight coaching? Filling prescriptions will likely not be enough to sustain your business.
- Know yourself — Being an entrepreneur is not for the faint of heart. Do you take chances? Are you persistent? Do you have an entrepreneurial spirit? Invest time in understanding yourself and you’ll be better positioned to succeed.
DSN: What’s new at this year’s RBC Boot Camp? What can participants expect to take from that event?
Sulzer: Participants can expect to receive new tools and resources to apply to their own ownership journeys, including sample business plans and tips on how to approach or start the pharmacy acquisition conversation with current owners.
We will continue to provide training on ownership essentials, such as financing a pharmacy, operational imperatives and strategies for growth.
DSN: How does Cardinal Health support women entrepreneurs?
Sulzer: Cardinal Health supports women entrepreneurs through our Women in Pharmacy initiative, which we launched in 2010. We provide access to business resources, encouragement and a supportive network of peers to help one another along the path to pharmacy ownership. We accomplish these goals through our events and programs offered nationwide and focus on three pillars: education, networking, and research and best practices.
I encourage everyone to join us at RBC for two Women in Pharmacy annual events:
Mix, Mingle and Mocha, Friday, July 22, from 10 – 11 a.m.
Pharmacy Ownership “Boot Camp”, Saturday, July 23 from 11:30–2:30 p.m.
DSN: Can we get an update on the co-branding initiative? What has been the buy-in?
John Fiacco, VP of Medicine Shoppe Pharmacies: The response to co-branding has been gratifying. We continue to add co-branded pharmacies to the system. We will have added about 40 co-branded pharmacies this past fiscal year.
DSN: What’s the owner feedback to the program?
Fiacco: Owner feedback has been very positive. They enjoy the additional support provided by Medicine Shoppe Pharmacy and the opportunity to be identified with a nationally recognized brand.
DSN: What new initiatives are coming for MSI? What’s the future look like for MSI pharmacies?
Fiacco: We are looking at a number of initiatives for our pharmacies for the coming year. We want to re-focus our efforts on our individual store business performance using our store business plan.
We also will continue to push Managed Care Performance and continued improvement of Managed Care ratings by promoting the use of MedSync Advantage, focusing on MTM opportunities and taking advantage of the opportunity to increase revenue by participating in programs like the National Medication Safety, Outcomes and Adherence Program (NMSOAP).
The pharmacy environment will continue to be challenging, but the future is bright for those who recognize the challenge and the opportunities provided. We will be there to assist our owners in navigating through the challenges and helping them thrive going forward.
Erik Wahl keynote to close out Cardinal Health RBC 2016
Cardinal Health RBC will host an eccentric keynote speaker as part of its closing session on Saturday, July 23 — just before attendees head home to implement all of the new tools they gained at this year’s conference in Chicago. Author, speaker, entrepreneur and graffiti artist, Erik Wahl comes to the Windy City with a reputation for getting business leaders to “unthink” everything they’ve ever thought about their customers and patients, recasting their focus to inspire new opportunities and reinvigorate business operations.
After an eight-year career as a partner in a corporate firm, Wahl became frustrated by the lack of innovative thought — and corresponding profits — that he saw in the business sector. So, he set out on a career to challenge companies to change their way of thinking.
Wahl now is a popular corporate keynote speaker who has presented before executives of some of the leading business operators in the country, including AT&T, Disney, London School of Business, Microsoft, FedEx, Exxon Mobil and Ernst & Young. His best-selling business book, “Unthink: Rediscover Your Creative Genius,” has been heralded by Forbes Magazine as the blueprint to actionable creativity and by Fast Company Magazine as provocative with a purpose.
During his RBC presentation, Wahl will literally paint an image on a canvas before the audience that will seamlessly become a metaphor to the core of his message — encouraging attendees toward profitability through innovation and superior levels of performance.
“At what age did that creative river that once did flow so freely, effortlessly, through each and everyone of us; at what age do you think it started to dry up?” Wahl asked the audience in one of his previous presentations. “Pablo Picasso said every child is an artist. The challenge, ultimately, is how to remain an artist once we grow up," he said. “How to retain that childlike passion, that childlike ability to differentiate, to creatively solve challenges and ultimately plug it back into your adult life, your retail business, your connection to consumer. To stop selling and start engaging."
Rethinking, or “unthinking,” the approach to a business could be the creative spark needed to truly connect with the consumer and wholly differentiate a community pharmacy from the competition. According to Wahl, never before have retailers had the kind of blank canvas that could be colored with a positive message and disseminated so quickly before a wide audience.
After all, business is social, Wahl noted in a previous presentation. And the future of the economy is going to be social. Those who are able to build trust through their brand and amplify it through social channels are better equipped to be able to succeed in the future, he said.
This is truly one event attendees of the conference won’t want to miss. In addition, to watching Erik paint his message, attendees will have the chance to win his artwork during the RBC 2017 kick-off party immediately following his session.
Cardinal Health RBC 2016 will take place in Chicago at McCormick Place West from July 20 to 23. Click here to register or explore this year’s agenda.