Location, location, location: Key considerations when buying a pharmacy
Buying and opening a new pharmacy can seem like a daunting prospect, but it doesn't have to be. Saghir Ahmed shares some top tips based on his experiences
Embarking on the journey of opening a new pharmacy is undoubtedly exciting, but it necessitates meticulous planning and thoughtful consideration.
From selecting an ideal location to navigating legal obligations, numerous critical areas warrant your attention.
Having been through several acquisition processes during my career, here are just some of the things I've learned.
The importance of location
Choosing an optimal location plays a pivotal role in the success of a new pharmacy. Conducting a comprehensive market analysis helps identify areas with a high demand for pharmaceutical services and minimal competition. Factors such as population density, proximity to healthcare facilities, and demographic information should be carefully examined.
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In addition, assessing the location's accessibility, including parking facilities and public transportation, is vital. Familiarity with the community and existing networks can enhance your prospects of success in a location where you already have a presence.
Having the right legal support
Engaging the services of a solicitor experienced in pharmacy acquisitions is advantageous. And collaborating with a solicitor well-versed in the structure and content of contracts drafted by the representatives of the selling party proves significantly beneficial. The solicitor's responsibility is to provide guidance on purchasing the business and the premises' purchase or lease.
As the buyer, it is crucial to absorb this advice and assume responsibility for decision-making. Though the influx of new information may seem daunting, the solicitor's role is to present all of the information and potential obstacles, while it falls on the buyer to determine the best course of action.
Getting your finances in order
Launching a new pharmacy demands thorough financial planning. Estimating the initial costs of acquiring or setting up a pharmacy involves considerations such as purchasing or leasing premises, procuring inventory, investing in technology and equipment and staffing requirements. It is advisable to request information from the buyer regarding the last stock valuation and negotiate to reduce stock levels before the sale's completion.
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Funding from a bank may be necessary to support the pharmacy purchase, requiring documentation such as profit and loss statements, pre-arranged payment and deposit (PPD) statements and supporting information on rent, rates, and employee wages.
A comprehensive business plan outlining projected expenses, revenue streams, and profitability is indispensable. Maintaining sufficient financial reserves is also essential to cover initial expenses until the business becomes profitable or meets desired financial goals.
Who will work for you?
The calibre of your pharmacy team will directly impact service quality and ultimately business profitability. Therefore, assembling a competent and reliable team is crucial for seamless pharmacy operations. Determining the number of staff members required should be based on the expected workload and services offered. You should also bear in mind that existing staff may be transferred under TUPE regulations.
Ensuring employee details are accurately reflected in the business purchase contract is essential. During the transition, allay any apprehensions among staff members by clearly articulating your vision for the pharmacy and how your team’s skills and contributions align with that.
When recruiting pharmacists, pharmacy technicians, and support staff, prioritise candidates who possess knowledge and demonstrate customer orientation. Consider applicants without pharmacy experience who exhibit a strong aptitude for learning, customer service and hard work, as they can develop into reliable team members.
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In addition, establishing a robust training and development programme fosters continuous learning and compliance with industry standards. You should always emphasise the importance of excellent customer service too, as it significantly influences patient satisfaction and retention.
Have you got the right technology and infrastructure?
Investing in cutting-edge technology and robust infrastructure is vital to streamlining pharmacy operations and providing efficient services. Implementing a reliable patient management record (PMR) system for inventory control and prescription processing is also important. While various PMR options exist, select one that aligns with your comfort and preferences or explore alternatives by observing their functionality in different pharmacy settings before approaching providers.
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Consider introducing automated dispensing systems to enhance accuracy and minimise errors too – but assess the return on investment and evaluate any additional costs associated with implementation. You should also remain abreast of advancements in pharmacy technology to stay competitive and deliver optimal care.
Is your marketing strategy fit for purpose?
Effective marketing strategies are indispensable for attracting and retaining customers. Therefore, develop a comprehensive marketing plan encompassing both online and offline channels and establish a professional website to disseminate information about your pharmacy, services and promotions.
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Leverage social media platforms as well to engage with the community and share valuable health-related content and collaborate with local healthcare providers and businesses to cultivate referrals and partnerships.
You should implement loyalty programmes and personalised services to augment customer satisfaction and loyalty as well. The entire community needs to be aware of your pharmacy's acquisition and the enhanced services you offer.
Are you ready for the transition?
Before the takeover, several tasks must be completed. You can either refer to a compiled checklist from previous acquisitions or seek support from a third-party management company. Essential items such as equipment, signage, and stationery must be ordered well in advance of commencing operations.
On the takeover day, the installation of your PMR may temporarily interrupt prescription dispensing, requiring effective communication with patients to manage their expectations. Additionally, ensure that your staff's NHS smartcards are updated with the new organisation data service (ODS) code before the takeover. This will enable them to access the electronic prescription service (EPS) spine for prescription downloads.
Consider allocating additional resources to manage the workload during the transition period too, as your staff may need time to familiarise themselves with the new PMR. These additional resources will also facilitate training on new procedures but ensure that information is provided gradually to avoid overwhelming your team members.
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Opening a new pharmacy demands meticulous attention and comprehensive planning across multiple areas. But by carefully selecting the location, adhering to legal and regulatory requirements, strategically managing finances, building a competent team, embracing technology, implementing effective marketing strategies and executing a well-defined plan during the transition, you can establish a robust foundation for a thriving pharmacy business.
Saghir Ahmed is operations and development director at GreenLife Pharma and superintendent pharmacist at Imaan Healthcare
