Pharmacy U

All posts tagged Pharmacy Finance

Learn the ABCs of pharma finance

Comments Off on Learn the ABCs of pharma finance
PharmacyFinance_Vertical_200px
As a pharmacist myself, I understand that pharmacists and pharmacy owners face many challenges to keep your practices running smoothly. Read more

Life insurance can help your business succession planning

Comments Off on Life insurance can help your business succession planning
PharmacyFinance_Vertical_Tagline2Lines_web_RGB_E
Estate planning ensures that an individual’s or family’s assets are distributed according to their wishes after death. Life insurance is often used as a solution to problems and needs identified in the estate planning process. Read more

Having the tough talk with your kids. No, not sex – finance!

Comments Off on Having the tough talk with your kids. No, not sex – finance!
PharmacyFinance_Vertical_Tagline2Lines_web_RGB_E
When I speak with established pharmacy owners about what worries them, health, work stress and retirement readiness all make the list. As I help prepare them for succession, another concern often emerges – wanting to ensure their children grow to be happy, productive and successful adults. Read more

Value drivers to sell your pharmacy business at the highest price, part 4

Comments Off on Value drivers to sell your pharmacy business at the highest price, part 4
PharmacyFinance_Vertical_Tagline2Lines_web_RGB_E
Although some buyers in the market focus almost entirely on numbers in their approach, it is important that you pay attention to the physical appearance and condition of your facility and equipment. This factor extends beyond the shelves, ceiling and floor, to the tidiness and cleanliness of work areas and your staff. Read more

What’s TVM…and why should you care?

Comments Off on What’s TVM…and why should you care?
PharmacyFinance_Vertical_200px
Proper financial planning takes time and the help of a good financial planner to determine your current and long-term financial goals. Read more

Value drivers to sell your pharmacy business at the highest price, part 3

Comments Off on Value drivers to sell your pharmacy business at the highest price, part 3
PharmacyFinance_Vertical_200px

PHFT18_Sponsor logos

 

 

By Mike Jaczko & Max Beairsto

In two earlier installments (part 1 and part 2) we identified six factors that drive the value of your pharmacy business. Here, we pick up where we left off.

#7. Competitive advantage

Your “monopoly of control,” as described by John Warrillow in Built to Sell, describes a concept that answers the question of how well your business is differentiated from competitors in your industry. Seth Godin, who wrote the Purple Cow, also laments on the importance of uniqueness and differentiation in your organization. Essentially, it boils down to developing a business where you have created your own monopoly; it is the only place where your customer can shop for your unique offering of services, products and courtesy.

The provision of unique value-added services and products is the glue linking your pharmacy business with your customers and patients. Creating some form of competitive advantage to prevent competitors from copying your activities will provide a “moat” around your pharmacy business. Some buyers will pay a premium for a niche that has barriers to competitive entry, but this can be a double-edged sword. If you have created something so far off the beaten path, it is sometimes difficult for a corporate buyer to envision your business in their fold.

Experts have identified numerous ways to create a competitive advantage, but some seem to resonate more for the pharmacy industry. Although trademarks and patents do not readily lend themselves to creating a competitive advantage for a pharmacy, developed processes, compound recipes, training programs, published articles, specialized licences or certificates, and service contracts do. Do not discount your location—and the security of your lease—as these can serve as a major barrier to entry for your competitors.

8. Patient/customer relationship

While the patient/customer relationship is somewhat related to competitive advantage, it is nevertheless deserving of recognition on its own. How likely are your patients to return to renew a prescription or re-purchase a product or, even better, refer friends and family to your pharmacy? The majority of your peers do not actively seek out or quantify the answer to this, but your corporate competitors actively pursue this information.

Stability, consistency, repeatability, reliability and sustainability are a few of the key attributes to establishing a meaningful customer relationship. Your quality marketing program needs to create name recognition (of both the business and key employees) and build customer awareness and loyalty. A long history of efficient operations, producing timely and accurate prescription output and complimentary professional advice, will drive a valuable reputation in your community.

While, the value of your business will in part, be related to the hard, tangible assets, it is the goodwill that constitutes the majority of the price a buyer will pay. Therefore, it is these softer value drivers that will help drive goodwill in your pharmacy business. Relationships and patient/customer habits remain the nectar of the valuation gods.

Mike Jaczko, BSc Phm, CIM® is a pharmacist by background, is a portfolio manager and partner of KJ Harrison, a Toronto-based private investment management firm serving individuals and families across Canada. For more information, email: mjaczko@kjharrison.com.

Max Beairsto, B.Sc. Pharm., MBA, CVA is a certified valuation analyst and business intermediary with Enterprise Valuators, an Edmonton-based valuation and business sales advisory firm. Their Pharmacy Edge division assists pharmacy entrepreneurs across the country needing transactional and valuation advice. For more information, email: max@enterprisevaluators.com

 

This article first appeared in Pharmacy Practice + Business.

 

PF18_Leaderboard_RegisterNow_728x90px


Value drivers to sell your pharmacy business at the highest price, part 2

Comments Off on Value drivers to sell your pharmacy business at the highest price, part 2
PharmacyFinance_Vertical_Tagline2Lines_web_RGB_E
In our first installment, we reviewed three of the key factors that drive the value of your pharmacy business: financial performance, growth and stability, and recurring revenue. Here we continue our journey to identify two other factors that drive the value of your pharmacy business. Read more

How much is your pharmacy worth?

Comments Off on How much is your pharmacy worth?
PharmacyFinance_Vertical_Tagline2Lines_web_RGB_E
Whether you are a pharmacy owner or a potential pharmacy buyer, it is always important to understand what a pharmacy business may be worth. Read more

Pharmacy Finance: Ever thought of investing in a retirement residence?

Comments Off on Pharmacy Finance: Ever thought of investing in a retirement residence?
PharmacyFinance_Vertical_Tagline2Lines_web_RGB_E
An aging Canadian population is fertile ground for seniors’ housing. Read more

Value drivers to sell your pharmacy business at the highest price, part 1

Comments Off on Value drivers to sell your pharmacy business at the highest price, part 1
PharmacyFinance_Vertical_Tagline2Lines_web_RGB_E
Warren Buffett has been quoted as saying, “Price is what you pay, value is what you get.” Read more