Weekly Comment

Welcome to Pharmacy Daily’s weekly comment feature.

This week’s contributor is Peter Marshall, Managing Director - Pharmacy Solutions Australia.

What do Pharmacy buyers look for?

EVERY pharmacy that is sold is unique. The mix of sales dispensary v retail, the mix of drugs sold in the dispensary, the lease situation, is there nursing home work, and so on. So what are the facets of a pharmacy business that are considered most desirable by buyers in the current environment?

In terms of security of the business - the lease and rent are obviously very important, equally important however is having a complete understanding of the competitive forces surrounding the business – these are the key factors that drive rate of return.

There are however numerous other aspects of the business that can have a positive bearing on a buyer’s perception of opportunity – some of these positive influences include;

• An increasing turnover is highly desirable

• Gross profit percentage is not high with no large fluctuations in previous years

• The wage percentage is not low

• Low generic substitution

• Little or no external business (e.g. nursing home)

• Low stock levels per square metre represents a great opportunity for a pharmacist with retail skills.

Simply put, obtaining a pharmacy that has multiple avenues for growth is the key to what is desirable to buyers.