I am amazed at the reluctance of many pharmacy owners to have a basic discussion regarding the fundamentals of a succession plan. There are a variety of reasons why pharmacy owners procrastinate about developing a succession plan: they will say there are too many pressing matters at hand; they get depressed thinking about writing or simply talking about a succession plan; or perhaps they are bound by fear like the fellow in the cartoon. Most think that there is plenty of time?? Did you know that having a succession plan makes your pharmacy business more attractive to potential buyers?
It is not pleasant to think about, however many pharmacy owners fail to appreciate that accidents can and do happen to pharmacy owners, and that is when a succession plan really pay dividends not only for the owners family but also for partnerships, staff etc.
Too many pharmacy owners operate under the myth that when it is time to exit, they will simply sell and retire with a bundle of cash and that this is a simple process that does not require much real planning or insight.
Unfortunately, that is more myth than reality. It is a reality, however, that many pharmacies are listed for sale each year, and there are many buyers. However which buyers are appropriate to engage with? Where do I start? Where do I find them? What does the process look like are just a few of the basic considerations.
Let’s look at what statistics say in regards to succession planning for pharmacy owners in Canada. According to the “Trends & Insights Report” 2016, the question was asked of owners when they paln to transition out of ownership?
More than 10 years 41%
4-10 years 22%
Don’t know 24%
Within 3 years 13%
In addition, many pharmacy owners make the mistake of believing that after a succession plan is written, there is no need to revise it. As you know, the retail pharmacy market place is changing rapidly which is affecting reimbursement and valuation methodology. To delay starting a plan is a major mistake since succession planning is a dynamic process that involves preparation, planning and a clear understanding of the process.
At Rxownership.ca, we can help with a ”Building a Succession Plan for your Pharmacy”workbook. This unique resource designed specifically for pharmacy owners in Canada, can show any pharmacy owner where to start as well as how to establish a plan towards the best possible outcome.
Written by: Phil Hauser
Source 2016 Trends & Insights Survey of Community Pharmacists, n=152(owners)