12 Business Objectives for Pharmacy Owners in 2024

January 18, 2024

When the new year rolls around, everyone talks about their personal resolutions, but what about business resolutions? There’s no better time than a calendar roll-over to look ahead and start planning ways to improve your pharmacy’s efficiency, profitability and, ultimately, value over the next 12 months. And there’s no benefit in putting it off – especially if you are thinking of putting up your pharmacy for sale within the next few years.

EVCOR is here to help, with decades of experience advising pharmacist-owners and supporting their ownership journey through every stage. That includes helping them prepare for the inevitable day when they will exit their pharmacy business. The end goal, of course, is to sell the business at maximum value, to the right buyer, at the right time, and then to be adequately financed and prepared for life after pharmacy. That process – if it’s done right – involves a lot more than scrubbing the shop floor and dusting off the shelves (although those can be important, too!).

So, here is our advice: start getting ready now, at the start of 2024, by setting concrete business objectives for the rest of the year.

And on that front, we have a few ideas ….

Improve store efficiency and productivity.

• Optimize staffing levels and roles. In our work as pharmacy advisors, we often meet pharmacist-owners who are spending too much on staffing. Quite often, a big part of the solution is ensuring that the right team member is doing the right job – and no one is doing work that’s “below their pay grade.”
• Embrace innovation. If you’ve been operating your dispensary the same way for 30 years, you are behind the times. Innovations like appointment-based models, automation and other technologies can improve efficiency and create happier customers.
• Make your pharmacy more fun: Nobody – not your customers, your staff, or you – wants to be bored. So come up with a few ways to make the experience of shopping or working in your store more fun. Then do them.

Prepare for your exit.

• Find an advisor to lead your transition team. When you are preparing to sell your pharmacy, you will need several advisors, but the most important is the one who will coordinate and direct the efforts of all the others. In short, take time to pick your team “quarterback” and make sure they are up to the task.
• Clean up your accounting practices. Savvy buyers will look very closely at your books. If they are not already, bring your account statements up to date and keep them that way.
• Consider more tax-efficient corporate structures. When you sell your pharmacy, the tax impact can be significant and unwelcome – if you don’t plan ahead. Several strategies can help ensure that your corporate structure minimizes the taxes you will have to pay when you sell, so talk to a qualified advisor about the right one for you.

Know where you stand.

• Get a credible, accurate, evidence-based business valuation. A solid valuation of your business is crucial not only to ensuring you go into a potential sale with a firm knowledge of your pharmacy’s value, but also to effectively planning your financial future post-exit.
• Learn about the sale process. The sale of a business can get complicated and confusing. Educating yourself about the process beforehand can save you headaches down the road.
• Decide who your ideal buyer is. We have seen some pharmacist-owners regret selling their business to an individual or organization that did not run the store the way they would have liked. Remember, the right buyer isn’t always the one offering the highest price, so take some time to consider what’s important to you in the entity that will carry on your legacy.

Plan your transition.

• Develop a strategic wealth plan. Selling your business will probably be the biggest financial event of your life. So plan for it, strategically.
• Start to think like an investor, not an operator. When you sell your pharmacy, you are no longer a business owner/operator, but an investor. That requires a change in mindset. A qualified, experienced strategic wealth advisor can help.
• Know your blind spots. To paraphrase Dirty Harry, an investor has to know their limitations. Successfully managing your wealth post-pharmacy will often require simply knowing what you don’t know, so take stock of your investing knowledge and make sure you get the help you need.

We realize that implementing all 12 of these business objectives may seem like a tall order – and, yes, it’s ambitious. So, over the course of the year, we’ll discuss each of them in more detail. (That’s our resolution.)

Remember that when it comes to selling a business, the general rule is that the more prepared you are, the better the outcome will be. Our advice: get started now to make 2024 the year where you make tangible steps towards getting ready for the rest of your life.