October 25, 2023
As with most big opportunities, selling a pharmacy business comes with big risks, and the path to a successful sale is fraught with potential errors. Getting it wrong when it comes to the details – corporate structure, tax planning, marketing efforts, negotiations, the strength or weakness of the advisory team, and a host of other factors – can make all the difference between walking away from your pharmacy with a smile on your face and living the rest of your life wondering what might have been. Yet in our experience as sale transaction advisors, during which we have helped hundreds of pharmacist-owners get the financial and business details right, there is one big mistake we see time and time again: not being mentally prepared for life after pharmacy.
In short, you can “win” the financial game when selling your pharmacy – getting a good price, having a smooth negotiation, mitigating any legal or tax challenges – but it can all be for nothing if you “lose” the mental game.
What do we mean by that? Well, it’s important to remember that the goal of selling your pharmacy in the first place is to be happy, not to put too fine a point on it. Yet many, many business owners, including pharmacy owners, emerge into the next phase of their lives and find something wanting. We might have dreams of sailing off into the sunset bliss of never having to work again, but the fact is that retirement can be hard. If you are going to be truly happy after selling your pharmacy, you must be mentally prepared for the “soft” challenges you will inevitably face, even if you have the wealth of Croesus in your pocket.
Here are four things to think about and get ready for:
This sounds painfully obvious, but we have seen many former pharmacist-owners live in regret and sometimes even shame over selling their business simply because they don’t like or approve of the way the new owner is running it. Maybe you sold to a big corporation that only cares about the bottom line and doesn’t get involved in the community the way you did. Or maybe the new owner doesn’t treat your longtime customers – people you know and like – very well. Whatever the grievance, it’s easy for a former owner to grumble and complain about their replacement and, trust us, if you let it get to you, it can ruin the whole enterprise of selling in the first place.
A couple ways to prevent it: First, when you are selling, choose your buyer carefully. If it’s important to you that they align with your values, your practices or the way you deal with the community, then make that one of the criteria for assessing any offer. And second, remember that once you have sold, the new owner has purchased the right to screw up any way they see fit. It’s fine to offer help, guidance, even criticism – when you are asked. Otherwise, get ready to keep your mouth shut and your emotions in check.
After years of pouring your time, money and effort into building a business, it’s natural – and rewarding – to derive a sense of identity from your pharmacy. When you sell, you are leaving that public-facing role behind, often along with a strong personal sense of who you are in your community, your family, your life. You need to prepare for that reality. So, before you sell, think about who you are besides a pharmacist-owner. What qualities, interests or activities define you outside of work? Who are you, really? It’s better to know the answer now before the harsh reality of no longer being a pharmacist slaps you in the face.
Retirement can be a difficult transition for pharmacist-owners. Yes, you have cash in the bank (hopefully), you have time on your hands, you are free from the demands of running a business. You can do anything you want! If only you knew what that was …
Chances are you have spent plenty of time thinking about what you will do in retirement. But we have found that many pharmacist-owners have unrealistic expectations for their “golden years.” They often haven’t had the time to cultivate their interests outside of work, so they may have little idea of what pursuing their dreams actually takes. One of our clients once joked that he planned to improve his golf game and get back into gardening – “but I guess I’ll have to find something else to do for the other 11 months here in Alberta!”
Especially in rural areas and small towns, pharmacist-owners are often deeply involved in their communities, and when they sell, they feel suddenly removed from something that was deeply important to them. On top of that, as we get older, it’s too easy to start feeling disconnected from the world at large. Listlessness, a lack of purpose, loneliness and even mental health issues like depression can set in when that happens. So, before you exit the business, think of how you will stay connected with the community. Local politics? Philanthropy and volunteering? Joining a church group or choir? Team sports? Coaching? Teaching? Mentoring? And outside of those structured activities, there is plenty you can do day-to-day to stay engaged, like looking after your health and staying up to date with technology.
Social people tend to be happy people. So figure out how to stay social before you wake up one morning feeling all alone.
At the end of the day, you can do everything right when it comes to the financial aspects of selling your business and still walk away unhappy – if you don’t take the time to prepare for life after pharmacy. It’s not always as easy as it seems. So our advice: know what you’re in for and develop real plans for dealing with it.
For Information about Strategic Wealth Planning for Pharmacy Owners, read this article: