Buying a business can be a stressful endeavour, especially as every business is different and has various details to take into consideration.
Buying a pharmacy is no different, and while every pharmacy is unique in its own way, here are some important points to consider when looking at purchasing one.
Choosing a Pharmacy
As well as looking at the overall financial performance of the pharmacy, there are some other due diligence considerations:
- Pharmacy premises lease – How long is the lease for? Is there an option period? Is the lessor willing to transfer the lease on existing terms?
- What Point-Of-Sale (POS) and dispensary software does the pharmacy currently use?
- Is the pharmacy part of a banner group, and if so will this impact the purchase conditions?
- Employees – Are the current number of employees too great? Too low? What award levels are they on?
Organising the Purchase
If you are happy with the answers to the above, you will more than likely require finance for the purchase. It is advisable to see a financier who has pharmacy lending experience to ensure the whole application process goes as smoothly as possible, and within your desired time-frame.
You will also need to engage a lawyer to review the proposed purchase contract to ensure all the terms and conditions of the purchase are aligned with your agreement.
Setting up your Pharmacy as a Business
While you are organising the financial and legal arrangements, consider the ownership structure of the pharmacy. Will you set up as a sole trader or partnership, and is it appropriate to set up a service entity? This is very important as it can be costly to change the ownership structure once it has been established. A good business adviser will be able to help you make the best decision for you based on your requirements and goals.
Once the ownership structure is set up it is time to apply for ABNs and TFNs for each entity.
Pharmacy Council Application
During this process it is useful to keep in mind the Pharmacy Council application and meeting dates, as these only happen once a month, so if you miss a deadline then you will have to wait another month to apply to the Pharmacy Council.
Make sure all the appropriate documentation is included in the application including, amongst other things, a signed contract, lease agreement, finance agreement and service agreement where applicable.
Once you have approval from the Pharmacy Council, you then apply to Medicare for various applications, including the ‘Change of Ownership’ of the pharmacy.
It’s in the Detail
There are still a few additional items to cover off:
- Apply for tax registrations such as GST and PAYGW
- Set up supplier accounts
- Take appropriate business and personal insurance
- Set up an appropriate accounting software file
After all of this organisational work, you will finally to able to open the doors to your new pharmacy.
Does this sound like a lot to set up on your own? BLG Business Advisers have a strong understanding of the pharmacy industry, with many long-term clients that we provide real support for, whether to set up or improve their businesses. Take this opportunity to get in touch with us online or call (02) 4229 2211 today.