My recent article and video “The Discounter Battle Part 2”, received universal endorsement from pharmacists up and down the country, which is both good and bad. Good because it looks like I got it right. Bad, because if I got it right, we have a BIG problem Houston.
So I will follow it up, but I ask that you email me with what you think pharmacy needs to do next. It’s not an easy fix folks. I could do with your help. Email me (see below).
So look out for that article next month. For now, I am going to pose a related question …
All across the country, young pharmacists are lining up to buy pharmacies. Bright young things, full of hope and enthusiasm, ready to fulfil their dream. Not put off by all this negative talk. Splendid. Right?
But given all the disruption going on … should they do it?
My answer is similar to what I would say to my son asking “should I do my OE now Dad?”, if war has broken out somewhere in the world. My answer: “Sure, but be careful where you go.”
DHBs going rogue
DHBs have wreaked havoc in Auckland and to a lesser degree other areas. So let’s start there.
To me, the Auckland pharmacy sector resembles a bit of a war zone. Some spots are doing okay, but they are wearing hard hats in case. In other parts there is damaged and smoking pharmacy wreckage dotted around. Few casualties yet but quite a few pharmacies are walking with a limp.
So to young pharmacists buying there – Be CAREFUL. Pay fair price AND NOT A CENT MORE. If the vendor gets you into a bidding war, don’t get carried away. Stay calm, be wise, and be prepared to pull out, and let some other mug take the hit. Have two, experienced, sources of valuation advice. Remember, professional though they are, both wholesalers and accountants have a vested interest in you buying. Be wise.
Oh, and DON’T start one up. DON’T. Not there.
Go rural
OK, so your extended family lives in Auckland, and you want to buy there, to stay near them? I have a suggestion – what about they move with you to the country, enjoy cheaper housing, and then you buy a rural pharmacy? My rural pharmacy clients have the healthiest and most stable incomes. No discounter is going to open in Alexandra. Or Pahiatua. Or Hokitika. Yes, its harder getting staff and all that. But remember, you are in no-discounter heaven. Probably for the rest of your business life. That’s big.
Advice, advice, advice
You can’t be wise at 30. You don’t even have a grey hair yet. So pick your advisors carefully, make sure your accountant at least is experienced in pharmacy. Ask questions, and listen carefully.
To help people like you, I have released a 4-part video series “Buying a Pharmacy”. It’s free. It’s pretty good. Did I say it’s free? Get it while it’s hot.
Hugh Lopdell
Oak Park Chartered Accountants
Pharmacy experts
DDI 04 282 0782