Broker Check

5 Obstacle’s Pharmacy Owners Face

Obstacle #1: Not having a business continuation plan

Every business needs to have a continuation plan to protect itself from unfortunate events. Most pharmacy owners haven’t taken time to create one, have a partial, uncompleted plan, or have a plan that is unfunded, making it useless.

  • Do I have a formal plan for continuing my business?
  • Have I selected a successor for my business?
  • Do I have a buy/sell agreement in place?
  • Do I know the professional value of my business?

Obstacle #2: No key employee benefits

Employees are important and most are vital for your business’s health and success. Benefits need to attract quality employees to then motivate, retain & reward them. Most pharmacies have common retirement plans, but extra incentives are important to have stability and protection. Pharmacists are employees too, so solid plans should reward them as well.

  • Which employees are critical to my bussiness’s success?
  • Have I created an employee benefit program to reward those employees?
  • Have I estimated the “income gap” my employees will face for retirement?

Obstacle #3: Not enough wealth outside of the business

Up to 90% of the average small business owner’s net worth is tied in their business. This means most of their financial future is aligned with the success or failure of the business. It is very important to have wealth that is not dependent on the practice. This allows more flexibility and freedom when money is wanted or needed, which also protects the practice.

  • How much of my financial future is dependent on my business?
  • Do I know where my money goes and what I’m spending it on?
  • Have I written down my financial goals & objectives? If so, am I on track to them?
  • Have I diversified my wealth among different financial vehicles?

Obstacle #4: No comprehensive retirement plan

Most pharmacy owners have worked hard their entire life and are looking forward to financial security in retirement. Unfortunately, some of them wait too long before evaluating their retirement plans to see if they can afford to retire, or they believe their standard plan and social security will be sufficient. For many, the result is a delayed retirement or an income shortfall.

  • Do I have a complete financial plan? If so, is it up to date?
  • Have I estimated what my annual expenses will be in retirement?
  • Have I accounted for inflation and possible tax rate increases?
  • How much income must come from other sources?
  • How much will my current investments provide?

Obstacle #5: No professional team to help with the mentioned 5 obstacles

Just recognizing the obstacles does not change anything. Every pharmacy owner needs to have a team of various professionals that they trust who are capable of creating and implementing the solutions needed for success.