Purchasing a pharmacy for the first time can bring many challenges, such as finding the right business, competing with offers from established pharmacy buyers and dealing with all the administrative red tape.
Those considering taking the leap into ownership can be reassured that, despite continued pressures in the sector and the wider economy, there are “positive levels of activity in the pharmacy market”, according to specialist business property firm Christie & Co.
In its Business Outlook 2023 report1, the agent says there is competitive bidding for quality pharmacy businesses in areas of low supply, resulting in an average price increase of 0.7 per cent last year. The broker sold 105 pharmacies in 2022 with a combined value in excess of £90m.
This year has seen higher levels of purchasing activity than for some time as the multiples seek to off-load pharmacies.
Of those interested in acquiring a pharmacy in 2022, the majority (80 per cent) were first-time buyers, 10 per cent were independent contractors looking to expand, and the remaining 10 per cent were a mix of small, medium and national multiple operators, says Christies. However, only 23 per cent of actual sales were to first-time buyers, “as vendors sought the security of selling to more experienced and well-funded operators”, the report finds.
“From a market perspective, performance last year was encouraging. However, there is no doubt that those operating in the sector have seen increasing cost and operational challenges,” says Tony Evans, head of pharmacy at Christie & Co.
“Many of these challenges remain in 2023 and will continue to influence decisions on selling, refinancing or buying as the year progresses,” he says. “It is hoped that recent, well-publicised campaigns highlighting the pressures contractors are having to endure will result in recognition of the issues but, more importantly, funding resolutions that will offer much needed respite.”
To find out about the reality for new owners, Pharmacy Magazine spoke to four first-time buyers about how they realised their ambitions, the lessons learned so far, and their hopes and plans for their pharmacies.
The biggest challenge during the purchasing process was being patient
Sharing the burden
Purchasing a pharmacy for the first time can be a daunting prospect. The new owners of Kings Pharmacy in Camden are able to share the responsibilities, challenges and rewards of running a family-owned pharmacy business.
Brothers and pharmacists Birpal and Harpreet Virdee purchased the central London pharmacy in March, having both decided it was time to take the next step in their careers. “We felt it was time to enter into the business side of pharmacy – it felt like a natural career progression,” says Birpal.
“Being a team of brothers is special. Running a pharmacy was something we always wanted to do together. It can be a lot for one person to take on, but if you have family there with you it makes things easier and you can share the responsibility.”
Birpal and Harpreet both studied pharmacy at Kingston University. After graduating, the brothers developed their pharmacy careers. Birpal – who is seven years older than his brother – did locum work and was also a PCN pharmacist in a GP practice, while Harpreet worked in community pharmacy, as a hospital pharmacist and as a clinical trials pharmacist.
Last year, they decided to purchase a pharmacy together and signed up with some agencies that specialise in pharmacy sales. The process was similar to buying a house, Birpal recalls, with the agencies gathering interest in a particular pharmacy property, the potential buyers carrying out viewings of the property and the seller deciding which offer to go for.
Birpal and Harpreet wanted to buy a pharmacy located in central London. “We enjoy the diversity of people living in the city – you see customers from all over the world and it is a vibrant place to work,” says Birpal.
Pharmacy sales specialists Hutchings Consultants contacted the brothers to see if they were interested in Kings Pharmacy in Camden. “Hutchings Consultants guided us through the sale and were always there to give advice,” says Birpal. “We completed the purchase in mid-March this year. From our initial interest to getting the keys took around 11 months. The biggest challenge during the purchasing process was being patient,” he says.
Buying a pharmacy involves doing a great deal of due diligence and Birpal found it helpful to seek advice from friends in pharmacy on what to look out for, including scrutinising the pharmacy’s accounts.
Kings Pharmacy had recently been refitted and was formerly a business under management by locums. “This means we have the opportunity to make our own mark on the pharmacy,” says Birpal. “Each of us brings different ideas to the table and we have our own strengths that can be used to push the business forward.”
The brothers plan to develop a variety of private services, including ear wax removal, vitamin D injections and screening for long-term conditions. Already they have set up a travel clinic. “We offer a full consultation service, advising patients on which vaccinations are recommended and what OTC products they might need when travelling overseas,” says Harpreet.
The brothers have also introduced Saturday opening hours in response to, and welcomed by, the local community. Harpreet says a key difference about owning your own pharmacy is having the freedom to make changes. “When you get feedback from patients that you are providing a great service, it is even more satisfying.”
While Birpal works weekdays and Harpreet weekends, alongside a team of two counter assistants and a dispenser, the brothers are also comfortable working alongside each other. “It is reassuring that we purchased and are running the pharmacy together,” says Harpreet. “It is a big step, but it is nice that we can take on the burden together. That helps a lot.”
Set yourself goals and targets to achieve your ambitions
Reyhane Kiani believes in forward planning and the value of personal development. “I always have short, medium and long-term goals in my head, looking at what I’d like to achieve, starting from a few months to up to 10 years,” she says.
Reyhane moved from Iran to the UK with her husband in 2009. Pharmacy was not her original choice of career. “I did a degree in architecture but moving to the UK meant I would have had to start again with my architectural studies,” she says. Instead, she chose to study pharmacy – a career that would play to her strengths in science and fulfil her ambition to support people’s health.
After studying for her pharmacy degree at Sunderland University and completing her pre-registration experience in 2017, Reyhane did some locum work. “However, I knew I wanted to run my own pharmacy and have the freedom of being my own boss,” she says.
“Locuming allowed me to accrue work experience in a vast network of pharmacies, and know more about different suppliers and management skills,” she adds. In 2021, to expand her skills further, she took an independent prescribing course at Aston University.
Since purchasing Allendale Pharmacy in the market town of Hexam, Northumberland, last year, Reyhane has been concentrating on her next goals – to introduce new services that will benefit the local community. “Solving health problems is the best part of the role,” she says.
When she began her quest for a pharmacy she knew little about the purchase process, so did some internet research as well as gathering information from pharmacy contractor friends. She did, however, have a list of desired criteria, which included location – the pharmacy needed to be close to a GP surgery and not far from home – it needed to have healthy OTC sales and prescription numbers, and open standard hours to ensure a work-life balance.
Allendale Pharmacy met most of her criteria and Christie & Co supported her through the process. It took around eight months to purchase the pharmacy. “The main challenge was Covid delaying things, such as the NHS paperwork, but Christie & Co, my solicitor and my accountant made me feel supported and in the end it was a pretty straightforward process,” she says.
Allendale Pharmacy is a medium-sized refurbished pharmacy with a large front-shop area. Reyhane heads a team of eight – two dispensers, three counter assistants, two delivery drivers and a pharmacist who covers for her in the pharmacy while she does her paperwork and carries out her role as a PCN lead.
Registered with the Community Pharmacist Consultation Service, the pharmacy now offers blood pressure monitoring, UTI treatment and smoking cessation advice, and there are plans for a travel clinic in response to customer demand.
So what would Reyhane advise others who are considering purchasing a pharmacy? “Just ask yourself whether you are satisfied that you are going to get what you want from the business. Buying a pharmacy involves taking a risk and potentially working long hours. Weigh up the pros and cons carefully, and set yourself goals and targets to achieve your ambitions,” she says.
Having realised her long-held ambition, Reyhane finds being a pharmacy owner is a rewarding experience despite the challenges – and it provides a vital sense of independence. “You are always learning different things and it gives you the ability to become a valued asset to your local community.”
By the time I was ready to buy my own pharmacy there were no surprises – I knew what I was getting into
When Venkat Adama purchased NB Pharmacy in Gravesend earlier this year, he was “over the moon” to have his childhood dream realised. “From when I was young I had always wanted to run my own business,” he says.
Venkat grew up in India, qualified there as a pharmacist in 2002 and moved to England in 2006. He gained experience and developed his communication skills working first as a pharmacy dispenser and then as a locum pharmacist in various independents and multiples.
“I compared how different pharmacies worked and learned about the challenges pharmacy is facing, so by the time I was ready to buy my own pharmacy there were no surprises – I knew what I was getting into,” he says.
In 2017, Venkat started the search for his own pharmacy, supported by Christie & Co, “who advised me of new pharmacies coming onto the market”. He chose to look for a medium-sized pharmacy, which he could then grow and develop.
“Organising a down-payment for the pharmacy was the biggest challenge throughout the whole process,” Venkat says, “as sellers often look for high profile buyers who are established in pharmacy.
“I put in bids for a few pharmacies, but they weren’t picked up,” he recalls. The pandemic also slowed his search but with each bid “I always gained some kind of knowledge. I told myself there was a pharmacy for me out there – I never gave up looking.”
In August 2022, Venkat put in a successful bid for NB Pharmacy, completing the purchase in April this year. The staff – two dispensers, one trainee dispenser and a driver – “are amazing”, he says. “They advise me on the particular needs for my patients and are very supportive. They are always happy to take on new challenges such as flu vaccination training and helping to deliver a blood pressure monitoring service.”
In the future Venkat hopes to provide a 24/7 prescription collection point at the pharmacy and offer a UTI clinic. “It is important to provide a full range of NHS services and to take pressure off GPs,” he says.
The six-year search to become an owner was well worth the wait, says Venkat. “I love this pharmacy and I’m eager to make a difference to as many lives as possible and support my community in any way I can.
“My six-year-old daughter says she wants to come and work at the pharmacy and my wife, who has supported me right from when I started my pharmacy degree, is delighted. She was the one who saw me dreaming about owning a pharmacy. She’s so happy that I’ve achieved this.”