Being the sole owner of an independent pharmacy is a lot of pressure. All the financial, management, and operations decisions come back to you.
Working with a business partner is one way to relieve that pressure. With the right business partner, you’ll have someone to bounce ideas off of. You’ll share the burdens of ownership, giving you more bandwidth to focus on your patients.
But the wrong business partner can do a lot of damage to your pharmacy. If you aren’t on the same page about how to keep things operating, you could end up running the pharmacy into the ground.
To make sure your business partner is the best match, ask these thirteen questions to learn more about them and their approach to business.
1. What do you hope to get out of this partnership?
To work well together, your goals and your business partner’s goals need to be aligned. If your partner’s main goal is to make the biggest financial return possible every year, while your goal is to serve as many people in the community as possible, you are setting the partnership up for failure.
Use your pharmacy’s vision and mission statements as a guidepost to build a unified front.
2. Where do you see yourself in five years?
This is both a personal question and a business question. Like the first question, this question will help you determine if your goals are aligned. But it also helps you find out if your business partner is in it for the long haul.
If your potential partner is hoping for quick profits so they can go live on a private island, they might be invested in their own success more than the pharmacy’s success.
3. What do your finances look like?
Asking about personal finances is taboo at the dinner table, but it’s a must before you enter a business partnership.
Check your potential partner’s credit score, ask about their history with debt, and ask them to share where their money is currently invested.
When you ask about finances, you also want to find out what their attitude toward money is. Are they the type of person to have a large emergency fund? Do they use a budget?
4. Have you run a business before?
Learn as much as you can about your partner’s history in the business world. If they’ve run a business before, what happened with it? Find out if they sold it for a huge profit, had to dissolve it after declaring bankruptcy, or something in between.
If they’ve previously worked with a different business partner, find out how that went. If you can, talk to the old business partner directly to learn more about your potential partner’s working style.
5. How should we split profits?
Hammer out the answers to these money-related questions before committing to anything on paper. If you can’t come to an agreement on what is a fair split, don’t go through with the deal.
In addition to figuring out how to split the profits, you’ll also have to come to an agreement on fair wages. If you’re working in the practice as a pharmacist, you’ll need to be compensated for that work before you start splitting profits.
6. How do you communicate?
Get to know your partner’s communication preferences and quirks. If they never answer text messages, it’s good to know that upfront, before becoming frustrated because all your messages are being ignored.
Plan a regular meeting to talk about the business to keep each other in the loop, especially at the beginning of the partnership. As you get to know each other better, you can tailor your communications more effectively.
7. What do you envision your role being in pharmacy management?
Some potential business partners will be happy letting you run the show, occasionally giving input on the direction of the business. Others will want to act in a hands-on capacity and be in the pharmacy every day.
Either option can work, but you should be clear about management style and expectations before going into business together.
8. Do you have any potential distractions?
Be aware of any potential distractions that could divert your partner’s attention away from the business. If they are going through a contentious divorce or working on a new side hustle, they may not be there for the pharmacy when you need them.
Distractions aren’t a deal breaker, but you should be aware of them and ask your partner how they plan to deal with them.
9. What’s your risk tolerance?
All businesses involve some form of risk, but you and your partner should have a similar amount of risk tolerance. If your partner is ready to invest in every single new technology that is pitched to them while you take a more conservative approach, there are bound to be some clashes.
10. How will we make decisions?
Build a framework for making pharmacy decisions. There may be some decisions that you can each make unilaterally while others need to be completely unanimous.
Be specific about what types of decisions fall in each category to avoid unnecessary conflicts.
11. How should we address conflicts among ourselves?
Even if you are a match made in heaven, you and your business partner won’t always agree on everything. Have a plan for addressing eventual conflicts.
For smaller conflicts, you may be able to talk things out. But if there are bigger issues — like one of you feels like the other isn’t holding up their end of the partnership — you should plan on bringing in a third party mediator to keep the discussion calm.
12. How do you behave in a crisis?
Things will not always be smooth sailing while running a pharmacy, so find out how your partner handles business in a crisis. Ask for examples of when they’ve been in tough situations and what they did to address it.
You don’t want to find out your partner falls into a puddle when you’re facing a natural disaster or PR nightmare.
13. What happens if someone leaves the partnership?
Before you enter a business partnership, establish the ground rules for what happens when one of you decides to leave the business. You may decide that one partner will buy out the departing partner’s financial interest.
If the departing partner plans to sell their part of the business to a third party, be specific about what sort of approval they need to get for a remaining partner.
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
