Written by John Thornett
The world of valuations has been the busiest that we’ve ever seen, and Pharmacy land is certainly an active one at present. One thing that has come to our attention recently are people’s perception of opportunity, particularly how individuals find success in a pharmacy site that others can’t or couldn’t see. We find it intriguing how different people’s perceptions can be.
Having done a lot of valuations over many years now, you develop a sense for what a particular site is capable of producing and what its growth opportunities are like after a while . If we gave you a pharmacy profile such as a small regional country town, or a small shopping centre next to an IGA in an established Perth suburb, a medium-sized metro shopping centre next to a major supermarket in a growing suburb, or a site next to an eight GP medical centre, most experienced pharmacy owners would have a fair idea of what that site should be doing and what it is capable of.
Most pharmacies we see in valuations meet our expectations. Of course, there are those that underperform. But every now and then, there is a store that really opens our eyes and make us say to ourselves, “How on Earth are they doing that? Producing turnover that is like… WOW!” There are also some regional stores producing growth that Perth suburban stores would struggle to achieve, and population is not a contributing factor. There are some really clever pharmacy owners out there, some who really know how to identify and maximise their opportunities.
What is interesting though, is what potential buyers view as an opportunity, and what some owners can turn into an opportunity.
Clever new owners taking on a store and achieving amazing results where the previous owner couldn’t. Some know how to turn a site into an opportunity, others don’t.
Some potential buyers look at a site and think it doesn’t have any potential. Others take it on and it turns into a great store. Some see risk, some see opportunity.
Buyers acquiring a store that has been consistently underperforming for years, only to find it continues to underperform. Some simply think they can do it better.
After seeing pharmacies change hands over time and having the opportunity to value some stores repeatedly, it is fascinating to observe individuals’ perceptions of opportunity. Perceptions of opportunity can change between individuals depending on:
Experiences as an employee pharmacist
We are very influenced by former bosses and places of employment. Our experiences working with different bosses under various leadership styles and different types of stores in our formative years of the profession have an enormous impact on our careers. Where have your views been impacted adversely by your experiences? Are you able to change your thoughts and beliefs if they are not serving you?Experience as a pharmacy owner
Something that didn’t work before does not mean it won’t work again. And something that did work before may not work again in a different location. Sometimes our experiences lead us to limiting thoughts and behaviours. Thankfully, there are enough pharmacy conferences and opportunities to network during the year to share experiences and learn from others about what worked and what didn’t.Attitude to risk
There are those who miss opportunities because too much energy is put into what could go wrong. Conversely, there are those who invest in the wrong store, or pay too much, because they place too much energy into opportunity and not enough into risk. Where are you in your attitude to risk, and how does this impact your decisions? How can you manage this to achieve better, more balanced decision making?Responses to failure
Often we try, and often we fail. Some try again and again until they get it right, some abandon it straight away. The key is knowing when a strategy will work. It is about figuring out how and not giving up.Failure to implement
This is a big one. We often find it is not knowledge or ideas that are the issue. Most people already know most of the buttons and levers in modern day pharmacy. It is simply failing to implement those ideas and not prioritising appropriately.An individual’s ability to learn, unlearn, and relearn
Saving the best for last, this is the key. The true mark of a pharmacy buyer or owner is when they are willing to admit to themselves that they don’t know everything, and that what they thought may be wrong. Heaven forbid. Our decisions are very much impacted by our beliefs, experiences, attitudes to risk, and responses to failure. But are we willing to unlearn and relearn over and over again? We remember having many conversations with owners about their thoughts on a particular service offering; some said no and it won’t work because of blah blah blah. Others had already embraced it and were able to make good coin out of it.
If you are a pharmacist looking to buy a pharmacy, or even a pharmacy owner looking to grow, surround yourself with the best pharmacy specialist accountants, advisors and mentors. But most importantly, the work you do on yourself - learning, unlearning, relearning, is a crucial part of your business career if you want to identify and take advantage of opportunities that come your way and potentially change the way you perceive those opportunities.
For any valuation enquiries, please reach out to John to discuss further.
Written by John Thornett