Exit Your Pharmacy Without Sacrificing its Value | Michelle Woosley, PharmD, MBA Cornerstone Business Services, VP, IB-Healthcare

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Mike: Michelle, introduce yourself to our listeners.

Michelle Woosley: My name is Michelle Woosley. I am a pharmacist, a compounding specialist, and a certified mergers and acquisitions professional. I do a lot of pharmacy consulting around the country. I've been at it for over 20 years. I can't give you the exact date,

Mike: No,

Michelle Woosley: wink,

Mike: no. Cause 20 years, like that puts you at 39 now or something, something like that. 

Michelle Woosley: a holding.

Mike: I see you got your MBA a little bit later in life. What was the impetus for that?

Michelle Woosley: I think as a pharmacist, you come out of school and you learn a lot about drugs and you learn a lot about, uh, dealing with patients, but you don't always learn about business and know really how to manage or run a business. I've been at it for several years where I'd been a leader or been the director and been responsible for big teams, but I really didn't feel like my degrees reflected my knowledge. I'm really a pretty savvy business lady. I really wanted that degree to reflect the world that I know about business and I like money and numbers and operational efficiencies.

And I like the op side of things. So I did that and worked full time and had a good time. I enjoyed it.

Mike: Michelle, that sounds honest to me because I grew up around the business and it's just second nature for me. So if I got my MBA, it would basically be to, well, maybe open up some doors.

But also, just have it behind my name. I don't think I would have done it just for the information. I just feel like I,I'm not saying I knew it all, but I feel I could get a lot of that. So it sounds like part of it, when you said you wanted to let the world know, it sounds like having the MBA behind your name.

Mike: Was part of 

Michelle Woosley: Yes, part of it for sure. and then just learning to do a deeper dive into financial management, about corporation structures, just really learning the business side of, you know, pharmacy. And so I specialize in health care. MBA has a focus in health care. So, I enjoyed it. kind of getting a little bit of, extra education, around the business aspect of

Mike: Mm hmm.

Michelle Woosley: So,

All right. so michelle, in fact when I look at your linkedin It says banking. So would you describe that do you officially work for a bank? Well, in the world of M&A, which is Mergers and Acquisition Professionals, your title as an M& A advisor is VP of Investment Banking. Investment Banking is the world that they call that. And that was really new to me. I'm not really a banker,

Mike: Yeah.

Michelle Woosley: speak,

Mike: Yeah,

Michelle Woosley: We are focused on, selling and acquiring and the mergers of businesses.

And so a lot of that has to do with finance and banking, and talking with buyers. And so that is that world. 

Mike: Were you into some of that before you joined that? Bank or does the bank hire you and say we want this to happen? What's the chicken and the egg on that?

Michelle Woosley: you want to hear the story?

Mike: I want the story

Michelle Woosley: So I don't work for a bank. So I work for an M& A

Mike: A firm, 

Michelle Woosley: An M& A firm, a small boutique firm. I work for Cornerstone Business Services out of Green Bay, Wisconsin my The road leading up to that was that number one, I was in healthcare leadership, pharmacy leadership knew a lot about business, very interested in the ops of the business. And then several years ago, I was hired by a private equity group to do compliance and quality management. They had a large pharmacy platform across the country and a lot of different types of pharmacies. And so on that side, I got to experience the world of private equity groups and how they manage platforms and how they look to acquire, particularly in this case, pharmacies. And what happened after the acquisition, was it good? Was it bad? And then I was always participating in the due diligence of bringing on a pharmacy or making an offer to a pharmacy. From my work experience in doing that, I fell in love with that world and really felt like there was an opportunity for a pharmacist to become that intermediary for these independent pharmacy owners that have these Legacy pharmacy companies that they have built their entire life and worked their blood, sweat, and tears to put together. I just felt like there was a gap in that because I did see a lot of where a PE group would come in and maybe not understand pharmacy, not understand the regulations. Maybe not understand the facility what was needed and then there was this mismatch after the acquisition of Where are we going next, 

Mike: Yeah,

Michelle Woosley: After a few years, I Took a leap of faith and stopped practicing pharmacy as a daily pharmacist. I went to a M& A source conference and said, I wanted to try this and see. If I really liked it like I thought I did and I went to the conference and I Continued to fall in love with that and just really continue to see the vision of how I could help particularly compounding pharmacies There was just a huge gap there I felt like in Representation and options for them who to choose to work with So I went to that conference I met, Scott Buschke, who is now my boss, and I didn't know he was going to be my boss at the time that I met him, and I said, Hey, I'm a pharmacist, and I'm really interested in this world.

How do I get a job? What should I say to someone who wants to hire me? You know, I don't have any experience in this industry. And he said, well, you know, I'd be interested in talking with you. And so, about six months later, after a couple of interviews, he hired me. and so I've been working with his firm and I, of certifications.

They Have a wonderful team. We do a lot of valuations for pharmacies. We also work in the medical spa space. and so it's been really exciting. I feel like I'm so blessed to be able to. Talk to pharmacy owners on their level and understand their value. it's hard to explain compounding sometimes pharmacy value to People are just putting together a platform,

Mike: yeah,

Michelle Woosley: I just felt very passionate about it. How I fell into it.

Mike: I never think of private equity when it comes to buying a pharmacy. People will say, because I'll probably be selling my store in a couple, a few years, people say, what are you going to do? I'm like, well, I'll either sell it to a group of guys and gals Maybe a half dozen that have bonded together their pharmacist Let's say an hour away and they come in there again, kind of growing their thing or I'll disband it I'm not sure what I'm gonna do, but I'm always thinking Of a group of pharmacists.

I never think of a private and Private equity firm, is that happening now? We're just a private equity firm that comes in and does something.

Michelle Woosley: There's very specific private equity firms that like to work in the pharmacy space

Mike: Hmm.

Michelle Woosley: And if you think about it and take a few steps back, you know, outsourcing facilities, 503Bs, manufacturing, pharmaceuticals, new developers. Pharmacy is not that big of a jump for a PE group, 

Mike: hmm. Hmm.

Michelle Woosley: that have an interest in either bringing on, A pharmacy as a platform pharmacy, or they have several, and they do add ons onto their platform, and so there's a lot of different advantages to working with PE groups, but to your point as well, I've seen, in this space that there are pharmacies that are wanting to grow,

Mike: Mm

Michelle Woosley: they want to acquire another pharmacy maybe across the country.

Just had one here, in December I met with them and they were looking, they wanted to buy something in Texas or they wanted to buy something in the middle of the country. so that's not unusual either. and, there's a lot of probably smaller, what I would consider pharmacy buying groups that maybe you don't hear of often, but you know, someone. in my position. That's what my job would be to know who those are and to help you. but to your point, are a lot of pharmacy owners out there that don't think about, what is their exit plan

Mike: hmm.

Michelle Woosley: when is it going to be and what should they do? And I've been to a lot of pharmacy conferences and I've never heard too many people in our industry Really talk about that.

And I just really felt passionately that there was a gap because poor planning causes you to lose money.

Mike: Yeah.

Michelle Woosley: You do not have the opportunity to either stay and continue to work or sell to the right people, 'cause I am a pharmacist, building value in making business decisions in your pharmacy space is not something you do overnight either.

Mike: Mm hmm.

Michelle Woosley: And so where's your next direction? What do you wanna do? How far out do you wanna be? You know, those are just conversations that I just really felt like they either weren't having with me or they weren't having them at all. 

Mike: Sure.

Michelle Woosley: to your point you're having in your head or you're having that conversation with your spouse.

Mike: Yeah.

Michelle Woosley: you really wanted to have that conversation, who would you call? You don't want to call a big M& A firm and they're not a pharmacist. They're not ready, 

Mike: right.

Michelle Woosley: I just felt like there was a gap And I was hoping to fill that gap for some pharmacies across the country. 

Mike: All right. So Michelle back though, on the private equity I'm picturing, whenever I picture private equity, I'm thinking New York. or banks that don't really know what the hell's going on. They're just throwing money away. Are there private equity groups that are owned by people that know pharmacy already or would the private equity place come in with this kind of generic money and say, all right, we're going to put money into this.

And the money we're putting into it also includes. Paying for management and things like that, that knows how to do this. I've just never heard of private equity coming in. So go into that a little bit more about, how the hell does a private equity firm know anything about pharmacy? 

Where is the link to that on the other side? Because you got private equity in the middle that wants to buy a pharmacy. Is the first link that they know anything about pharmacy in the first place? 

Michelle Woosley: Great question I would say that the first link starts with a few of the individuals who maybe started the PE group, they have an interest in healthcare management,

an interest in

that they have an interest in the medical space. and so that would be the cornerstone or the backbone of their massive fund, 

and then take that a step further. if you can have some P. E. groups that are specifically interested in pharmacies. They love pharmacies. they usually have a, like a management team, that helps them run their, that arm or that platform. they will often bring in people like me in my past where I worked for the P.

1. group. I was a

quality person. They'll hire, Maybe a lead managing or a managing director that kind of comes in and helps assimilate that pharmacy that has a background in pharmacy You know, so those are some of the scenarios that I've heard and then other scenarios that are also a feasible option is They don't have any pharmacies on their platform and they're really going to lean on that owner

that owner to come in and help them develop that and so that's where someone, you know, maybe in your shoes You get to stay a few more years and you get to really help them develop what that could look like

and help it grow and they infuse some capital and then maybe they want to buy another one.

Mike: As I asked this question, part of my gap in thinking this was that thinking like these people were the private equity, they funded it all, but this is really a firm that is trying to raise money from. Others and then go to the pharmacy side, 

you wouldn't say that this group of people are the source of the money. they're the ones that market this and then. Others can invest in them and then they're basically investing in pharmacy.

Michelle Woosley: Yes. The intention is to grow the business, you know, that, that is they would be interested in, that particular pharmacy, not because you're ready to retire and get out, but because your pharmacy has a lot of potential for growth, or you've worked very hard on a business development strategy and them coming in. Help support that and then they can expand a platform and then later turn around and band it together

there's a few instances where that's happened. They buy one or two here and there. They become familiar with how to manage those pharmacies and then they continue to grow or you get added into a platform That's already there.

They already have All the HR resources, you know, all the insurance and your employees have a, what I would consider maybe a more stable environment, which they, you know, have more support, on that end. Not all on you, 

Mike: yeah,

Michelle Woosley: owner anymore.

Mike: And then the private equity firms they're then gonna turn that over eventually, they're not in the business really of running these things forever They're gonna turn it over to whom would they typically do that?

Michelle Woosley: Well, that depends on the growth and yes, that is always their interest, this is, pharmacy is money and healthcare is money, and being able to grow. but I can't really tell you when they would do that. That would be something that probably, during your LOI when you were looking at interest, what were the goals for the pharmacy?

What would they want out of you and you know, what is their projected? Those are conversations you want to have at the table

happens. and then if they sell, they usually sell at a higher level. It really doesn't usually impact that pharmacy directly. They'll

as a whole

investments.

And so, you know, the pharmacy would probably maintain steady, it wouldn't be like a buyout.

of seeing somebody comes in and buys out CVS and

it wouldn't be like that on a PE

Mike: kind of like mortgages being thrown around after you get them

Michelle Woosley: yeah.

Mike: When I talked to someone before about private equity, they were saying that, they don't need as many successes as the average place does maybe that's more for startups where they know the rates of success may not be as great, but the ones that great are a higher, Investment earning than just, you know, the stock market 

Michelle Woosley: it might be more tricky to pull it off, but the results might be better for those that are successful I think that you're asking about a startup versus a mature

Mike: I think you're right. I think private equity will go into startups, they know that there's a higher failure rate, but then more remuneration for them if something does take off. So I think I'm 

 more startups. 

Michelle Woosley: There are some investors out there that do help entrepreneurs get started in their businesses, I have run across some of those, companies, those are not typically the target companies that I work with, but they are out there to help a startup, to help infuse capital with that return investment, PE groups usually have, qualifications by which they will look at you, and that is based on your revenue, your EBITDA, your growth plan, and the risk and the value the value detractors that we talk about that's great to have with an owner who's thinking about it.

Here's the good, the bad and the ugly of the situation and how we can move forward. 

Mike: When I was sick of pharmacy back in the day, well, who am I kidding? I'm always kind of sick of pharmacy, but

Michelle Woosley: I was getting ready to say

Mike: when I,

Michelle Woosley: I retired from pharmacy

Mike: yeah, I've got a year or two left, so I'm in it now, but this is 15, 20 years ago. I'm thinking, you know what? Here's my plan.

I'm going to go to companies. I think I could do better on, you know, the windows are dirty. They got flyers up everywhere and, you know, this wooden floor, they could sand this down and do this or that. I'm looking at that and thinking, I want to find out who the owner is.

And then I would go on Zillow or something like that and find out where they live. And then I thought, okay, if they've got this business, it's obviously taking in enough. Money that they can make a house like this. Let's assume that people aren't going to share this information with me.

Let's say I've got to be an investigator on my own. And then I'd say, Oh, they're making it so I can get that business. It has enough revenue to support me and then I can make it better. Long story short, the private equity firm, I imagine they don't want a company that is already in.

fullest stride if they don't think they can improve it at all, they want a company that's successful enough yet. They've got to see some areas where they can improve it. Maybe not all revenue wise, maybe like you said, on the back end with the HR and banding it together and so on. But I'm just kind of reiterating that they have to be able to see growth in it in order to get it.

They're not just interested in running the place.

Michelle Woosley: You make a great point. And that's where someone like me comes in. I'm in a unique position to have some of these conversations with pharmacy owners before they ever get to the table before they ever really say I'm ready to sell. Selling a business. Let's just say having a business is like a constant bell curve. you never stay on the top. You're either going backwards or you're going forwards. The time to sell is when you're moving up toward the top, and there's still growth potential in your business. You still have great ideas. You still have referral sources you can reach out to and you're still excited.

there's a lot of opportunities there. You're getting more state licenses. You're going to start a new formulation. you don't want to sell on the downslope. try to get me in there and talk to some of these pharmacy owners in advance of that while they're Contemplating what to do with their business

Mike: Yeah,

Michelle Woosley: have honest conversations.

when I go to the PE groups, to your point,

can advocate for, you know, they still have a lot of growth and development here

more valuable. 

Mike: Who was it? Maybe my old man who's long gone now or somebody they're like, well, you don't buy something on potential, you know, don't, they call it the P word. Like something was dirty about it, but don't buy, don't buy on potential. That reminds me. Michelle, I gotta, I gotta tell you this one.

Years ago at our cottage, years ago we had a boat, a used speed boat. We had it for about four years. I hated the damn thing. I hated the sun, hated the gas. The only days everybody wanted me to drive them around was on holidays when it was all busy and stuff. I just hated it. So. This is not a great story. I'm just talking about the p word. So just bear with me There's not a big huge punch line for this. After boating for the day, Those Buttons, you got to snap around and stretch the canvas to cover the boat for the night. I said, screw it. So I let it just sit there. Well, the problem is the rain came and it filled up.

And then when I took off, apparently all the rain flooded the engine that was in there from weeks of it sitting outside flooded the engine. So I take it to this guy down the road and this guy's dropping F bombs all over the place. Not to me, just in his vernacular. Talking about things. He's like, Yeah, you, you, effin did this and effin did that.

Well, a'ight, a'ight, effa, all this stuff. And then, he finally says, and, you know what that is? That's a P. O. S. he says. You know what P. O. S. is? I'm like, yeah, piece of blank. He's like, yeah, and I'm like. You just dropped about 40 F bombs on me and now you don't want to say the S H I T word.

I don't get it. So anyways, I told you there wasn't much to that, but talking about the P word, they always said don't buy on potential because you are never sure if it's going to go up or down. I don't necessarily think that's true. I think people want to buy your place if they think it has potential.

Michelle Woosley: Absolutely. And, you know, in different private equity groups or different buyers, let's just say buyers. There could be independent buyers I've spoken with buyers that are not with the PE group that are really interested in getting into pharmacy. Maybe they have a pool of owners that are not PE categorized that are interested in that and they're interested in. Getting into a pharmacy and helping it grow and helping it run more efficiently what I see a lot of also is, you know branding better better marketing I've seen one where they come in and infuse the pharmacy Post acquisition with salespeople and I always think that's a wonderful thing because many of these, particularly compounding pharmacies, they have a lot of state licenses, but they don't really have a lot of representation in all those states. It's really just online stuff. So, you know, helping a pharmacy build out their reputation, whether that be locally, regionally, state wise, or, you know, whatever.

So that's always a good thing, the potential of being able to do that. And the uniqueness, you know, what is unique about the pharmacy, what makes it different, you know, what makes it special, so. I come in, that's what I sell. I'm selling the specialness of the pharmacy because I understand it.

Mike: And I imagine there's a balance when you go in, Michelle, let's say you have a bunch of ideas. I think you already alluded to it. So I imagine you do some things, but you also want to show that you're on the bottom side of the curve coming up. Dare I say you tell a company not to, infuse their good ideas, just kind of think about them while they're in that stage.

I mean, you don't want to pull them all out because then there's no potential left to sell somebody.

Michelle Woosley: I think it would depend on what it is. I think being able to say I have a strategy, here are some potential ideas of my strategy, here's what it would take to make it work.

knowing what it would take, maybe how long it would take and then why is it going to be beneficial? You know, the, the, all those kinds of questions, could be presented without really necessarily sharing. This is a specific, you know, thing that I'm doing, but being able to execute and implement on a good idea and maybe having history. Proof where the pharmacy's done that before and how it helped grow their, you know, grow their revenues before it's a good indicator 

Mike: You might want to do what you can do, but things that maybe are just a little bit out of reach or maybe take more equity and things like that. Those are some of the things that you would not hold back on purpose, but just because you don't have enough capital to do that.

So there's probably enough out there that is, a potential that is maybe not a potential for you, but that's why you're reaching out to a firm that. Has more of those abilities.

Michelle Woosley: Yes,

 typically be a group that maybe had a couple other pharmacies on their platform and were experienced and being able to do that.

Mike: Yeah,

Michelle Woosley: you

Mike: right. 

Michelle Woosley: maybe the right fit for that situation.

Mike: Yeah. What? Personalities, when you get to the pharmacy side, well, let's go across the board. I'm sure it's not your, your people you deal with. I'm sure they're all cream of the crop, but what kind of personality might rub you the wrong way or might be somebody that probably won't get the most out of what they need because of that personality trait.

Michelle Woosley: I Think that at some level of selling your pharmacy and preparing to sell your pharmacy and having a good business strategy, that person has to be somewhat of a risk taker. and they have to be willing to, kind of say, I'm going to do this no matter what because I think it's going to work and have that passion and focus to do that. a lot of people Get stuck in the well, I'm not sure 

phase now and in the indecisive phase, I'm not sure what I want to do. I'm sure that a lot of pharmacy owners get stuck here. I don't know who to call. I don't really want to call a big PE.

I mean a big M&

Who do I talk to about this confidentially? your spouse isn't always going be the best one to, to tell you about that,

listeners, who on your team could help you make the decision?

and here's the thing about being indecisive is that a lot of times we get stuck. In that of our brain without really knowing the facts to move forward.

So without taking those steps to say, well, I'm really worried about this. here are some answers on what you could do here

 You're not supposed to get stuck in indecisiveness. It's

that you pass through.

and the way to get through it is to gather the information you need to make the decision.

Mike was an area that I felt like I wanted to help pharmacy owners and people get past because I don't want anyone to have missed an opportunity to make a plan.

Because again, you're not gonna decide to sell and six months later you wanna get out, it's gonna be something you think about and, and have to work toward and build up. That includes, you know, how do your finances look? What, what is your strategy? Like, what are you going to do? but then the other part of it is the unsolicited offers. And I would be. I miss if I didn't mention that there's a lot of unsolicited offers that go on and the pharmacist is either burnt out, they're tired, they don't want to deal with a whole lot and so the, the, the company comes in and says, well, this is what we think the value of your pharmacy is. They don't call anybody. They get a nice check, they walk away, and they leave money on the table. And, I've heard many stories about this and it burns me up as a pharmacist to know, you know, being a pharmacist and owning a pharmacy is hard work.

It's a passion every day.

It's sometimes that thankless job where you keep the lights on, you keep everything going, you keep your staff going and, and it's hard.

I would never want anyone who put all that work in after all those years to leave anything on the table. Driving value and advocating for value is what I'm very passionate about.

Mike: There's a couple levels of that in my mind. There are unsolicited offers. There's also people that maybe get a hold of a company that, you know, brings these sides together, which is maybe not as important anymore with the internet and the interconnectivity of people, that sometimes not a whole lot more than just matching people up, making sure the books are in order and things like that. I don't know how much effort is put into saying All right, going to get you a fair market value, but I don't know how much effort is put into saying before that, let's, let's up this 20 percent just by doing this and this and this let's, let's add value before, before you sell it.

So I think there's two levels. There's a quick sale, but there's also just people that are matching people up without maybe making it go smoothly, but without adding a lot to it.

Michelle Woosley: You make another great point. One of the areas that I encourage pharmacies Whether you're ready to sell, whether you're thinking about it, whether you don't know, is to get an evaluation. it's not super expensive to do. have your financials looked at, have everything looked at, talk with, someone like our firm, like me, know the value of your pharmacy and then if you do get an unsolicited offer or someone comes in you kind of know where you are or

in your closet.

I'd rather go hunt for my own skeletons. I say that when the and regulations and in your finances and

Go find your own skeletons, get them out, look at them, be honest, and then try to fix them so you kind of get rid of them. 

that's in the world of compliance.

I in compliance than I do finances, but It's a truth on both sides

getting a valuation to your point you determine helps a pharmacy owner determine or a business owner determine Yeah, I think it's worth more or I think I couldn't get what I wanted out of it right now And I need to come up with some kind of business strategy to help it grow,

Mike: Finding your own skeletons. I had an attorney about a year ago and one of the Wholesalers basically was trying to strong arm me, but I didn't owe them anything because they had a bunch of returns that they never processed correctly So it was basically a draw, but this place was strong arming me and Before I realized how many returns that they had not processed for us.

Cause we don't, I ain't a pharmacy. I just like to get old crap out of the store. I don't really keep that good a track of returns before I knew exactly how they owed me. I offered this wholesaler, 

an amount of money say, here, we'll pay off our final bill.

I'm not sure exactly where we are. After our attorney made this offer, one of my guys showed me, I'm like, I'm like, holy crap They owe us more than we owe them. the wholesaler owes us more, they should be paying us. So, my attorney writes to their attorney he says, um, sorry, I'm a little bit embarrassed of this. 

we gave you this offer, but we found some more information and uh, you know, we need to open this back up a little bit. So I email, I'm like, Todd, what the hell, you know, you're embarrassed of me, your client , you're telling the other side, you're embarrassed.

He's like, Mike, settle down. He said, I should have explained it to you. But that's a personal audit, basically telling them. What's on their mind before they tell you what's on their mind. In other words, don't give them the chance to say, what the hell you gave us this offer and now you're pulling it back.

What kind of games are you playing? our attorneys like, look, you know, I'm sorry. I'm a little bit embarrassed. My client, this and that. And so he's like, Mike, we want to beat them to the punch. We want to find those skeletons or.

Arguments before they bring it up. Let's clear the table off so we can get back to true negotiations so that we're not spending this time trying to fight for our identity. So same kind of idea,

good. but it still didn't help that he was embarrassed about me. I said, Todd, are you really embarrassed? He's like, I'm not embarrassed about that's part of it.

Michelle Woosley: he wasn't.

Mike: wasn't embarrassed about me. 

So Michelle, kind of clients. Cause I know some of these other firms, they merge, they say, you should have at least this or that as far as revenue and things like that.

are the standards that you would even touch? in other words, I know your, target market is probably not a bunch of old farts like me that kind of want to, drift off in the sunset and get something, but what's too low or too small for you 

Michelle Woosley: I think for M&A just in general, it's anything over a million in and many of the groups that I speak with and buyers that I speak with, they want the business to be going for at least five years. And to have some, historical, financials to look at for performance, have a solid team place.

And I know that's a challenge now with a lot of pharmacies keeping, keeping a strong team. and then think as you for an exit or are planning, to start thinking about that, is, as an owner, are you doing all the work

Is it dependent on you? How are you able to leverage your operations so that you can, you know, do more? Those are some things that we look at. If you, if you're the only pharmacist in the building and you're doing, you know, 10 billion of revenue, that's a very risky platform to someone buying that because what if you, you don't want to stay. Because let's face it, you know, pharmacy and revenues and patients and providers, that's all built on relationships

the provider. We're talking about patient care,

We're talking about a lot of money, 

we're really talking about patient care and we're talking about relationships with providers and that trust that you as an owner and your pharmacy have built, to have those referral sources and those providers and those revenues.

And so, you know, you look at those things too, not just, you know, oh, what's your number,

you're looking at how well has a pharmacy done to establish themselves as a reputable pharmacy and their referral sources and that type of thing. So it's a fun exercise in figuring out that

Mike: So the part about the hats and not just buying a job and things like that. Are you saying that mainly because it shows? profit in the company to have another pharmacist or it shows more than just the owner, or it shows that The place can run pretty well without the owner being there all the time. What things are you looking at to say?

Let's make sure that the main guy is not doing everything on the bench 

Michelle Woosley: I think you make a great point both ways. So it is more profitable. the pharmacy individually to be the pharmacist there full time

doing all that right. That's how you cut down on your costs. And at some pharmacies at their point in their business, that might be what they need to do to get started right to get the revenues.

but if a pharmacy is looking to sell and they want to use another platform, perhaps, having that owner Deeply embedded in the daily operations is a value detractor, for many buyers, and could be that some appreciate that. but you know, that's when you get into, you know, are you going to say a year? Are you going to say two years? How involved are you going to stay? And that's when you get into your rollover equity and what, you know, what are the choices for the owner? I had a business not too long ago. I spoke with them last week and they do both administrative work and they actually work in their business with their health care providers and they said we just don't want to do the admin. We just want to come in and staff. We just want to staff a few days. We love the patients and so, you know, what a great value driver that you want to stay but you know You don't want to, you don't want to run the whole pharmacy all the time. And that's that's typically a lot, you know, and particularly as you grow and your revenues grow and you got more stuff going on Sometimes you need that additional support grow

Mike: But what is the detractor of having the main owner doing more? Is it that there's not enough profit in the business that he's sticking his nose into too many things that the place can't run on its own? What's the detractor of having the main person doing most of the pharmacist work?

Michelle Woosley: Keeping it stable so if the owner does choose to exit After a year or at, you know, at close, again, it goes back to the referral sources,

the providers trust the owner, right,

been driving that for so many years.

There's that relationship there. and so that's, that would be considered. Something that we would have to talk about on the table. And that could just be that next year or two years or whatever, that owner decides to say that there's a transition. Is there anyone on the team? Is there someone there that could actually roll into a pharmacy manager or a PIC position, and that we could train them to kind of do that.

And then that owner pulls back, you know, those are a lot of conversations that you could have. it's not a no go, But it's definitely, we've got to have a plan here. to make the operations stable.

Mike: Yeah, the plan would be if the owner's not doing it, got to figure that maybe there's. An employee who has enough relationships and so on, but usually it's not probably as strong as with the owners. Usually there's usually enough in the pharmacy that even if you lost the employee, you may not.

Lose that much because there's probably an infrastructure built up for success and so on. But if you've got the pharmacist doing that and all the relationships, not terrible, but you have to protect yourself and have a So it doesn't all drop off the same day.

Michelle Woosley: yes,

Mike: Michelle, we talked about the, what, you know, the revenue, , the structure and things like that. You had mentioned compounding a few times.

I think you probably do something more with that. that. And you talk about potential. I know that there were a lot of compounding places that had a lot of potential, maybe two years ago, but maybe in the last week or so, maybe don't with the weight loss thing. So how does that all play into stuff?

Michelle Woosley: So my passion is compounding. I love compounding pharmacies. I travel all over the country, and do audits and inspections of compounding pharmacies for Gates Healthcare. a lot of these pharmacies are doing a lot of the GLP 1s, and some of them are doing sublingual, some of them are doing injectables, with some of the recent, decisions by the FDA to take off these critical GLP 1s from the drug shortage list, now there's a lot of concern and worry around the, growth in the profitability of the pharmacy that I had a month ago,

pharmacy is different now. We kind of knew it was coming, and we knew that the FDA would swing in the direction of the. big guys, but what did we do to protect ourselves and what can we do now? And much of that is I'll go back to talking about your financials and how to prepare, that's applicable, how to prepare for maybe an exit. And that is making sure that your accountant or whoever you're working with, that you're able to, kind of look at your therapy types. and really drill down on your therapy types, because here's what's going to happen. You're going to see a really great increase in growth and revenue. Some of them are astronomical in the GLP ones. And this is when you look at the

million to 7 million in the last five years, what many of the PE groups are going to want to look at is where was the growth in the business, and so I just want to encourage pharmacy owners to, speak with your accountant, make sure if you're doing, hormone replacement therapy, that you have a category for hormone replacement therapy and you're able to track and trend your growth,

Whatever else, those therapy types, you know, uh, ED, whatever things that, you can typically categorize those and see. That also helps you make a good business decision. You know, where am I not reaching out to those providers?

did we lose a provider, those types of things.

It's important for your finances. So I know this is going to have a really big impact on our pharmacies, and I feel for them. But, point in case, we will probably try to do something like, six months from now, a year from now, if a pharmacy is interested in selling, we're probably going to try to do a normalized revenue. Peeling off of the GLP one, probably not a hundred percent, but they'll peel off some of it. And they'll try to do a normal revenue adjustment, to kind of see. And that's why it's important to have growth in all areas. Many of these pharmacies have just solely focused this and rightfully so ride the wave man,

you can put the money in the bank, do a great job for the patients. you know, having that plan B. Aggressively pursuing your plan B while you're pursuing plan A

Mike: Right.

Michelle Woosley: is always my advice. 

Mike: This wasn't going to last and probably lasted longer than a lot of them thought it would. it seems like you already do compounding. got to know that you're going to have an increased revenue, but maybe make sure that you can get smaller quickly when that, or don't even grow, try to do it very efficiently with the staff you had, but then, you know, and then be able to come down.

But the problem with that probably is the business that you used to have is not as strong anymore because you just got lazy and depended on the GLP ones and you haven't done the outreach and things like that, that maybe. Got you in there in the first place? So I can see it would ruffle some people up quite a bit.

I bet.

Michelle Woosley: Yeah. 

Mike: All right. So, Michelle, we already talked about what kind of pharmacies you could. Help, but really, who do you want to hear from if the phone rings or the email comes to you, what are you really looking for? And if people come to you and they're too small or not the right type, can you still help them by sending them somewhere?

What do you really want?

Michelle Woosley: I would always encourage you. Any pharmacy owner, if you've been in your pharmacy and you've owned your pharmacy for a few years and you've done really well.

Get a pharmacy valuation. Know where you are because it is not the number your CPA gives you at the end of the year about how much you made. It's not, and that is a misunderstanding that a lot of us have. Oh, we made 1. 2 million last year. That is not the value of your pharmacy. One of the things that I spent a lot of time doing was researching deals, what happened last year, who bought who, and where is the market multiple right now? That could change. The market multiple may go up or may go down. Getting that valuation, Is really critically important. And again, it is not expensive. Um, through Cornerstone, my company, we do an initial evaluation for one fee, one time fee, and then we update it for free for the following two years.

So you get three years of a pharmacy valuation for one flat fee. And, you know, and we're always keeping you informed of the market. So that just adds to the knowledge that these owners have to make those decisions about what to do next and where to go. 

Mike: They get the valuation that would not be you putting all your Thoughts in there. I imagine that they could hire somebody, you to then say, how can we increase that valuation?

Would that be the next step from there?

Michelle Woosley: that would be a good step if it's not the number that they want, and everybody has a magic

in their head. those valuations help them get to that, 

if they did need help with that, we probably would not do that through cornerstone. I do have a lot of resources through Gates Healthcare, 

real resource within the community for pharmacy business development. 

to give references, referrals, uh, and get them connected to the right person that could potentially have a conversation.

them. 

Mike: Well, golly, Michelle, nice talking to you.

I've had some merger people on, but it's fun to talk to somebody who deals with them. Equity people who I know aren't there just to make something happen, but try to get a little bit more punch out of it. It was cool to see it from that little bit more of a financial side.

Mike: 

I encourage people to reach out to you, but it's just a pleasure talking to you today.

Michelle Woosley: It's been great, Mike. I appreciate it.

You've made it easy. 

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