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How to Support Family while Starting New Business?

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rated:
I am a pharmacist in NY. I am looking to possibly partner with a colleague of mine in purchasing an existing pharmacy. Without even getting into those details, my primary question and issue is financial. I would like to get informed opinions on this one primary issue for me at this very preliminary time: I don't currently have money saved nor do I really have any liquid funds that I could use to support my family at the early stages of a business venture. Even with getting a small business loan, my biggest fear is having funds to support my family while I get into business. Can anyone tell me if they have ever started a business in such a circumstance? If so, can you provide some direction on this issue. I would appreciate it.
Please Help.
Thanks !
I didn't find the right solution from the internet.

References:
- https://www.smallbusinessforums.org/showthread.php?17718-An-absolute-beginner-s-question515165
 

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rated:
Pick your preferred answer:

a. If you are asking this question then you probably shouldn't be doing this as your best hope will be luck.

b. You should look up SCORE (https://www.score.org/) or find someone who has started a business, pay to take them to lunch and get some very valuable near-free advice.

c. Setup an appointment with a local bank, explain what you are doing, and ask how many million they will loan you.  Then ask why and listen.

d. Don't worry about it and hope that you won't make mistakes and find that you needed much more money for the business than you planned, then be forced to give up on the business sooner than you wanted to take a job to pay your mortgage.

rated:
Have you considered delaying your buy-a-business plans, saving money, and then trying to start a business after you have saved enough money?

rated:
While I understand you very well having started a few failures of my own, you are not ready to take on this desired business. The desired pharmacy can be cash poor at times placing you in a horrid position trying to feed your family or not lock the doors. Inventory control is a financial nightmare. Given your self described situation, the distributors will demand cash on delivery or within 48 hours at best. I am NOT a pharmacist, but I have dealt with some in similar situations and have seen some pharmacies forced to shut their doors.

rated:
After buying the business, you want to have enough cash in the bank to cover at least 6 months of expenses - both personal living expenses and fixed business expenses - assuming zero revenue.  If not, you shouldn't be buying the business.  Even successful, profitable businesses can go bust due to short term cash crunches.

rated:
Carts go after horses..

rated:
My wife is a pharmacist. She wants to open her own compounding pharmacy. We've done the initial research on it. We would need to have around $200K for everything, and shouldn't expect to do better than break even the first year.

Pharmacy schools have cranked out around twice as many pharmacists as are needed in the market. That's driving wages down, and making it harder to find a job. A recent Pharmacy Manager opening with her company had 50+ internal applicants(didn't even get posted to the public), and wasn't even a very desirable location.

Unless you have management experience, at least 1 year cost of living saved and the money needed to buy/open the pharmacy, you're going to be in a much worse financial situation a year from now than if you stay a pharmacist working for someone else.

rated:
RealEstateMatt said:   My wife is a pharmacist. She wants to open her own compounding pharmacy. We've done the initial research on it. We would need to have around $200K for everything, and shouldn't expect to do better than break even the first year.

Pharmacy schools have cranked out around twice as many pharmacists as are needed in the market. That's driving wages down, and making it harder to find a job. A recent Pharmacy Manager opening with her company had 50+ internal applicants(didn't even get posted to the public), and wasn't even a very desirable location.

Unless you have management experience, at least 1 year cost of living saved and the money needed to buy/open the pharmacy, you're going to be in a much worse financial situation a year from now than if you stay a pharmacist working for someone else.

I hope she has researched FDA requirements for compounding pharmacies well. Especially if she is going planning to compound anything sterile. 200k sound slow. I am an industrial pharmacist with my own pharmaceutical operation. Our analytical equipment alone costs over $500k/year to operate and maintain. You maybe underestimating the costs, especially of hiring adequate qualified personnel. I would recommend you review this link at minimum: 

https://www.fda.gov/drugs/guidancecomplianceregulatoryinformatio...

Disclaimer: My opinion is biased because as a pharmaceutical firm we spend millions developing and manufacturing drugs while maintaining compliance with FDA requirements. However, often feel that compounding pharmacies are not held to the same standards when essentially they are manufacturing the same pharmaceuticals. 

P.S.: OP I did leave a very comfortable job to start my business and I tend to agree with what others are saying. a 6 month safety net is absolutely recommended. After 5 years of starting my own business, my only regret is why I did not do it sooner. Best of luck!

rated:
If you partner with the right doctors prescribing the right medications to the right patients(thinking opioids) you could be making money right away. Maybe you could find someone in the opioid business that needs to launder money?

Might be better off buying a Winnebago and setting up shop in the desert. 

rated:
Wait a minute, this doesn't make any sense. If you are a current pharmacist in NY, why do you not have money saved? How long have you been a pharmacist and why do you suddenly want to buy a business?

I am looking to possibly partner with a colleague of mine in purchasing an existing pharmacy.

How much is the purchase for? Is this place not revenue positive? Is the pharmacy not turning a profit from which you can pay yourself a salary, even a small one? If it is not revenue positive and producing a net profit, why in the world are you thinking of buying it?

Without even getting into those details, my primary question and issue is financial.

As they should be, and mine too. My first questions is why do you not have any savings? This suggests poor personal financial management and if you can't manage your own stuff, how are you going to manage business finances?


I don't currently have money saved nor do I really have any liquid funds that I could use to support my family at the early stages of a business venture.

Why would you have to "support" your family? That's what the EXISTING business is supposed to be for. The one with clients and employees and such that is currently running right now.

rated:
Maybe your family should support you in the mean while.

rated:
A pharmacist looking for a solution? Oh I kill me.

rated:
joeclarkvideo said:   I am a pharmacist in NY. I am looking to possibly partner with a colleague of mine in purchasing an existing pharmacy. Without even getting into those details, my primary question and issue is financial. I would like to get informed opinions on this one primary issue for me at this very preliminary time: I don't currently have money saved nor do I really have any liquid funds that I could use to support my family at the early stages of a business venture. Even with getting a small business loan, my biggest fear is having funds to support my family while I get into business. Can anyone tell me if they have ever started a business in such a circumstance? If so, can you provide some direction on this issue. I would appreciate it.
Please Help.
Thanks !
I didn't find the right solution from the internet.

References:
- https://www.smallbusinessforums.org/showthread.php?17718-An-absolute-beginner-s-question515165 
 

  you probably never heard or had the need to deal with a phrase called "working capital"....its the business equivalent for what you are thinking about your family expenses....how are you going to deal with providing sufficient working capital? a great large percentage of small businesses fail in the early phases.......

rated:
Retail pharmacies are cash flow hogs.  You have to buy inventory, replace it the day you sell it and wait for payment from insurance companies that offer take it or leave it contracts.  Then in many cases they come to you after the fact and try to recoup their payments through audits and DIR fees that will make your head spin.  Purchasing an existing pharmacy is better than starting from scratch, but in the best case scenario, your are really only buying a job and if you really crunch the numbers are much better off being an employee.  Why take on all the headaches for the possibility of a slightly higher income if you can ever pay off the debt.  Work a few extra hours, above your schedule now and your free time is yours without any of the frustrations.  Even if you pay off the debt, selling an existing pharmacy these days does not net the owner much in the way of a retirement nest egg, like it did when the chains were in a feeding frenzy to obtain more volume.  Single independent pharmacy owners are becoming extinct, for the reasons I outlined and many, many more that are too lengthy to detail here.
 

rated:
Keep your existing rx job and buy CVS on 5:1 leverage. Probably the same risk profile.

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