Flint Hills Pharmacy and Hometown Apothecary. Presented By: Melissa Rufenacht Eric Gourley

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1 Flint Hills Pharmacy and Hometown Apothecary Presented By: Melissa Rufenacht Eric Gourley

2 MISSION STATEMENT.As independent and compounding pharmacies is to fulfill the need for easily accessible health care to the city of Burlington, Kansas and the surrounding rural community. Our goals include providing medications, specialty compounding to community members and veterinaries, durable medical equipment, early detection and treatment of common disease states, and education from caring staff of pharmacists and employees. We are focused on improving our patient s quality of life as well as becoming active and supportive members of our community.

3 LEGAL STRUCTURE OF BUSINESS Independently owned and operated Subchapter S Corporation Two separate entities within corporation Junior Partnership agreement with current owners of Flint Hills Pharmacy

4 LEGAL STRUCTURE OF BUSINESS Benefits of Subchapter S Corporation Avoid double taxation Evade personal liability Allows profit sharing between percentage ownership

5 PRIMARY MANAGEMENT Equally shared ownership of Flint Hills Pharmacy and Hometown Apothecary. Pharmacist in charge of Hometown Apothecary is Melissa Rufenacht, Pharm. D Pharmacist in charge of Flint Hills Pharmacy is Eric Gourley, Pharm. D All services will be performed equally by the pharmacists and staff.

6 INSURANCE Pharmacists Mutual Property General liability Professional liability Employee benefit liability Money and securities and loss of income Personal Health Insurance Blue Cross Blue Shield of Kansas Each entity has own insurance and registration

7 SECURITY MEASURES ADT PremisePro Wireless system Motion sensors and security cameras on all doors and windows Emergency buttons that contact local police Schedule II Controlled Substance Lock Box One ton office safe Local Burlington Police department 24 hour emergency response Meets State Board of Pharmacy guidelines

8 LOCATION ANALYSIS Downtown Burlington, Kansas Corner of 6 th and Main Street Surrounded by other local businesses Plenty of accessible parking Large store front windows for display

9 PRODUCTS AND SERVICES Flint Hills Pharmacy Products Prescription medications OTC medications Health related items Quality gifts and cards One hour photo shop Office supplies Few nonperishable food items Old Fashioned soda fountain and snacks

10 PRODUCTS AND SERVICES Flint Hills Pharmacy Services New Services offered Private patient counseling Medication Therapy Patient record maintenance Management Drug utilization review Immunization clinics Delivery for prescription and Disease state education health care needs Diabetes monitoring 24 hour emergency service Blood pressure checks Nursing home consulting Patient med box filling

11 PRODUCTS AND SERVICES Hometown Apothecary Bioidentical hormone replacement therapy compounds Consult for doctors Patient therapy management Veterinary compounds Specialty non-sterile compounds Pain management compounds Patient specific medications via doctor orders Patient counseling

12 MARKETING AND ADVERTISING Hours of Operation Flint Hills Pharmacy Monday-Friday: 8:00 a.m.-6:00 p.m. Saturday: 8:30 a.m.-1:00 p.m. Hometown Apothecary: Monday-Friday: 8:00 a.m.-6:00 p.m. 24 hour emergency on call prescription service

13 MARKET AND ADVERTISING Target market Entire rural community of Burlington, KS City of Burlington population: 3,280 Only pharmacy in county so surrounding area Burlington County population: 4,876 Aging Baby Boomer population Patients requiring specialty compounding Nursing homes and assisted living facilities Chronically ill patients

14 MARKETING AND ADVERTISING Outcomes Product awareness Compounding exposure Community and school involvement Health professional support Market potential awareness Event Amount Community Sponsoring $3800 Annual Luncheon $2100 Newspaper $1250 Local TV $980 Website $680 Business Cards $185 Promotional Items $320 Other/ Miscellaneous $685 Total $10,000

15 MARKETING AND ADVERTISING Annual Luncheon Informational event for all healthcare professionals in the area Focuses on a specific compounding opportunity Quarterly Newsletters Mailed to all local healthcare professionals Separate letter sent to veterinarians Provides information on our compounding services offered

16 MARKETING AND ADVERTISING Compounding Closest pharmacy is 25 miles away Only compounding pharmacy within 50 miles Mail order pharmacy popularity Still offer competitive prices Accessible and friendly pharmacists and staff Offers 24 hour on call emergency service Medication Therapy Management services Full range service Old fashioned soda fountain

17 PHYSICAL DESCRIPTION OF BUSINESS 9825 sq. ft. Flint Hills Pharmacy Hometown Apothecary

18 PHYSICAL DESCRIPTION OF BUSINESS Flint Hills Pharmacy main floor

19 PHYSICAL DESCRIPTION OF BUSINESS Hometown Apothecary

20 FINANCIAL DOCUMENTS Assets Current Assets Flint Hills Pharmacy and Hometown Apothecary Balance Sheet Cash $275, Accounts Receivable $120, Inventory $243, Total Current Assets $639, Fixed Assets Building $263, Equipment $190, Autos $72, Depreciation allowance -$401, Total Fixed Assets $124, Other Assets Prepaid Expenses $10, TOTAL ASSETS $774, Liabilities and Equity Current Liabilities Accounts Payable $42, Accrued $22, Other liabilities $9, Total Current Liabilities $75, Long term Liabilities Equipment $138, Autos $49, Notes payable $98, Total Long term Liabilities $286, TOTAL LIABILITIES $361, OWNERS EQUITY(Assets-liabilities) $412, Owners Equity $412, Total Assets $774, Total Liabilities $361,983.02

21 PROJECTED SALES/EXPENSES Year Sales Expenses Net Income 2010 $3,905,731 $3,685,436 $220, $4,181,596 $3,907,852 $273, $4,469,403 $4,144,524 $324, $4,771,989 $4,395,245 $376, $5,064,190 $4,660,860 $403, $5,365,346 $4,939,761 $425,585

22 COST AND EXPENSES PER SQUARE FOOT Year Total Profit/ Square ft. Total Expense/ Square ft. Total Revenue/ Square ft $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $43.32 Total square footage of Flint Hills Pharmacy and Hometown Apothecary: 9825 ft 2

23 FINANCIAL DOCUMENTS Hometown Apothecary over Term of Junior Partnership Expenses $225,035 Profit $768,750 Break even Projection Expected number of Prescriptions 7,501 prescriptions 24,375 prescriptions Flint Hills Pharmacy amortization data After junior partnership we plan on financing and paying off the pharmacy in 5 years The last payment will be January 1, 2021

24 FINANCIAL DOCUMENTS Inventory Evaluation Computerized inventory control Perpetual control of inventory Calculates reorder point and economic order quantity Generates automatic orders Internet order of Schedule II drugs Year 1 Year 2 Year 3 Inventory Turnover rate Inventory Turn(days)

25 JUNIOR PARTNERSHIP Payment from Junior Partner based on 10% of the total price of the pharmacy at the end of the year which the junior partner only pays 5%. Payments start after the end of the second year End of the 6 th year the Junior Partner owns 50% of the corporation which will then be collateral to purchase the last 50% using a loan from the bank. Beginning 2017 the Junior Partners will make all decisions concerning the corporation.

26 FINANCIAL DOCUMENTS Flint Hills Pharmacy and Hometown Apothecary Income to Owner from Net Profit and Purchase Payments End of 2010 End of 2011 End of 2012 End of 2013 End of 2014 End of 2015 Value of Pharmacy $870, $922, $977, $1,036, $1,098, $1,164, Ownership share to Junior Partners 0% 10% 20% 30% 40% 50% Payment from Junior Partner $0 $46,110 $48,877 $51,809 $54,918 $58,213 Net profit of Pharmacy $220, $273, $324, $376, $403, $425, Owner's Share of Pharmacy 100% 100% 90% 80% 70% 60% Owner's Share of Profit $220, $273, $292, $301, $282, $255, Total $220, $319, $341, $353, $337, $313, Amount made by owner if sold outright: $870,000 Amount made by owner through Junior Partnership: $1,885,433

27 FINANCIAL DOCUMENTS Flint Hills Pharmacy Income from Bonus and Profits and Projected Payments of Junior Partner Year of Transfer agreement Income from Net Profit Income from Annual Bonus Net profit and Annual Bonus of Junior Partner End of Year Payment to current owner 2010 $0.00 $11, $11, $ $0.00 $13, $13, $46,110.00* 2012 $32, $16, $48, $48,877.00** 2013 $76, $18, $95, $51, $122, $20, $142, $54, $172, $21, $193, $58, *Junior Partners need to save $ per month to avoid borrowing. **Junior Partners need to save $12.09 per month to avoid borrowing. Bonus based on 5% of net profit

28 FINANCIAL DOCUMENTS Debt/Equity Ratio Total Liabilities minus Total Assets equals Equity Based on the beginning of 2016 Debt is the total amount of loan to pay for half of the pharmacy Equity is amount of pharmacy owned by Junior Partners which is half Debt/Equity ratio equals 1

29 ACKNOWLEDGMENT John and Glenda Lowdermilk Amber Haag Curtis and Barb Woods Dennis Grauer The Deans of The University of Kansas, School of Pharmacy

30 QUESTIONS???

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