EMPLOYEE OR INDEPENDENT CONTRACTOR – ACE INSURANCE VS TRIFUNOVSKI
On 25 January 2013 the Full Court of the Federal Court handed down its final decision in the case of ACE Insurance Ltd v Trifunovski [2013] FCAC 3 (‘ACE Insurance’). Upholding the first instance decision that five persons who had been classified as contractors were in fact employees at common law. ACE Insurance is one of the more recent cases of a growing list illustrating the significant difficulties faced by employers today in classifying a worker as an independent contractor.
SALE PRICE REALITY
Pharmacy Solutions Australia is well placed to comment on what is happening to the prices of pharmacies across the country. We have offices in Melbourne, Sydney and Brisbane and have operated as independent pharmacy business brokers for almost 20 years and transact between 25 and 35 pharmacies per annum. It is now the reality that prices for pharmacies have softened from the heady heights they reached two years ago. They have softened because of the general caution that exists in the pharmacy industry and the weakened economic conditions of our country.
THE BLENDED SOLUTION
Interest rates are at historically low levels providing opportunities for borrowers to establish a worst case interest rate at attractive levels. But a recent spate of improved economic data is indicating that fixed rates may be on the rise in the near future. This leaves borrowers with a limited time to take advantage of low fixed rates for terms between three and five years.
FURTHER DISTRESSED ASSETS BUT LOOK FOR POSITIVES
It is not helpful for the pharmacy industry that there are a couple more groups now in (and about to be in) receivership. As I wrote a few months ago there is pain to be felt this year, but unfortunately this pain is going to be felt by all in the pharmacy industry (not just those in trouble) as banks further consider their lending policies.
STRUCTURING FOR SUCCESS
Previously we have written about the challenges of buying a pharmacy including some of the financial realities that surround a successful purchase. This article is about structuring for success. Pharmacy business structuring includes a myriad of topics such as ownership, staff mix/skill set, IT policies & disaster recovery plans, partnership agreements, sale/purchase option agreements, insurances and business plans to name but a few etc.
SURVIVING THE RENTAL BLUES
It is evident that survival in the current turbulent times requires a great deal of vigilance on all aspects of your pharmacy business. Extra care with staff costs, greater discipline in your buying and not entertaining any unnecessary expenses are the start of keeping your pharmacy profitable. The one area that continues to be the greatest source of threat and the number one reason for pharmacy insolvency is unsustainable rent.
PBS REFORMS – ONE YEAR ON
The PBS reforms which began in April 2012 are almost a year old. At the time there was much industry wide discussion and opinion on how they would affect Community Pharmacy. Some accounting groups argued the weighted average disclosed price (WADP) reductions would lead immediately to many pharmacy businesses failing while others modelled that initially extra profit would be available in 2012, before the tightening would commence in 2014 when net profit would be squeezed in an ongoing “python like” grip.
THE COMFORT’S IN THE PLANNING – BUSINESS SUCCESSION PLANNING FOR PHARMACISTS
Have you ever thought of what would happen to your interest in your pharmacy business if you suddenly died or became permanently disabled? Have you ever wondered what would happen if either of these sudden events happened to your business partner? Could you afford to buy their interest out? Have you and your business partners agreed on the procedure to be followed if a partner wishes to exit the business or retire?
HAPPY NEW YEAR
I hope the festive season was relaxing and that you are ready for a busy 2013. This year will continue to pose challenges, (as have the last few), but if these are met with a willingness for change, an eye for detail and a positive attitude – the pharmacy business will continue to provide solid returns for those who are meeting these challenges.
ANOTHER YEAR COMES TO A CLOSE – WHAT A CHALLENGE IT HAS BEEN!
Another year is almost behind us and it has been a year of significant change for the pharmacy industry with the effects of price disclosure starting to be felt by all pharmacy owners. This year has had many owners considering their future in the pharmacy industry with many colleagues, in a similar age bracket to myself, deciding if it is time for them to exit the industry they have been part of for so many years. As the leading pharmacy brokers in the country, we are very busy speaking to owners about selling their businesses and preparing free market assessments on what price we believe we can achieve in the current marketplace.
WHAT SHOULD YOU LOOK FOR WHEN CHOOSING A BANKING PARTNER?
Some may recall a television advertisement where a banker is at a BBQ, and the participants grow very silent when he announces what he does for a living, but there is then a collective sigh of relief when he proudly announces the bank he works for. Whilst the advertisement has provided a great deal of amusement and laughs, the underlying intent is that the bank mentioned is a differentiated player and provides a safer pair of hands than the majority.
WOULD YOU LIKE TO HAVE A MEDICAL PRACTICE ADJOINING YOUR PHARMACY?
You probably all know a pharmacy that enjoys the significant benefits that flow from the creation or expansion of an adjoining medical practice. Despite appearances it is unlikely these “success stories” have happened by accident. To create value in this way is not difficult (and is preferable to buying it from someone else!) but it does require time, effort, capital and risk taking. Equally, to ignore an opportunity also carries risk as property developers, medical consolidators and pharmacy competitors alike are seeking to capitalize on the commercial benefits a medical centre offers.
