Joe Koechner Keeps Independent Community Pharmacy Growing in Northeastern Kansas
Total Page：16
File Type：pdf, Size：1020Kb
Joe Koechner keeps independent community pharmacy growing in northeastern Kansas By Chris Linville Joe Koechner acquired a building that was in foreclosure in Atchison, Kan. (above left). After extensive renovations, it became his third Kex Rx pharmacy. Eight years ago, Joe Koechner was at a good place in life. In 2005, Koechner traveled the 120 miles south from After graduating from pharmacy school at the University Omaha and met with previous owner Steve Smith (the of Missouri at Kansas City in 1996, his career progressed pharmacy was known as Steve’s Corner Drug). After giving steadily. By 2005 he was in Omaha, Neb., working at Kohll’s Koechner and his wife a tour of the community, Smith Pharmacy and Homecare, a local independent chain. suggested that Koechner work for him for a year to find “I liked working and living in Omaha,” he says. “My out if he liked it, with the long-term goal of transitioning wife Chanda is from there, and our first child was born ownership to Koechner. there. We enjoyed it.” “This way I could find out if it was a good fit,” Koechner Then, a friend told him about a pharmacy for sale in says. “At the end of that year we could make our decision. Hiawatha, Kan. I figured if it works out, great, and if not we’ll shake hands “We went and looked at it and I realized it was what I and go our separate ways. It left it pretty wide open. I really wanted to do,” he says. had nothing to lose. I knew I could go back to Omaha and Koechner had grown up in Tipton, Mo., a community find a job pretty easily [if it didn’t work out].” of about 3,500 people, and the idea of owning a small-town So Koechner and his family moved to Hiawatha and business was appealing. knew within a few months that it was the right decision. “It reminded me of the area where I grew up,” he says. He and Smith began working on the details. Like most “My dad was a small business owner, a welder; he made pharmacists who weren’t owners, Koechner didn’t have a turkey cages. I think that’s why I always wanted to have my lot of capital to invest, so he and Smith decided on a 100 own store, and this gave me the opportunity to do that.” percent owner-financed sale. That first pharmacy acquisition got Koechner thinking “He took the whole note on and I have been paying about a second which he purchased in 2010 in Horton, it back in monthly installments over time,” Koechner Kan., and then a third, a recently opened store which he says. “That works out really well. He continues to own built from scratch in Atchison, Kan. All three operate the building, and there are two years left on the lease, under the Kex Rx Pharmacy & Home Care banner (http:// so I am leasing it from him, and then at the end of the www.kexrx.com/), with the two locations open for more lease agreement, which is eight years, we have the first than a year combining for $5 million in annual sales. The option to buy.” corporate name is Koechner Pharmacies, LLC. Koechner Koechner adds, “It relieved the burden of trying to go says it will transition to Kex Rx Hiawatha as one LLC, as will through the financing with a bank. I think it worked out for the Horton and Atchison businesses. Each will be its own him too because he didn’t have to realize all the income on LLC, wholly owned by Koechner Pharmacies. taxes in one year. It was kind of a win-win situation.” “We’re changing the corporate structure primarily Hiawatha is the county seat for Brown County, and to transition ownership of each store possibly 50/50 to the pharmacy is located in the downtown square near the other individuals as pharmacist partners are brought on courthouse. The one-story building, constructed in the board,” he says. early 1980s, is about 4,000-square-foot and in a structure And Koechner doesn’t plan on sitting still. 40-foot wide by 50-foot long. At one time it had been “I would be very interested in continuing to acquire divided into three different business spaces. The pharmacy other stores, either through acquisition or startup,” he says. was located in one section, with one-third rented out to “I’ve been very fortunate. Things are going very well with an insurance agent, and a small portion to a barber. By the the management of the three locations right now, which is time Koechner arrived, the business had expanded into greatly attributed to the staff here and being able to assume durable medical equipment and compounding, and the their roles and do a good job.” pharmacy occupied the entire space. Koechner says the pharmacy was showing some First Pharmacy wear and tear after 30 years, so he decided to make some Hiawatha is tucked away in the northeastern corner of cosmetic changes. The carpet, paint, and lighting had Kansas, about 15 miles from the Nebraska state line and become dated, so those were all upgraded. Also, a wall some 30 miles from Missouri. dividing the building in half was removed. www.americaspharmacist.net March 2013 | america’s PHARMACIST 31 In 2009, he brought in industry consultant Gabe “That always drove me crazy,” he says. “Employees Trahan, now NCPA’s senior director of Store Operations were walking back and forth to check people out. So we and Marketing and a team member of Front-End moved the checkout counter to the back, which I think has Overhaul (www.ncpanet.org), to help freshen up the helped customer service.” pharmacy even more. On the exterior, Koechner had kept the store’s old name “We needed a lot of help in merchandising, product for continuity, “but we were getting new customers, and selection and pricing,” Koechner says. “We had a lot of they were calling me Steve. That was when we decided it was questions, and we didn’t have a lot of experience in that time to make the change [to Kex Rx].” area. We were like most retail independent pharmacists: we With the name change came some exterior had about two inches of space in between each item on the facelifting. The old sign—a 4-foot by 8-foot sheet of shelf. And most things only had one SKU on the shelf.” hand-painted plywood—was replaced by a new lighted Trahan was able make some suggestions, for which sign. The awning was also repainted. Koechner is grateful. The Hiawatha store has what Koechner describes as the “I give Gabe a lot of credit for the improvements,” “three-legged stool—traditional dispensing retail, durable he says. “We hadn’t thought a lot about it and didn’t medical equipment, and compounding.” The pharmacy put a lot of value into it, honestly. Some of us do things has two full-time pharmacists (other than Koechner), four because we’ve done it forever, and we don’t sit back full-time technicians, two dedicated DME staff, a full-time and question it. He kind of cuts through that type of DME delivery driver (who also does DME maintenance and thinking, so he was a big help.” cleaning), a part-time local delivery driver, and a bookkeeper. Working with Trahan, Koechner tweaked the A part-time respiratory therapist was recently hired also. interior layout. The store dispenses about 225 prescriptions daily, “A path had been worn back to the pharmacy which includes LTC and a small number of compounded counter, so people wouldn’t even look to see what we had medications. The front-end is mostly DME, with in terms of front-end items,” he says. “We rearranged the some greeting cards and a few spinner racks. Koechner selection of merchandising, so people spent more time to uses standard technology such as point-of-sale and see what we had for purchase.” e-prescribing. His computer vendor has web refilling Also, the pharmacy section was in the back but the available, and he is looking to take advantage of some checkout counter was up front, which made no sense smartphone apps that it offers. Koechner also says “the to Koechner. SIG capture on the POS is priceless.” 32 america’s PHARMACIST | March 2013 www.americaspharmacist.net Branching Out After acquiring the Hiawatha location, Koechner wanted A NAME CHANGE to branch out. He found a location in Horton, Kan., CAN BE A GAME CHANGER about 12 miles south of Hiawatha. It was a traditional By Gabe Trahan retail pharmacy located inside a doctor’s clinic building. There are three types of pharmacy customers out Koechner says it was owned by the local hospital, which there. Group one are those who are aware of your was purchased by an acquisition company based in Kansas pharmacy and choose to patronize it. Group two City, Mo. The company decided to spin off all of the other are those who are not aware of your store, and entities that the hospital had acquired over the years, one group three are those who know about your store, of them being the pharmacy. and for whatever reason choose not to patronize it. Groups two and three are required for accelerated Koechner received a heads up from the hospital growth. To attract these groups a pharmacy’s name administrator about the pharmacy divesture. change may need to be a part of your marketing “I was interested, and we put together something program.