Selling a Pharmacy
The sale of a pharmacy is a delicate matter and most owners want someone to help them that understands the emotional ties, as well as, the business end of this decision.
Whether you’ve worked your whole career building your business, inherited or purchased from family, or more recently acquired the business, at some point all owners start to think about the next chapters of their life and selling their business. This is more than a business decision, as this sale will impact the lives of your staff and community. Is this pharmacy responsible for your retirement, a business investment, a family legacy? Regardless of the answer, the sale of a pharmacy is a delicate matter and most owners want someone to help them that understands the emotional ties, as well as, the business end of this decision.
The process of selling an independent pharmacy is challenging and attempting to do it alone can be an overwhelming task. Unfortunately, most sales are not seamless or pain-free. Owning and operating an independent pharmacy has never been more challenging. With low reimbursement rates, difficult regulations, and increased DIR fees, even owners with prime locations and a large customer base can struggle to stay afloat.
Whether you are researching how to sell a pharmacy business, open a new pharmacy, need to value a pharmacy, or even need representation during a sale in progress, R.J. Hedges & Associates can assist you every step of the way.
Reach out to us for more information about selling a pharmacy business and the best ways to calculate the overall business worth of your pharmacy; we would be happy to assist with any questions that you may have. Or you can review one of our published articles.
Selling a pharmacy is one of the most complicated brokerage transaction.
Download our pretty-darn-complete guide to help understand our selling process.
Selling an Independent Pharmacy…
Broker, Attorney, CPA, or Solo?We’ve noticed a trend with pharmacy owners who are selling their pharmacies; if they are using a CPA or an attorney, they often fail to consider the intricacies of the pharmacy licensure and operating numbers, leaving large gaps for the new owner and the seller to continue to struggle with post sale. A pharmacy is not a hardware store!! In fact, selling a pharmacy is one of the most complicated brokerage transactions. And, even if a broker is involved, once the sale is finalized and commissions are paid, the buyer and seller are left in the dark. How do you close out your files? Which suppliers or vendors need notified? Do you need to change addresses for your reimbursements? Are their actions to take with your NCPDP, NPI, PTAN, etc.?
We have been asked many, many times at the 9th hour to step in and help review documents, prepare closing paperwork, draft articles, and complete applications to help, not only the sellers but also the buyers. All of which we are happy to do and, luckily, have the ability and knowledge to do so.
At some point as owners, we all toy with the notion/question “What if I sell my business?” So if you’re currently considering selling, please keep in mind we treat brokerage like compliance where we can help with one element all the way up to full service assistance; we can help with Pharmacy Valuations, can serve as your representation in a sale, and can handle the full listing and sale as we are licensed and accredited brokers.
Our Blog “3 Roads To Sell Your Pharmacy” outlines selling generationally (to a member of your family), to a staff member or other Independent pharmacy owner, or to a Chain; we also have several other articles available on our website - www.rjhedges.com.
At R.J. Hedges & Associates, we are a fully licensed and accredited pharmacy brokers, we have experience selling all types of pharmacies including retail, long-term care, and compounding. We can provide services for all sizes of pharmacies, including multi-locations, across the country.
If you are looking at selling an independent pharmacy, there is a step-by-step approach we’ve developed that establishes the selling process, which also simplifies the entire selling experience from initial consultation, to the closing date and beyond.
Our simplified, straightforward approach allows us to take control of the selling process, which allows the seller to concentrate on their future.
At R.J. Hedges & Associates, we like to refer to ourselves as the “checklist people” as we have checklists for everything. We hope you find these 6 steps helpful.
Selling a Pharmacy:
A How to GuideDetermine Ability and Willingness to Sell Pharmacy
A phone call helps us get to know you and your situation. This is a no cost, no obligation, confidential call. If you are interested in our services, we will prepare a Non-Disclosure and Listing Agreement. These do NOT obligate any owner to sell their pharmacy but provides confidentiality, protects both parties, and outlines fee structures. It most certainly can be canceled at any time by either party if need be.
Calculate the Value of your Pharmacy
We offer different services for finding out what your pharmacy is worth. Depending on your needs and reasons for wanting to determine the value of your pharmacy, our services may range from a market analysis to a professional letter of opinion. Like selling a home and acquiring a home appraisal, knowing your pharmacy value is instrumental in not only listing a pharmacy for sale, but ensuring the best price is achieved.
Prepare for the Sale of your Pharmacy
Once the value of the pharmacy is determined, if the price range is acceptable, we will proceed to the marketing phase. A listing will be created on our website as well as other leading business sites to help attract potential customers. We will also notify buyers within our network of the new listing. When qualified buyers express interest, we will acquire a Non-Disclosure Agreement from them and, in return send a “Confidential Business Review”; this presents a professional snapshot of your business in a confidential manner to potential buyers.
Find a Buyer(s) for your Pharmacy
Our job is to get you the best possible sale price while keeping in mind your wishes. If a chain will give you the highest dollar but you want your location to stay independent, we will respect that and present you a variety of options. In the end, we will work much like a matchmaker and discreetly find a qualified buyer(s) for your pharmacy.
Prepare for the Sale of your Pharmacy
We negotiate with other independent pharmacy owners, investors and regional and national chain buyers to get you the best value. We have contacts for buyers in all possible areas.
Complete the Sale of your Pharmacy & Ongoing support
From start to finish, we will be there when you need us, even if we need to fly across the country to help you on your closing day. Our representation doesn’t stop at inventory counting, document signing, and the final exchange of funds. Our experience as compliance experts has made us well aware that the final signing is no where close to the end of the sale. There are notices that will need prepared, licenses that potentially need returned, and many other details that will still need attention. This is what sets us apart from other brokers, attorneys, and CPA’s.
When is the right time
for Selling an Independent Pharmacy?
There are several reasons why an independent pharmacy owner may want to sell their pharmacy. From retirement to wanting to start a new business venture, there’s no wrong reason to sell a pharmacy. One may argue there is no wrong time to sell a pharmacy, but the right time is surely when the owner decides freely and of their own choice that it is time to sell. Some common examples of why or when an independent pharmacy owner may want to sell their business include:
- Retirement
- Health concerns
- Pursuit of new business ventures
- Feeling burned out and overwhelmed
- Ownership Discrepancies
- Devolvement of Estates and Divorce
- Poor business performance such as reduced revenue or shrinking profit margins (Thank you DIR Fees)
- Competition or shrinking customer base
Although it is usually better to sell your pharmacy when it is doing well, we understand that annual sales and profits for owners maybe on the decline due to low reimbursement rates, DIR fees, mail order competition and even contract retention. Regardless of the financial state of the pharmacy, we can help acquire buyers.
Properly executed commercial transactions are complex; adding real estate and transferring licenses and operating numbers increases the difficulty. Selling your pharmacy without a licensed broker experienced with selling pharmacies, can net a lower selling price and open Pandora’s box for untold future issues. Please, if you are considering selling your pharmacy, do not share ANY information with a potential buyer without proper representation.
