When considering selling your pharmacy, it is imperative to stand back and consider a few key points.
Regardless of the reason behind the decision to sell your pharmacy, it is crucial to consider certain actions to make sure your sale is not only smooth and successful, but that it also provides the maximum captial return.
Choose your advisers wisely
Ensure that you seek advice from a reputable agent and solicitor, in addition to your accountant, who will have a detailed financial understanding of your business.
While many agents and solicitors have experience in the pharmacy sector, some are small with limited reach, whilst others have a nation-wide network offering national, regional and local knowledge.
Research prospective agents thoroughly, visiting their websites to compare their services, recent activity, endorsements and testimonials.
Your agent should be willing to meet with you to not only understand your business, but also obtain insight into the competitive landscape in the local area.
Granted, you may be nervous about confidentiality at this early stage, however, a good agent is always happy to meet at a time that is convenient for you.
When choosing a solicitor, adopting the same approach as when choosing an agent will lead you to someone with an understanding of the sector.
Asset or share sale?
If your company is incorporated, it is important to seek early advice from your accountant to ensure that your adopted sale structure is as tax efficient as possible.
Preparing for market
Collating a pack of summary information will help you and your agent get a better understanding of your business and its standing.
Generally, the agent looks for:
- The last three years’ trading accounts
- Management accounts for the period to date from the last formal accounts prepared to show current trading
- Statements from the last 12 months to provide a detailed summary of dispensing and service activity
- A breakdown of staffing - anonymised to outline position, hourly rates and typical hours worked
- Tenure information - if leasehold, either a copy of the lease for the premises or a summary of principal terms
There isn’t a bad time to sell if your business if it is presented to the market properly and priced correctly.
The agent normally expects a period of 6 to 10 weeks of general marketing prior to seeking ‘best and final’ offers.
Once an offer is accepted, the average time a sale will take to complete is approximately 6 to 7 months.
This means you can expect to see a full sale process take up to 9 months to complete, although this will depend on the sale process adopted.
A share sale will often be quicker, due to a different regulatory approach in relation to the pharmacy licence.
While some of the above may appear daunting, if you have never sold a business before, a professional and experienced agent can easily guide you through deciding when, and how, to bring your pharmacy to the market.