Deciding to sell your pharmacy is never easy. There are several time-related considerations to address as you begin the selling process, all of which will impact the time it takes to close. One of the biggest decisions you’ll have to make is whether to work with a professional or to try selling your pharmacy on your own. Both paths have their benefits and drawbacks, so it’s best to do your homework and some soul searching.
At the end of the day, you need to make the decision that’s right for your situation. Let’s discuss the different professionals you can work with and the pros and cons of each one.
Who Can Help You Sell A Pharmacy?
You can sell your pharmacy on your own, or you can enlist the help of an attorney, a certified public accountant, or a broker. Here’s a breakdown of each option:
1. On your Own
Selling a pharmacy is a time-consuming process in general, but even more so if you decide to sell on your own. If you’re thinking about selling your pharmacy on your own, consider how much time you want to invest in the process. If you find yourself questioning where to start, how to draw up papers, find buyers or unable to fully dedicate yourself to completing these items by yourself, it could be a sign that finding a professional is the right move.
If you do decide to sell on your own, start by figuring out what you’re selling, as well as how much it’s worth. Do you have a plan to liquidate assets if your buyer only wants a part of the business, such as patient files? Next, who do you want to buy your business; do you want to sell to a chain or keep it independent? Are you selling the business as a stock or asset sale? Are you willing to do owner financing of any sort? Then determine how you are going to market it, qualify your potential buyers, negotiate pricing, handle all paperwork, licensure, and notices.
These decisions can be overwhelming, especially when added to the normal workload of running a pharmacy. It’s similar to why so many people use a wedding planner when getting married. You probably wouldn’t consider making your own cake, arranging your flowers, or sewing your own dress or tux. Having someone guide you throughout the process makes it much easier. Working with professionals and specialists gives you extra peace of mind.
Many have sold their businesses own their own successfully. If you have the time, the patience and the knowhow, it’s a challenging and rewarding path to choose. Please be sure if you do sell on your own, you still take time to get occasional assistance from a trusted attorney or CPA. They can make sure you aren’t making any major mistakes and can advise you as you work through the selling process.
2. The Lawyer
Selling a pharmacy is a lengthy process that includes a myriad of documents, agreements, and other papers to sign. An attorney will prepare any necessary documents, and work with the buyer’s attorney, to ensure everything is agreeable and the selling process keeps moving along.
Have you ever signed a contract, or agreed to terms of service, that you didn’t fully comprehend? Having a lawyer on your side means they’ll examine any agreements and negotiate changes to certain sections, or wordings, to benefit you. They’re also great at finding appropriate verbiage to use when drawing up documents on your behalf.
One major issue in working with an attorney, however, is how unique pharmacy sales truly are. If your lawyer has never dealt with a pharmacy sale, or possibly doesn’t do it often, you could experience issues. Lawyers will have no issues drawing up an agreement of sale, but they are unlikely to include the transitions of your pharmacy license, pharmacy contracts, DEA number, Medicare number, and more. Be sure to consult a pharmacy consultant to be sure the correct items are being included and not overlooked. This advice also goes for buyers when buying a pharmacy and utilizing the assistance of a lawyer.
3. The Accountant
Working with a CPA is a solid option when it comes to selling your independent pharmacy. Getting your books and finances in order is something that a considerable amount of time to do if you haven’t been diligent on your records or if your past accountant wasn’t as thorough with their recommendations and oversite.
If are using an online accounting platform, like QuickBooks, your accountant will be able to easily run reports and provide you with any financial information you need, which is especially helpful when determining the value of your pharmacy before you sell it. Items to review would be Balance Sheets, Reconciliation Reports, Perpetual Inventories, Depreciation Schedules, Asset Sheets, 3rd Party Receivables, etc.
Be wary of accountants who still rely on a pen and ledger system. Most of the world has moved to digital accounting platforms, in these instances, running reports take significantly longer. Not only does this hold up the valuation and sales process, but it can cause frustration for you and for any potential buyers – which is the opposite of what you want. If this option resembles your current situation, you may want to consider upgrading your accountant to someone familiar with the realm of pharmacy and let them know in advance your planning to sell in a certain number of years, so they can help get your books in order and normalize your records.
Additionally, accountants are great resources for forecasting tax liability. All professionals are going to look at the sale differently, but they will be able to look at the sale from the tax stand point and give their opinions to sell as a stock or asset and can help determine which options are best from a tax stand point.
Most local accountants don’t have experience with pharmacy sales. In many ways, pharmacy sales are no different than the sales of other businesses, but the healthcare industry is by far the most heavily regulated industry. Working with someone who isn’t familiar with pharmacies could make things more difficult instead of easier. Consider an accountant that specializes in healthcare or pharmacy as a niche client.
4. The Broker
Working with a broker to sell your independent pharmacy is often the best option, especially when they have experience selling pharmacies. Brokers are familiar with the entire sales process and can work as the go-between for both lawyers and CPAs, making things as easy as possible for you.
Selling your pharmacy can be a lengthy process, but a broker will do everything in their power to speed it up. Your broker will send out requests for any information they need, as well as, when they’ll need it, so you’re never in the dark.
When working with a broker that is familiar with pharmacy sales, they’ll know to create purchase agreements, promissory notes, guarantee agreements, powers of attorney, CHOW, and Medicare apps for the transition of ownership at closing. These are items you won’t have with a professional who is unfamiliar with pharmacy sales.
5. R.J. Hedges & Associates
Looking for an option to ensure smooth sailing while navigating the sale of your business? Do you want to sell your pharmacy? Want to know what it's worth? Are you curious about who may be interested in buying it? R.J. Hedges & Associates is a great choice. Our dedicated business intermediaries are accredited, licensed, insured, and will treat your business with the care, integrity, and respect you deserve.
Our team understands how difficult it is to run a business while also trying to sell it; which is why we work with the required professionals, accountants, attorneys, and regulatory agencies on your behalf. With the experience needed to navigate unique situations that may arise, you can be assured you will have the support and guidance, to not only get your pharmacy ready for the sale, but have support during and after the sale to complete all the necessary actions.
The team at R.J. Hedges & Associates has developed extensive processes and detailed checklists at every step of the way: preparing to sell, negotiating and closing the sale, finalizing the sale, and post-sale, to ensure all necessary items are collected and prepared. With the help of a dedicated broker, who will hold your hand throughout the entire sales process, you can feel confident all matters are being handled carefully and correctly.
If you are interested in working with a broker to help sell your independent pharmacy, contact us today to learn how we can help.
To learn more consider one of our other blogs:
- How much time does it take to sell a pharmacy?
- 3 Roads To Sell Your Pharmacy
- How to Value an Independent Pharmacy
- You Sold Your Independent Pharmacy, Now What?
- Introduction to Pharmacy Brokerage [PodCast]