Navigating Brokerage

with R.J. Hedges & Associates

It’s not always smooth sailing. Whether you are Buying, Selling, Expanding, or Planning for the Future, the R.J. Hedges Sales & Business Acquisitions Team can help you navigate the waters ahead of you.

SCHEDULE A ONE-ON-ONE QUESTION & ANSWER WITH A BROKER

Our Process

ico_02

Confidential Conversations

We strive to maintain confidentiality throughout the process to protect buyers and sellers. Confidentiality is critical during the sale process, especially during any ownership transition. This is why brokers often say, “Don’t talk to anyone about selling your business unless you have representation.” If suppliers, competitors, prescribers, staff members, or personnel know about a proposed transaction, it can and will diminish the value of the business and, in some cases, substantially. We will advise clients when to inform parties along the way, although many won’t be looped in until after formal agreements have been signed.

ico_03

Partnership

Much like a matchmaker, we manage the process of connecting buyers and sellers to find the best possible match keeping their individual wants and expectations in mind. We have a personal and business philosophy: "Do what you do best and contract the rest.” Your broker should be someone you trust fully with your business. The established trust and partnership should allow you to continue doing what you do best, taking care of patients while we do what we do best, finding qualified buyers for your business.

ico_06

PRICE SETTING

Much like a real estate agent evaluates real estate, we evaluate community pharmacies using specific financial indicators, past and current market performance, and comparable sales of similar pharmacy businesses and provide a realistic price range or value of the business.

ico_04

Marketability

We know exactly what potential buyers are looking for and will prepare two marketing pieces to help advertise to potential buyers. First, a business listing will be created that will include detailed descriptions of your business without compromising your identity or specific location. This is done to appeal to prospects and peak their interest and curiosity, but only disclose some information. After they contact us and we determine they are qualified prospects, we will have them sign a Non-Disclosure Agreement. We will then share a formal and confidential business review outlining more specific and detailed descriptions of your business, services, equipment, employees, contracts, etc.

We have hundreds of independent pharmacy clients across the country, so we likely have potential buyers in close proximity interested in acquiring an additional pharmacy. Combine that with our ability to market on an extensive national database with over 4,000+ registered and prequalified buyers and investment companies, and we have a great pool of prospective, potential buyers to choose from.

ico_05

Managing the Process

It is very difficult to run your business and try to sell it simultaneously, and almost impossible to manage the various professionals requesting paperwork and information. We can work with the required professionals, attorneys, accountants, and many regulatory agencies on your behalf.

ico_01

Negotiating

Even if you already have a buyer in mind, we can assist in all negotiations. In an article written by Len Krick, he used the phrase, “One Buyer is No Buyer.” Being able to negotiate even with only one buyer properly can help increase the final sale price. By having additional potential buyers, you can create some competition for your business, which can help drive the final sale price up. Acting as an intermediary, we can help address the concerns of buyers and sellers and help find shared ground on terms and price.

Available Professional Services

1. Pharmacy Valuation

The valuation process is a valuable tool for any pharmacy owner. Owners request valuations of their businesses for bankruptcy, divorce, estate planning, goal setting, succession planning, buying or selling a business, etc. Items required to evaluate a retail pharmacy include financial statements, tax returns, various pharmacy reports, lease reviews, real estate review, prescription count, technology, trademarks, patents, specialty items, and services, community demographics, and a few others. The result is an official letter of opinion depicting the business's realistic price range or value. If moving into a brokerage agreement, we will guide you in determining the actual value of the facility before establishing a sale price.

 Bankruptcy
 Buying/Selling a pharmacy 
 Buying out a partner 
 Comparisons for a current pharmacy to others nationally 
 Determining market value 
 Disputes with IRS audit 
 Divorce 
 Estate planning 
 Financial health check of your pharmacy 
 Goal setting 
 Junior partnership or succession planning 
 Retirement planning 
 Determining stock value

 

Benefits of having a valuation

Find What Drives Value by identifying the strengths and weaknesses of your pharmacy. If moving toward selling, it also allows owners to solve problems before beginning the selling process.

1. Set a Reasonable Price
There are many different business valuation equations that take into account a wide assortment of variables such as number of prescriptions, net and gross income, expenditures, dollars per prescription, percent of revenue, multiples of earnings, etc. Using any one equation may present a figure either too high or too low. Without determining your value, taking into account many of these equations and utilizing an experienced broker, you will not know how to accurately price your pharmacy.

2. Minimize your risk
If legal or financial matters are involved that may devalue a pharmacy. Having a true comprehensive pharmacy valuation will help safeguard and substantiate your valuation claims.

what-we-do@2x

Doing something new for the first time, people usually enlist a professional, someone with experience, a guide. Buying, Selling, Expanding, or Planning for the Future shouldn’t be different. R.J. Hedges Sales & Acquisitions Team can help point you in the right direction, where ever your path may head.

DOWNLOAD THIS GUIDE

navigating-brokerage-ph01

2. Pharmacy Brokerage

For the owner who wants help every step of the way, we can offer full brokerage assistance for buyers and sellers by:

  • Determining value
  • Marketing the business
  • Screening potential buyers
  • Arranging conversations and viewings for buyers and sellers
  • Preparing all paperwork, including Non-Disclosures, Offer Letters, Sales Agreements, Power of Attorneys, checklists, and notices.
  • Managing all contacts with professionals, including attorneys, accountants, vendors, and regulatory bodies

By evaluating the business and completing a valuation, we can present a market value and will then work with the owner to help determine an asking price. We can then actively market the pharmacy while confidentially advertising the business. When a buyer is identified, we facilitate introductions and the review process. If buyers wish to purchase, we can help negotiate and work with both sides to find mutually agreeable terms and prices. We can also work with financial institutions to help secure financing. Brokerage fees are generally based on a percentage of the total transaction price, including the sale of the business, inventory, real estate, if applicable, and other tangible items in the agreement. Fees can also include stipulations based on the size and complexity of the deal. At R.J. Hedges & Associates, we don’t believe in making clients pay twice, so if a valuation is completed first, then the client moves to a full brokerage agreement, we will always credit that payment toward the final brokerage commission.

3. Representation

Many times, buyers or sellers have already identified a potential transaction with one another and possibly entered into some negotiations but feel they need help from a qualified professional. We can represent buyers and sellers in a potential sale and will assist with all parts of the brokerage process. Fees will be negotiated based on the time and effort needed to assist with the transaction. Additional variables may need to be addressed based on the complexity of the proposed transaction.

4. Acquisition Search / Market Viability Studies

If a buyer has a specific geographical area where they would like to do business, we can conduct a search within that specific area for an existing pharmacy for sale or prepare a market viability study to determine if a new pharmacy is needed and can thrive based on population and proximity to other services and pharmacies. Fees are usually based on a percentage of the transaction, to be negotiated between the prospective buyer and broker.

5. Pharmacy Loans and SBA Assistance

Multiple options for pharmacy loans are available, and lenders are competing for business. We can help you compile the information lenders need to secure the best terms and make better offers with less cash out of pocket. We have worked closely with banks, both locally and nationally, and can ensure lenders receive the correct information promptly to secure the financing you need to close the deal.

Sometimes brokers need to be creative to help put together deals, it is not uncommon for sellers to help “self-finance” if a prospective buyer is short on capital but high in ambition and values.

Types of pharmacy loans available include:

  • Small Business Administration (SBA)
  • Conventional
  • Refinancing
  • Expansion
  • Mergers & Acquisitions
  • Partner Buyouts
  • Seller Financing
navigating-brokerage-ph02

All financial information about pharmacies listed for sale and buyer’s qualifications are representations of the principals and are not guaranteed in any way by R.J. Hedges & Associates. Buyers and Sellers are urged to perform all necessary due diligence through whatever means they are most comfortable with before entering into a transaction to buy or sell any pharmacy listed on this website.

Business Brokerage Terms

Non-Disclosure AGREEMENT

A promissory document that ensures there will be no talking to or sharing of information with any party that does not have a Non-Disclosure Agreement in place.

Engagement Agreement

This is the most important document because it grants R.J. Hedges & Associates (RJH) permission to list and sell a business. It lists the agreement for payment, to conduct Valuation, to prepare Confidential Business Review, and outlines any retainers and scope of work to be completed by RJH.

Consulting Agreement

To be used if RJH is representing a buyer. RJH generally charges $3,000-$5,000 to help review documents and provide guidance if the buyer is working independently of a broker.

FSBO

(For Sale by Owner)

In this situation, for a small fee, RJH can provide documents to help the owner(s) sell their own business. RJH charges $1,250; this is good for businesses selling for less than $50,000.

Letter of Intent

Prepared on behalf of the pending buyer. RJH provides a template and helps the pending buyer complete it, then RJH presents it to the seller.

Due Diligence

The process where the pending buyer is evaluating all documentation provided and does independent research to verify statements, records, and validity of books.

Financial Information Disclosure

Documents completed by prospective buyers to show they have the means to purchase the business.

Stock/Asset Purchase Agreement

Agreement depicting how the pending buyer purchases the pharmacy and assets as a stock or asset sale.

Referral Agreement

Agreement for paying 5-10% to persons who bring RJH a lead of an individual looking to sell their business.

Are you looking to buy your first pharmacy or thinking about adding a new location to grow your business portfolio?

Maybe you’ve already found a business and need help working through the acquisition process. Let our dedicated staff of fully licensed, insured, and accredited business intermediaries help you find the business that is the right fit for you. R.J. Hedges & Associates is A+ rated by the Better Business Bureau and 2017 winner of the Torch Award for Ethics. With a decade of experience, we’d love to help make one of the most important purchases of your lifetime an easy and enjoyable process.

If you’re looking to sell your pharmacy, unsure what it is worth, or curious who may be interested in purchasing it, there are several companies to choose from.

R.J. Hedges Sales & Business Acquisitions has dedicated business intermediaries that are accredited, licensed and insured. With an A+ rating from the Better Business Bureau and winner of the 2017 Torch Award for Ethics, R.J. Hedges & Associates promises to treat you and your business with the care, respect and integrity you deserve. With 10 years’ experience in brokerage, our team members know the hard work that is put into building a business and are prepared to address the questions and reservations regarding the sale of your business. Call today to see if the right time to sell your business is now!

Succession, Estate, and Exit Strategy Planning

If you're looking ahead and want to start preparing your legacy to leave to a family member or possibly sell, the R.J. Hedges Sales & Business Acquisitions staff can help you create plans and put them in place. Actively thinking ahead is what helps so many entrepreneurs succeed. Shouldn't your future plans include thinking about the next generation of owners? If you need help finding the next steps, please contact us today. Our Business Management Section will help you plan the pharmacy's opening, strategies, and benchmarks for succeeding in the marketplace. For Buyers, Brokerage is just the starting point to success.

If you are considering selling your pharmacy, do not share ANY information with a potential buyer without proper representation.

SCHEDULE A CALL

Brokerage FAQ

  • Every pharmacy is different, there is no one set formula that works for every pharmacy. Let our experts with years of experience in business valuation set the proper value and asking price for your pharmacy.

  • Chains are not the only option and may not be the best value for your Pharmacy. Absolutely if you want your Pharmacy to remain independent we will help you sell to another independent owner.
    We never limit our options to one set of options or buyers. We market your pharmacy to find the best offer for the seller. In most cases it is another independent pharmacy owner.

  • You should tell your staff and customers once the sale is final. You don’t want to do anything before the sale happens that could affect the sales of the business.

  • The wholesaler’s only interest is in keeping the pharmacy inside their network.

  • R.J. Hedges & Associates is A+ rated by the Better Business Bureau. R. J. Hedges & Associates is the 2017 winner of the Torch award for ethics from the Better Business Bureau. Our staff is both licensed and accredited as business Brokers. For the last eight years we have been offering the sale of pharmacies internally to our exclusive clients.

    R.J. Hedges & Associates has a long established reputation for outstanding customer service. Recognized with an A+ Better Business Rating and the 2017 Winner of the 2017 Torch Award for Workplace Ethics. Our staff is licensed and accredited as business brokers and with over eight years of experience we are able to serve your individual needs.
  • We highly recommend you seek professional representation and guidance. We have long standing relationships with Attorneys and CPA’s that have experience dealing with the Pharmacy industry. We can help you with establishing a relationship with seasoned professionals who know your industry inside and out.

  • Many independents have the cash, credit and borrowing power to purchase your pharmacy. These well capitalized buyers and investors with financial institutions we have relationships with provide available capital and funds to purchase your pharmacy.

  • The length of time for due diligence will vary with every transaction. The comfort level between the buyer and seller as well as the clarity of properly prepared financial records have the biggest effect on the time it takes a buyer to review a purchase.
  • Yes. All parties will receive Non-Disclosure Agreements before any review of sensitive information is given out. All buyers will be pre-qualified and run through extensive checks before being brought to the table.
  • R.J. Hedges & Associates has been brokering the selling and purchasing of pharmacies on an exclusive basis to our existing clients for the past eight years. We have now chosen to offer our services to all Pharmacies.

  • The length of time to sell a pharmacy varies on every deal. Some can close in as little as two months others may take nine months or more. The largest effect on time is having clean financials for the due diligence process, and the speed at which the buyer and seller wish to complete the transaction where they both feel comfortable. State and Federal licensing must also be in place before the transfer of ownership can happen.