Whether you’re selling your drugstore so you can retire or ready to move onto your next business venture, the timing should always be right to sell your business.
There are several procedures to follow to ensure the sale process runs smoothly. It is also important to know, as the vendor, what factors could impact the sale of your business.
Factors to consider
The financial analysis of your pharmacy will essentially be the most important factor to determine the value of your business.
However, there are also several other factors that will influence the value, such as the physical condition and appearance of the premises. If there are any signs or building repairs that need doing, it’s a good idea to tend to this before you put your business on the market.
Entrepreneurs who are interested in purchasing the business will want to know what other competition is in the area.
Be fully aware of who your main competition is and show prospective buyers what your main USPs are in comparison to these other drugstores; perhaps you have an extensive cosmetics and beauty range that attracts other customers to your store, or maybe you focus in specialist prescriptions and medication.
Your drug store’s reputation within the community is just as important as the physical appearance of your business; it’s likely a potential buyer will want to oversee how the business operates by talking to staff, managers and customers.
It is important during this period to show that your business is a well-oiled machine that has a good team of staff and great customer service.
Determining a sale price
Appointing a real estate agent, broker or Mergers and Acquisitions advisor with experience in the pharmacy industry, to mediate between you – the seller – and any potential buyers is a good way to make sure you get the best possible price for your business.
It also keeps negotiations strictly professional; if you are handling the sale of your business by yourself, it’s easy for things to become personal, especially during negotiations, as you are more likely to be sentimental and bias about the value of your business.
The value of your drugstore will largely be determined based on the business’s tangible and intangible assets. Tangible assets will include any stock that is being included in the sale, such as equipment, accounts receivable and sometimes real estate, which includes the land and building.
Intangible assets will include prescription files, customer lists, repeat business and goodwill.
Another formula is multiplying the net income of the pharmacy by a multiplier which reflects the current drugstore market in Canada. The average revenue for a pharmacy in Canada is
Your business broker will want to review several years of business accounts, which will help determine a fair and realistic price for your drugstore; make sure all your accounts and bookkeeping is in order as most prospective buyers will also ask to review your accounts before they make an offer.
If you haven’t kept your accounts in order throughout running your drugstore business, then it’s a good idea to set aside time to do this so you have all the information at hand for any sale negotiations.