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Strategies for Increasing the Value of Your Independent Pharmacy Before Sale

You’ve spent years building your independent pharmacy, but now you’re considering putting it up for sale. The question is, how do you maximize its value before you make that big move? This is where strategic planning comes into play. Focusing on critical areas like operational efficiency, customer experience, and revenue diversification can significantly enhance your pharmacy’s market value among other pharmacies for sale. This attracts more potential buyers and positions you for a more profitable sale. So, keep reading the blog to learn more.

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Why Is It Important to Know the Value of Your Business?

Figuring out the value of your business is a complicated undertaking. There are many variables and aspects to consider, and one must not only look closely at your business but also understand your external environment.

Business evaluation services can take the guesswork out of this process in several ways. Business valuators in Winnipeg will know the city and the surrounding context, including how to get the best price for your business and when is the best time to be on the market.

Whether you are considering selling your business soon or are just restructuring and making changes, you might want to consider business evaluation services. Here are some ways a business valuator can help you.

We Can Lend Objectivity

When you have built your business from the ground up or have entered the business later through an acquisition, you need to get the best value for the time and work you put into it. Sometimes, people can even feel emotionally tied to the business they have created because it took so much time and effort.

Business evaluation services can help by bringing some objectivity to the valuation process. Business valuations will consider how events like the pandemic have affected your business or how it has been performing in recent years.

A business valuation service will assess the team in place and the market trends for your industry. These are questions that can often feel quite subjective for owners, making them inadvertently follow emotional rather than logically informed assumptions.

Source- https://www.evcor.com/blog/why-is-it-important-to-know-the-value-of-your-business/

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There are five phases to selling your business: valuation, marketing, bidding, due diligence, and closing. Timelines may vary, it is safe to budget one month for each phase for a total timeline of six months.

https://www.evcor.com/veterinary-practices/

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The Advantages of Hiring Experienced Brokers to Help Sell Your Business

Selling your business is a significant step and can be rife with complications and potential pitfalls. But hiring business brokers in Edmonton can be the best first step to take.

Business brokers are trained to understand the ins and outs of selling your business. A business broker can let you know the right time for selling and when is not a good time. Your broker will also get you the best price and potentially even get you the best deal on your taxes.

While these are some expected benefits, there are plenty more advantages to hiring an experienced business broker, whether in Vancouver, Calgary, or Edmonton.

Private and Confidential

When getting ready to sell your business, conveying the news too early can be disadvantageous. Breaches of privacy and confidentiality can be the result. But with an experienced business broker, they can manage this aspect, and you can be assured they will keep your interests safe and operate with more trust and confidence. For example, the broker can qualify the buyer before they even know it is your business for sale.

Business Valuation Expertise

The best business broker in Edmonton will be fully versed (and credentialed) in preparing a detailed and well-researched valuation of your business. Some business brokers have expert tools to address the science and art of valuing your business.

There are many complicated variables when it comes to business valuation. For this reason, experience and credentialling pay off. Look for well-established business brokers with regional and national contacts who are well equipped to guide you in the right direction.

Access to a Larger Network

Another benefit of working with an experienced business broker in Edmonton is that they have access to a broader network than you. Just like with your real estate agent, a broker – whether business brokers in Vancouver or Calgary – with a wider network has more access to potential buyers and will even keep you in mind if you are ever looking to purchase again down the road.

Save Time and Money

Business brokers work to get you a better price and work with your other professional advisors to reduce frictional transaction tax, but there are other ways they can save you money. Oposed to you running your business, your business broker is only focused on the sale of your business which can expedite the process.

Source- https://www.evcor.com/blog/the-advantages-of-hiring-experienced-brokers-to-help-sell-your-business/

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How Long Will It Take to Sell a Drugstore?

If you have a drugstore for sale, you may be wondering how long it might take to sell it. This is where having a pharmacy business consultant can come in handy. They will walk you through the process and set reasonable expectations regarding how long of a wait it will be. Whether they are full retail drugstores or clinic pharmacies for sale, these advisors have got you covered.

How Long Will It Take To Sell?

From first contact to closing, the average time to sell a drugstore is about 6 months. This can vary depending on various factors, including price, condition of the business, landlord issues, how much work you are willing to put into the business before selling it, etc.

The best way to get an idea of how long it might take to sell a pharmacy is to contact a business broker specializing in selling pharmacy businesses.

Any pharmacy business for sale is typically highly sought after, which leads to a lot of competition among prospective buyers. As a result, the bids usually come in quite efficiently. Once the offer is in hand, there are a myriad of tasks to complete to get the transaction across the finish line.

How to Know When It’s Time?

When however, your drugstore for sale has been on the market for three to six months, it may be time to rethink your expectations and approach.

While you probably won’t sell the business overnight, there are things that you can do to increase interest in your pharmacy for sale and speed up the process.

If you haven’t received an offer on your drugstore after six months with a business broker, ask them to take another look at your business package and prepare for a second marketing cycle. Often, this is all it takes before prospective buyers or their agents call asking about the status of your deal. In any case, having a business consultant on board allows you to get real-time advice about what your next steps should be, which you can then follow up on at a later time.

Don’t Lose Hope

It is also advised that you keep in regular contact with your business broker during this time to track the progress of the sale. Once someone has expressed interest in buying your pharmacy for sale, now is not the time to lose contact or focus on other things.

Source: https://www.evcor.com/blog/how-long-will-it-take-to-sell-a-drugstore/

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Ever wonder how to sell your pharmacy business? It can be a daunting task if you have never done it before. And thats why leaning on the expertise of pharmacy business consultants is so essential.

https://www.evcor.com/blog/an-overview-of-buying-and-selling-pharmacies/

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Why You Should Hire an Advisor When Selling Your Business

When serious money is involved, it’s vital to have good advisors by your side. As you consider selling your business, whether due to changing life circumstances, retirement, or a career change, it is best to hire an expert to provide you with transaction advisory services. This will help you get a good handle on your entity’s value and develop a clear exit strategy as you move on to the next challenge.

As you prepare to sell your business, you want to avoid any potential messes, both financially and logistically. Any fears or doubts you have about the process will be eased by working with business transaction advisors. Ensure a seamless exit by avoiding these potential pitfalls.

Don’t Retain Advisors Who Aren’t Specialists

When seeking transaction advisory services for your business, ensure that you get people specializing in your type of business, like a pharmacy or veterinary practice. Many owners work with advisors who simply aren’t a good fit for the role. When it comes to pharmacies, they struggle with the intricacies and don’t have good working industry knowledge. When it comes to veterinary practices, they don’t understand how the market sees companion animal or mixed practices. The last thing you want is an advisor who provides uninformed advice and doesn’t understand the parameters of selling your type of business.

Ensuring a successful exit means you must retain advisors who have the industry background to understand the value of your business and its industry.

Good Advisors Ensure You Don’t Overestimate the Value of Your Business

Advisors will take the emotion out of the selling process, ensuring you don’t overestimate your business value. They offer constructive advice to highlight the best parts of your business and determine what aspects of the business need optimizing so you can improve your sale price.

Estimates get unrealistic once you rely on hearsay, rules of thumb, or getting advice from people who don’t specialize in the valuation. Good advisors compile empirical and verified data about sale prices in a specific region, substantiated by their experience within the particular industry. Backed by data and industry knowledge, advisors will give you the facts regarding how much your business is worth.

Source: https://www.evcor.com/blog/why-you-should-hire-an-advisor-when-selling-your-business/

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As you engage with business valuation services and determine the plan of action for selling your pharmacy business. Contact EVCOR to learn more about services.

https://www.evcor.com/blog/how-to-gauge-the-value-of-your-pharmacy/

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Why Hire a Broker for Selling a Pharmacy Business?

With any business having a good broker to turn to for advice is a big help. There’s a lot of terminology within the sales process best suited for a broker to handle during negotiations. And, there’s documentation that they can help you prepare and understand during what can be an arduous, multi-layered sales process. Pharmacy business brokers bring the buyers and sellers of pharmacies to the negotiating table to work out a potential deal. They also spare pharmacy owners from worrying about the finer details or acquiring the requisite knowledge needed to make a sale successful.

When selling your pharmacy, the broker seeks important information that factors into the fair market value of the business. Hiring pharmacy brokerage services will ensure you streamline various aspects of the selling process and ease the burden of the complexities posed throughout.

A Broker Knows How to Market Your Business

It’s a broker’s job to successfully market your pharmacy business so you can attract potential offers, not yours. Having a broker or consultant on your side allows you to focus on the daily operations of your pharmacy, which should always have your undivided attention.

Pharmacy brokerage services do much of the heavy lifting for you. They locate, screen, and educate buyers about your business. They also inspire confidence during what can be a difficult transition period for pharmacy owners. A strong broker will do all the necessary groundwork when organizing your pharmacy’s marketing materials utilizing reports you’re able to provide.

Ensuring You Get Fair Market Value

A good broker will ensure your pharmacy for sale in Ontario attracts the highest possible value based on market conditions. A knowledgeable broker knows what the market pays for comparable businesses to yours, arranging formal business appraisals where needed. It is a bonus when the broker is also a certified valuator! Through your broker, you will understand the various methodologies involved in determining business valuations within the current financial landscape.

Source: https://www.evcor.com/blog/why-hire-a-broker-for-selling-a-pharmacy-business/

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5 Questions Every Pharmacy Owner Should Consider Before Selling Their Business

Have you asked yourself, “How can I sell my pharmacy?” Here are five questions every independent owner should ask before selling their pharmacy.

When should I start planning for the sale of my pharmacy?

If you plan to sell your pharmacy, the process should ideally begin two years before the actual transaction. You should start planning for the sale of your pharmacy by creating a business plan to support growth objectives, developing succession strategies, evaluating financing options, and preparing financial projections along with reporting systems that would provide you with up-to-date financial information to share with interested buyers. Additionally, it would help if you left enough “runway” for tax planning, hence the two your ideal window.

How can I make my pharmacy more attractive to potential buyers?

You can make your pharmacy more attractive to potential buyers by upgrading your systems and processes, optimizing working capital, boosting revenue through improved space planning and merchandising, utilizing new technologies, and other customer service enhancements.

Other attractive features of a pharmacy include trained staff, optimum operating hours, and pharmacist accessibility. Beware, however, just like renovating your home in order to sell it, where you spend the money is essential – depending on your sale “window,” the ROI may not be there.

Which elements will influence the value of my business?

Five factors that may influence the value of your business:

Pharmacy sales/prescription revenue and cost control

Number of pharmacies owned (a multiple-location business may be worth more than a single store)

Pharmacist availability and commitment to stay within the agreement term (the longer the pharmacist commitment, the higher the perceived value to buyers)

Expertise and investment in the right technology

Audit risk

Source: https://www.evcor.com/blog/5-questions-every-pharmacy-owner-should-consider-before-selling-their-business/

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Some Variables to consider while Buying or Selling Veterinary Practices

The decision to buy or sell a veterinary practice requires many small decisions and plenty of research. Here are some things to keep in mind when looking at a veterinary clinic for sale.

If you’re not fully aware of the necessary financial and legal aspects to acquire or divest of a vet clinic, then you should build a team of experts. This team should include a lawyer, an accountant, and a transaction advisor. This trio of professionals will collectively know everything you need when looking at veterinary practices for sale. When you decide “it’s time to sell my veterinary practice,” you can rest assured that the process will go smoothly.

Selling

When you decide it’s time to list your veterinary clinic for sale, it’s a good idea to let your accountant know as soon as possible. Think in terms of years, not months. Two years will give you enough time to ensure that you are eligible for capital gains exemptions if not correctly structured. Doing this will make the potential sale a time for joy rather than trepidation.

Buying

When looking for veterinary practices for sale, there are certain things to keep in mind. For instance, if you’re looking to earn a profit beyond your professional fees, owning the clinic can be a good method.

One option when looking for a veterinary clinic for sale is to consider a staggered purchase, in which a person buys a 50% stake in the business, with an agreement to buy the other half in a set amount of time. Usually, this is several years. A complete business sale or purchase may seem less complicated, but this option allows for easing into the business with the guidance of an experienced owner. This can be beneficial for people new to business ownership and those just out of veterinary college.

Source: https://www.evcor.com/blog/some-variables-to-consider-while-buying-or-selling-veterinary-practices/

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Addressing the Important Tax and Legal Issues of Selling a Pharmacy

Getting Started

Undoubtedly, lawyers and accountants will be involved in the sale of a pharmacy, but long before an owner is ready to sell a pharmacy, they should speak to a particular type of accountant and lawyer. Both professions have tax specialists who can develop strategies to minimize the tax burden when the sale goes through.

Several approaches can ensure that your liquidity event is as profitable as possible. Selling the assets of a pharmacy and selling the shares is one of the considerations a tax lawyer and your tax accountant will contemplate. In most cases, a prospective buyer will want to purchase the assets of your business, which means that you, as the seller, can retain the business entity. However, it may be in your best interests to sell the shares of the corporation. But this is only one aspect in minimizing the frictional tax costs in selling a pharmacy business. It is critical that you speak with these professionals years before you plan on selling a pharmacy.

The Paperwork Involved

Before you get started a sale process and decide to entertain any suitors for your business, you will need your lawyer to prepare a Non-disclosure agreement (or “NDA”). This document will have confidentiality provisions that will help protect your information from leaking out or being used unscrupulously. No piece of paper will offer absolute protection, so work with honorable buyers from the start.

Once you have decided on a buyer and verbally agreed on the sale, typically, the buyer will compile a letter of intent (an “LOI”). These letters are usually non-binding but form the basis of the definitive and binding agreements.

The LOI should include such basic terms as a closing date, payment price and terms, and any conditions on which you settle. Before you execute the LOI, your corporate lawyer will help you tailor it to suit your needs. Once both parties have signed the letter of intent, the buyer’s lawyer will use the terms of the LOI to craft the first draft of the definitive purchase agreements.

Having documents such as externally prepared financial statements can go a long way in ensuring you’re prepared to sell a pharmacy. When contemplating a share sale, determining how to deal with redundant assets and preparing a purification step document is crucial. This, along with estate planning, are important discussions to have before deciding to sell.

Source: https://www.evcor.com/blog/addressing-the-important-tax-and-legal-issues-of-selling-a-pharmacy/

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Four Ways to Sell a Pharmacy Business

The next chapter of your life is always the hardest to write, especially when you’re uncertain about what the future holds; this is no different if you’re a pharmacy owner, as you may not be particularly sure what you’ll do when you hang up your smock. You also may be unwilling to part with your business because of community needs, the level of care that may be lost should you sell it, or the inability to find a trusted buyer.

When thinking, ‘How will I sell my pharmacy?’ there are a few avenues to go down that may reduce those fears. Here are four ways to make selling a pharmacy business a more seamless one.

1. Keep It In Your Family

A very convenient thing when available when selling an independent pharmacy is to conduct a generational sale. If your business has been around for a long time and you can see your children or closest family members running, then making a transitional sale like this one will tick all of the boxes.

Generational sales are typically made as share sales. With these sales, the corporation name remains the same, but the shareholders change. The business frame remains the same, and you can feel securer knowing that your pharmacy’s legacy is in the hands of the people you trust the most.

2. Sell To Staff

“I don’t have any family to sell my pharmacy to,” you may be saying. In that case, the next best thing would be selling an independent pharmacy to an employee or colleague who will provide fresh ideas that keep it sustainable and take it to the next level. Your employees already know how your business operates and may already have thoughts on how to build on the foundation you’ve set. Collaborating with them will allow you to pass on your knowledge and work with their ideas to ensure a smooth transition.

3. Selling to a Younger Version of You

Many young buyers are looking for their break despite what people say about the next generation not being interested in entrepreneurship. There are, however, a lot of tire-kickers out there, and that can be an exhausting process. Additionally, it is hard to find those buyers and advertise your sale without inadvertently disclosing it to your patients and staff. Using an intermediary like EVCOR can be instrumental in keeping your sanity and the sale confidential.

4. Selling To a Consolidator or Corporate Pharmacy

Admittedly, sometimes it’s not the most popular option. However, corporates and many consolidators have the necessary funds needed to complete the transaction when you’re selling your independent pharmacy.

Source: https://www.evcor.com/blog/four-ways-to-sell-a-pharmacy-business/

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3 Most Common Approaches To Determining A Business Value Whether you’re thinking of selling your business or looking for new investors to join you, you will have to determine the value of your business first.

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Get Advice for Drugstore for Sale in Canada - EVCOR

With over 15 years of experience, Enterprise Valuators Corporation working as one of the most trusted business consultants in Canada. EVCOR's experts provide help to clients with an estimation of the true value of a drugstore for sale in Canada.

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How Crucial Is Business Valuation for Companies?

Routine business valuations are a crucial component for successful businesses. Companies that undergo regular business evaluations have data, analyses, and industry insights that allow the business to make informed, rational measures in response to – or in anticipation of – significant events that would otherwise cripple or bankrupt a company. EVCOR, a business valuation company in Edmonton, can help Canadian companies prepare for such important events.

Reasons to Evaluate a Business

Business evaluation services are commonly associated with selling or buying businesses. However, there are several other events and scenarios where a professional, third-party business evaluation can provide essential insights and reduce the associated time and costs:

When shareholders disagree, and the only solution is to part ways, a certified valuation of the business is essential. To ensure a fair division of marital assets, invoking a professional business valuator’s services is vital.

Owners of family-run businesses should hire a business valuation company at the beginning of significant personal events such as estate planning and legal issues associated with marriages.

The Importance of Annual Business Valuations

Contrary to popular belief, business owners should not wait until a major event to perform an valuation. Whereas some business-related events cannot be accurately predicted – such as natural disasters or cyber security incidents – many significant events can be anticipated months or years ahead of time, such as retirement and business restructuring. Hiring a business valuation firm to perform annual appraisals is the best way to ensure that the company has current data to handle unexpected and foreseeable events. A yearly business valuation is comparable to a person’s annual physical exam, as both measures provide a snapshot of overall health and lead to suggestions to course-correct and improve for the next check-up.

Source: https://www.evcor.com/blog/how-crucial-is-business-valuation-for-companies/

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Walking Through the Process of a Drugstore Sale in Canada

Selling a drugstore isn’t as straightforward as people assume. In fact, for some independent drug store owners, this can be the most decision they will ever make in their lives. You need the help of experts to guide you through the process and ensure that when you put your drugstore for sale, you come out with a winning deal.

With our years of experience and countless business deals, our experts at EVCOR have helped identify the five steps in the process of selling a pharmacy.

Step 1 – Analysis and Valuation

Do you know the real value of your drugstore? We’re not talking about a value that you ‘feel’ is right; it’s the actual estimated value based on proper analysis. This is where experts like EVCOR can help. Determining the value of a pharmacy involves understanding your total tangible and intangible assets. The sum total of these two assets subtracting any liabilities is often considered the sale value of the pharmacy. This, however, does not mean that your final sale price will be the same as the valuation. At this stage, we also help identify any opportunities that could possibly encourage higher offers.

Step 2 – Marketing Preparation to Attract Buyers

Do you already have a buyer in place? If not, you’ll have to prepare to market your business to potential buyers. To be one of the unique pharmacies for sale means you’ll have to create a sales or marketing document known as a Teaser. It is recommended to keep the document very high level and anonymized at this stage without disclosing any genuinely confidential information. Once you have possible buyers showing interest, you can prepare a Confidential Information Memorandum to be taken out to those who qualify.

Step 3: Bid Process

The bid process takes approximately four weeks, and it’s at this stage, you can check-in with potential buyers, share additional detailed information, and answer all Q&As as needed. At this stage, you can also ask for a Letter of Intent (LOI), a non-binding contract signed by both parties that essentially takes the pharmacy off the market for a period of time until it is supplanted by a definitive agreement.

Step 4: Due Diligence and Definitive Agreements

The next step would be to start negotiation and preparation of Asset Purchase Agreement (APA) or Share Purchase Agreement (SPA). This is where the buyers will perform their due diligence to ensure the contract runs smoothly. Once the due diligence is completed, you move toward the closing process.

Step 5: Closing Process

The closing process takes about another five weeks where definitive agreements are signed, finance and due diligence conditions removed, staff and vendor notices served, third party inventory count, and lastly, transfer of funds.

Source: https://www.evcor.com/blog/walking-through-the-process-of-a-drugstore-sale-in-canada/