What are some common misconceptions when it comes to selling a pharmacy?
Dealing directly with your wholesaler or chain representative will not yield the highest sale price. An experienced broker brings value to the selling process by creating a healthy competitive tension among multiple buyers in a short window of time to increase the value of your pharmacy and get you the highest possible price. Selling a pharmacy through any party whose fiduciary duty is to someone other than you will limit your pool of buyers and decrease your eventual selling price.
Nationwide Buyer Outreach
One of the common misconceptions I hear with clients is “who has the most buyers?” Just because someone has a buyer in California in 2008 doesn’t mean they want to buy a pharmacy in Missouri this year. Each project I do is a new project. We have great outreach, as good as anybody, to buyers in the country. We keep a list of buyers who are interested in certain areas but also do outreach with every single project. We spend a lot of money in advertising.
Local Brokers Versus National Brokers
As far as using a local broker versus where I’m located, in Minnesota, brokering a pharmacy is a national project. You may find somebody in your neighborhood that wants to buy your pharmacy, but that is unlikely. An example is of a store I sold in Texas. I found a pharmacist in Maine who wanted to buy a store in Texas and move there, and by my national outreach and advertising I found him a buyer who ended up moving to Texas and buying that pharmacy. He ended up being highest bidder for the store. It was a win-win for the buyer and the seller. I have a track record 200 pharmacy sales in 42 states. I let you run your business as usual and we implement best practices on a nationwide basis to get you the optimal buyer for your store.
Who Will Pay the Most: Chains or Independents
Another misconception I often hear is “chains will pay more than an independent.” That couldn’t be further from the truth. Each store must be looked at individually. If there’s a chain right across the street from you, they may give a very high price for your store but they also may realize, “why should I pay more? I’m going to get half the business anyway.” You really have to create a competitive process with multiple buyers to really drive the highest price. You can then decide what’s the best fit for you.
Buyer Financing
I also hear with independent pharmacies that there is a concern that, “an independent pharmacy can’t afford to buy my pharmacy.” With the pharmacy lending situation the way it is nationwide, banks will loan now, since January 2018, 90% of the purchase price with only a 10% down payment. That’s really opened up the lending field for pharmacies to not only buy more pharmacies, but also more expensive pharmacies, and be very competitive with chains. At least half the stores I sell are independents to independents.
Know Your Options When Selling
When you consider all the misconceptions about buyers in the pharmacy industry, I really encourage you to keep an open mind. It’s best to know all your options. My job is to find as many buyers as I can for your pharmacy, run a confidential process, and drive the highest price. Give me a call today. I’d love to give you a free, no obligation consultation.
