VALUATION OF YOUR PHARMACY

The pharmacy is one of your biggest assets within your overall finances, so ensure a professional valuation is completed by a pharmacy expert/agent prior to putting the business up for sale. When you are selling your pharmacy, be aware that your business will be valued by the buyer and their advisers and the valuer for the bank will often come in with low valuation, leaving a shortfall to be found by the buyer.

The value of the pharmacy is determined by a number of factors such as: –

Financial information – this should be up to date and readily available as failing this you will attract poor offers and the sale will be delayed.

Location – pharmacies in London and other home counties are more desirable and will fetch a higher price compared to those in other counties. Similarly, pharmacies located in a health centre or next door to a GP surgery will also fetch a higher price.

Lease and rent – ensure that there is at least 10 years left on the lease and the lease is renewable at the end of its term. A very high rent will be a detriment to sale and/or getting a good price even if the business is profitable. Buyers will think of future rent and increases.

Staff costs – high staff and locum costs will reduce the value of the pharmacy as this will be reflected in net profits.

100 hour pharmacies/competition – if a 100-hour pharmacy is located near yours, this will have an impact on the value of your pharmacy and may make it difficult to sell quickly. Similarly, if there are many other pharmacies in the proximity, a GP surgery near your pharmacy is relocated or has plans to relocate, this will also have an adverse impact on the value of your pharmacy.

NHS/OTC/services/wholesale/online/export sales – ensure that these sales are analysed separately in the accounts. This will save you so much time answering many of the questions from the buyer and will quicken the sale. In most cases, the buyers won’t pay for wholesaling or export activity, so if this is identified well in advance the valuation process also becomes easier and quicker.

Growth potential – think from a buyer’s viewpoint on how to enhance the business. If you are not doing many of the services it could mean that a buyer will see an opportunity. That’s not to say that you stop providing existing services but if the buyer can see a growth potential, it is often an attractive proposition. Leave something for the buyer!  

For FREE valuation, please contact Sanja on 020 7380 3446 or email to sanja@modiplus.co.uk