If you find yourself asking the question, “how do I sell my pharmacy?” then you probably understand that there are processes to go through and the process for selling a pharmacy (as for buying) is unique.
Firstly, make sure to tie up any loose ends, pay off tax bills, and any other large bills, issue staff contracts, etc. If the pharmacy is on leasehold, you should (preferably) make sure there is at least 10 years left on it, as the buyer will need at least that length.
In addition, you should get tax advice prior to selling, even in as advance as 2 years before, in order to allow for tax planning – you may need to hire an accountant with experience in the pharmacy sector for this.
Lastly, make sure you have a solid understanding of your trading figures, your turnover, profits,etc and be prepared to have potential buyers look at the accounts of the business. By having up to date financial records, you’ll best be able to back up your figures and valuation of your pharmacy, and get the best offer possible.
You also need to take into account, that when a business is transferred to a new owne, the terms and conditions of the existing staff is also transferred. The Transfer of Undertakings (Protection of Employment) (TUPE) Regulations 2006 outline what both yourself and the new owner will need to follow.
Call in the experts
Now, even that previous section may seem like quite a bit to get your head around – so it goes without saying you will need to hire some advisers to save time and money, and minimise stress.
Here’s a few people you’ll need to contact
- Pharmacy sales agent – will determine the value of the pharmacy, introduce interested parties and oversee a sale. They will normally charge a percentage of the sale price. (around 3% plus VAT) and are experts in attracting people who are looking to buy a pharmacy
- An accountant/tax advisor (specialising in pharmacy) can advise on the sale and deal with any accountant and tax issues. Fees can vary from £1,000 – several thousands.
- Specialist solicitor will be useful to advise on contract specific issues ike Category M provisions and transfer of ownership issues (e.g. staff contracts) It should be a fixed fee, which can be from £5,000-10,000 for sole trader/partnership and £10,000-20,000 for company sales.
When to sell?
Another important consideration when its time to sell your pharmacy. Currently, there are not enough pharmacies to meet demand, so it is currently a sellers market. And with banks being keen to lend to pharmacy buyers and low interest rates, this further drives the potential of selling a pharmacy. There should also preferably not be any direct threats to the businesses’ value, such as local doctors retiring with no replacement, impending opening of a dispensing doctor or new health centre pharmacy. In addition, many owners will sell close to retirement, or when a pharmacy refit is required. Refits will not add value to a business, it will only cost money, so its normally better to let the new owner do this.
At the least, 6 months from start to finish should be needed. The entire process is usually split into 3 parts
- Pre-sale – Decision to made to sell, and a pharmacy agent is contacted to value the business. (1-6 weeks)
- Marketing process – agent arranges viewings for buyers, obtains offers and if a sale is agreed, passes onto the solicitors (another 3- 6 weeks)
- Legal process – legal contracts prepared and due diligence carried out. Solicitors and accountants from both parties are involves and the agent will coordinate this to speed the sale up. (around 12 weeks)
So instead of franctically searching on Google for “sell my pharmacy” at least now you have some background knowledge and a fair idea of the processes involved! Just be clear about the reasons for selling, ensure all financials are in order and market appropriately and hire good professional advice. Just as you did when buying a pharmacy, you need to be just methodical when selling a pharmacy. By doing this, you can minimise stress and maximise the efficiency and value of the sale.