January 22, 2021
Assembling Your Transaction Team – Part 1 of a Five-part Series
If you have spent years or even decades building a successful pharmacy business, chances are you have amassed a vast storehouse of expertise and knowledge – about running a pharmacy business. But successfully selling a pharmacy is a far different thing from successfully running one. Developing and executing a business exit strategy is a complex process, and all the complexities will go well beyond the knowledge you have amassed over all those years operating your business. That’s just one big reason why it is imperative, in our view, that any pharmacist contemplating a sale of their business assembles a team of knowledgeable advisors to help.
Another reason: you might be too close to your business to be an effective negotiator of its sale. The sale of anything is an inherently adversarial process. The buyer wants the lowest price with the highest level of warranties and protections, while the seller wants the highest price with the least restrictions. This process can heat up quickly when the seller is someone who has put years of blood, sweat and tears into the entity being sold.
If you are preparing to sell your pharmacy business, a solid advisory team can help you maintain some level of objectivity about the transaction and take the emotion out of the often-difficult negotiating process. Your advisors can also give you a fuller sense of your business’s value, filtered through the lens of a realistic market assessment. It is hard if not impossible for you to do that on your own; you are simply too close to your business to expect to be able to make decisions based on objective, empirically sound facts.
In short, selling your business is not an individual effort. Nor should you rely on just one advisor. To execute a successful transition, it takes a team. Ideally, it will include your accountant, a tax specialist, an experience lawyer who specializes in transactions, a financial advisor and an intermediary who will guide the team, be the “glue,” and make sure all the players are working together and representing your interests. You are not going to find all of those abilities in one person – we havenever found one in our many decades of helping pharmacists sell their business. You need to cover all the bases, because missing one or more of these specialists could end up in an exit that falls far short of your hopes or expectations.
What qualifications should you look for? Ideally, your advisors as a group will:
In future editions of the EVCOR Advisor, we’ll discuss the qualities and expertise you should look for in your pharmacy transition lead – perhaps the most important building block for a successful advisory team.