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December 7, 2020

How to Evaluate an Independent Pharmacy

pharmacy business evaluation

A pharmacy’s sale value is determined by what a potential buyer or buyers are willing to pay for it. Still, an independent pharmacy needs to conduct a valuation to determine its market price. Beyond that, valuations happen for a variety of reasons; some of them include:

  • Retirement planning
  • Career changes
  • Dissolving partnerships
  • Understanding your business growth potential and more

Finding pharmacy business consultants to conduct a business valuation will essentially help you learn if the asking price from the potential buyers or buyers has merit. If there’s a staggering variance in your expectations versus what’s being offered, expert pharmacy business brokers like EVCOR can develop a strategy to boost profitability. EVCOR can help reduce your tax burden at the time of sale, increase your selling price, or even make an unsellable business sellable. It is this service for which our customers can vouch.

Let’s now take a closer look into understanding what goes into valuating a pharmacy.

Determining the value of a pharmacy involves a complete understanding of your tangible and intangible assets. Tangible assets can be felt, touched, and seen and therefore include items like real estate or property, furniture, fixtures, accounts, stock and inventory, accounts receivables, and more. A pharmacy’s intangible elements include assets such as goodwill, customer lists, loyalty, brand name, and more. Summing up intangible assets can often be tricky as you cannot attach an exact value to it.

Liabilities are another factor that could significantly impact the total value of a pharmacy. Liabilities include debt, leases, and any other sorts of pending contracts and commitments.

The sum total of these two assets subtracting any liabilities is often considered the pharmacy’s final value.

It is essential to know that every business is different.

Multiple formulas exist to provide a reasonable idea of the pharmacy value. While that is correct and often an ideal practice, one must know that there is no single formula that can have all the answers and also that every business is unique in its own way. However, by exploring the business’s unique characteristics from a different perspective and any external factors, a pharmacy business consultant can conclude on its value with reasonable certainty.

Why choose EVCOR as your pharmacy valuation services provider?

The company has a long tradition of pharmacy, veterinary valuation, value preservation and enhancement, and transactional advisory services. At EVCOR, we have professionals with vast experience in carrying out such valuations, a prerequisite for most deals like this.