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Why you need a Quarterback when selling your pharmacy

April 30, 2024

You have likely poured years or decades of money, worry and sweat into the business. You probably have the majority of your wealth invested in it.  When you exit, you need to know that whatever amount you sell it for will be sufficient to support you and your family as you transition to the next stage of your life. To navigate this complex process effectively, you need a team of experienced professionals by your side, and at the helm of this team, a quarterback to lead the way. In short, when you sell, you want to get it right.
That’s one of the biggest reasons why pharmacist-owners who are planning to sell need to assemble a team of experienced, professional advisors who can help guide them through the many complexities of the transaction and avoid the many potential pitfalls. These individuals are also vital in that they can provide an objective, unbiased view of your business and of the sale negotiations—which can be very hard for a pharmacist-owner who has lived and breathed their pharmacy for years to achieve.

The Dream Team

Each member of your transition team will bring specific skills and experience to the table. A lawyer, an accountant and a strategic wealth advisor—ideally, all with pharmacy-specific knowledge as well as experience in business sale transactions—are key team members. But the most important one is the individual who will coordinate and direct the efforts of all your other advisors. We call this person the team “quarterback,” and when you are preparing to sell, finding and hiring them should be your top priority.

What does a transition team quarterback do?

In short, your quarterback is an intermediary charged with ensuring that everyone on your team is working together and moving in the right direction: towards the goal line. Their job is to ensure that all the players are indeed functioning as a team, and they will represent your interests from start to finish.

Trust us, we have seen what can happen when a pharmacist-owner’s advisors cannot get their act together. Conflicting advice, missed timetables, confused priorities and a host of other screwups large and small can occur when an advisory team lacks leadership and direction. The result can be a bad deal for the pharmacist-owner or, in the worst case, no deal at all.
It’s possible that the pharmacist-owner themselves can function as their own team quarterback, but in our view, they are often too emotionally attached to the business and the sale process to provide effective guidance. Some pharmacist-owners simply turn over quarterbacking duties to the advisor they know the best, who is usually their long-time accountant. There’s nothing wrong with that, necessarily. In fact, this leader can be any one of your existing advisors, or they could be an outsider whose sole function is to lead the team. What matters most, is that they have the required skills and “soft” qualities to keep the team and the sale of your business on track.

What are those skills and qualities?

An intimate knowledge of the pharmacy industry.

Your quarterback should understand your business as well – if not better – than you do. They should be armed with objective data, such as information about recent and similar prior transactions to the one you hope to complete. It also helps if they have been pharmacist-owners themselves and have successfully sold their own pharmacy.

Extensive experience in many pharmacy sale transactions.

Experience matters. And you might be surprised how many “experts” there are out there who have little experience in helping pharmacist-owners. It's not just about understanding the process; it's about anticipating challenges, leveraging opportunities, and ultimately ensuring a smooth transition for you. In an industry where each transaction is unique and nuanced, having a seasoned perspective can make all the difference.

Specific qualifications.

Look for relevant credentials, such as an advanced business degree or certification in negotiation or business valuation. A background in corporate law, financial accounting or tax is an asset. Just as important are your quarterback’s soft skills, in particular the ability to actively listen—in particular, to you.

The infrastructure to support you effectively.

Your team quarterback should be equipped with the technical ability to process and protect your information. But beyond IT, their support infrastructure should include a designated backup person who is kept apprised of the sale process and can step in at any point—for instance, if the QB gets sick or takes a vacation.

Fiduciary relationship.

Your team quarterback must represent you and only you. They act in your interest exclusively, not those of the buyer or anyone else. They must not accept payment or incentive in any from the buyer. (You would be surprised how often this happens.) And they should never contemplate violating legal or ethical principles when they represent

Thoroughness and attention to detail.

Your quarterback’s level of sophistication with regard to negotiations and the overall sale process should be at least on par with that of your potential buyer. Before beginning that process, they should be ready with an evidence-based valuation of your business. And they should be able to develop and recommend several approaches to selling your pharmacy. As well as,  explaining the potential benefits and risks of each approach to you thoroughly and knowledgeably.
A good transition team quarterback is a bit of a unicorn—a rare beast, indeed. When you have decided to prepare to sell, finding the right one for you should be a top priority. So, do your homework, and do it early. The benefits of having the right leader on your team will far outweigh the time you put into finding them or the cost of hiring them.
 
Max Beairsto B.Sc. Pharm, MBA, CVA - is a pharmacist, valuation analyst and the president of EVCOR.
EVCOR is a Canadian business valuation and boutique M&A firm that focuses on valuations and the sale advisory of independent pharmacies. Over the last 18 years through his company, he has been actively involved in hundreds of valuation assessments and consultations.
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