The largest, most famous, and most powerful celebrities and corporations in the world rely on professional advisors for their important business transactions:
- Tom Cruise is arguably the most bankable movie star in the world. However, Cruise does not call movie studio executives and they do not call him. All of Cruise’s business transactions are handled by his manager, Paula Wagner, who protects his interests and gets him the most money possible.
- LeBron James is widely considered one of the greatest athletes of all time. LeBron does not call up the owners of different teams to try to negotiate the best deal for himself. His agent, Rich Paul, handles that for him.
- When Target wanted to sell its 1672 pharmacies, it did not pick up the phone and call CVS and ask them to make an offer. Target called Goldman Sachs who solicited multiple potential buyers and then negotiated the best possible deal with all of them, eventually selecting CVS.
If the most bankable movie stars, greatest athletes, and largest companies (including pharmacy companies) in the world do not represent themselves in deals, why do some pharmacy owners think they can pick up the phone and call a pharmacy chain, or sell to their PIC, without professional representation? In almost all cases, they waste time, leave substantial money on the table, or don’t close at all.
The Truth about DIY
Here are 9 reasons why trying to sell your Pharmacy without Colony RX is a bad deal.
1. Using Colony RX Sends a Clear Message. So does not Using Colony RX.
When you choose to sell without an advisor, or use an advisor that doesn’t have Colony’s horsepower, you give off a vibe. This is what a seller who doesn’t use an advisor is saying to the market, “I’m looking to save money on commission because I don’t have the cash to afford an advisor and business is slow so I have time to do this on my own.”
This vibe attracts buyers who are also looking to save money by lowballing you or don’t have the ability to close, and it triggers the buyers who would have paid more to offer you less. This vibe is very much like driving up in a beaten up Honda wearing dirty clothes. You are going to get lowballed or worse, no offers.
When buyers see a deal presented by Colony, it sends a completely different vibe. It’s like pulling up in a chauffeured Rolls Royce wearing a custom fitted Armani suit. When buyers see this, the tirekickers are scared away, more buyers are interested and the the serious buyers start from a higher position because they know we have cultivated deep relationships with other buyers who will outbid them if they try to mess around.
The same pattern applies to real estate. The National Association of Realtors has shown over and over again that sellers represented by realtors get more money for the same property. The same house with professional representation gets more money. It’s all about the vibe and image.
2. Tell me a story.
What does every four year old say? “Tell me a story?” This is what we do with your pharmacy to get buyers to understand what we are selling and why we are selling it.
People make their first impression of a pharmacy very quickly and then spend the rest the time justifying what their initial impression was.
If buyers see issues at the start, they’ll get a bad impression about the store. Humans are pattern seekers, so as buyers continue the process, they’ll be looking for other issues to confirm if there is a pattern from this first impression. However, if everything on the first impression is appealing, the more forgiving they buyer will be during the process because — again, they are trying to confirm the pattern from the first impression. By packaging your pharmacy in a story, we can help control the first impression.
3. COLONY RX is Objective; You’re Not
You have survived a lot in your business. Staff quitting, audits, changing wholesalers, remodels, cash crunches, and lean and difficult years to get where you are. You have had sleepless nights and early mornings. You have survived computer changeovers, staff turnover, and major changes to the industry, mostly from PBMs. As a business owner, you have made money, lost money, and had every up and down imaginable.
Whether you have owned your pharmacy for two years or fifty, you undoubtedly have a highlight reel of memories — good and bad — and probably some loyalty to your staff, your community and your business. It is completely normal to feel that toward something that’s kept them occupied and fulfilled for years, and that’s supported their lifestyle for decades.
While your pharmacy might feel like part of your family, to an advisor, we don’t have any of this emotional baggage. We’re not insensitive; we understand this pharmacy is part of your life, but we don’t feel the same emotions toward it, and that’s a good thing for our clients. As your advisor, we are very much like surgeons. We are focused on doing our jobs, and while we appreciate the major consequences to our clients or their families of us not performing , it’s not going to distract us from getting the job done because we act objectively and without emotion. If you were a heart surgeon, would you perform a heart transplant on your wife? It’s the same concept with selling your own business. Don’t do it.
For maximum negotiating power, using an advisor prevents owners from mixing emotions with money. We want to sell your pharmacy and were going to be objective about the price, the process, the buyers, the timeline, your staff, and the outcome.
4. We make less than what you pay us, and you keep the difference.
We reinvest a lot of money into marketing. A lot. Trade shows, internet marketing, social media marketing, brokerage listings, talking to other brokers, calling everyone in the industry, USPS mailings, etc. This marketing gets us exposure FOR YOU. It results in you getting more offers, more buyers and higher offers. The more we spend on marketing, the better out clients do and the better we do. We get paid after spending all this money that you benefit from.
5. Price Matters.
Since the “golden time” for a home listing is within its first week, and after just four weeks it’s past its prime, pricing a home correctly from the get-go is uber critical. List it too high and nobody stops to look. List it too low and people ask what’s wrong with it. The window is narrow and the stakes are high.
A Realtor will perform a comparative market analysis on your home before they list. Combined with their knowledge of the area and the market, as well as how objectively they’re approaching it all, they’ll help you find the sweet spot.
The price at which you choose to list your home is not something you should arrive at willy-nilly. Pricing a home for sale is both an art and a science, a gift and a skill. If you do it wrong, you’re going to mess this whole home sale thing up.
6. Exposure is Everything
If you chose to list your own pharmacy, no one is talking about it except for you. If you’re working with COLONY RX, our “machine” will get your listing in front of the maximum number of potential buyers. Our machine is the time, money, e-mail lists, websites, contacts and phone calls we make every day. We are at all the major conferences, and speak to people.
7. We Manage the Process.
People have no idea how much WORK is involved in selling a store. Just because you have a buyer, doesn’t mean you have a closed deal. Getting that check requires 100 steps, some which have to be done weeks in advance. If you show up to the closing unprepared, you will have a busted deal. If you don’t have the checklists and know how to use them, you are going to miss something.
Knowing how to use the checklists is key. The day you sign with us, we are running checklists against your store. We know what issues will come up in 3,4,5 and 6 weeks before closing and we put out those fires from day one.
8. Advisors Offer You Their Experience & Judgement
Good advisors have a great mix of knowledge and experience. They’re both street smart and book smart.
Owners who are trying their hand at selling themselves by giving up too much information. Or are afraid to give up information that they don’t disclose what is needed. In addition, experienced buyers will hear right through whatever words a sellers says, pick up on the emotion, and then screw the buyer over in ways they don’t even realize.
Selling a pharmacy requires you to avoid a lot of landmines, tiptoe around conversations that would give the buyer too much power, be careful about potential liabilities, and manage a process to get the deal closed.
Not only do we do these things, we also have a “Spidey sense”. We can tell when buyers aren’t serious or don’t have their financing act together. We can spot these landmines from a mile away and help you avoid the common, often-funny but sometimes-tragic blunders that come along with pharmacy sales. We will steer your clear of red flags you wouldn’t know to look out for on your own.
9. We are Closers
We are the leading pharmacy advisor in America.
Selling your store by reading a few articles isn’t like trying to fix your sink by watching a YouTube video and a wrench. FSBO can be a flop that costs you ten of thousands of dollars and a lawsuit… and for what?
Use an agent to sell your home — better yet use one of the best real estate agents in your neighborhood — you’ll get more for your house, better peace of mind and an advocate.
Article Image Source: (Andy Dean Photography/ Shutterstock)
Prior to brokering pharmacies, I was engaged in buying and operating them. One of the earliest deals I did was with a guy who acted like he was the smartest person in the world. The type of person who has an opinion on every subject. I asked him how much he wanted for his store. He said $2.25 million plus inventory. His store was worth $3.75 million plus inventory, and my partner and I would have happily paid every penny of the full amount.