Most business owners only sell a pharmacy once in their lifetime. The sales process is complicated and can take a lot of time. Understanding how to prepare for your business sale and make your organization more attractive to potential buyers are crucial for success. While it’s best to work with a business advisor, like COLONY RX, or other professional intermediary, these steps to selling your business can help you prepare for what’s ahead.
How to Sell Your Small Business
Selling your business requires a good bit of preparation. Business buyers will have a lot of questions for you. As a seller, you’ll need to understand your business’ position financially, competitively, and within the greater market. Following this guide can help you put your best foot forward.
One of the most common first questions a prospective buyer will ask is why you’re exiting the business. Whether you’re hoping to retire, take on a new venture, or the company is no longer a good fit for your goals, you’ll want to flush out your answer. Exiting due to financial problems is a red flag for buyers. If a lack of profitability or a competitive threat to your market is leading your decision, it may be best to take a step back and take stock of whether or not the business is in selling shape.
Consider Your Exit Strategy
Determine the timeline in which you would like to exit the business. While there are steps you can take to encourage a faster sale, market fluctuations are out of your control. You’ll want to possibly plan for a long process.
Consider if you’re interested in a particular type of business buyer, and dig a little deeper into how you can leave the business in the best possible shape for them. For instance, will you offer training for a new owner? If you have employees, will they stay on?
Get a Professional Valuation
While many parts of the business selling process are possible to do independently, valuing your business is best left to someone objective. A third-party business valuation ensures that your asking price is credible when the business is being listed. However, when the business is not being listed, it is best not to include a price and start a bidding war.
Improve Where You Can
If, after these steps, you realize that your business is not in the perfect position for a sale, then take some time to tune things up before inviting in prospective buyers. Addressing any issues with your physical space and equipment, shaving down expenses, developing a better customer base, or streamlining your processes can all go a long way. If you work with a professional advisor or business broker, they can help you determine how to position your business to be more attractive to the right buyer.
Organize Your Financial Statements
Interested buyers will want a clear and accurate representation of your financials. Take time to prepare balance sheets, tax returns, and any relevant real estate documentation. Giving a clear picture of current cash flow and projected earning potential is crucial for your sale. Colony RX will do all of this for you and make sure your pharmacy is presented in the best possible light.
Find a Qualified Buyer
One of the most time-consuming aspects of selling your business is finding and targeting potential buyers. While you can list your businesses for sale yourself, a professional intermediary can help you assess competitors, strategic buyers, and others with the experience and capital to buy your business. Colony RX also knows hundreds of potential buyers, and the highest prices are often achieved when we target someone we know is a good fit.
Do You Need a Business Advisor to Sell?
While it’s certainly possible to sell your business alone, working with a business broker offers many benefits. A broker can help you get the best price for your business while keeping your confidential information safeguarded throughout the process. Not only that, but they can help you level the playing field with more experienced potential buyers. To be candid, an experienced pharmacy buyer will fleece you in ways you don’t realize if you don’t work with an advisor. Seemingly innocent questions will be used to bargain down the price in ways you cannot foresee. Finally, since our job is to help you sell the business, you have better odds of reaching a purchase agreement in a shorter timeframe.
Want to save yourself the hassle of selling independently? Call Colony RX today for a no obligation consultation.