When it comes time to sell your business, one of the very first things that you need to do is find out the value of it. It makes sense right? You wouldn’t try to sell anything without first knowing what it is worth, and your pharmacy business is no different. Here’s everything you need to know about the valuation process.
All of your paperwork will be scrutinized
Every document that you have ever written, signed, or agreed to will need to be available for inspection by the team working with your buyer. Aspart of their due diligence, the buyer will want to know that they are not agreeing to take over a business that has substantial debts, or agreements in place that will prevent them from conducting business how they plan to.
Finances are not everything
They are important (of course), but your financial data is not the only part of the valuation. A good, professional, business valuation will incorporate any number of non-financial factors; including the worth of your assets and equipment, the deals that you have in place with suppliers or customers, and what similar pharmacy businesses have sold for recently.
Pre-valuation is a thing
The final valuation figure that you and your team arrive at is the result of calculating and accounting for a multitude of factors. Pre-valuation can help you to boost those numbers –it is a chance for you to get ahead of the final figures and make adjustments to improve on them. This could take the form of dropping a poorly-performing, low-profit product line, it could be as simple as painting your premises –whatever it takes to improve your valuation.
Business valuation is equal parts art and science
An accurate valuation of your business is all-encompassing. Yes –there are simplistic equations that take your profit and multiply it by a number of years, but these in no way reflect the true value of what you have built. You need to take into account so many other factors: even assessing other recent business transactions has a lot of variables, like demographics, size, throughput, location, etc –you cannot simply look at another pharmacy and take that as the value of your own.
What is your value?
If you both own and run your pharmacy business, then the chances are high that a lot of the value of the company is tied up in you personally. When you sell the business, the new owner wants to be able to step in and take over on day one with no issues –and if you have been handling most of the operations yourself then they will not be able to do so. Make sure that you account for your own value when you assess the market worth of your company and take steps to delegate everything you can.