- By By Andrew Sirianni
The following is a generalised version of the article Preparing Your Pharmacy For Sale that originally appeared on Attain Business Broker's Blog.
Business sales are priced based on risk: the riskier the opportunity, the lower the price; the less risky the opportunity, the higher the price. Ensuring that there is sufficient information to confirm the performance of the business provides increased clarity on the business and hence reduces the risk of the acquisition.
The following is a list of some of the key steps you can take to prepare your business for sale:
- Financial Records:
Ensure that you have Accountant Prepared financial statements for the most recent financial year. If available, also provide interim Management Accounts if some time has lapsed since the end of the last financial year. Be sure to take note an explain any variations, trends and personal items that appear in these reports. If possible, have your accoutant conduct a pre-sale Due Diligence to verify the date before presenting to buyers. - Staff Records:
Prepare a staff roster of a usual week in your business. Consolidate this with the salaries paid to your staff to provide some accountability in your figures. At the same time, take stock of any entitlements owed to staff and be aware of the impact of this when placing your business for sale. - Lease:
If you have an existing lease, ensure that you have the lease document readily available. Take note of how much longer you have remaining on your lease as this will be of concern to purchasers and their financiers - you may want to re-negotiate your lease before selling the business to make the opportunity more attractive. If you own the freehold property, consider what lease you would be willing to offer the purchaser if they buy your business and seek advice. - Depreciation Schedule:
Note what items you are selling as part of the Fixtures & Fittings of the business. A depreciation schedule should be available to confirm the list of items and the written down value of those items. - Leased/Hire Purchase Items:
If you have any leases/hire purchased assets in the business, many of these will need to be paid out before they are sold to the incoming buyer. Take a moment to identify what these are and how they are likely to impact you in a sale. - Debtors & Creditors:
It may be wise to consider calling in outstanding debts and paying outstanding creditors in the lead-time to placing the business on the market. This will ensure that you can manage your cash flow through the sale process and minimise the adjustments at settlement.
While the above list is not an exhaustive list of what to do, it does address some key items that you can manage in the process of preparing your business for sale. If you are considering selling your business, it is important to mobilise your team of advisers to assist you in preparing your business for the sale early.
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