Finding your price point


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Do you know what your pharmacy is worth? Frank Sirianni explains why it’s important when contemplating a sale

Continuing our practice4sale series, Frank Sirianni provides a second tip on how to buy or sell a pharmacy.  

For many pharmacy owners, selling their pharmacy is a once in a lifetime event.  For some, building and selling pharmacies is a key strategy to creating wealth.

Regardless of why you are selling, getting the process right is critical for both you, your family, and your team.

Practice4sale.com.au is an independent website dedicated to helping vendors (and their business brokers) attract more potential buyers and get you top dollar while keeping the identity and location of your pharmacy private.  This means less risk of your staff or competitors finding out about your plans, or your financial and operational details.

Practice4sale was established to create an open and transparent market for the sale of pharmacies throughout Australia.

Tip 2 – Set a realistic price

Do you know what your pharmacy is worth? Have you set a realistic price?

Often owners have an incorrect view of what their pharmacy is worth.  This is understandable as many have a strong emotional and identity attachment to the business.  For some, they have an inflated view of the value of the pharmacy.  Incorrect views can lead to incorrect outcomes and delay the sale process.

A realistic valuation with some understanding of the factors that drive value will ensure you are ready.  This may require you to “sell” the positives and potential of the business.  Make sure you present the business as you expect a buyer would like to see it.

A realistic price helps in achieving a successful sale and your acceptance of reasonable offers.  It may also assist in a timely settlement.  Take some time to consider what a realistic price is and seek advice to ensure your judgement is not affected by emotion.  Be wary of tales of spectacular prices being achieved.

Price and value are never black or white.  Often they are a function of the time available to sell and how you structure the sale of the business.

Endowment effect

The Endowment Effect is a term in behavioural economics which highlights how individuals see greater value for something that they own compared to something they do not.  In economic terms this means that a business owner will often demand much more to sell their pharmacy than they would be willing to pay to acquire it.

Our emotional and other attachment to the pharmacy often means that we do not set a realistic price for the pharmacy.

An independent business value assessment by someone with expertise in the pharmacy market will provide you with a reality check.

Over the next few weeks/months practice4sale will provide further tips on selling your pharmacy. Click here for Frank’s first tip

Practice4sale.com.au is an independent website dedicated to helping vendors (and their business brokers) attract more potential buyers and get you top dollar while keeping the identity and location of your pharmacy private.  This means less risk of your staff or competitors finding out about your plans, or your financial and operational details.

Practice4sale was established to create an open and transparent market for the sale of pharmacies throughout Australia.

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