Pharmacies For Sale: What You Need to Know

First Financial Bank
Dec 15, 2020
Doing your due diligence is essential to ensuring you understand the true value of a business and its potential for your future.

It can be challenging to determine if a current pharmacy business is a good deal or a potential money pit. Doing your due diligence is essential to ensuring you understand the true value of the business and its potential for your future. More importantly, you need to be able to provide that information to potential funders.

As both experienced pharmacy buyers and lenders, our team knows both the questions and the best answers for identifying a pharmacy worth your money. We ’ve created a free, downloadable checklist to help you evaluate and collect the information you – and your funders – will need to assess your opportunity. So whether you’ve found an existing pharmacy for sale, or are still shopping, here are some things you’ll want to know and areas covered by the checklist:

Why is the pharmacy for sale?

There are many answers to this question that don’t necessarily set off the alarms – owner/operator retiring to a fabulous place; this is sadly part of an estate being settled; etc. Then there are the ones that are the non-answers – “going into a different industry” or “moving and don’t want to manage at a distance” – the answers that make you wonder. And you should wonder.

No matter the reason, you want to dive deeper. Is the real reason owner is selling and “retiring” because the pharmacy for sale is no longer bringing in the income it formerly did? Has a Walgreen’s, CVS and/or Walmart moved in down the block and siphoned off most of the prescription (and incidentals) business? Or is just a poorly managed business that could be turned around with a better approach? Regardless of the answer, it is just one piece of the puzzle.

It’s all about the numbers…

What is the current value of the pharmacy’s business – and has it changed?

This is all about the numbers:

  • Annual gross sales
  • Net operating income
  • What has the owner been paying themselves as a salary (or have they?)
  • # of scripts filled annually and annual value per script
  • Inventory value
  • Other $/items that are current expenses not applied to you (add back in)

In addition to the most recent numbers, you’ll also be looking at last few years’ numbers to see if this has changed – for the better or worse.

What is the potential of this business?

In addition to the most recent financial history, some of the most important numbers are those have not happened yet:

  • Location/market analysis – is the current location and market demographics a growing or diminishing opportunity for sales?
  • Existing partner/purchasing agreements and personnel – are there gems in those relationships that can be pluses to you or are they detrimental to your future?
  • Physical structure – if acquiring the lease and/or the ownership of the physical building, is it sound or need overhaul?
  • Merchandising potential – are there immediate and low-cost changes that could be made to start realizing some immediate upselling opportunities or will it cost much more to make an impact?
  • And more!

Request your checklist and get started now.

Download this handy checklist to ask the questions and get the answers you – and your potential funders – will want to know.

Want to chat about your plan?

What Do You Need to Know to Buy a Pharmacy?

Learn more details about how to buy a pharmacy and calculate your monthly mortgage.

Pharmacies For Sale: What You Need to Know

Doing your due diligence is essential to ensuring you understand the true value of a business and its potential for your future.

Planning to Sell a Pharmacy Business?

Ready to hang that “Pharmacy Business for Sale” sign in the window?