Selling a pharmacy is a significant decision that requires careful consideration of various factors. One crucial aspect to ponder is the method of sale, and while off-market sales may seem discreet and efficient, there are compelling reasons to explore the open market. In this article, I’ll delve into the benefits of opting for an open market sale campaign when selling your pharmacy.
- Wider Exposure and Market Reach: One of the primary advantages of an open market sale is the exposure your pharmacy listing gains. Utilising an open market sale process ensures that your business is presented to a broader audience, attracting potential buyers who might not have been aware of an off-market opportunity. This increased visibility often leads to a more competitive bidding environment, potentially driving up the sale price. Choosing a specialist pharmacy broker, with a national presence and a large network of qualified buyers will ensure no stone is left unturned when canvassing the market.
- Competitive Bidding Dynamics: The open market fosters competitive bidding dynamics as multiple interested parties vie for the opportunity to acquire your pharmacy. This competition can result in better terms for the seller, including a higher sale price and more favourable contractual conditions (e.g. finance conditions, settlement timelines etc.). A transparent and competitive process typically leads to an optimal sale price being realised.
- Professional Representation: Engaging with reputable, specialist pharmacy business brokers provides professional representation for sellers. These experts bring industry knowledge, negotiation skills, and the ability to navigate the complexities of the sales process that exists in the Australian community pharmacy market. Their involvement can be particularly beneficial in the open market, where negotiations may be more intricate. Utilising specialist pharmacy lawyers, accountants, valuers, and finance brokers also assist in ensuring a smooth sales process that is timely and has less chance of ‘crashing’ prior to settlement.
- Different Psychology: When you try to sell anything ‘Off-market’, you put yourself in a one-on-one situation with a prospective purchaser, creating a ‘You vs Them’ scenario. The mindset for any potential purchaser in this environment is, “How cheap can I get this business/product/service…” and they essentially put all their effort into beating down the price as best they can. In an ‘Open market’ environment, the potential purchaser knows there are other people they need to compete against, and as such the mindset changes to “How much do I have to pay to beat the other buyers?” This completely changes the negotiation dynamic, without upsetting the buyers, as it is not you forcing them to pay more.
- Direct Approaches: It may seem obvious, but the main reason a prospective purchaser approaches directly is to save themselves money and pick up a bargain by avoiding competitive market dynamics. While it may appear to be an ‘easy’ option, it is highly unlikely to yield the optimal sales price.
- Risk Mitigation: The open market inherently reduces risks associated with a limited buyer pool. By widening the scope of potential buyers, sellers can mitigate the risk of relying on a single interested party, often with multiple offers to choose from, increasing the likelihood of a successful transaction.
In conclusion, while off-market sales are sometimes an appropriate option and may offer a sense of discretion, the benefits of selling a pharmacy on the open market are compelling. From increased exposure and competitive bidding dynamics to professional representation and maximised sale price, an open market sale can unlock opportunities that might not be realised through a more private transaction. Ultimately, navigating the pharmacy sale process, utilising industry experts, with transparency and strategic planning usually leads to the most successful and rewarding outcome for sellers.
Written by Stuart Ellis, QLD State Manager – AP Group
AP Group are the leading pharmacy experts in Australia, helping hundreds of pharmacists into ownership every year – our team can help with sourcing finance for your purchase, as well as providing the right legal advice to help you navigate the process.
We connect existing pharmacy owners with over 5000 ready and eager investors via our cutting-edge online Data Room. Our Data Room keeps confidential listing data secure and allows buyers to make informed decisions on each of our pharmacies for sale.
About the Author:
Stuart brings over 20 years of pharmacy and business expertise to the AP Group table, a journey that’s been as diverse as a pharmacy’s offerings. He’s not just a pharmacist – he’s a seasoned entrepreneur who’s owned and operated successful pharmacies across the country and was pivotal in starting two respected national pharmacy retail brands Good Price Pharmacy Warehouse’ and ‘Chemist King’.
Stuart’s trajectory led him through Sigma Healthcare for more than a decade, where he played pivotal roles such as Head of Brand for ‘Chemist King’ and ‘Pharmasave.’ With this rich background, he’s a vital asset for both those seeking to buy and sell pharmacies, armed with a wealth of incredibly valuable knowledge and insights.
Away from the world of pharmacy, you’ll find Stuart indulging his need for speed as a car enthusiast. Whether he’s piloting his Porsche GT3 RS through Queensland tracks or occasionally venturing to races beyond state borders, his love for racing matches his passion for pharmacy. But when it’s time to step off the gas, Stuart enjoys quality moments with his wife and their young daughter.