Pharmacy owners should have an exit strategy mapped out for their business.
Whether your goal is to sell your pharmacy to your children, an employee, or an outside source, there are many things you need to consider. It all begins with the right plan in order to maximize the selling price of your business.
I would like to ask you a vital question. If you were to die tomorrow, for example, what would happen to your pharmacy? Would your widow or family be prepared to take over your business immediately? This is something you should seriously think about. Did you know that your pharmacy is worth more while you are alive than after you pass on? That means that every day that goes by after a pharmacy owner dies, the family loses money. All that hard work you put in over the years and poof it is gone at exactly the moment your loved ones need it most.
Please forgive me. I am not trying to upset you by implying that something will happen to you in the near future. While this topic is uncomfortable for all of us, it is something that must be discussed. I continue to see this happen over and over again. Most pharmacy owners have not thought this through and the outcome can be overwhelming. When you think about it, having two exit strategies would be quite beneficial. The first strategy is the ideal sale of your pharmacy.
Pharmacy owners who maximize the sale price of their pharmacy don't wait for their local market to dictate when to sell their business. They map out their strategy before they launch their business and then massage their plan as their pharmacy grows and develops, which results in:
Your second strategy is more like an emergency parachute for your family in case of your untimely death. Your family needs to know exactly who to call and what needs to take place so that they, too, can receive the maximum value from your business.
Think about it this way. If something were to happen to you, your loved ones are already grieving their loss. The very thought of selling your pharmacy turns their stomach into knots because in their mind, they will be losing you all over again. So, they put it off... put it off... put if off. The next thing you know, it is two years, three years, or possibly greater than four years later. In that amount of time, your business has been impacted. The pharmacy is no longer running efficiently, which results in less than desirable profit margins. There is now new data on the pharmacy that far outweigh your history of running a highly profitable business. Buyers are now chomping at the bit to purchase your once-healthy store at a bargain price.
Please don't leave your family with this burden. You owe it to them to plan this out well in advance. Thus, I challenge you to pack an emergency parachute for your family now. Not tomorrow, not next week, not when you get around to it, but right now. Include those details in your will.
I would even encourage you to include a time frame in your will of when your business should be sold. When is the right time to design your exit? In a perfect world you would have developed your succession plans before you purchased your pharmacy. If you have not mapped out your strategy yet, rest assured you are not alone. Regardless if you want to sell in one year, five years, 10 or 25 years from now, you simply need to take time now and develop the plan that is right for you.
In the words of John F. Kennedy: "There are risks and costs to a plan of action. But they are far less than the long-range risks and costs of comfortable inaction." For those of you who have mapped out both of your exit strategies, I applaud your business acumen. As for the rest, it is imperative that you establish both plans now. Your inaction can be devastating to both you and your loved ones.
THE AUTHOR is a principal in SHB Consultants, http://www.shbconsultants.com/, and president of the nonprofit Keep Your Pharmacy Open, http://www.Keep-Your-PharmacyOpen.com/. She can be contacted at firstname.lastname@example.org
or (972) 471-0652.