The value of your Pharmacy whether selling the entirety, selling a share or re-financing is a critical element of any deal with the financial institution that you or a potential purchaser of your business uses.
With a tightening in lending that we have all noted over the last year or so there has come with it a restriction in the ability of valuers to freely interpret what the market value of a pharmacy actually is. Financial institutions have been quick to eliminate rogue valuers if they believe that their valuations have been over stepping the mark, which has in turn led valuers to a restrictive, financial institution driven, valuation process.
Of course valuers want to keep the flow of work coming their way, at up to $3,500 per valuation there is plenty of money at stake. The independence of valuers is also up for question, How can a business broker such as Pharmacy Solutions provide a totally unbiased valuation on a pharmacy – we would always be conflicted. Or, how can an accountant with many pharmacy clients not have some level of conflict, especially if the pharmacy she is valuing is next door to an existing client.
Financial institutions do drive the method of valuation which is acceptable as it is industry standard and they do have policies in place to try and eliminate conflicts but from my experience it is vitually impossible to totally remove conflict from this process. There are independent valuers who offer their services to all financial institutions and I would suggest that a company that only does valuations and does not offer financial/business broking services or have accounting clients takes a large step towards an un-conflicted position.
Peter Marshall
Managing Director of Pharmacy Solutions Australia
Pharmacy Solutions Australia has offices in NSW, Qld and Victoria they are the largest Pharmacy Brokers in the country.