We speak with pharmacists every day about the many aspects involved in buying and selling a pharmacy. Through these conversations, we hear a mix of well-founded views and, just as often misconceptions that can materially affect outcomes.
“Why use a broker when a wholesaler will find me a buyer at no cost?”
The saying “you don’t get anything for free” is particularly relevant here. A simple consideration of whose interests the wholesaler ultimately represents provides the answer. Once your pharmacy is sold, the purchaser becomes the wholesaler’s new client and your relationship at that store effectively ends.
Further to this, a wholesaler is unlikely to expose your pharmacy to the full open market. More often, the sale is directed toward a known or “friendly” buyer, which rarely delivers the best possible price or terms.
“You shouldn’t pay more than turnover for a pharmacy.”
Pharmacies are valued and sold based on EBITDA, not turnover. A highly profitable pharmacy can quite reasonably command a price well in excess of annual turnover. The critical question for any buyer should always be whether the net profit is sustainable over the long term.
“A long lease will make my pharmacy easier to sell.”
A lease represents your time at a particular location – but not all time is created equal. A long lease with excessive rent, restrictive clauses (such as demolition clauses), or poor positioning can quickly become a liability rather than an asset.
While financiers do require lease terms that broadly align with the loan period, committing to a poor lease structure will only compound an already challenging situation. If your lease is less than ideal, we strongly recommend seeking professional advice before proceeding.
“All buyers are the same.”
This could not be further from the truth. At Pharmacy Solutions, we work with a wide spectrum of buyers – from large corporate groups to first-time owner-operators purchasing their first pharmacy in a single-pharmacy town.
While experience is important, integrity is paramount. We maintain long-standing relationships with buyers across Australia and only introduce those who consistently follow through on their commitments. Buyers who attempt to renegotiate price without justification, or who misrepresent their readiness due to unresolved tax or financial issues, are not buyers we can trust or work with again.
The strongest buyers are those who understand their limitations and are supported by a competent accountant and an experienced finance broker.
The Biggest Misconception About Pharmacy Brokers
Some sellers assume that bigger automatically means better. In reality, what matters most is a broker’s reputation, track record, and ethical approach. Ask for testimonials. Seek evidence of successful outcomes.
Most importantly, look for a broker who provides a personal, hands-on service – from the initial discussion through to settlement and beyond. That level of commitment is what truly delivers results.