Making the decision to sell your pharmacy can be a very daunting prospect, particularly if you have built up your business over many years. The process can take some time and involve a lot of hard work, so you will need a trusted team of advisors who understand the pharmacy sector on your side.

Neil Jones, director and joint head of the corporate and commercial law team at Ansons Solicitors in Staffordshire, gives you his top five tips for selling your pharmacy in 2017.

1. Give yourself plenty of time

Gather a team of advisers, ideally with pharmacy sector specialist knowledge, early on so that you can plan your exit strategy on a financial, tax and legal level. Your accountant will be able to advise you on the most tax effective structure for the deal.

Check whether you are making the most out of your business. Take time to review what services you offer and what more, if anything, can be done to increase revenue or streamline costs, which is likely of course to help you optimise value.

Think about whether you will need to bring in any help from within the business. Letting employees know can be difficult and can leave them feeling uncertain about the future but you may need to confide with some on a confidential basis if you are likely to need their help.

2. Prepare, prepare, prepare!

Preparation is key and a buyer will carry out a due diligence exercise on your business. This is an investigation into most areas of the business including your contracts, employees, insurance…the list goes on! The buyer will usually also carry out financial due diligence normally through your accountant. Ensuring your documents and records are up to date and in order, well in advance, will make the process smoother when you eventually sell. The more you can organise before you go on the market, the less you will have to do during the sale process itself. Remember, during the sale process you will still have a business to run. Some of the key issues we frequently come across are:

• Are your insurances in the right name if you have incorporated?
• Do you have full copies of terms and conditions with your suppliers including, for example, rebates offered?
• Is the business registered with the Information Commissioner’s Office at www.ico.org.uk? Failure to comply with the data protection legislation could result in prosecution and could even include a significant fine.
• Are you complying with your pension obligations?
• Are your contracts of employment and employee policies and procedures up to date?

Your legal advisers should be able to provide you with a typical due diligence request list or for a relatively small fee (by comparison to deal costs) do a pre-sale check-up so that you can see what areas you may fall short in and where you may need to concentrate your efforts.

3. Going to market

At the right time, it is useful to instruct a specialist broker who is experienced in the pharmacy sector and can advise you on the value of your business. Experienced brokers will know the market well and should be able to optimise sale value for you. A well-connected broker may also be able to sound out some buyers on a confidential basis, if you prefer this approach.

4. Your team

Ensuring that you have experienced financial and legal advisors with good pharmacy sector knowledge is key to minimising the risk of a failed transaction.

On a basic level, the transaction is normally split in to four main stages:

• due diligence;
• negotiating the sale documents;
• disclosure; and
• completion.

While your existing legal advisor may be an expert in dealing with your estate planning, you will need an experienced transactional lawyer who knows the pharmacy sector sufficiently to help guide you smoothly through each of these stages.

5. Positive approach

Selling your business is likely to be the biggest transaction you will ever be involved in and it can exhaust your time and energy. Recognising this early, adopting a positive mind-set and planning your strategy with your advisory team will help you avoid a drawn-out process and related deal fatigue.

The pharmacy team at Ansons Solicitors is made up of specialist corporate and commercial property lawyers who have a wealth of experience in advising on the sale or purchase of pharmacy businesses across the UK.

For more information on buying or selling a pharmacy, refinancing or relocating a pharmacy, renewing your lease or preparing your business for sale, contact Neil Jones on 01543 431184 or email njones@ansonsolicitors.com.