Establish a Timeline

Step-by-Step Guide

Set Goals

Establish a Timeline

Identify Advisors

Organize your Finances

Calculate Pharmacy Value

Prepare For Transfer

How do you go about setting a realistic timeline?

Conventional wisdom says that it is never too early to begin planning for the sale of your pharmacy. What conventional wisdom neglects to add is that this planning isn’t a full-time requirement. It really means that you need to understand what will be involved when you do decide to sell the business so that you can have the long-term requirements in place. Some changes to legal corporate structure can take up to 10 years to take effect prior to the sale of your business.

What if you don’t have 10 years before you want to sell? Follow the same conventional wisdom and begin planning now. Gather a team of specialists to help you understand the decisions you need to make and the potential changes to your business so that you can maximize the value of the business when you do sell. Even if you have very little time, planning and obtaining good counsel can help you.

Here is an example of a timeline for selling an independent pharmacy:

10 years before transferring ownership

• With the aid of your attorney and/or accountant, determine the correct corporate structure. Some of the choices include:
  • Limited Liability Corporation (LLC)
  • S-Corporation
  • C-Corporation
  • Sole proprietorship
  • Partnerships
• Develop accounting and legal structure that enables you to manage and track your business

5 years before transferring ownership

• Begin rationalizing financial statements and balance sheets to provide you and the next owner with a clear, accurate understanding of the business
• Fully understand ratios and other financial benchmarks in order to maximize margins
• Begin considering candidates to succeed you and evaluating ownership transfer and financial models

3 years before transferring ownership

• Understand the best way(s) to place a valuation on your business and ways to enhance that valuation, including evaluating business and personal expenses charged to the company, inventory dating, specialty businesses, equipment amortization, accounts receivable, and so on
• Settle on the most advantageous ownership transfer model and, if appropriate, begin implementing with your designated successor
• Ensure that your pharmacy has curb appeal and is visually competitive to attract customers and a potential buyer
• Confidentially alert our Ownership Consultant or your McKesson sales manager that you are preparing to transfer ownership in the next three years so he or she can support your efforts by identifying potential buyers and providing resources and programs such as Health Mart to help enhance the value of the pharmacy

1 year before transferring ownership

• Work confidentially with our Ownership Consultant or your McKesson sales manager to prepare for the transfer
• Create a marketing strategy if selling to an outside party
• Ensure that your financial statements best reflect the profitability of the pharmacy
• Maximize the curb appeal of your store