Organize your Finances

Step-by-Step Guide

Set Goals

Establish a Timeline

Identify Advisors

Organize your Finances

Calculate Pharmacy Value

Prepare For Transfer

Get your financial house in order before you sell.

As you prepare for the eventual sale of your pharmacy, well-documented financial records are essential. You’ll need to demonstrate to prospective buyers how the pharmacy has performed operationally in the recent past — through income statements, balance sheets, and cash flow records. Beyond the numbers, work closely with your accountant and attorney to help effectively manage your business affairs.

Here is an example of a timeline for organizing your finances:

10 years before transferring ownership

• With the aid of your attorney and/or accountant, 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 evaluating 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

1 year before transferring ownership

• Ensure financial statements best reflect the profitability of the pharmacy

Learn more about the sources and different types of financing.