What are they, do you need one, and what will it cost?
At the point where you’ve got your eye on a particular pharmacy, the very next thing you should do is conduct a proper appraisal. This will give you a good idea of how profitable the business is and what it’s really worth, and will ensure no nasty and unexpected surprises rear their head after you’ve put money on the table.
The first step is to make sure you speak to a pharmacy specialist accountant
Now I realise, as a pharmacy specialist accountant, you may think I’m biased. But whether it’s myself or someone else you speak to, you must ensure they specialise in pharmacy; pharmacy just isn’t like any other business. Once you’ve found your chosen accountant, the first thing you’ll want is a review of the target company’s accounts and the proposed structure of the deal to identify any potential tax or commercial issues that you need to be aware of. At Hutchings Accountants we actually provide this for FREE, to help you start the process.
Understanding the business you are buying and how profitable it is
The value attributed to a pharmacy when it’s marketed for sale is made up of myriad factors. How profitable is it, how much counter trade do they do, where is the nearest surgery, how much competition is there? These are just a few of the things to consider, and each one can have significant implications. A thorough commercial appraisal of the pharmacy you are considering acquiring will identify key performance indicators and compare these to similar pharmacies. This will give you a good idea of how its value matches up to its asking price. Again, if you’re not sure, we can help you decide how much is reasonable to make an offer for.
You then need to decide how to structure the purchase
Should you do a share purchase or asset purchase? Should you purchase in your own name, or use a holding company? There are advantages and disadvantages to each option when it comes to choosing the right structure for your purchase and trading. If you’re not sure about how the best way to proceed, we’ll help by first explaining all these different options and then establishing the best way to structure your purchase so that you can fully understand all the tax implications and pick the right structure to fit your circumstances.
Securing financing for your purchase
If you need to raise funds for your purchase, we can guide you through the available options and make introductions to lenders and brokers, and assist with the preparation of business plans, cash-flow forecasts and other reports required by your lender. Once you have an offer for finance, we’ll help you understand what the likely loan payments will be and the implications of this on your cash position and profitability.
The fine print; Reviewing the purchase agreement
Your pharmacy specialist accountant should be able and willing to work closely with your solicitors. They should assist with the drafting of the purchase agreement, deal structuring, and other commercial and taxation aspects of the purchase so that it all goes as smoothly as possible for you, and that your interests are considered and protected at every step.
Having the right pharmacy specialist accountants in your corner means you can rest assured that you’ll be supported each step of the way, so that you can navigate the purchase process with confidence. You can also rely on them to help with any other matters that may arise, such as setting up a company vehicle for the purchase, provide tax planning advice, and assisting with all your compliance needs in the future.
What will it cost?
Every pharmacy purchase is different, and the fees for a pharmacy appraisal will vary depending on your individual circumstances and the scope of your requirements. At Hutchings Accountants we understand that buying a pharmacy (particularly if it’s your first one) can be stressful and impact on your cash flow in the early days of running your business. Our Buyers package can help by providing all the accountancy support you will need with in respect of the purchase, and all at a reasonable fixed fee, so you don’t have to worry about costs spiralling if there are any delays. Fill out the form at the bottom of this page, or send me an email at atif@hutchingsaccountants.com for a bespoke quotation.
