As brokers, we’d love to have a magic formula that enables us to accurately predict how long it will take to sell your pharmacy. But unfortunately, no two pharmacies are the same and in a dynamic and ever-evolving marketplace, such a formula will never exist.
There are, however, a few important contextual questions that will help inform the decisions you and your broker make around listing duration.
Before asking “how long should I leave my pharmacy on the market?” first ask yourself:
What kind of pharmacy am I selling?
This may sound simplistic, but it is important to consider the nature of your business and what percentage of the market it is likely to appeal to. For example, if you’re selling a profitable pharmacy in a metro area then it’s likely that your business will appeal to a large portion of the market and consequently should attract offers (or at least some valuable market feedback) within three weeks.
Conversely, if your pharmacy is located in a remote setting, then it’s likely to appeal to a smaller percentage of the market and you will probably need to give your broker a bit more time to sell it. Price point is also key. Pharmacies in the $5m+ bracket should be given extra time because not many buyers can afford to play at that level, while pharmacies in the $1m and under bracket are affordable to most buyers.
How reasonable are my price expectations?
If you won’t settle for anything less than a significant premium for your business then you may need to wait around for a buyer that is keen enough to pay ‘overs’ and depending on how big a premium you’re seeking, that buyer may never emerge at all.
At AP Group, we always go to market with a Indicative Bank Valuation from Armstrong Business Valuers. This is prepared for the purpose of supporting a possible application for finance and to provide prospective buyers with a credible, independent assessment of the business. Generally speaking, the closer the gap between asking price and the Indicative Valuation price, the quicker the business will sell.
What is the early market feedback?
Certainly, the first three weeks of any listing are critical and the market feedback you receive during this period should be carefully considered and used to inform your strategy for the remainder of the campaign. If a significant number of buyers have been introduced to your listing during this time and the overwhelming feedback is that the asking price is too high, then simply leaving it on the market a little longer is unlikely to deliver a positive outcome.
On the other hand, if the early feedback is that the asking price is reasonable and there is still a large group of buyers who are yet to view the data, then staying the course for the time being might be the right call. At AP Group, we carefully monitor our website activity and we are able to provide our vendors with realtime updates on how many prospective buyers have clicked through to their listing and what reports they have looked at.
What time pressure do I have as the vendor?
It’s important to consider your own financial and personal circumstances when answering the “how long?” question. Opportunistic buyers who would be happy to hold onto the business if they can’t get a premium can afford to keep the line in the water for longer in the hope that the big fish comes along one day.
However, if you’re under financial pressure to sell, or your personal circumstances demand a swift sale, then you will need to respond more pragmatically to the market feedback because it’s simply not an option for you to let the listing hang around too long on the market.
In short, when deciding how long to leave your pharmacy on the market you should weigh up all facets of the campaign, be clear with your objectives and ensure that conversations with your broker are regular, open and honest. Just keep in mind that the pharmacy market is far from an exact science and to some degree us brokers have come to expect the unexpected.
– Robert Whelan, Managing Director at AP Group