Pharmacy U

All posts tagged Pharmacy Finance

Time to sell your pharmacy, Part 4 – Your transition accountants

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Mike_Jaczko_Max_Beairsto
You might have noticed that this blog post, unlike the others in this series, does not include the word “choosing.” That’s because we are realists. We know that in most transactions (at least those in which we have been involved), the pharmacist’s regular, long-time accountant will be on the file. In many ways, that only makes sense. Why reinvent the wheel, after all? Read more

Pharmacy U presenters Mike Jaczko and Max Beairsto: How much is your pharmacy worth?

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Mike_Jaczko_Max_Beairsto
Whether you are a pharmacy owner or a potential pharmacy buyer, it is always important to understand what a pharmacy business may be worth. Read more

Pharmacy U speakers – Time to sell your pharmacy, Part 3. Choose your transition lawyer

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Mike_Jaczko_Max_Beairsto
Selling your pharmacy is not just a financial transaction, but a legal one, and it behooves you to consult a lawyer early in the process. A good lawyer with experience in the sale of businesses is an important player on your transition team, and they will work with your team lead, accountant, tax and financial advisors to determine the structure of the deal before going to market. Read more

Time to sell your pharmacy, Part 1. Choose your dream team.

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by Mike Jaczko and Max Beairsto

All babies are beautiful – to their parents. It can be the same with a business. After spending years, even decades, building their pharmacy, surviving through the hard times and celebrating the good, many owners have a difficult time seeing their “baby” for what it truly is. Because they are so close, these owners struggle to remain objective about their business, and about exiting it. In our view, it is imperative that any pharmacist contemplating a sale retain a team of experienced, professional advisors who can help them view the business and the transaction through the broader lens of a realistic market assessment. It’s not good enough to proceed based on “over the backyard fence” anecdotal hearsay. You need to make your decisions based on objective and empirical facts about your business.

Another important reason to assemble a team of advisors is that the sale of anything, by nature, is an adversarial process. One side wants a low price, the other a high price. The buyer will want you to give as much in terms of representations and warranties, and you, the seller, will wish for as few as possible. Not only do you, the seller, need someone on your side to filter the negotiating rhetoric and take your personal feelings out of it; you also need someone to navigate all the complexities, which will be beyond what you have learned operating your business through the years.

Ideally, this will be a multidisciplinary effort provided by a team of advisors, not just one. One solid model for an effective transition team comprises your accountant, a tax specialist, an experienced corporate lawyer, a financial advisor and – perhaps most important – an intermediary who will act as your “quarterback” to ensure everyone is working together and moving in the right direction: towards the goal line. Having any one of these team members missing could damage or derail what would be an otherwise successful exit.

As a team, this set of advisors should provide you with a sense of assurance that they:

  • have experience in selling pharmacy businesses;
  • have general experience in acquiring private businesses;
  • have knowledge of or are able to research your specific market attributes;
  • can communicate well and offer effective negotiating tactics;
  • can provide well-considered and objective advice, and
  • understand the taxation consequences of the transaction.

In the next article in this series, we’ll talk about the qualities and experience you should look for in a transaction “quarterback.”

Mike Jaczko, BSc. Phm, RPh, CIM®, FEA, a pharmacist by background, is a portfolio manager, partner and member of KJ Harrison Investors, a Toronto-based private investment management firm servicing individuals and families across Canada. For more information on this topic, email mjaczko@kjharrison.com or visit www.kjharrison.com.

Max Beairsto, B.Sc. Pharm., MBA, CVA is a pharmacist and valuation analyst with Enterprise Valuators Corporation (EVCOR), an Edmonton-based business valuation firm that focuses on business valuations and sale advisory of small and mid-sized private companies. You can reach him at max@evcor.com or visit www.evcor.com.


Have you considered life insurance for your estate plan?

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Mike Jaczko
Estate planning ensures that an individual’s or family’s assets are distributed according to their wishes after death. Read more

The three stages of financial planning for your pharmacy

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Mike_Jaczko_Max_Beairsto
No business remains the same over the course of its lifetime, from startup to exit. Read more

4 ways data analytics can help your pharmacy

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Mina Tadrous
Today, big data is changing the rules of business operations, creating opportunities for small businesses and challenging the way we look at pharmacy. Read more

Are you prepping for retirement?

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Mike_Jaczko_Max_Beairsto
Whether we acknowledge it or not, we all have a nagging little voice in the back of our heads that goes around and around wondering whether we currently have enough money to retire and if so, can we continue to enjoy the lifestyle we have come to expect? Read more

Your kids need to be part of your pharmacy plan

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Mike Jaczko
When I speak with established pharmacy owners about what worries them, health, work stress and retirement readiness all make the list. As I help prepare them for succession, another concern often emerges – wanting to ensure their children grow to be happy, productive and successful adults. Read more

So, you want to own a pharmacy, Part 3 – Know your numbers

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Pavi_resized_1
How well do you understand your numbers? Numbers can be a daunting task for many people and there is no shame in that. It is the main reason that it is always recommended to utilize a professional when considering transactions, especially ones that are complicated. But there are some basics that individuals should understand. Read more