There are lots of guides for all the processes and procedures of selling your pharmacy. This is not one of them. In this guide, we’ll focus entirely on how digitisation can raise your sale price.
Selling Your Pharmacy 101
When it comes to selling your pharmacy, you obviously want the best price possible. But for every person selling a pharmacy, there’s someone buying. They want the best price too. So how do you go about convincing that buyer to spend more money on your pharmacy business?
It starts by thinking like a buyer.
What do buyers want when buying a pharmacy?
Some of the main considerations when purchasing a pharmacy are:
- How profitable the business is
- Whether revenue is trending up or down
- The potential for growing the business
- Spotting opportunities to save money where the existing business doesn’t
- The volume and mix of prescriptions
- The categorical mix of the pharmacy’s patients, e.g. clinical, prescription, retail
- Status of contracts
But the main considerations we’ll explore in this article are the ones we’ve highlighted.
Whilst there are people who prefer buying struggling businesses and turning them around, most buyers want a healthy business. The majority of bets in a horse race are on the favourite. And higher profit margins equals a higher purchase price.
Stable. Replicable. Predictable.
But here’s the rub. What buyers really value is continuity in those high profits. The continuation of that upwards revenue trend. It’s great that you’re generating all those profits. But if you leave the business? Taking your extensive local knowledge, partnerships you’ve developed over years, and the understanding of your pharmacy team with you? Where’s the assurance that the healthy business they’ve bought won’t fall down around their ears?
What they want, with a healthy business, is business as usual. Stability in transition. Predictability for the future, which means replicable business practice. Savvy pharmacy buyers will poke holes in valuations that don’t have these characteristics, driving down the price. So in this instance, digitisation doesn’t necessarily raise the price of your pharmacy, but it does prevent it from being driven down.
The more systemised, the more automated, the more robust processes in place, the better. Digitisation is a major component in all three.
How do digital systems increase the value of your pharmacy?
Well, in the purest form, digital systems, (e.g. websites) are an asset. If your pharmacy is worth £980,000 and you spend £20k on a website, now your pharmacy is worth £1m. So if you’re planning on selling your pharmacy, a website is a reasonably risk-free investment, as you can build it into the value of your business.
Naturally, that only works if you own the website. Website rental software, the type you pay for year-on-year, doesn’t belong to you, nor does any data contained within it. Therefore, you cannot build it into the value of your business.
Another way digital systems increase the value of your pharmacy, is the opportunity for revenue growth, especially in the future.
An existing marketing list, a website where several of your services get found on Google, an engaged audience on Social Media…these are all things that take time to cultivate. And time = money. Especially time well spent.
Since pharmacy sales usually take a while to go through, provided you haven’t even begun the process yet, you’ve still got plenty of time to digitise your pharmacy.
Why ignoring data is a disaster
For a start, let’s make one thing clear. Data is the most valuable commodity in the world. That’s why companies like Google, Amazon and Meta are so big.
There are three important questions to answer before you can assuredly include data into the valuation of your business.
What data does your pharmacy business own? (Important distinction which I will clarify later)
How does your pharmacy collect data?
What does your pharmacy do with the data?
How valuable data appears throughout your Digital Ecosystem
- A proper website provides digital infrastructure which both harvests and utilises useful data for your pharmacy business
- A healthy social media presence helps transition a change of management with the pharmacy’s existing community
- Email Marketing Lists retarget existing pharmacy users and drive repeat business
- EPOS systems with key consumer insights both in-store and via eCommerce help with retail sales and promotions
- Paid advertising accounts with data on previous campaigns aid future campaigns
There are always due diligence processes during the purchase of a pharmacy, ensuring a pharmacy is as it claims in the listing. Data is concrete. It can’t be questioned.
Google Analytics for Your Website
Let’s say you’re top of Google, and you get 1,000 clicks per month on that page. With a quick calculation on Google Ads, you can understand how much each click is worth for the keyword you’re ranking for.
If it costs £1/click for you to appear on Ads for “Yellow Fever Vaccine” and you’re getting 1k clicks per month? That’s £1k/month you can incorporate into the value of your business.
But you cannot do that without having the data. You cannot have that data without having a website. And this is why digitisation built into your business is a really quick way to increase the value of your business.
Don’t own your website? You don’t own the data within it either.
In the same way that if you owned a fleet of vans, you can incorporate the assets into the value of a business, but you can’t if they’re rentals, you can’t incorporate either a website or its data into your business valuation if you don’t own them.
Want some other quick ways to increase the value of your pharmacy?
A good yardstick for measuring the progress of your pharmacy by taking The Perfect Pharmacy Scorecard. 30 questions. 5 minutes. Tailored report, with advice for improvement in each area depending on how you score. Then a 5-day email action-plan diving into more detail on each major area of a pharmacy business (non-clinical).