Categories
Business Trends

Pharmacy Accountants Miami

Pharmacy Accountants Miami

As a Pharmacy Accountants Miami, we serve an integral part of the community, providing detailed health and medicinal advice to the general public. Their health and well being are in your hands, so it is incredibly important that your business is equipped with all the necessary resources, products and amenities they need in order to fulfil your role and position. That’s why you need pharmacy accounting specialist and at Pharmacy Accountants Miami we have 25+ years of experience.

Why choose Pharmacy Accountants Miami

Whether you are an individual dispensary, a branch or belong to a multi-shop business, our committed team of specialist Pharmacy Accountants Miami can assist you in your business management, so you can focus on what matters most: supplying the public with the best possible healthcare service available.

At Pharmacy Accountants Miami we pride ourselves on taking a keen interest in you, and indeed your working environment and your future expansion potential too.

For this reason you can feel confident that our Pharmacy Accountants Miami will always keep you abreast of all the latest industry trends, government regulations and consumer demands to make your business stronger and more profitable.

We are pleased to be able to offer you the following services:

  • Strategic planning and budgeting
  • Benchmark your results against the industry and historical financials and statistics
  • Tax and superannuation planning (to help minimise and manage your tax)
  • Best options to capitalise on your current circumstances
  • Financing and purchasing a pharmacy
  • Interpreting industry and government agreements
  • Implementing P.O.S
  • Profit/loss reports
  • VAT
  • Payroll
  • Succession planning (including partnership structures)

As a small business, your pharmacy is exposed to many liabilities and taxing responsibilities. However, our Pharmacy Accountants Miami can quickly help alleviate this pressure, enabling you to focus on growing your business or even making the transition from pharmacy manager to company owner.

For many years now our Pharmacy Accountants Miami expertise has enabled us to harness the latest industry trends and integrate them into all our client relationships, and we can do the same for your business too.

 

Categories
Business Trends

What’s my pharmacy worth?

What’s my pharmacy Worth?

What affects the value of my pharmacy?

As Pharmacy Accountants Miami, we have been preparing valuations of and answering the question, What’s my pharmacy worth? This is valuable information for pharmacies to be used when buying, selling and financing pharmacies. Even though each pharmacy business is unique, the concepts of a pharmacy valuation (What’s my pharmacy worth?) are similar.

As Pharmacy Accountants, we determine What’s my pharmacy worth? using one of several methods. Most commonly, valuations are determined by applying a multiple (a capitalisation rate) to the adjusted annual profit of the pharmacy.

A Capitalisation Rate is the desired rate of return that profit represents to the purchase price required to buy a pharmacy. It is best understood by the following formula:

Capitalisation Rate % = Annual Net Profit / Cost (or value) x 100

So the higher the value of a pharmacy, the lower the Capitalisation Rate % will be on the same Annual Net Profit.

Often it is easier to understand Capitalisation Rate % and how it determines a business value by converting it to its equivalent multiple of annual profit. This can be obtained by applying the following formula:

Cost (or value) = 100 / Capitalisation Rate % x Annual Net Profit

So a Capitalisation Rate of 20% = a Multiple of Annual Net Profit of 5 times. For example, valuing a business with a Capitalisation Rate of 20% of Annual Net Profit will determine a business value equal to 5 times its annual profit.

There are many factors which affect the Capitalization Rate and therefore What’s my pharmacy worth?. These include:

  • Demographics
  • Size
  • Location
  • Potential for growth
  • Competition
  • Proximity to Doctors
  • Opening hours
  • Staffing
  • Lease
  • Fit out

Demographics

The location of the pharmacy determines who your customers are and how often they shop at your business. Changing demographics can also affect the potential for growth in the business. For example, new housing subdivisions mean new people moving to your catchment area which should lead to increased sales.

Size

The turnover of the pharmacy can impact on its value, particularly as there are certain fixed costs of running an average sized pharmacy. The concept of economies of scale can be applied to a pharmacy business whereby the ratio of running costs (lease, utilities, wages, insurance etc) to gross turnover impact on the business’ value.

Location

The location of a pharmacy typically defines its type as either a medical centre pharmacy, shopping centre pharmacy or stand alone pharmacy. In each situation, the location and therefore the type of pharmacy is taken into consideration when valuing the business.

Potential for growth

In addition to the impact that location and changing demographics might have on a business, growth might be achieved through active measures such as training staff in retail selling, stocking products to suit customer demographics, such as mobility products, or employing specialist staff to service your market, such as a naturopath or baby nurse.

Competition

The concept of competition when determining What’s my pharmacy worth? goes further than identifying the number of competing pharmacies located within a given radius.

Competition must also take into account the number and type of businesses that are located near the pharmacy which also stock product lines that are not pharmacy specific.

Proximity to doctors

The proximity of a pharmacy to doctors can add value to a pharmacy. By being located beside a doctor’s practice or medical centre, a pharmacy can expect a significant number of patients to frequent their business. A pharmacy that is instead located even a block or two away from a medical practice will find customers will use other pharmacies for a variety of reasons.

Opening hours

A pharmacy’s opening hours can impact on its value in a number of ways. A pharmacy that has the same profit as another but has fewer opening hours is likely to have a higher value.

Staffing

The staff of a pharmacy affects the value of a pharmacy in several ways. They are essential for the business to open each day and operate. They also contribute to one of the larger cash outlays for the business. As a consequence, pharmacies that are overstaffed for both their size and turnover will find their value affected.

Lease

The lease is one of the most crucial factors on the valuation of a pharmacy business. The ability to continue to trade from your current premises is very important. Leases with significant periods until their expiration are more favourable to both banks and purchasers.

Leases with short timeframes until expiration add uncertainty to the pharmacy’s ability to renegotiate a new lease with suitable conditions. There are substantial costs involved in moving a pharmacy and so this needs to be factored into any value, if applicable.

Build out

The age and quality of a shop’s fit out is also an impacting factor. Old and tired fit outs mean that potentially in the short term funds will be required to redo the interior of the shop. Potential purchasers will consider this when assessing the value of a pharmacy.