Pharmacy valuation was made zero

Pharmacy1

I was in the process of purchasing a 100hpurs pharmacy. The bank offer was conditional upon the valuation report. The valuation was done and was disappointed that business valuet who assessed it made a nominal value of zero, although the business is running properly.
I can't understand that if a business is running how can the valuer made it zero that is the business is not running at all
Only reason for that was the valuer said that I can't work more than 48 hours and I have already made plan to work 80 hours per week
Which is usual for an independent owners.
He is also writing in his report that there are many pharmacy around so he is assuming that this business will not work and due to his
Report the bank is now reluctant to give me the loan
I am feeling so disappointed with the valuers way of dealing and assuming things
Can some one please device me on how to deal with this.

Pharmacy1

Can some one please advice me. It will be very helpful for me
Could I make an appeal and if so to whom shall I make an appeal
Thanks in advance

Browntoa

No one will make a business loan on those valuations

Annisele

Is the valuer saying the business would only be profitable if you worked more than 48 hours a week?

If that's the case, I'm not surprised he's valued the business at zero - and if he's right, then he's done you a huge favour. You might be better off looking for a different pharmacy to purchase.

paddyrg

I think the problem is that any business that relies on you doing 80h/week is going to be in trouble if you get sick or go on holiday. I don't know what the going rate is for an agency pharmacist, but if you based your figures around that, does it change things dramatically?

Does the valuation include significant stock, for instance?

[Deleted User]

paddyrg wrote: »

I think the problem is that any business that relies on you doing 80h/week is going to be in trouble if you get sick

That won't be a problem.

After all, she'll be working in a pharmacy.

Mattygroves2

Did you show the valuer the most recent accounts from the existing business to show the current profit it is generating and any stock or other assets held ? Are these profits stable ?

How many people currently operate the shop ? Do your projections build in a similar number ?

You need to build a business case that supports a higher valuation which might involve paying an accountant to do a valuation for you or try a different bank.

DCFC79

OP has also posted 2 threads on he loans board

antrobus

Pharmacy1 wrote: »

I was in the process of purchasing a 100hpurs pharmacy. The bank offer was conditional upon the valuation report. The valuation was done and was disappointed that business valuet who assessed it made a nominal value of zero, although the business is running properly....

To the uninitiated, pharmacies are subject to subject to market entry requirements, as in NHS England will only allow a pharmacy to open if there is an identifiable need for one. However, there was a time when you could open a pharmacy anywhere you liked so long as you agreed to be open for 100 hours a week.

That's a 100 hours pharmacy.

They tend to be worth a lot less than normal (or 40 hour) pharmacies because the requirement to be open 100 hours a week is a burden not a benefit. The valuer's job is to come up with a number that reflects what your lender could get for the business if they were obliged to repo and offer it for sale. Presumably the cost of employing multiple pharamacists to cover 100 hours is equal to or greater than the profits the pharmacy generates during that time, and therefore the value of the business is zero.

The fact that you are willing to work some ridiculously long hours to reduce that cost, doesn't change anything.

antrobus

Mattygroves2 wrote: »

...You need to build a business case that supports a higher valuation which might involve paying an accountant to do a valuation for you or try a different bank.

P.S. Your typical accountant would have no idea how to value a pharmacy. It's quite a specialist task, involving things like the split between OTC and NHS dispensing income, and the extent to which dispensing income is derived from care homes etc.

Savvy_Sue

Mattygroves2 wrote: »

How many people currently operate the shop ? Do your projections build in a similar number ?

And are you (the OP) acquainted with TUPE and the implications that would have if you intended to use fewer members of staff?

It would worry me if I knew the person responsible for dispensing / checking drugs being issued to me / my family was working 80 hours per week.