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Warning: Watch For Detours Ahead – Focus On Securing Your Exit

October 27, 2021


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The Four D’s – What Happens If Your Exit Plan Takes a Detour

By Max Bearisto and Mike Jaczko

Retirement can and should be viewed as the consistent long-term goal of any sound exit strategy, and it is the most common reason for pharmacist-owners to want to sell their business. Yet, in the real world, events do not always follow our best-laid plans. Things go wrong. Marriages break up. People get sick. Sometimes they die unexpectedly. 

For most owners we deal with, a comfortable, financially secure retirement is the No. 1 goal. If you are in your 30s and a long way from your golden years, your exit strategy needs to incorporate plans for life after work, including the management of the wealth you hope to gain through the sale of your business. But beware of the Four D’s”

What are the “Four D’s?” These are the risks to your planned business exit because they can turn it from a voluntary act into an involuntary one – an unplanned exit if you will. In other words, you need to be aware of and incorporate them into your broader exit strategy.


The show-stopper is death, and quite obviously, we are not often in control of when (or how) it occurs. Having a will (primary and secondary in some provinces) in place is essential if you own a business. More specifically, even after your death, a robust exit strategy still has utility in how it can provide a vital blueprint for your survivors to either keep the business or successfully monetize the assets. 


For example, what happens if you get in an automobile accident, suffer a severe injury and can no longer go to work? If you are struck with a disability, you might be able to manage your business, but you might not be in your store. Many owners who suffer ill health in whatever form find they do not have the energy, strength or desire to continue being involved with their business. If they already have an exit strategy, it makes it easier for them to decide when and how to leave.


The ending of a marriage can be, and often is, a difficult situation. If you and your spouse jointly own a business, it can be even more complex. You will want and need the advice of a competent family law lawyer in the event of a divorce. However, you will also very likely need to have a detailed estimate of your business’s value, even if you have owned it outright since before the marriage (that is, your spouse has no or a limited claim to it as a marital asset).

In the case of joint ownership, there is the possibility that one of the parties will opt to buy the other out. But this often does not happen. Why? Either side may not have the funds to buy the other out or the desire to take on the debt needed to do so. In such cases, the sale of the business is often unavoidable. 

Shareholder Disagreements

We have lots of experience in transactions that arise because of shareholder disputes. Subsequently, these occur because one or several parties want to exit the business and the other shareholder or shareholders cannot or do not want to raise the capital needed to buy them out. As with similar situations in divorces, a business evaluation should be conducted and a sale transaction becomes inevitable, even if one or some of the shareholders do not want to sell.

In Conclusion

Therefore, be aware that any of these “4 D’s” can derail your eventual retirement plan and force you to either dramatically revise or advance the timeline for your exit. Any of these can happen at any time. So it makes sense when you’re strategizing to ask yourself, “What if?” What if you die, or get divorced, or are unable to go to work? What if you and your shareholders no longer see eye-to-eye on the way you run your business, your growth strategy or your exit? Contemplate the answers to these questions now with a business advisor, and save a lot of time and heartache for yourself and/or your loved ones should the unforeseen occur.

Read more about Exit Strategies:  How To Make a Great Exit , 5 Ways To Get Your Business To Run Without You


Max Beairsto, B.Sc. Pharm., MBA, CVA is an intermediary and valuation analyst with EVCOR (Enterprise Valuators Corporation), a Canadian business advisory firm that focuses on valuations and the sale of healthcare-related companies.

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.


Pharmacy business

Coming to Market:


Western Canada

Max Beairsto, BSc., MBA, CVA
1-844-283-6367 ext 101

Dan Reich, PharmD.
1-844-283-6367 ext 106

Eastern Canada

Ray Becher
1-844-283-6367 ext 113

Mike Jaczko
1-877-583-3320 ext 251

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Detours Ahead


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