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Planned and unplanned exits: Beware the 4 Ds!

When your exit plan takes a detour – look out for the 4 Ds.

The long-term goal of most pharmacist-owners is retirement. It is the significant component of an exit strategy and the most common reason for selling their pharmacy. But, in the real world, events do not always follow our best-laid plans. 

Your exit strategy needs to incorporate plans for the “What if?” What if you die, or get divorced, or are unable to go to work? Or you and your shareholders no longer agree on the way you run your business. 

This brings us to the “4 Ds.” These are appropriately seen as 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. 


“What happens to my business if I die suddenly?” This is the most difficult “D” to think of and one you have probably worried about at some point. Many people depend on you: employees and their families, clients/patients and your own family. Having a will (primary and secondary in some provinces) is essential if you own a business. A robust exit strategy still has utility after your death as it provides a vital blueprint for your survivors to either keep the business operating or successfully monetize the assets.


What would you do if you or your business partner became too ill or hurt to work? Many owners who suffer ill health in whatever form might manage their company but might not be as physically present in the pharmacy. In some situations, they do not have the energy, stamina, or desire to continue being involved with their pharmacy. While these circumstances may be temporary, planning for a lengthy, permanent withdrawal from the operations is necessary. 


The dissolution of a marriage is a stressful experience for any couple, but if you and your spouse jointly own a business, the property division can become the most complicated and contentious aspect of the divorce. 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. The value of the pharmacy may be so high that neither side may have the capital to buy out the other spouse or the ability to take on the debt needed to do so. In such cases, the sale of the business is often unavoidable. 

Disputes (between shareholders)

We have lots of experience in transactions that arise because of shareholder disputes. When relationships break down, a company must have methods to deal with the disagreement or procedures to facilitate the exit of one or more owners. As with similar situations in divorces, a sale transaction becomes inevitable, even if one or some of the shareholders do not want to sell.

Even if you are a long way from your golden years, be aware that any of these “4 Ds” can derail your ultimate retirement plan and force you to either dramatically revise or advance the timeline for your exit strategy. And any of these can happen at any time. 



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