The events nobody schedules
Ask an exit planner why owners should start preparing years before a sale and you'll hear a piece of professional shorthand: the five D's. Death. Disability. Divorce. Disagreement. Distress. They are the involuntary exits — the events that put a business on the market, or a partnership interest in play, before anyone planned for it.
Industry studies consistently put the share of unplanned exits at half or more of all business transitions — and the surveys behind that number are sobering on their own. In the Exit Planning Institute's 2023 State of Owner Readiness study, a third of owners had no long-term plan at all or were unsure what would happen to the business after them. In RBC Wealth Management's 2024 owner survey, two-thirds had no documented transition plan — and 41% had never done any valuation analysis, ever.
What does that cost when a D arrives? Two numbers frame it. Professional valuers apply a distressed-sale discount of 20–40% below fair market value when a business must sell under time pressure — urgency and the seller's inability to stand behind warranties do the damage. And that's for the businesses that sell at all: the International Business Brokers Association has reported that the large majority of businesses listed with brokers never close. An unprepared exit doesn't just price at a discount; more often, it simply fails.
Every D has the same thing in common: each one creates an urgent need for a credible business valuation at the exact moment there's no time to produce one.
- Death triggers the buy-sell agreement and the estate — and the question of whether the funding matches what the business is worth now, not what it was worth when the agreement was signed.
- Disability triggers the same buyout provisions, which are even more commonly unfunded than the death provisions.
- Divorce puts the business — usually the largest marital asset — into a proceeding where its value will be contested by professionals.
- Disagreement means a partner buyout, and a buyout negotiation that starts without a shared reference number tends to become the next dispute.
- Distress compresses the timeline hardest of all: a business that must sell quickly gets valued by whoever shows up with a checkbook.
The sixth D
The classic five strike the owner. The sixth strikes the business itself: Disruption. AI is repricing business models in quarters, not decades — compressing margins in some industries, commoditizing services in others, and quietly changing what a buyer will pay for revenue that used to look durable.
Disruption belongs on the list because it produces the same outcome as the other five — an exit, or a repricing, on a timeline the owner didn't choose. And it's the only D whose frequency is going up.
But Disruption is different in one useful way: it's the only involuntary-exit risk you can rehearse. Death arrives as a phone call. Disruption shows up in the numbers first — growth flattening, recurring revenue churning, a multiple that quietly slips — if anyone is looking. An advisor and owner can sit down with a scenario planner and price the risk together before it prices itself: pull growth down five points, watch what happens to the value, and ask the question out loud — what does waiting two years cost if this hits us?
What preparation actually looks like
Here's the uncomfortable part: when a D actually fires, a planning-stage valuation is usually not the tool for the aftermath. An estate settlement needs an IRS-qualified appraisal. A divorce needs a valuation that can survive litigation. Those belong to credentialed appraisers — ABV, ASA, CVA — and the good ones are slow and expensive on purpose, because their number has to hold up under legal scrutiny.
The preparation play is entirely on the before side. An owner who maintains a current, credible baseline valuation — refreshed annually, the way financial statements are — meets any D with the number already in hand:
- The buy-sell is funded against today's value, not the value from the signing dinner.
- The family isn't discovering, in the middle of a probate process, what the business might be worth.
- A partner buyout starts from a reference point both sides have seen for years.
- And when Disruption starts moving the numbers, the owner sees it move — because there's a baseline to move from.
The one-sentence version: the five D's were always the argument for planning early — you don't get to schedule them. The sixth adds something sharper: the value you're planning around may not hold still while you wait.
The habit, not the event
The reason most owners don't have a current number is friction: a traditional valuation engagement costs thousands and takes weeks, so it happens only when something forces it — which is to say, after a D, at maximum stress and minimum leverage.
That's the equation a planning-stage valuation changes. When a credible triangulated baseline takes minutes instead of weeks, the annual refresh becomes a habit — a line on the same calendar as the tax return. Owners working with an advisor get the stronger version: a live working session where advisor and owner move the value drivers together and watch the consequences in dollars, then set the plan against them.
Nobody gets to choose whether the D's apply to them. The only choice is whether the number exists before the event does.