Exit Planning Examples: What the Deal Data Says a Sale Looks Like

The useful exit planning examples are not stories about other owners. They are the published deal data and the arithmetic that sits on top of it. In the second quarter of 2026, the BizBuySell Insight Report recorded 2,117 closed sales reported by brokers with a median sale price of $349,250, median revenue of $692,087, median cash flow of $155,921 and a median cash-flow multiple of 2.7. Those four numbers, plus the SBA’s financing rules and the IRS’s allocation rules, describe the shape of a small-business sale more honestly than any anecdote.

The short version: the price comes from an earnings figure and a multiple, the financing rules decide how much of it arrives in cash at closing, and the allocation across asset classes decides how much of what arrives is taxed as ordinary income.

This page states published rules and names the body that publishes each one. It is not tax or legal advice, and none of it is advice about your business or your sale. Take your own numbers to your own CPA and attorney.

Where these exit planning examples come from

Every figure below is either a published statistic, with its publisher and edition named in the sentence, or arithmetic that is labeled as hypothetical. Nothing here describes a real transaction, a real business or a real person.

Two of the sources deserve their limits stated up front. The BizBuySell Insight Report tracks sales and listing prices drawn from roughly 50,000 businesses for sale and recently sold, and its own method note says that “closed transactions are reported to BizBuySell.com on a voluntary basis by business brokers nationwide.” It is not a census, it is not audited, and its “cash flow” field is seller-reported and closest to seller’s discretionary earnings. The IBBA and M&A Source Market Pulse report is a quarterly survey of advisors rather than a transaction database, and its free highlights sheet carries the note that purchase prices from under $500,000 to $2 million are quoted as a multiple of seller’s discretionary earnings and prices from $2 million to $50 million as a multiple of EBITDA.

The standard-setter for valuation says the same thing in stronger terms. NACVA’s Professional Standards, effective for engagements accepted on or after June 1, 2023, state that “rules of thumb are acceptable as reasonableness checks, but should not be used as a stand-alone method.” A multiple from a marketplace report is a sanity check on a number, not the number.

Example one: the median business that sold in Q2 2026

Take the BizBuySell medians for the second quarter of 2026 and multiply the two that the report publishes together. Median cash flow of $155,921 at the median cash-flow multiple of 2.7 gives $420,986.70, call it $421,000.

Now look at what the same report says the median sale price actually was: $349,250. Run the other published multiple and the gap widens. Median revenue of $692,087 at the median revenue multiple of 0.7 gives $484,460.90.

That is three different numbers from one quarter of one report, because a median price, a median cash flow and a median multiple are each computed across a different set of transactions and do not multiply together into a real deal. Anyone quoting you 2.7 times earnings as the value of your business is quoting the middle of every industry and every size in one marketplace’s voluntarily reported closings.

The report does publish two timing figures by sector for the quarter: service businesses saw median days on market improve 9% to 155 days, while manufacturing transactions took 247 days to close, up 17% year over year. Those are days on market for businesses that sold, so they exclude every listing that never found a buyer and they understate how long an owner waits. No all-market median time to sell is published for the quarter, which is why you will not find one here.

Example two: financing that price with an SBA 7(a) loan

Carry the $421,000 forward as a hypothetical purchase price and put it through the rules an SBA lender applies. SOP 50 10 8.1 takes effect on October 1, 2026; the procedure in force until then is SOP 50 10 8, effective June 1, 2025. Both of the structural rules below appear in each, and the arithmetic assumes the purchase price is the entire project cost, with no working capital or closing costs added, which keeps the numbers readable rather than realistic.

Step one, the equity injection. SOP 50 10 8 requires “an equity injection of at least 10 percent of the total project costs” on a complete change of ownership. SOP 50 10 8.1 sets the same 10% and adds that “for Initial Acquisitions, the required equity injection cannot be reduced or eliminated.” Ten percent of $421,000 is $42,100.

Step two, how much of that the seller may supply. Seller debt counts toward the injection only on full standby, and only up to half of it. SOP 50 10 8: seller debt “may not be considered as part of the equity injection unless it is on full standby for the life of the SBA loan, and it does not exceed half of the SBA-required equity injection.” Full standby means “no payments of principal or interest for the term of the 7(a) loan.” So a standby seller note can cover at most $21,050 of the injection, and the buyer’s own money has to cover at least the other $21,050. The loan is then about $378,900.

Step three, the coverage test. The SOP defines debt service coverage as “earnings before interest, taxes, depreciation, and amortization (EBITDA) divided by the combined debt service post transaction,” and sets the minimum historical ratio at 1.25:1 for an Initial Acquisition, 1.15:1 for a Business Expansion, and 1.25:1 for an Owner Buyout and for an ESOP or cooperative.

Here is where the earnings figure matters more than the multiple did. The $155,921 is a marketplace cash-flow field closest to seller’s discretionary earnings, which the IBBA defines as earnings before, among other things, “one owner’s entire compensation, including benefits and any non-business or personal expenses paid by the business.” The lender underwrites to EBITDA, so a salary for whoever now runs the business comes out first. Put a plainly invented $80,000 in that slot, chosen to show the mechanism rather than to represent any market rate, and EBITDA is $75,921. At 1.25:1, combined post-transaction debt service can be no more than $60,736.80 a year. Whether a roughly $379,000 loan fits inside that depends on the rate and term the lender offers, which no published source fixes.

Step four, the valuation. Under SOP 50 10 8.1 the business valuation “must be requested by and prepared for the Lender,” and “the Lender may not use a business valuation prepared for the Applicant or the seller.” It must state “the individual’s conclusion of value” and it “must support the Purchase Price … regardless of how the debt is structured. If the amount paid for the business exceeds the business valuation, the difference must be made up by equity.” At $421,000 the new Quality of Earnings requirement does not bite: that applies to Business Expansion and Initial Acquisition transactions where the purchase price is $3 million or more, measured before buyer equity, seller debt or other financing.

One timing rule worth knowing before a seller note is signed: SOP 50 10 8.1 makes seller debt “eligible to be refinanced after it has been in place and current for 36 months,” where the earlier procedure said 24.

Example three: how the price splits across asset classes

The price is one number to a buyer and seven numbers to the IRS. The IRS states that “the sale of a business usually is not a sale of one asset. Instead, all the assets of the business are sold. Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss,” and that “the residual method must be used for any transfer of a group of assets that constitutes a trade or business.”

The instructions to Form 8594, Asset Acquisition Statement Under Section 1060 (revised November 2021), say that “generally, both the purchaser and seller must file Form 8594 and attach it to their income tax returns (Forms 1040, 1041, 1065, 1120, 1120-S, etc.) when there is a transfer of a group of assets that makes up a trade or business.” The form is attached “to your income tax return for the year in which the sale date occurred,” and failing to file a correct one by the due date without reasonable cause exposes you to penalties under sections 6721 through 6724.

The allocation runs in a fixed order: reduce the consideration by Class I assets, allocate what is left to Class II, then III, IV, V and VI in that order, in proportion to fair market values within each class, and put the remainder in Class VII. The instructions add the constraint that decides most arguments: “the amount allocated to an asset, other than a Class VII asset, cannot exceed its fair market value on the purchase date.” Class V is where furniture, fixtures, buildings, land, vehicles and equipment generally sit. Class VI is section 197 intangibles other than goodwill, and it expressly includes “any covenant not to compete entered into in connection with the acquisition of an interest in a trade or a business.” Class VII is goodwill and going concern value.

Here is the mechanism on the same hypothetical $421,000, with figures invented purely to fill the classes. It is not an estimate of anything.

Section 1060 provides that a written allocation agreed between the parties binds both of them “unless the Secretary determines that such allocation (or fair market value) is not appropriate,” which is why the allocation belongs in the purchase agreement rather than in each side’s return three months later. Where the split lands changes the character of the seller’s gain, since parts of the price carry depreciation recapture and ordinary income treatment rather than capital gain. Which parts, and at what rate, depend on facts only your own adviser can see.

Example four: the same sale taken in installments

If the seller takes part of the price over time, a different set of rules applies. IRS Publication 537 defines an installment sale as “a sale of property where you receive at least one payment after the tax year of the sale,” and reporting is on Form 6252. Regular inventory sales, dealer dispositions and publicly traded stock or securities are not eligible for the method.

Three points decide whether installment treatment does what a seller assumes it does.

• Recapture is not deferred. Publication 537 states that “you must report any depreciation recapture income in the year of sale, whether or not an installment payment was received that year,” on Form 4797, Part II. In the allocation above, that is the Class V equipment talking.
• The classes do not all qualify. Publication 537 excludes regular inventory sales, dealer dispositions and publicly traded stock or securities from the method, so the Class IV inventory in the allocation above sits outside it.
• A standby note is still a note. The SBA rule in example two requires a seller note counted as equity to take no principal or interest for the life of the 7(a) loan. The payment schedule and the tax reporting schedule are two different things, and which years the gain falls in is a question for the seller’s own CPA before the note is drafted, not after.

Two federal charges sit on top of the outcome and are worth naming because they are fixed by statute rather than negotiated. The net investment income tax is 3.8% on individuals, estates and trusts above modified adjusted gross income of $250,000 for a joint return, $125,000 for married filing separately and $200,000 for everyone else, reported on Form 8960; those thresholds are not indexed. And the long-term capital gains brackets for tax years beginning in 2026, from Revenue Procedure 2025-32, run the 0% rate up to $98,900 of taxable income on a joint return and the 20% rate above $613,700, with unrecaptured section 1250 gain taxed at 25%.

What these examples cannot tell you

They cannot tell you what your business is worth. None of the published sources is a valuation and none is a census: BizBuySell reports closings brokers chose to report, Market Pulse reports what advisors said they saw, DealStats and GF Data are subscription databases, neither of which publishes multiples free of charge, and GF Data’s coverage begins at $10 million in deal size, an order of magnitude above the median business that sold last quarter.

They also cannot tell you how long a sale takes or what an intermediary charges. The only current published timing figures are the two sector numbers above. On fees, the IBBA publishes no fee schedule and its glossary carries no entry for the tiered commission formulas quoted around the web, so the only sound move is to ask any broker for their fee schedule and their minimum fee in writing before signing a listing agreement.

For the valuation methods themselves, how to value a small business sets out the three approaches and the difference between a conclusion of value and a calculated value. For the sequence of a sale, see how to sell a small business and the exit planning process checklist, and for what is left after debt, fees and tax, exit planning financial considerations.

Who to bring in, and when

Four roles, and they are not interchangeable. A valuation credential holder produces the conclusion of value a lender will accept, and if SBA financing is involved the accreditation is defined for you: SOP 50 10 8.1 names the ASA, the CBA, the ABV, the CVA and the BCA as Qualified Sources, and requires the valuer to be independent of the loan production function. A CPA handles the tax structure, the allocation on Form 8594 and the installment reporting, and should see the purchase agreement in draft rather than in final. An attorney drafts the agreement and the covenant not to compete that lands in Class VI. A broker or intermediary runs the process and finds the buyer. Our directory lists CPA firms by state and city, and where the books need to be in a condition to survive a buyer’s diligence before any of this starts, that clean-up is fractional CFO work rather than tax work.

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