Your Ultimate Guide to Business Broker Fees

jitender kumar
May 26
3 min read

Selling a business is a big step, and a business broker can help you get top dollar while streamlining the process. But what do business brokers charge? This guide dives into their fees, commission structures, and whether they’re worth it, so you can make smart choices when selling your business.

What Are Business Broker Fees?

Business broker fees cover services like valuing your business, marketing it to potential buyers, negotiating deals, and closing the sale. These fees reward brokers for their expertise and effort in ensuring a successful sale.

Are Business Brokers Paid a Commission?

Yes, brokers are typically paid a commission, usually 8-12% of the sale price, with 10% being standard. For example, a $500,000 sale at 10% means a $50,000 fee. This motivates brokers to maximize your sale price.

How Are Fees Structured?

Fees vary based on the broker and deal. Common structures include:

1. Commission-Based Fees

Most brokers charge 8-12% of the sale price, incentivizing them to secure the best deal.

2. The Lehman Scale

For larger sales or M&A, brokers use the Lehman Scale or Double Lehman:

10% on the first $1 million
8% on the second $1 million
6% on the third $1 million
4% on amounts above $3 million

Example: A $5 million sale:

10% of $1M = $100,000
8% of $1M = $80,000
6% of $1M = $60,000
4% of $2M = $80,000
Total fee: $320,000

3. Flat Fees

Some brokers charge a flat fee ($5,000-$15,000) for specific services, ideal for high-value businesses.

4. Hybrid Fees

A lower commission (e.g., 5-7%) plus an upfront retainer ($1,000-$5,000) balances costs.

5. The Difference Between Upfront Fees vs. Post-Sale Fees from Business Brokers

Upfront Fees: Paid before the sale for tasks like valuation, typically $1,000-$5,000.
Post-Sale Fees: Commissions or success fees paid after closing, based on the sale price.

6. What Are Success Fees and Monthly Retainers?

Success Fees: Paid only if the sale closes, usually 8-12% or a minimum commission ($10,000-$25,000).
Monthly Retainers: Ongoing fees ($1,000-$5,000/month) for services like marketing, often credited toward the success fee.

The Size of Your Business Matters

Small Businesses (under $1 million): Higher rates (10-12%) or minimum fees apply.
Mid-Sized Businesses ($1 million to $5 million): Rates of 8-10%.
Large Businesses (over $5 million): Lower rates (5-8%) via tiered structures.

Sale Price	Commission Rate	Estimated Fee
$500,000	10-12%	$50,000-$60,000
$1,000,000	8-10%	$80,000-$100,000
$5,000,000	5-8%	$250,000-$400,000

What Influences Fees?

Business Size: Smaller deals have higher rates; larger ones benefit from lower percentages.
Complexity: Niche or complex businesses may incur higher fees.
Broker Expertise: Experienced brokers or M&A firms charge more.
Market Conditions: Competitive markets may lower fees.
Services: Full-service brokers charge more than basic listings.

Additional Costs

Valuation Fees: $1,000-$5,000.
Marketing Costs: $500-$2,000.
Legal/Accounting Fees: $2,000-$10,000, separate from broker fees.

Who Pays the Broker?

The business seller generally pays, but fees can sometimes be negotiated with the buyer.

Are Fees Worth It?

Brokers can boost your sale price, save time, ensure confidentiality, and connect you with buyers. For complex sales, their value often exceeds their cost. For simple deals, consider DIY or flat-fee options.

Tips for Hiring a Broker

Get quotes from multiple brokers.
Negotiate fees, which aren’t always fixed.
Check for hidden costs in contracts.
Verify credentials like CBI or IBBA.
Ensure a strong marketing strategy.

Final Thoughts

Business broker fees, typically 8-12%, depend on your business size and deal complexity. Understanding upfront vs. post-sale fees and success fees vs. retainers helps you plan. A good broker can make the selling process easier and more profitable. Compare options and negotiate to get the best value.