How much does a business broker charge?

Business broker commissions range from 5–12% of the final sale price depending on deal size. Smaller businesses (under $1M) typically pay 10–12%, while mid-market businesses ($1M–$5M) pay 6–10%. Some brokers also charge an upfront retainer of $2,500–$15,000 for CIM preparation, which is usually credited back at closing.

How long does it take to sell a business?

Most small to mid-market business sales take 6–12 months from broker engagement to close. The stages include CIM preparation (4–8 weeks), buyer outreach and qualification (4–12 weeks), due diligence (30–90 days), and closing (2–4 weeks). SBA-financed deals add 30–60 days to the timeline.

What is seller's discretionary earnings (SDE)?

Seller's Discretionary Earnings (SDE) is the standard valuation metric for small businesses. It equals net profit plus owner salary, owner benefits, non-recurring expenses, and depreciation/amortization. SDE represents the total economic benefit to a single owner-operator. Most small businesses sell at 2–4× SDE.

Do I need a business broker to sell my business?

While you can technically sell without a broker, data consistently shows brokered transactions close at 15–25% higher prices and at higher completion rates than unrepresented sales. The exception is if you already have an identified buyer at an agreed price. In any other scenario, professional representation pays for itself many times over.

What is an IBBA-certified business broker?

The International Business Brokers Association (IBBA) is the professional body for business brokers. IBBA-certified brokers hold designations like CBI (Certified Business Intermediary) or M&AMI (Merger & Acquisition Master Intermediary), which require transaction history, continuing education, and adherence to a code of ethics. These certifications signal professional commitment and deal experience.

What is the difference between a business broker and an M&A advisor?

Business brokers typically handle Main Street and lower-middle-market transactions — businesses selling for $100K to $10M. M&A advisors operate in the middle market ($10M to $500M+) with larger teams, investment banking capabilities, and institutional buyer relationships. For businesses under $5M, a CBI-certified business broker is usually the right choice.

Asset Sale vs. Stock Sale: Which Is Better for Sellers?

The structure of your business sale — asset or stock — affects your taxes, the buyer's risk exposure, and often the final price. Most buyers prefer asset sales. Most sellers prefer stock sales. Here is why, and how to negotiate it.

What's the Difference?

Asset Sale

The buyer purchases specific assets of the business — equipment, inventory, customer lists, goodwill, intellectual property, and potentially real estate — but does not acquire the legal entity itself.

→Most common for small/mid-market deals

→Buyer gets a stepped-up tax basis

→Old entity (with liabilities) stays with seller

Stock Sale

The buyer acquires the shares (or membership interests) of the legal entity itself — getting everything that comes with it, including all liabilities, contracts, and obligations.

→More common for C-corps and larger deals

→Simpler contract assignment (licenses stay)

→Buyer assumes all liabilities

Tax Implications: Why Sellers Prefer Stock Sales

In a stock sale, the proceeds are generally taxed as long-term capital gains (20% + 3.8% NIIT for high earners) if you've held the shares for more than one year. Capital gains rates are significantly lower than ordinary income rates.

In an asset sale, the tax treatment depends on what's being sold:

Goodwill and intangibles

Long-term capital gains (favorable)

Fixed assets (equipment)

Ordinary income on depreciation recapture

Inventory

Ordinary income rates

Non-compete payments

Ordinary income to seller

The blended tax rate on an asset sale is almost always higher than a pure stock sale. The difference can be $50,000–$300,000 on a $1–3M transaction. This is why sellers prefer stock sales.

Why Buyers Prefer Asset Sales

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Step-up in tax basis

In an asset sale, the buyer depreciates the acquired assets at their new (higher) purchase price — generating significant future tax deductions. In a stock sale, the buyer inherits the seller's historical (lower) basis.

→

No inherited liabilities

The buyer doesn't take on unknown historical liabilities — employment disputes, tax liens, prior contracts, environmental issues. With an asset sale, they start with a clean slate.

→

Selective asset purchase

The buyer can choose which assets to acquire and which to leave behind (bad accounts, old equipment, unfavorable contracts). Stock sales are all-or-nothing.

→

Simpler financing

SBA lenders and conventional lenders generally prefer asset sales because collateral is more clearly defined and historical liability exposure is lower.

When Stock Sales Make Sense

Stock sales are more common when:

→Non-transferable contracts or licenses would be lost in an asset sale (government contracts, regulated licenses, SaaS agreements with assignment restrictions)

→The business has significant net operating loss (NOL) carryforwards the buyer wants to preserve

→The seller is a C-corporation — the double taxation of an asset sale makes stock sale economics clearer

→The deal is large enough ($10M+) that buyers are sophisticated and willing to accept inherited liability in exchange for lower cost basis

→The seller has significant qualified small business stock (QSBS) exclusion benefits

How to Negotiate Deal Structure

When a buyer insists on an asset sale and you prefer a stock sale, the negotiation typically comes down to price. A buyer who demands an asset sale (and gets the tax benefit of a stepped-up basis) should pay more — that tax benefit has real value.

The structure negotiation framework

1. Get your CPA to model the after-tax proceeds under both structures at your expected sale price.

2. Calculate how much more the buyer would need to pay in an asset sale to leave you with the same after-tax result as a stock sale.

3. Present that number to the buyer. Many buyers will pay 3–7% more to get the asset sale structure and still come out ahead after their tax benefit.

This negotiation requires a tax-aware broker and a CPA working together. Most buyers will agree to a higher price for an asset sale if the seller can show them the math. Don't accept asset sale pricing at stock sale pricing.

Asset Sale vs. Stock Sale: Which Is Better?

What's the Difference?

Tax Implications: Why Sellers Prefer Stock Sales

Why Buyers Prefer Asset Sales

When Stock Sales Make Sense

How to Negotiate Deal Structure

Work with a broker who understands deal structure