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.

Do business brokers and M&A advisors charge different fees?

Yes. Business brokers typically charge 5–12% commission of sale price, with higher rates for smaller deals. M&A advisors charge a retainer ($10,000–$100,000+) plus a success fee (2–5% of transaction value), often using the Lehman formula or a variant. M&A advisors also typically charge a minimum fee regardless of deal size.

What is an investment banker vs. an M&A advisor?

The terms are often used interchangeably in middle-market M&A. Investment bankers typically refer to professionals at registered broker-dealer firms; M&A advisors may or may not be at registered firms. For deals above $50M, you'll typically work with a registered investment banking firm. For deals in the $10M–$50M range, boutique M&A advisory firms and lower-middle-market investment banks both operate.

Guide · Fundamentals

Business Broker vs. M&A Advisor: Which Do You Need?

Q: 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.

Q: 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.

The right advisor depends almost entirely on your business's size and likely buyer type. Here's the full breakdown — fees, deal sizes, processes, and buyer networks compared.

The Short Answer

Under $5M: Use a business broker — specifically, an IBBA-certified CBI.
$5M to $15M:Could go either way — depends on buyer type and broker's institutional experience.
Above $15M: Use a dedicated M&A advisor or investment bank.

Full Comparison: Business Broker vs. M&A Advisor

Factor	Business Broker	M&A Advisor
Typical Deal Size	$100K – $10M	$10M – $500M+
Primary Buyer Type	Individual buyers, search funds, small PE	PE firms, strategic acquirers, family offices
Commission Structure	5–12% of sale price (no retainer common)	Retainer + 2–5% success fee (Lehman formula)
Upfront Cost	$0–$15,000 (optional CIM retainer)	$10,000–$100,000+ (non-refundable retainer)
Minimum Fee	Typically $25,000–$50,000 minimum	$150,000–$500,000+ minimum
Team Size	1–3 person team	3–10 person deal team
CIM Preparation	Standard (included in commission)	Detailed offering memorandum (OM) with financial model
Buyer Outreach	Business-for-sale portals, broker network, direct outreach	Proprietary buyer database, targeted institutional outreach
Process Formality	More flexible, seller-friendly pacing	Structured process with formal bid rounds
Timeline	6–12 months average	6–18 months average
CBI / M&AMI Certification	Common (20% hold CBI; 4% hold M&AMI)	FINRA licensing at registered broker-dealers
Best For	Main Street and lower-middle-market sellers	Mid-market and institutional transactions

Business Brokers: What They Do and When to Use One

A business broker is a professional intermediary who represents business owners in the sale of their company, typically for transactions between $100,000 and $10M. They handle the full process: valuation, CIM (deal book) preparation, confidential marketing through business-for-sale portals and their buyer networks, NDA management, buyer qualification, negotiation, due diligence coordination, and closing.

Business brokers typically charge a commission of 5–12% of sale price, with no upfront fees (or a modest CIM preparation retainer of $2,500–$15,000, usually credited at closing). This commission-only model aligns incentives: the broker gets paid only when the deal closes.

The IBBA (International Business Brokers Association) is the primary professional body for business brokers. IBBA-certified brokers hold either the CBI (Certified Business Intermediary) or M&AMI (Merger & Acquisition Master Intermediary) designation, signaling completed transaction experience and adherence to a professional code of ethics. About 20% of IBBA-member brokers hold a CBI; 4% hold an M&AMI.

Business brokers are the right choice when:

Your business will sell for under $10M
Your likely buyer is an individual, search fund, or small PE firm
You want a simpler, more flexible process
Your business is in a Main Street industry (services, retail, restaurant, trade)
You don't want to pay a large upfront retainer

M&A Advisors: What They Do and When to Use One

M&A advisors (also called investment bankers or M&A bankers) work on larger transactions, typically $10M and above. They run structured sale processes: building a detailed Offering Memorandum (OM) with full financial models, creating a targeted buyer list of PE firms and strategic acquirers, managing formal bid rounds, and negotiating complex deal terms including escrow arrangements, representations and warranties insurance, and management incentive plans.

M&A advisors charge both a retainer and a success fee. Retainers range from $10,000 to $100,000+, paid monthly during the engagement. Success fees typically use a Lehman formula (5% on first $1M of value, 4% on next $1M, etc.) or a flat percentage. Minimum fees typically run $150,000–$500,000, meaning M&A advisory is only cost-effective on larger transactions.

M&A advisors are the right choice when:

Your business will sell for $10M or more
Your likely buyer is a PE firm, strategic acquirer, or family office
You want a competitive bid process with multiple institutional offers
Your business is technology, healthcare, manufacturing, or professional services in the mid-market
You need detailed financial modeling and an institutional-quality offering memorandum

The Gray Zone: $5M to $15M

The $5M–$15M range is where the business broker / M&A advisor distinction gets fuzzy. Experienced business brokers — particularly those with M&AMI designations — regularly close deals in this range. Lower-middle-market M&A boutiques actively compete for this market too.

The key decision factor in the gray zone is buyer type:

PE roll-up or strategic buyer — Use an advisor with institutional buyer relationships and a formal process. A general business broker without PE buyer relationships will underperform here.
Individual buyer or search fund — An experienced business broker with M&AMI or strong transaction history in your deal range is the right call.

Ask any advisor you're considering: “What were your last three closed transactions? What were the deal sizes, and who were the buyers?” That answer tells you more than any credential.

Fee Structures Compared

Business Broker Fees

Commission-based: typically 10–12% for businesses under $1M; 8–10% for $1M–$3M; 6–8% for $3M–$10M. Some brokers charge an upfront retainer of $2,500–$15,000 for CIM preparation, credited at closing. Minimum commissions typically $25,000–$50,000. No retainer is common for businesses under $2M.

M&A Advisor Fees

Retainer + success fee structure. Retainers: $10,000–$100,000+ (monthly, non-refundable). Success fees: commonly use the Lehman formula (5% on first $1M, 4% on second, 3% on third, 2% on fourth, 1% on value above $4M) or a flat 2–4%. Minimum success fees: $150,000–$500,000+. Total fees on a $20M transaction might be $800,000–$1.2M.

Fee Takeaway

For a $2M business, a business broker at 10% = $200,000 total. For a $20M business, an M&A advisor at 4% plus retainer might cost $900,000. But a good advisor on a $20M transaction will typically generate competitive tension that adds more than their fee to the final price. The question is always: will professional representation pay for itself?

Frequently Asked Questions

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

Business brokers handle Main Street and lower-middle-market transactions — businesses selling from $100K to $10M. M&A advisors handle mid-market deals ($10M–$500M+) using more sophisticated processes, larger deal teams, and institutional buyer networks. The right choice depends primarily on your business's size and buyer type.

At what deal size should I use an M&A advisor instead of a business broker?

The typical inflection point is $10M in transaction value. Below $5M, a CBI-credentialed business broker is almost always the right choice. Between $5M and $15M, both options can work depending on buyer type. Above $15M, a dedicated M&A advisor or lower-middle-market investment bank is standard.

What certifications should I look for in a business broker?

The two IBBA designations signal verified experience: CBI (Certified Business Intermediary) is held by about 20% of IBBA-member brokers and requires completed transactions and education. M&AMI (Merger & Acquisition Master Intermediary) is held by about 4% of IBBA members and indicates experience with larger, mid-market transactions. Use BizBrokerMatch to filter brokers by certification.

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Can a business broker handle a $5M to $15M deal?

Yes — particularly brokers with M&AMI designations and institutional buyer relationships. Many experienced business brokers regularly close deals in the $5M–$15M range. Interview any advisor in this range with specific questions: their last 3 transactions, deal sizes, and buyer types.

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