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.

How to Sell a Manufacturing Business

Manufacturing businesses often sell for higher multiples than other Main Street and lower-middle-market businesses — but they require more preparation and specialized buyers. Here is what you need to know to exit at full value.

Manufacturing Business Valuation

Manufacturing businesses are typically valued on EBITDA multiples, with the range driven by customer concentration, contract terms, equipment quality, and whether the business has proprietary processes or products. Asset-heavy businesses may also have a floor value based on equipment and real estate.

Manufacturing Multiple Ranges

Job shop / contract manufacturer

3–4.5× EBITDA

No proprietary products, customer-concentration risk

Niche manufacturer, good margins

4–6× EBITDA

Defined market, stable customers, good IP

Proprietary product / recurring customers

5–8× EBITDA

Brand, IP, or spec-in advantages

Platform quality ($2M+ EBITDA)

6–10× EBITDA

PE-attractive scale, defensible moat

Customer Concentration: The Critical Issue

The single most common valuation discount in manufacturing deals is customer concentration. If one customer represents more than 20–25% of your revenue, buyers will either discount the price, require a portion of the sale to be held in escrow contingent on customer retention, or structure an earnout tied to that customer staying post-close.

The fix is simple but takes time: diversify your customer base at least 2–3 years before you plan to sell. If you can't reduce a key customer below 25%, at minimum lock them into long-term contracts before going to market.

Environmental and Regulatory Due Diligence

Manufacturing is the sector most likely to have environmental liability in M&A. Buyers — especially PE-backed acquirers — will conduct a Phase I environmental assessment on any real property and sometimes a Phase II if Phase I findings warrant it. Known contamination, permits for hazardous materials, or prior violations need to be disclosed and handled proactively.

Environmental issues don't necessarily kill deals, but undisclosed issues do. Work with an attorney experienced in environmental transactions before going to market.

Preparing Your Manufacturing Business for Sale

Audit and document your equipment

A comprehensive equipment list with purchase dates, maintenance records, and replacement values is table stakes in manufacturing M&A. Buyers will want this before making an offer and their equipment appraisers will verify it during diligence.

Organize your customer contracts

Buyers want to see signed master supply agreements, purchase orders, and any long-term commitments from key customers. Verbal relationships don't survive due diligence at their full value.

Document your proprietary processes

What makes your manufacturing operation different from a competitor? If it's process-driven, document it. If it's people-driven, cross-train. Buyers pay for defensible competitive advantages.

Separate real estate from the business

If you own the facility, sell the business and lease back to the buyer. The combined value of the real estate and business sold separately typically exceeds a bundled sale. Industrial real estate values are strong in most markets right now.

Address your technology and systems

Outdated ERP systems or manual production tracking are flags in diligence. Buyers want to see that the business runs on systems they can integrate or understand. If you're still on spreadsheets for production scheduling, that's worth addressing.

Why You Need a Manufacturing-Specialist Broker

Manufacturing deals are more complex than Main Street transactions. The CIM needs to speak the language of industrial buyers — capacity utilization, machine uptime, SKU margin analysis, tooling amortization. A broker who doesn't understand manufacturing will present your business in a way that leaves institutional buyers unconvinced.

More importantly, manufacturing buyers — strategics and PE — are not on public listing sites. They're in proprietary databases maintained by brokers who work exclusively in the sector. Without those relationships, your business won't reach the highest-paying buyers.