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.

What Is a Business Broker? (And When Do You Need One)

A business broker is a professional intermediary who represents business owners in the sale of their company — handling valuation, buyer outreach, negotiations, due diligence coordination, and closing. Think of them as the real estate agent of the business world.

What a Business Broker Actually Does

Most business owners only sell one company in their lifetime. Business brokers do this for dozens of clients a year. The experience gap matters enormously in a transaction where one side is negotiating their first deal and the other side has done hundreds.

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Business valuation

Brokers analyze your financials, comparable transactions, and market conditions to establish an accurate asking price — one that's high enough to maximize your return but realistic enough to attract qualified buyers.

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Confidential marketing

Selling a business must stay confidential until a deal is nearly closed. Employees, customers, and competitors cannot know. Brokers market your business through blind listings, screened buyer databases, and direct outreach — all while protecting your identity.

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Buyer qualification

Most people who inquire about a business for sale are not qualified to buy it. Brokers screen buyers for financial capability, industry experience, and serious intent before you spend time on them.

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Negotiation

Brokers negotiate on your behalf — on price, structure, terms, representations and warranties, and transition requirements. An experienced broker knows what's standard, what's negotiable, and where sellers get taken advantage of.

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Due diligence management

The due diligence phase is when deals die. Brokers manage the information flow, keep the process on track, and help you respond to buyer requests without exposing you to unnecessary liability.

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Closing coordination

Brokers work with attorneys, lenders, and landlords to close the transaction — handling the administrative complexity that overwhelms sellers who try to do it themselves.

How Business Brokers Are Paid

The vast majority of business brokers work on success-only commissions — they earn nothing until you close. Commissions typically range from 8–12% for smaller Main Street businesses ($500K and under), 5–8% for mid-sized businesses ($500K–$5M), and 3–5% for larger lower-middle-market transactions.

Some brokers also charge an upfront retainer — typically $2,000–$10,000 — to cover the cost of preparing the marketing package. This is most common for larger or more complex deals. The retainer is usually credited back to the seller at closing.

The math on broker fees

On a $2M sale, a 7% broker commission is $140,000. That feels like a lot. But consider: the difference between a well-run competitive sale process and an unrepresented or poorly-marketed sale is typically 15–30% in final price. On the same $2M deal, that's $300,000–$600,000 in additional value — well in excess of the broker fee.

Business Brokers vs. M&A Advisors

The terms are sometimes used interchangeably, but there's a meaningful distinction. Business brokers typically handle Main Street and lower-middle-market transactions — businesses selling for $100K to $10M. M&A advisors typically operate in the middle market — $10M to $500M and above — with larger teams, deeper investment banking capabilities, and a focus on institutional buyers.

For most business owners selling a company under $5M, a business broker — specifically an IBBA-certified one with experience in your vertical — is the right choice.

Do You Need a Business Broker to Sell?

Technically, no. You can sell your business without a broker. But the data consistently shows that brokered transactions close at higher prices, with better terms, and at a higher rate than unrepresented sales. The exception is if you already have an identified buyer — a family member, employee, or known strategic — who you're selling to directly at an agreed price. In that case, you still need a business attorney but the broker role is less critical.

In any other scenario — where you need to find and qualify a buyer, run a competitive process, and protect yourself in negotiation and due diligence — experienced representation pays for itself many times over.

What to Look for in a Business Broker

IBBA membership and certification

The International Business Brokers Association is the industry's professional body. Look for IBBA members, and specifically those with the Certified Business Intermediary (CBI) or M&AMI designations, which require transaction history and continuing education.

Vertical specialization

A broker who has sold businesses in your industry will have relationships with the right buyers, understand how to value your specific revenue types, and know what issues will come up in due diligence.

Local market knowledge

Business sales are local. A broker who operates in your market knows the active buyers, the lender relationships, and the business climate that affects valuation.

Transaction history

Ask how many businesses in your revenue range and industry they've sold in the past 24 months. References matter. Talk to past clients if you can.

Exclusive listing agreements

Be wary of non-exclusive arrangements — brokers who aren't exclusively engaged tend to put minimal effort into marketing. A 12-month exclusive listing with a well-qualified broker is the standard structure.

What Is a Business Broker?

What a Business Broker Actually Does

How Business Brokers Are Paid

Business Brokers vs. M&A Advisors

Do You Need a Business Broker to Sell?

What to Look for in a Business Broker

Find the right broker for your business