Selling your company is thrilling until you see the fee schedule. Here’s the no-fluff answer to “how much do brokers charge to sell a business,” plus what to watch for so you keep more at close.
The short answer
For “Main Street” deals (usually <$1M–$2M in sale price), most business brokers charge about 8%–12% of the final price, often right at 10%, with a minimum fee that can range from $10K–$25K+. For larger, lower-middle-market deals, firms often use a tiered (Lehman or Double-Lehman) success fee that steps down as price rises (think 10% on the first $1M, 8% on the next, and so on). Sources: BizBuySell, Morgan & Westfield, Axial M&A Fee Guide, DealStream.
What exactly are you paying for?
1) Success fee (contingent commission)
Paid at closing, this is the big one. Typical ranges are 8%–12% for smaller deals, trending down as value increases. Many national brokerages and independents publicly cite ~10% as standard. See: BizBuySell explainer and this practitioner’s view from DealStream.
2) Retainer / work fee (sometimes optional for smaller deals)
Some brokers charge upfront retainers to cover prep and marketing (quality CIM, buyer outreach, data room setup). These can be fixed (e.g., $5K–$25K+) or monthly, and are often credited against the success fee. See data-backed ranges and structures in Axial’s M&A Fee Guide and a seller-focused overview by They Got Acquired.
3) Minimum fee
If your business is on the smaller end, expect a minimum commission, commonly $10K–$25K+, so the broker doesn’t get stuck with a tiny payout after months of work. See examples and ranges discussed by Morgan & Westfield, and this fee breakdown from MidStreet.
4) Reimbursable expenses (case-by-case)
Think targeted ads, premium listing fees, travel, or specialty research. Many firms roll these into their success fee; others bill as incurred. Clarify what’s included (and capped) in your listing agreement.
How fees change with deal size (Lehman, Double-Lehman & examples)
For lower-middle-market transactions, advisors often use a tiered formula rather than one flat percentage. The Double-Lehman (a modern variant) commonly looks like:
- 10% of the first $1M
- 8% of the second $1M
- 6% of the third $1M
- 4% of the fourth $1M
- 2% of amounts above $4M
Example: On a $5M sale price, a Double-Lehman fee would be:
$1M × 10% = $100,000
$1M × 8% = $80,000
$1M × 6% = $60,000
$1M × 4% = $40,000
$1M × 2% = $20,000
Total = $300,000 in success fees. See the full explanation and math in Morgan & Westfield’s fee guide and market data via Axial.
Who pays & when?
- Sellers typically pay the broker, and the success fee comes out of the proceeds at closing. Payment timing for retainers and expense caps should be spelled out in the listing agreement. See this plain-English overview from Baton Market (plus their breakdown of average commissions here).
- If real estate is included, you may see a separate (lower) rate for the property portion or a split structure; clarify this early. A broker explainer with typical splits is in MidStreet’s guide.
What drives your fee up (or down)?
- Deal size & complexity: Bigger deals pay a lower percentage but higher absolute dollars.
- Industry & buyer pool: Niche markets or heavy regulatory burden can increase work scope.
- Quality of your records: Clean, GAAP-friendly financials reduce friction and sometimes help you negotiate structure (e.g., lower retainer, expense caps).
- Advisor caliber: Seasoned brokers and sector specialists may charge retainers but often deliver better buyer access and deal certainty.
- Exclusivity & term: Shorter exclusivity or well-defined milestones can create healthy accountability. For role clarity (broker vs M&A advisor), see Investopedia’s overview.
Smart ways to cut your total cost (without cutting results)
- Ask for retainer crediting. If there’s an upfront fee, negotiate that 100% applies to the success fee.
- Define expense caps. Agree on monthly caps and pre-approval for big-ticket marketing.
- Tie fees to outcomes. Consider tiering the success fee with premium tiers above target valuations.
- Shop the market, but compare scope, not just price. Ask each broker for a sample buyer list, a CIM outline, time-to-close data, and minimum fee policy.
- Prepare like a pro. Solid add-backs, clean books, and a compelling growth story can widen the buyer pool, often worth far more than shaving 1–2% off commission.
FAQs: “How much do brokers charge to sell a business?” (and other things you were going to Google)
Q1) Is 10% still the norm for smaller sales?
For many sub-$1M deals, yes! around 10% remains common, with a minimum fee. See: BizBuySell and DealStream.
Q2) Are retainers normal or a red flag?
They’re increasingly common as deals get larger or more complex. Many credible firms use modest retainers to fund real work up front and credit them at close. Data on structures and ranges: Axial: M&A Fee Guide and a seller-oriented look from They Got Acquired.
Q3) Who usually pays the broker fee?
The seller, from closing proceeds. (Your asset vs. stock deal structure and any buyer credits should be negotiated explicitly.) Quick primer: Baton Market.
Q4) Are fees negotiable?
Yes, especially retainer crediting, expense caps, and success-fee tiers. Get proposals in writing so you can compare scope + fee, not just percentages.
Q5) Are tax tips fees deductible?
Often treated as transaction costs, deductibility and timing vary by jurisdiction and structure. Ask your CPA before you assume anything.
Bottom line
If you’re asking “how much do brokers charge to sell a business,” a realistic planning range is 8%–12% for smaller transactions (with a likely $10K–$25K+ minimum), and a tiered success fee for larger deals using Double-Lehman logic. The right structure balances motivation, scope, and certainty, not just a headline percentage. Start with three proposals, compare the work plan line-by-line, and negotiate credits and caps that align incentives.
