How Much Do Brokers Charge to Sell a Business
Introduction to Business Broker Fees
Selling a business is no small feat. Whether you’re retiring, cashing out, or moving on to your next venture, chances are you’ll need a professional to help you navigate the complexities of a business sale. That’s where business brokers come in. But many owners pause at one critical question: How much do brokers charge to sell a business?
In this comprehensive 2025 guide, we’ll walk you through broker fee structures, real-world commission examples, and insider tips to help you understand exactly what you’re paying for—and how to make it worth your while.
Standard Commission Rates by Business Size
Broker commissions typically depend on the size and complexity of the deal. Here’s how it usually breaks down:
Under $500K Sale Price
For smaller businesses, brokers generally charge 10%–15%, sometimes even enforcing a minimum fee of $10,000–$25,000. These deals are less profitable for brokers, so flat fees or higher percentages help justify their time investment.
$500K to $1M Sale Price
This range remains in the 8%–12% commission zone, with brokers often using a fixed percentage plus potential bonuses for reaching certain thresholds.
$1M to $5M Mid-Market Deals
Expect commissions to fall between 6%–10%, with a decreasing percentage as the deal size increases. Brokers may start implementing tiered commission models here.
$5M+ High-Value Transactions
These larger deals command 2%–8% commissions. Firms often use the Lehman or Double Lehman formula, offering scaled pricing to reflect the deal’s complexity.
Understanding Broker Fee Structures
Flat Fees vs. Percentage Commissions
Some brokers charge a flat fee, especially for small or straightforward transactions. However, most use a percentage-based commission, aligning their incentives with your sale price.
Lehman and Double Lehman Formulas
Standard Lehman Formula:
5% on the first $1M, 4% on the second, 3% on the third, and so on.Double Lehman Formula:
Common today for deals under $10M. It doubles each tier (e.g., 10%, 8%, 6%, 4%, 2%).
Retainers and Success Fees
Higher-end M&A advisors may charge retainers ($5,000–$50,000) that get credited against final success fees. This ensures sellers are serious and helps offset upfront marketing efforts.
Minimum Commission Requirements
Brokers often include minimum fee clauses to guarantee they’re fairly compensated, especially on smaller deals. Even if your business sells for $100,000 and 10% equals $10,000, a broker might still enforce a $20,000 minimum.
Upfront and Retainer Fees Explained
These fees vary widely:
Small businesses: $2,000–$5,000
Mid-market deals: $10,000–$25,000+
M&A advisory: $25,000–$50,000+
Most retainers are credited toward final commissions, so they’re not an “extra” cost—just a front-loaded one.
Ongoing Monthly Broker Fees
Some brokers charge monthly fees—usually for long-term engagements or complex businesses. This can range from $500 to $5,000/month, depending on your service level.
Breakdown of the Lehman Formula
| Tier | Standard Lehman | Double Lehman |
|---|---|---|
| First $1M | 5% | 10% |
| Second $1M | 4% | 8% |
| Third $1M | 3% | 6% |
| Fourth $1M | 2% | 4% |
| Above $4M | 1% | 2% |
These formulas offer a tiered structure, which rewards brokers for higher-value deals without ballooning fees on large transactions.
Real-World Broker Fee Examples
| Sale Price | Commission Model | Estimated Fee |
|---|---|---|
| $500,000 | 10% flat | $50,000 |
| $2,000,000 | Tiered (Lehman) | ~$140,000 |
| $10,000,000 | Double Lehman | ~$400,000 |
These figures vary by geography, broker reputation, and negotiation skill—but provide a useful benchmark.
Factors That Affect Broker Commission
Deal Size: Larger deals often mean lower percentage rates.
Business Complexity: Franchises, IP-heavy firms, or regulated industries may cost more.
Market Conditions: A seller’s market can lead to reduced fees.
Geographic Location: Fees vary between urban and rural areas.
Broker Reputation: Experienced firms may charge a premium.
Comparing Small Business Brokers vs. M&A Advisors
| Feature | Small Business Broker | M&A Advisor |
|---|---|---|
| Typical Clients | <$5M sales | $5M–$100M+ |
| Commission | 8%–12% | 2%–6% |
| Services | Basic packaging, local marketing | Due diligence, national outreach, legal support |
| Upfront Fees | Low to none | High ($10K–$50K) |
Choose based on your business size and complexity.
Can Broker Fees Be Negotiated?
Yes! Here’s how:
Bundle services (valuation, listing, legal).
Ask about minimums and tiered models.
Offer exclusivity for reduced rates.
Negotiate on sale milestones, not just percentages.
Hidden Costs and Additional Charges
Be alert for:
Marketing fees ($500–$5,000)
Valuation services (sometimes billed separately)
Legal coordination fees
Closing costs (title, escrow, etc.)
Always clarify what’s included vs. optional add-ons.
What to Look for in a Broker Contract
Read the fine print:
Commission rate & formula
Exclusivity period
Termination terms
Upfront and minimum fees
Timeline & milestones
Never sign without a clear understanding of these points.
DIY vs. Broker: Cost-Benefit Analysis
Going solo can save on fees but may cost you more in valuation mistakes, lost buyers, and negotiation errors.
Use a broker if:
Your business is complex or niche
You lack time to manage the process
You want maximum exposure and price
FAQs About Business Broker Fees
1. Do I pay a broker if the business doesn’t sell?
Most brokers only get paid on a successful sale, but upfront or retainer fees may be non-refundable.
2. Are broker fees tax-deductible?
Yes—broker commissions are usually considered a selling expense and can be deducted from capital gains.
3. Can I sell my business without a broker?
Yes, but it’s risky without experience. Brokers bring valuation, buyer networks, and negotiation expertise.
4. How long does it take to sell a business through a broker?
The average timeline is 6 to 12 months, depending on the business and market.
5. What happens if I find my own buyer?
It depends on your contract. Some brokers require a fee even if you find the buyer, unless exceptions are written in.
6. Can I negotiate the broker’s minimum fee?
Yes, but you’ll need leverage—such as a high-demand business or multiple brokers interested in your listing.
Conclusion: Finding the Right Broker at the Right Price
Now that you know how much brokers charge to sell a business, you’re equipped to make informed decisions. Whether you’re closing out your career or launching a new chapter, don’t just focus on the price—focus on value.
Choose a broker who aligns with your goals, offers transparency, and gives you the best shot at a successful sale.
Recommended Read: ExitWise’s Guide to Broker Fees
