How much do business brokers charge: Breaking down pricing and fees
Dylan Gans
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7 min read
If you're thinking about selling your business, the broker's fee is one of the largest costs of the sale.
Most business brokers charge a success fee of 8%–12% of the final sale price, with 10% the most common rate for businesses selling under $2 million. Most also set a minimum fee—typically $10,000–$15,000—which means the effective rate on a small deal can run well above 12%. The seller pays it, at closing, out of the proceeds.
That's the average. Whether you should pay it is a different question: rates vary more than most owners expect, several parts of the agreement are negotiable, and there are newer models that charge half as much.
Average business broker commission by deal size
Deals under $500K
Typical fee: 10%–12% of the sale price, or the broker's minimum fee — usually 10,000–15,000 — whichever is higher
What it costs: roughly 25,000–60,000 on a 250K–500K sale
Deals from $500K to $2M
Typical fee: 8%–12% straight commission, with 10% the most common figure on Main Street deals
What it costs: roughly 50,000–200,000
Deals from $2M to $5M
Typical fee: 6%–10%, sometimes tiered so the rate steps down as the price climbs
What it costs: roughly $120,000–$500,000
Deals above $5M (M&A territory)
Typical fee: a Lehman-style sliding scale plus a monthly retainer
What it costs: varies widely, but the effective rate usually lands between 2% and 8%
The two biggest takeaways for these numbers:
Minimum fees punish small deals hardest: a $12,000 minimum on a $100,000 business is an effective 12% before anything else.
Rates are inversely related to deal size. The smaller your business, the larger the percentage you'll be quoted, because the broker's work doesn't shrink with the price.
How business brokers get paid: the three fee structures
Commission-only (success fee). The broker earns a percentage of the sale price, paid at closing, and nothing if the business doesn't sell. This is the standard Main Street model. Its incentive is mostly aligned with yours—no sale, no fee—with one catch: a broker earning 10% has little reason to fight for the last $50K of your price because their share of it is only $5K. Quick-and-done can beat slow-and-maximized from the broker's side of the table.
Retainer or monthly fee. This is common in M&A and with some brokerages on larger listings. It shows up as a monthly amount ($2K–$10K on Main Street; $50K+ engagement retainers in M&A) paid regardless of outcome. While it compensates the broker's real upfront work, it also means you can pay for a year and still hold an unsold business.
Hybrid. This is a smaller monthly fee credited against a success fee at closing. Done honestly, this filters out non-serious sellers and keeps the broker motivated to close.
For larger deals you'll hear the Lehman formula: 5% of the first million, 4% of the second, 3% of the third, 2% of the fourth, 1% thereafter, and its more common modern cousin the Double Lehman (10/8/6/4/2). On a $5M sale, Double Lehman works out to $300,000.
What a broker fee actually costs at every deal size
$500,000 landscaping business at 10%: $50,000. If the broker's minimum is $15K and your business sells for $120K instead, you're at 12.5% effective.
$900,000 business at 10%: $90,000 (often more than the owner's annual take-home from the business itself).
$2M business at 10%: $200,000.
Against those numbers, the questions below (who pays, what's negotiable, and whether you need a traditional broker at all) are worth considering.
Who pays the business broker fee?
The seller. The fee comes out of the sale proceeds at closing; you never write a separate check, which is exactly why it's easy to under-scrutinize.
When two brokers are involved (one representing each side), they typically split the seller-paid commission through a co-brokerage agreement, the way real-estate agents do. Your cost doesn't change; the split is their business.
Buy-side brokers are the exception. A buyer who hires their own broker or M&A advisor to find and negotiate an acquisition pays that advisor directly, typically including a retainer plus a success fee of 1%–4% of the purchase price, or a flat engagement fee.
Are business broker fees negotiable?
Yes, and often on more dimensions than the headline rate:
The rate is most negotiable on clean, attractive listings (strong financials, growing revenue, owner-independent operations) and on larger deals. A tiered structure—i.e. 8% up to your target price, 12% on anything above it—aligns the broker with stretching your price and is a reasonable counter to a flat 10%.
The minimum fee is often the first thing a broker will move on, especially for a small business they expect to sell easily.
The exclusivity period. Standard listing agreements lock you in for 6–12 months. Push for 6, and for a termination right with 30 days' notice if the broker goes quiet.
The tail. Most agreements include a clause entitling the broker to their fee if you sell—to anyone they introduced, or sometimes to anyone at all—within 12–24 months after the agreement ends.
Are broker fees tax deductible?
Broker commissions are treated as selling expenses: they reduce the amount realized on the sale (and consequently your capital gain) rather than being deducted like an operating expense. On a $1M sale with a $100K commission, you're taxed as if you received $900K. Structure matters (asset vs. stock sale, allocation across asset classes), so run the numbers with a CPA before you list, not after you close.
This is general information, not tax advice.
The other fees of selling a business
The broker isn't the whole bill. Budget for:
Attorney fees ($5K–$25K+ depending on deal complexity)
CPA/accounting work for deal structuring and tax pre
Valuation or appraisal costs if you commission one independently ($3K–$15K for a certified appraisal (though a data-backed estimate is available free, below)
Transfer and assignment fees on leases, franchises, licenses and permits
Prepayment penalties if the sale triggers early payoff of business debt
Taxes on the gain , usually the largest number on this list and the one most worth planning for in advance
All-in, selling costs commonly reach 12%–15% of the sale price with a traditional broker.
Do you have to pay traditional broker fees?
No. The 10% commission is a legacy of how businesses were sold: local networks, print listings, one broker gatekeeping everything. What you're actually buying from a broker is a valuation, buyer reach, screening, negotiation support, and deal management. Each of those now exists in forms that don't cost 10%.
Baton sells businesses with a 6% success fee: no upfront cost, including a free valuation that traditional brokers charge thousands for. On a $900,000 sale, the difference between 10% and 6% is $36,000.
FAQ
How much do brokers charge to sell a business? Typically 8%–12% of the sale price, with 10% most common and minimum fees of $10,000–$15,000. On a $750,000 sale, expect a quote around $75,000 at standard rates.
What is the average commission for a business broker? About 10% for businesses selling under $2 million. Larger deals are usually priced on a sliding scale (Lehman or Double Lehman formula) that brings the effective percentage down as the price rises.
Who pays the broker fee: the buyer or the seller? The seller, out of the proceeds at closing. If the buyer brought their own broker, the two brokers usually split the seller-paid commission. A buyer who independently hires a buy-side advisor pays that advisor separately.
How do business brokers get paid? Most work on a success fee: a commission paid only when the business sells. Some charge monthly retainers or a hybrid of both. Always ask whether any upfront or monthly payments are credited against the final success fee.
Is a 10% broker fee normal? Yes: normal but negotiable. Rate, minimum fee, exclusivity period, and the post-agreement "tail" are all standard points of negotiation, and lower-fee alternatives exist.