What does a business broker do and what do they charge?

A business broker finds buyers for your business, manages the process from listing to closing, and earns a commission when the deal closes. They’re the person who sits between you and a buyer, handling negotiations, paperwork, and confidentiality so you can keep running your business while the sale moves forward. The IBBA Market Pulse Q3 2025 survey, which covered 300 brokers and 247 completed transactions, found that roughly 90 percent of sellers are first-time sellers with no prior experience in business sales. That gap in experience between the seller and professional buyers is the core reason most advisors recommend representation for any deal above $500,000.

The core job

The broker’s main job is to get your business in front of qualified buyers without telling the world it’s for sale. That last part matters more than most owners realize. If your employees, customers, and suppliers find out you’re selling before you’re ready, it can destabilize the business, and hurt your sale price.

A good broker does several things to make this work:

• Prepares the listing. They help you put together a Confidential Business Review (CBR), a document that explains what the business does, what it earns, and why someone would want to buy it.
• Screens buyers. They qualify buyers before sharing any details about your business, requiring signed NDAs and verifying they have the financial capacity to close.
• Runs a confidential process. They present your business through their network and on business-for-sale platforms without naming the company publicly.
• Manages negotiations. When offers come in, the broker helps you evaluate them, respond, and negotiate, without you having to deal directly with buyers in early stages.
• Coordinates the closing. They work with attorneys, accountants, and lenders to get the transaction across the finish line.

What a broker doesn’t do

Knowing what’s outside a broker’s scope helps you build the right team:

• They don’t give tax advice. You need your own CPA who works with business owners and understands the tax implications of a sale.
• They don’t represent you legally. You need a transaction attorney to review the purchase agreement and protect your interests.
• They don’t do your valuation. A broker can give you a ballpark, but a formal certified valuation is a separate service.

A broker is the quarterback of the process. They coordinate the team, but you still need the team.

How brokers get paid

Most brokers work on a commission basis:

• Under $1 million in sale price: typically 10% of the gross sale price
• $1 million to $5 million: typically 8 to 10%, sometimes on a sliding scale (the Lehman Formula is a common starting point)
• Above $5 million: lower percentage, often 5 to 7%, sometimes with a flat floor

Some brokers, especially on larger deals, charge a retainer upfront ($5,000 to $25,000 is common) that may or may not be credited against the success fee at closing.

You pay when the deal closes. If no deal closes, you typically owe nothing beyond any retainer you agreed to upfront. BizBuySell’s Q3 2025 Insight Report put median sale prices at $320,044 with businesses closing at a median of 94 percent of asking price and 149 days on market. A 10 percent commission on a $320,000 sale is $32,000. If a broker’s competitive process produces even one additional offer that moves the price 6 percent higher, the commission pays for itself and the seller nets more than going solo.

What to look for in a broker

Not all brokers know your industry. The single most important thing to look for is a broker who has sold businesses similar to yours, in your industry, in your revenue range.

Other things that matter:

• Track record. Ask for a list of recent closings. A broker who can’t show you recent closed deals in your range is a red flag.
• Process. A good broker will walk you through exactly how they manage the sale. If they’re vague about the process, they’re vague in general.
• References. Ask to speak with sellers they’ve worked with, not just buyers.
• Exclusivity period. Most brokers ask for an exclusive listing agreement of 6 to 12 months. That’s normal. Read what happens if they don’t deliver.

Is a broker always the right choice?

For most business owners, a broker is the right starting point. The exception is if your business is very small (under $200,000 in annual earnings) or very large (over $10 million). At the small end, a broker’s commission may be hard to justify. At the large end, an M&A advisor with investment banking experience is often better suited.

For the vast majority of owners in the trades and mid-market, HVAC, roofing, manufacturing, professional services, a business broker with industry experience is the right person to call first. Morgan and Westfield’s research on sale outcomes found that only 20 to 30 percent of businesses that go to market actually sell. Brokers report that financial issues, primarily unclean or inconsistent financials, kill roughly 45 percent of potential deals before they reach closing. A broker with trades experience knows what buyers look for and how to present your numbers before any of that becomes a problem.