Quick take
- Brokers are usually paid a success fee at closing.
- Other costs come out of proceeds too.
- Ask for the fee and the agreement length in writing.
- Compare the fee with the tax and price at stake.
When a Broker Gets Paid
Most business brokers earn a success fee, paid from the proceeds at closing. If the business does not sell, you generally do not owe that fee, though some brokers charge a smaller upfront fee, so ask.
The exact percentage varies by broker and deal size, and a range is normal. Ask for it in writing.
What Else Comes Out of Proceeds
Your net is not the sale price minus the broker. Attorney and CPA fees, escrow costs, payoff of business debt and taxes on the gain all come out too. Plan around the net, not the headline.
The Engagement Agreement
Most agreements are exclusive, so one broker represents you. Splitting the job between two can mean owing two commissions.
A five year agreement is a warning sign. Under a year is typical. Read the section on what happens if you sell to someone you already know.
Why Owners Pay It
A fee feels large when you write it. Compare it with what the broker may do: reach buyers you cannot, keep your name private, screen buyers for real money and negotiate against people who buy businesses for a living.
Taxes on a sale are usually a bigger cost than the commission, so planning those matters more than haggling over a point of fee.
Questions to Ask Any Broker
- How long have you worked full time as a broker?
- How will you market my business beyond a listing site?
- What is your fee, and when is it paid?
- How many of your listings actually close?
Fee Terms to Compare
Two brokers can quote the same percentage and still charge differently. Ask whether there is a minimum fee, whether the fee applies to the whole price or only cash, and what happens on a seller note.
Get all of it in the agreement before you sign.
Next Steps
Read our referral fee page to see how we are paid, then ask what your business is worth.