Monthly Archive: February 2025

Let’s be real—if you’ve ever thought about selling a business, at some point, you’ve probably wondered: Are business brokers just middlemen taking a fat cut for doing nothing?

I know I did.

A few years ago, I had a business that was doing well—consistent revenue, solid team, decent brand recognition. But I was burnt out. Late-night strategy meetings and endless operational headaches had me questioning if this was really the life I wanted. So, I started exploring the idea of selling. Enter: business brokers.

At first, I thought they were just salespeople in suits, throwing around buzzwords like exit strategy and valuation multiples to justify their commissions. But the deeper I got into the process, the more I realized: These people actually do a lot. And their paychecks? Well, let’s just say they’ve figured out a pretty lucrative game.

So, if you’re like I was—skeptical, curious, maybe even a little paranoid that someone’s taking a bigger slice of your pie than they should—let’s break it down. How do business brokers actually make money, and are they worth what they charge?

1. The Standard Commission (a.k.a. The Big Cut)

The bread and butter of any business broker’s income is their commission on the sale price of the business. And this isn’t chump change.

Most brokers charge anywhere from 5% to 12% of the total sale price. So, if your business sells for a cool $1 million, that’s anywhere from $50,000 to $120,000 straight into the broker’s pocket.

Now, you might be thinking: Wait… I’m the one who built this business! Why am I handing over six figures to someone who just made a few phone calls?

Fair question. But here’s what most people don’t see:

• Brokers find buyers—and good ones. The kind of buyers who won’t waste your time with tire-kicking and lowball offers.
• They negotiate like sharks, making sure you get a price that reflects the true value of your business (not just what some bargain-hunting buyer wants to pay).
• They handle the paperwork—and trust me, the legal and financial red tape in a business sale is not something you want to DIY unless you have a law degree and a high tolerance for pain.

So yeah, that commission stings. But if they can get you 10-20% more on your sale price and take the stress off your plate, suddenly it doesn’t feel like highway robbery.

2. Retainer Fees (a.k.a. The “Are You Serious?” Fee)

Some brokers don’t just work on commission—they also charge a retainer fee upfront.

This can be anywhere from $2,000 to $20,000, depending on the size of your business.

Why? Because brokers don’t want to waste their time with uncommitted sellers who think they want to sell but won’t actually pull the trigger. The retainer weeds out the just browsing folks and ensures they’re dealing with serious sellers.

It also covers some of their upfront costs—things like business valuations, marketing, and outreach to potential buyers.

If you’re selling a business under, say, $1 million, you can probably avoid this fee by working with a broker who only takes commission. But if your business is in the $5M+ range, expect to pay a retainer.

3. Valuation Fees (a.k.a. The “Let’s See What You’ve Got” Fee)

Not sure what your business is worth? Brokers will happily charge you for a valuation.

Some offer this for free as part of their commission deal, but others charge anywhere from $500 to $10,000, depending on how detailed you want the report to be.

If your business is complex—multiple revenue streams, real estate holdings, intellectual property—expect to be on the higher end. But for a simple Main Street business, a basic valuation should be affordable (or free).

Pro tip: Before paying for a valuation, ask the broker if they’ll waive the fee if you sign a contract with them. Some will, especially if they’re confident they can sell your business.

4. Marketing Fees (a.k.a. “Why Am I Paying to Sell My Own Business?”)

This one can feel like a scam—some brokers charge marketing fees to cover the cost of advertising your business to potential buyers.

This can be anywhere from a few hundred to a few thousand dollars. If you see a marketing fee in your broker’s contract, ask what it actually covers. Are they running ads? Listing your business on high-traffic platforms? Creating a slick sales brochure? Or just pocketing the cash?

The best brokers include marketing in their commission—so be wary of anyone trying to double-dip.

5. Success Fees (a.k.a. “The VIP Bonus”)

Some brokers add a success fee for selling your business above a certain price.

For example, they might say: If we get you more than $2 million, we take an extra 2% on anything above that.

Sounds sneaky? Maybe. But it also gives them incentive to push for a higher sale price, which could mean more money for you in the end.

If your broker proposes a success fee, make sure it’s structured in a way that benefits both of you—not just them.

So… Are Business Brokers Worth It?

It depends.

If you have a small, local business and a buyer already lined up, you probably don’t need a business broker. Save the commission and close the deal yourself (with a good lawyer, of course).

But if you’re selling a business with real value—one that requires serious negotiations, strategic marketing, and access to high-quality buyers—then yeah, a broker can be worth their weight in gold.

The key is finding the right broker.

• Look for brokers who specialize in your industry. A broker who sells manufacturing businesses might not be the best choice for a tech startup.
• Avoid brokers who ask for huge upfront fees without a clear plan.
• Negotiate the commission and ask if they’ll structure it based on performance.

At the end of the day, a good broker makes you more money than they cost. A bad broker? Well, let’s just say you’d be better off selling the business yourself.

Ready for a successful exit? Make sure you know exactly how your broker gets paid before you sign anything. Your future bank account will thank you.

Alright, let’s talk about something most business owners don’t think about until it’s too late—selling their business. You built something from scratch, poured years of blood, sweat, and let’s be real, a few panic attacks into making it work. Now, whether you’re looking to cash out, move on, or just take a long vacation where nobody emails you about inventory shortages, selling your business is no small task.

But here’s the kicker: Most people have no idea how to actually sell a business.

That’s where a business broker comes in. And before you roll your eyes thinking, Pfft, I can sell it myself and save the fee, let me tell you why that’s about as good an idea as selling your house without a real estate agent—only a hundred times riskier.

The Time Suck You Didn’t See Coming

Running a business is already a full-time job. Selling one? That’s like adding another 60 hours to your workweek on top of everything you’re already juggling. Think about it:

• You have to figure out what your business is actually worth (spoiler: It’s probably not what you think).
• You have to find serious buyers who won’t waste your time or ghost you after three promising meetings.
• You have to negotiate like a pro—because trust me, buyers will try to lowball you hard.
• You have to navigate contracts, legalese, and a mountain of paperwork that could make even a lawyer’s head spin.

Meanwhile, your actual business—the thing you’re trying to sell—is suffering because you’re too busy playing DIY dealmaker. A business broker takes all that off your plate, so you can focus on keeping things running smoothly and making sure the business is actually worth buying when the right deal comes along.

They Know What Your Business is REALLY Worth

I’ve seen it time and time again—owners slap a random price tag on their business based on vibes, gut feelings, or what their cousin’s friend sold his company for back in 2014. That’s not how valuation works.

A good broker will dig into the nitty-gritty:

• Your financials (Are they clean? Are there skeletons in the closet?)
• Your market position (Are you a big fish in a small pond, or swimming with sharks?)
• The intangibles (Brand reputation, customer loyalty, competitive advantages—things a spreadsheet can’t always capture)

Then, they’ll use actual market data from reputable sites like businessbrokernews.org and industry expertise to price it right—high enough to get you a solid return, but not so high that buyers laugh and walk away.

They Bring Buyers to the Table (Not Tire Kickers)

You’d be shocked at how many people say they want to buy a business but have zero ability (or intention) to actually pull the trigger. Sorting through these tire kickers takes time—time you don’t have.

Business brokers already have networks of real buyers. They know who’s serious, who has the financing, and who’s just here to waste everyone’s time asking a million questions before disappearing into the abyss. More importantly, they know how to keep things confidential. The last thing you want is employees, customers, or competitors finding out you’re selling before you’re ready to announce it.

Negotiating Without the Drama

Negotiation is a skill, and let’s be honest, not everyone has it. When it’s your business, emotions get involved. You’ve spent years building this thing, and now some buyer is pointing out every flaw like a contestant on Shark Tank? Yeah, that’s not fun.

A broker handles the back-and-forth, takes the emotion out of it, and ensures you don’t get strong-armed into accepting a lowball offer just because you’re exhausted. They’ll also structure the deal properly—because a great price with bad terms is still a bad deal.

The Legal and Paperwork Nightmare

Selling a business isn’t just about shaking hands and handing over the keys. There’s a ton of paperwork—contracts, financial disclosures, non-compete agreements, due diligence reports. If you mess up even one thing, it could cost you big time, either in lost money or post-sale liabilities you didn’t see coming.

A broker works with attorneys and accountants to make sure everything is buttoned up. They ensure that you get paid properly, that you’re not on the hook for hidden liabilities, and that the entire process goes smoothly without any last-minute “uh-oh” moments.

But What About That Commission?

Yes, business brokers take a cut—usually somewhere between 5-10% of the sale price. But let’s put that into perspective:

• If they get you 20-30% more for your business than you could have on your own, that fee pays for itself.
• If they prevent you from making a costly mistake in negotiations or paperwork, they just saved you way more than their fee.
• If they get the deal closed faster (which they will), you’re saving time, stress, and lost revenue from a drawn-out sales process.

Think of it this way: Would you rather keep 100% of a mediocre deal, or 90% of an amazing one?

The Bottom Line

If you’re even thinking about selling your business, do yourself a favor—talk to a business broker. Even if you decide not to use one, at least get a professional opinion on what your business is worth and what the market looks like.

Selling a business isn’t like selling a car or a house—it’s complex, emotional, and full of potential pitfalls. A good broker makes sure you get the best possible deal, with the least amount of stress, and actually walk away happy instead of wondering if you left money on the table.

So, are you ready for a successful exit? Or do you want to roll the dice and hope for the best? Your call.

FAQ

Q: What does a business broker actually do? A: A business broker helps business owners sell their businesses by handling valuations, finding buyers, negotiating deals, and managing paperwork to ensure a smooth transaction.

Q: How much does a business broker charge? A: Typically, brokers charge between 5-10% of the sale price. While it may seem like a lot, they often secure better deals that more than justify their fee.

Q: Can I sell my business without a broker? A: Technically, yes. But without expertise in valuation, negotiation, and legal matters, you may end up with a lower price, a longer sales process, or costly mistakes.

Q: How long does it take to sell a business? A: It depends on factors like market conditions, business valuation, and buyer interest. On average, it can take anywhere from 6 months to over a year.

Q: How do brokers find buyers? A: Brokers leverage their networks, databases, and marketing strategies to attract serious, qualified buyers while maintaining confidentiality.