Do Business Brokers Charge a Commission or a Flat Fee?

Your business is humming along, and you’re thinking about selling it or buying another. Either way, you will need someone to help you find a buyer or seller and navigate state regulations, the valuation of your business, and tax implications. That person is a business broker.

While you know what business brokers can do for you, there’s one thing you might not have explored: Do business brokers charge a commission or a flat fee? 

Most Business Brokers Charge a Commission

Instead of a flat fee, many business brokers work on commission, or a “success fee,” as it is known in the business broker world. It’s called this because you pay a percentage commission to the business broker only after the deal is successful. This fee structure is similar to working with a real estate agent, who gets paid at the closing of a sale.

The commission for business brokers is typically between 10% and 15%, depending on the price and size of the business. Generally, the smaller the sale or purchase, the higher the percentage commission; deals worth more than $1 million might see commissions slide toward the lower range of the scale.

Good business brokers should always work in your best interests, trying to get the most value they can for you. Working on commission can be an added incentive.

Some Business Brokers Charge a Flat Fee

Generally, a flat fee structure doesn’t give business brokers an incentive to increase the value of the transaction. But there are reasons business brokers might charge a flat fee.

Some business brokers charge a flat fee of $10,000 to $15,000 for sales and purchases of smaller businesses. These small businesses might generate around six figures in annual sales or less. 

For businesses valued at less than $100,000, the flat fee might seem high, but the value of hiring a business broker — finding a buyer or seller, adding value to the business, and marketing the deal — might be worth it.

The opposite end of the spectrum is another time business brokers might charge a flat fee. Large, multimillion-dollar deals or transactions that take 12 months or longer might require a flat fee as a retainer.

Other Fees You Might Encounter

While typical commissions are around 10% to 15% and flat fees are often at least $15,000, there are no set prices for business brokers. You can negotiate the commission or flat fee.

One thing to keep in mind when researching business brokers is that you might be charged additional fees, even if you’re paying a commission. Business brokers handle a lot of tasks, and they might charge fees for some of those tasks in addition to their usual commission or flat fee. For example, a business broker might charge you additional fees related to legal work, accounting, and marketing. Whether you pay a commission or a flat fee, find out up front whether these additional fees or others are included in your payment agreement.