Disclosure: we may in future agree referral fees with brokers for introductions we make. No referral agreements are currently in place, and no broker pays to be listed.

How to choose a business broker (US)

Choosing who represents you affects price, confidentiality and time to close. This page compares Main Street brokers, M&A advisors and marketplaces, outlines typical fee patterns, notes that licensing varies by state, and lists questions and red flags.

Main-street broker vs M&A advisor vs online marketplace

• Business brokers: commonly used for smaller Main Street businesses. They list, market, qualify buyers and help move a deal toward closing. Service quality varies by firm and individual broker.

• M&A advisors / investment bankers (lower-middle market and up): run formal processes, prepare CIMs, and negotiate with strategics or sponsors. Better fit when the deal is larger or more complex.

• Online marketplaces: expand reach; you still need someone (you or an advisor) to manage diligence and negotiation.

Pick based on deal size, industry and the buyer universe you need — not on a promised multiple alone.

Typical fees (typical, varies)

Main Street listings often use a commission in the 8-12% range of the sale price, frequently with a minimum fee (typical, varies). Source: IBBA whitepaper: Main Street commissions 8-12% of purchase price Larger transactions often use Lehman-style or modern sliding scales (higher percentages on the first dollars of value, stepping down as value rises). Source: Lehman Formula (definition) Some advisors also charge retainers or work fees credited against success. Confirm the fee base, minimums, tail periods after the agreement ends, and whether co-brokerage splits reduce what you owe.

Licensing varies by state

In some states, selling a business (especially where real estate is included, or under specific statutes) may require a real estate broker license or other registration. Requirements differ. Ask any broker you interview which license they hold, in which state, and whether your transaction type requires one. Do not assume a national website equals authority to represent you in your state. Source: American Business Brokers Association: states requiring a real estate license

Questions to ask

Ask: How many businesses like mine have you sold recently? What is your average time to LOI and to close? Who writes the CIM? How do you screen buyers and handle NDAs? What is the full fee schedule, minimum and tail? Are you exclusive, and for how long? Will you support diligence and lender requests? Can I talk to past seller clients? How do you handle offers that include heavy seller financing or earn-outs?

Red flags

Watch for: guaranteed prices or “we have a buyer already” pitches before diligence; pressure to sign before you review fees in writing; opaque marketing; no clear confidentiality process; and engagement letters that make large fees due even when no deal closes on terms you accepted.

Have your attorney review the listing agreement. Tax and structure choices (asset vs stock, purchase-price allocation) affect your net proceeds — get professional tax advice in parallel with choosing an advisor.