If you're ready to sell, you're probably wondering how much you'll pay for professional business valuation and M&A advisory services. Most business brokers charge a commission of 5% to 15% of the final sale price, with 8% to 12% being the norm for businesses valued under $1 million to $2 million. As deal size grows, the percentage drops, and larger transactions use a tiered formula instead of a flat percentage.
This guide breaks all of that down with real numbers, so you can read a broker's proposal and know whether it's reasonable.
|
Deal Size |
Fee Structure |
Approximate Blended Rate |
|
Under $500,000 |
Flat fee or straight percentage |
10%–12% |
|
$500,000 – $2 million |
Percentage commission, sometimes with a retainer |
8%–12% |
|
$2 million – $25 million |
Tiered (Lehman or Double Lehman) formula |
4%–9% |
|
$25 million+ |
Tiered formula, handled by an M&A advisory firm |
1%–4% |
These ranges are useful for planning, but they are not universal industry standards. Actual fees vary by broker, transaction size, services, market, and negotiated engagement terms.
If you are asking what business brokers charge to sell a business, there is no single rate that applies to every transaction. Several factors can affect the fee.
Not all brokers price their services the same way. In practice, you'll run into one of four models, sometimes combined.
Success-fee commission
The broker earns a percentage of the sale price, paid at closing. No sale, no fee. This is the dominant model for businesses under roughly $2 million, and it's why brokers are motivated to actually close a deal rather than just list one.
Flat fee
A fixed dollar amount regardless of sale price, common for very small businesses, especially those valued under $100,000, where a percentage commission wouldn't cover the broker's time.
Tiered or sliding-scale commission
The percentage decreases as the transaction value increases. This shows up once a business is worth more than $1 million to $2 million, where a flat 10% commission would produce an unreasonably large dollar fee relative to the broker's added workload. The Lehman Formula is the best-known version.
Retainer plus reduced commission
The seller pays an upfront fee to begin the engagement, covering valuation work, marketing materials, and buyer outreach, then a lower success fee at closing. This is more common as deal size and complexity increase.
The size of the business can affect how much a broker charges. Smaller businesses have a higher commission percentage, while larger transactions use lower or tiered rates.
Main Street businesses (roughly under $1–2 million)
Business broker fees for smaller transactions commonly fall around 8% to 12%, with 10% often used as a general benchmark. At this size, brokers charge a simple percentage of the final sale price rather than using a tiered fee structure.
Lower middle-market businesses ($2 million to roughly $25–50 million)
As transactions get larger, the commission percentage decreases. Brokers and M&A advisors start using tiered fee structures, with blended rates often falling somewhere between 4% and 9%. Retainers, minimum fees, or other upfront costs also become part of the engagement.
Middle-market businesses ($25 million and above)
Larger transactions are more likely to involve M&A advisory firms rather than traditional business brokers. Success fees range from 1% to 4%, depending on the deal's size and complexity. A lower percentage does not necessarily mean a smaller fee. For example, a 2% fee on a $40 million transaction would still equal $800,000.
Important point to keep in mind: as deal size increases, some advisors combine a success fee with a retainer or monthly fee. This means sellers should look at the full fee structure, not just the commission percentage, when comparing business brokers or M&A advisors.
If your business is worth more than roughly $1 million, there's a good chance your broker's fee will reference the Lehman Formula, a tiered fee structure that dates back to 1970s investment banking and has since become a common reference point in business brokerage and M&A.
The original, standard Lehman scale works like this:
These percentages apply to each bracket separately. A $5 million sale doesn't get charged 1% across the board; it gets $50,000 + $40,000 + $30,000 + $20,000, plus 1% of the remaining $1 million, for a total of $150,000. That's a 3% blended rate, even though the "headline" tier is 1%.
Because a $5 million deal today involves far more work than it did decades ago, many brokers now use the Double Lehman (also called the Modern Lehman), which simply doubles each tier:
On a $3 million sale under Double Lehman, that's $100,000 + $80,000 + $60,000 = $240,000, or an 8% blended rate. Under the original Lehman scale, the same deal would produce $50,000 + $40,000 + $30,000 = $120,000, a 4% blended rate. Neither number is "wrong" — they're just different formulas, and the gap between them is exactly why it matters to know which one your broker is quoting before you sign.
In most business sales, the seller pays the business broker’s fee. The engagement agreement should clearly state the payment terms before the business is marketed.
The fee covers services such as:
Before signing, confirm which services are included and whether expenses or additional fees apply.
A broker’s fee can be worthwhile if the advisor brings relevant experience, qualified buyers, strong negotiation skills, and a clear process for getting the deal to closing.
Compare the broker’s:
The lowest commission isn't necessarily the best deal. What matters is what you're paying for, how the fee is calculated, and whether the advisor has experience with transactions similar to yours.
If you're considering selling a business with $1M–$250M in revenue, Aria Business Advisors brings 20+ years of M&A experience to business sales and related advisory work. The firm's expertise spans valuation, financial, legal, and capital advisory needs across the transaction.
Contact Aria Business Advisors to discuss your potential business sale.