How Much Are Business Broker Fees
Business owners who are planning to sell their companies usually consider the fee structure as an important aspect when selecting a broker to work with.
Brokers offer different fee structures depending on the nature of their service and size of transaction. These are the usual fees that brokers charge businesses whose value is:
Less than $100,000
These businesses usually sell via real estate agents who primarily sell real estate every year. Agents show possible buyers the business and put an advertisement in MLS. The seller answers the questions of buyers and conducts most of the selling. Real estate agents usually charge 10 percent of value of the deal on closing.
Between $100,000 and $1 million
These businesses usually get the help of intermediaries or business brokers. These brokers generally offer business valuation, buyer screening, confidential marketing, exit strategy consulting and more. They usually charge 8 to 12 percent of the price of the deal on closing. Some intermediaries charge a deposit amount between $1000 and $10,000 after validating the listing agreement. This amount is non-refundable.
Between $1 million and $5 million
These businesses usually work with intermediaries or business brokers who focus on the lower middle market group. They are professionals who have a good understanding of business strategy and finance and have the sales and people skills needed in the negotiation process. Some of them charge a non-refundable deposit between $2,000 and $20,000. The commission charged once the transaction is closed is usually 10 percent of the first million dollars as well as 1 to 5 percent of the balance.
Between $5 million and above
These businesses are usually sold via acquisitions and mergers advisors or intermediaries. Those professionals can do comprehensive business valuations and have advanced finance skills. Intermediaries usually charge a non-refundable deposit between $10,000 and $50,000. They also charge a success payment using the Double Lehman or Lehman formulas.
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