Typical structures: business brokers charge an 8 to 12 percent success commission (often a Lehman or Double Lehman scale); M&A advisors and investment banks charge a monthly retainer plus a success fee that is a smaller percentage, roughly 1 to 5 percent or more, declining as the deal grows; and a direct sale to an operator-buyer that acquires as a principal charges the seller nothing. Always confirm the scale, the minimum fee, and any retainer in writing before you sign.
Fees by advisor type
| Path | Retainer | Success fee | Best-fit deal size |
|---|---|---|---|
| Business broker | Sometimes small | 8 to 12% (Lehman scale) | Under ~$5M |
| M&A advisor | Usually | ~2 to 6%, declining | ~$2M to $50M |
| Investment bank | Yes | ~1 to 5%+, declining | $10M+ enterprise value |
| Direct operator sale (WETYR) | None | $0 to the seller | $1M to $50M revenue |
What drives the number
Two things move advisory fees most: deal size and process. Percentage fees decline as the price rises, which is why brokers charge the highest rate on the smallest deals and banks the lowest rate on the largest. A more intensive, marketed process (a full auction) costs more than a targeted one. Beyond the headline percentage, watch for minimum fees that can make a small deal uneconomic, retainers that are or are not credited against the success fee, and exactly what triggers the fee.
The other costs of a sale
Advisory fees are not the only cost. Budget also for a transaction attorney, accounting and any quality-of-earnings work, and sometimes tax advisory. On a direct operator sale you avoid the intermediary success fee entirely, but you still want your own attorney and accountant. The right comparison across paths is total net proceeds after all fees and taxes, not the gross price or the headline commission alone.
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Frequently asked questions
What is a typical business broker fee?
Most business brokers charge a success commission of 8 to 12 percent of the sale price, often on a Lehman or Double Lehman scale that declines on higher tiers, sometimes with a minimum fee. There may also be a modest upfront or marketing retainer.
What do M&A advisors and investment banks charge?
Usually a monthly retainer plus a success fee, roughly 1 to 5 percent or more depending on deal size, on a scale that declines as the price rises. Larger deals pay a smaller percentage; small deals may hit a minimum fee that makes the engagement uneconomic.
Do I pay a fee if I sell my business directly?
Not to an intermediary. Selling directly to an operator-buyer that acquires as a principal carries no success fee to the seller. You still pay your own legal and accounting costs, but you avoid the 8 to 12 percent or retainer-plus-success structures.
Are M&A advisory fees negotiable?
Often, yes, particularly the scale, the minimum fee, whether a retainer is credited against the success fee, and the exact fee trigger. Because the fee can be a large share of proceeds, negotiating the structure before signing is worth real money.
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