A business broker is a licensed professional who helps buy or sell a business, similar to how a real estate agent handles property sales.

Unlike a real estate agent, a business broker typically works with the financial and operational details of the company itself—revenue, customer contracts, employee agreements, and tax records. They value the business, find potential buyers or sellers, negotiate terms, and guide both sides through due diligence and closing. Some brokers specialize in specific industries like restaurants, medical practices, or e-commerce; others work across all business types.

A broker does not work for free. Most charge a commission based on the final sale price, usually between 5 and 10 percent, though some charge flat fees or hourly rates. You pay only if the sale closes. The broker's incentive is to complete the transaction, not necessarily to get you the highest price, so understanding how they are compensated matters when you decide whether to hire one.

Key Takeaways

  • A business broker values your company, markets it to buyers, and handles negotiations—work that typically takes three to twelve months.
  • Brokers charge commission (usually 5 to 10 percent of sale price) only after closing, so there is no upfront cost to you.
  • You can sell without a broker by handling marketing and negotiations yourself, but you will need an accountant and lawyer regardless.
  • Brokers are not required to be licensed in most states, so verify credentials, references, and whether they carry errors and omissions insurance.
  • A broker's incentive is to close the deal, not maximize your price, so you should still hire your own attorney to review the final agreement.

How a broker finds buyers and values your business

A broker typically starts by preparing a valuation of your business using methods like revenue multiples (a common approach is to multiply annual earnings by a factor between 2 and 5, depending on industry and risk), asset value, or cash flow analysis. This valuation becomes the asking price or a starting point for negotiations. The broker then creates a confidential business summary—a document that describes the business without revealing your identity—and circulates it to their network of potential buyers, other brokers, and sometimes publicly on listing sites.

The broker screens inquiries, arranges showings or calls with serious prospects, and collects non-disclosure agreements before sharing detailed financial records. This process can take weeks or months. Once a buyer emerges, the broker facilitates offers, counteroffers, and negotiation until both sides agree on price and terms. The broker does not make the final decision—you do—but they guide the process and pressure both parties to move forward.

What you will handle yourself even with a broker

A broker handles marketing and negotiation, but you still need professional advisors. Hire a CPA or accountant to prepare financial statements, tax returns, and a detailed breakdown of business expenses and revenue for the past three to five years. Buyers will request these, and accuracy matters because discrepancies can kill a deal or lower the price. You will also need a business attorney to review the purchase agreement, handle escrow arrangements, and may support the sale complies with any contracts you have with customers, landlords, or lenders.

You are responsible for deciding what to disclose about the business—pending lawsuits, customer concentration (if one customer is 50 percent of revenue, that is a red flag), lease terms, or equipment condition. Hiding problems can void the sale or expose you to legal liability after closing. The broker will advise you on what buyers typically ask for, but your attorney should review what you actually say in writing.

Selling without a broker: what changes

You can sell your business without a broker by marketing it yourself through your network, local business groups, or online marketplaces like BizBuySell or Flippa (for digital businesses). You handle all buyer outreach, screening, and negotiation. This saves the commission but requires time and sales skill. Many owners find this exhausting alongside running the business, and deals often fall apart because neither side has a neutral third party to keep momentum going.

Even if you sell without a broker, you still need an accountant and attorney. The attorney cost is often similar whether you use a broker or not—typically $2,000 to $5,000 for document review and closing—because the legal work is the same. The accountant cost may be slightly higher if you are preparing financials from scratch, but that is necessary either way. The real savings is the commission, which can be $50,000 to $500,000 depending on sale price. Whether that is worth the extra work and risk is a personal calculation.

Broker credentials and what to check

Business brokers are not required to be licensed in most states, unlike real estate agents. This means anyone can call themselves a broker. Look for brokers who hold the Certified Business Intermediary (CBI) credential, awarded by the International Business Brokers Association (IBBA) after training and experience requirements. Ask for references from past clients—both buyers and sellers—and contact them directly about whether the broker was responsive, honest about valuation, and effective at closing deals.

Verify that the broker carries errors and omissions (E&O) insurance, which protects you if the broker makes a mistake that costs you money. Ask how long they have been in business, whether they specialize in your industry, and how many deals they closed in the past year. A broker who closed two deals in twelve months may not have the network or skill to move your business quickly. A broker who closed twenty may have the reach but may not give your deal personal attention.

Commission structures and negotiating fees

The standard commission is 5 to 10 percent of the final sale price, split between the broker who represents you (the seller) and the broker who represents the buyer, if there is one. Some brokers charge a flat fee instead—say, $15,000 to $50,000 depending on business size—or an hourly rate. A few charge a retainer upfront plus a smaller commission at closing.

Commission is negotiable. If your business is large or straightforward to sell (stable revenue, no legal issues, clear customer base), you may push for 5 percent instead of 8 percent. If the business is small or has complications, the broker may ask for 10 percent or a retainer to cover their time if the deal falls through. Ask the broker to explain their fee structure in writing before you sign an agreement. Also ask whether the fee applies only to the sale price or includes non-compete agreements, real estate, or equipment sold separately—these details matter.

Timeline and what to expect month by month

A typical business sale takes three to twelve months from listing to closing, depending on business size, industry, and how many buyers are interested. The first month is usually valuation and preparing financial documents. Months two through four involve marketing and initial buyer inquiries. Months five through eight are negotiation and due diligence—the buyer investigates your finances, customer contracts, and operations. The final one to two months are legal review, financing approval (if the buyer needs a loan), and closing.

This timeline is not fixed. A hot business in a competitive market might sell in six weeks. A business with customer concentration, lease issues, or declining revenue might take eighteen months or not sell at all. The broker should give you a realistic estimate based on comparable sales in your industry and the current market. If a broker promises a sale in two months, that is a warning sign—either they are overselling or they are pushing you to accept a low offer quickly.

Frequently Asked Questions

Do I have to use a broker to sell my business?

No. You can sell directly to a buyer you know, through your network, or by advertising online. However, brokers have buyer networks and negotiation experience that often result in higher sale prices and faster closings. Whether the commission is worth it depends on your business size, how much time you have, and your comfort with sales and legal documents.

What if the broker does not find a buyer?

If no buyer emerges after a set period (usually six to twelve months), you can end the agreement and try a different broker or sell without one. Most broker agreements include an expiration date. If the broker has not generated serious interest by then, it is reasonable to move on. Ask about this term before signing.

Can the buyer and I negotiate directly after the broker introduces us?

Technically yes, but doing so can breach your agreement with the broker and cost you the commission anyway. The broker agreement usually states that the broker earns commission on any sale to a buyer they introduced, even if you negotiate directly later. Read the agreement carefully and ask the broker to clarify this before signing.

What happens if the buyer's financing falls through after we agree on a price?

The deal is not closed until the money is in your account. If the buyer cannot find a loan or backs out, the sale is off. Your attorney should structure the agreement so that the buyer's financing contingency expires after a set number of days—typically 30 to 60—so you are not stuck waiting indefinitely. The broker should advise on this, but your attorney makes the final call.

Should I hire a broker even if I already have a buyer in mind?

If you have a serious, may have access to buyer ready to negotiate, a broker may not be necessary. However, a broker can still add value by valuing the business fairly (so you do not leave money on the table), handling negotiations so emotions do not derail the deal, and managing due diligence. Some owners hire a broker just for these services even when they already know the buyer. Discuss this with the broker upfront—some will work on a flat fee or reduced commission in this scenario.