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A reader once sent me a business broker agreement to look over before he signed it. The commission was a perfectly normal 10%. The problems were everywhere else: a 12-month exclusive, an 18-month tail that covered any buyer who had been introduced to the business by any means, and a definition of sale price that included the building he planned to keep and lease to the buyer. Rewriting those three clauses saved him more money than haggling over the percentage ever could have.
That is the theme of this guide. Business broker fees are about more than the headline commission. Below I cover what brokers and M&A advisors charge in 2026, how the Lehman and Double Lehman formulas work, which upfront fees are fair and which are red flags, and the contract terms that quietly cost sellers the most. If you are still deciding whether you need a broker at all, start with my guide on how to sell a business.
Short answer: how much do business brokers charge?
Main street business brokers typically charge a success fee of about 10% to 12% of the sale price for businesses up to roughly $1 million, often with a minimum fee. BizBuySell puts the common range at 10% to 15% for businesses selling between $100,000 and $1 million, with flat fees for very small deals. Above $1 million, fees usually step down on a sliding scale such as the Double Lehman formula (10% of the first $1 million, 8% of the second, 6% of the third, 4% of the fourth and 2% after that), which works out to about $300,000, or 6%, on a $5 million sale. M&A advisors handling larger companies may also charge a monthly retainer.
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Earned Exits, our top-rated broker, charges a success fee paid only when your business sells. Best fit: $1M to $40M in revenue.
Business broker fee structures by deal size
| Deal size | Typical fee structure | What it usually looks like |
|---|---|---|
| Under $100K | Flat fee | A fixed amount, often $10,000 to $15,000, per BizBuySell’s examples |
| $100K to $1M (main street) | Percentage success fee | About 10% to 12%, sometimes up to 15%, frequently with a minimum commission |
| $1M to $5M | Tiered percentage or Double Lehman | About 8% to 10% on the first $1M, stepping down on higher amounts |
| $5M to $50M (lower middle market) | Modified or Double Lehman, plus retainer | Success fee of roughly 3% to 6% effective, often with a monthly retainer credited against it |
| $50M+ | Investment bank fee | Negotiated success fee, retainers and sometimes a minimum fee |
Ranges reflect common market practice and BizBuySell’s published examples. Fees are not set by law and are always negotiable.
According to BizBuySell’s guide to broker fees, the seller generally pays the broker, and when a buyer has their own broker, the two usually split the seller’s commission rather than charging the seller twice. Some buyer-side brokers charge buyers a flat fee instead.
The Lehman and Double Lehman formulas, explained
The original Lehman formula is generally credited to Lehman Brothers in the 1960s, and it is rarely used in its pure form today. What most brokers and M&A advisors use now is the Double Lehman, which simply doubles each tier. Both apply a lower percentage to each additional million dollars of sale price.
| Portion of sale price | Lehman formula | Double Lehman formula |
|---|---|---|
| First $1 million | 5% | 10% |
| Second $1 million | 4% | 8% |
| Third $1 million | 3% | 6% |
| Fourth $1 million | 2% | 4% |
| Everything above $4 million | 1% | 2% |
What that means in dollars
| Sale price | Flat 10% | Lehman | Double Lehman | Double Lehman as % of price |
|---|---|---|---|---|
| $500,000 | $50,000 | $25,000 | $50,000 | 10.0% |
| $1,000,000 | $100,000 | $50,000 | $100,000 | 10.0% |
| $2,000,000 | $200,000 | $90,000 | $180,000 | 9.0% |
| $5,000,000 | Rarely used | $150,000 | $300,000 | 6.0% |
| $10,000,000 | Rarely used | $200,000 | $400,000 | 4.0% |
Many advisors now quote a “modified” Lehman, for example a higher rate on the first few million or a minimum fee floor. Always ask for the exact schedule in writing and run it against a few realistic sale prices.
Business broker fee calculator
Enter an expected sale price to compare a flat percentage fee with the Lehman and Double Lehman schedules. Use it to sanity-check any quote you receive.
Upfront fees: when they are fair and when they are a red flag
Over the years, the most expensive broker I have seen was not the one with the highest commission. It was the one who charged a seller a $15,000 “marketing package” upfront, posted the business on a couple of listing sites, and then went quiet. Success fees keep a broker focused on closing. Large upfront fees can do the opposite.
| Fee type | What it is | My take |
|---|---|---|
| Success fee | A percentage paid only when the business sells | The standard. Your broker gets paid when you do. |
| Retainer (monthly or upfront) | A fixed fee for preparing materials and running the process | Common and reasonable for $5M+ deals, especially when credited against the success fee |
| Valuation or engagement fee | A charge for a formal valuation or opinion of value | Fine if the deliverable is real and useful; ask what you get |
| Marketing or listing fee | An upfront charge for advertising your business | A red flag on main street deals; most reputable brokers cover this |
| Minimum fee | A floor on the commission regardless of price | Normal, but make sure it is reasonable for your deal size |
Contract terms that cost sellers more than the commission
- Length of exclusivity. Six to twelve months is common. Ask for the right to cancel after a set period if the broker is not performing.
- Tail period. This entitles the broker to a fee if you sell to a buyer they introduced, even after the agreement ends. Keep it to 12 months or less and limit it to buyers the broker can document.
- Definition of sale price. Find out whether the commission applies to seller notes, earnouts, inventory, real estate, consulting agreements and non-competes. Real estate you lease to the buyer should usually be excluded.
- Payment timing on earnouts and notes. Negotiate to pay the broker on deferred amounts only when you actually receive them.
- Carve-outs. If you already know a likely buyer, such as a competitor or key employee, exclude them or negotiate a reduced fee.
- Co-brokering. Confirm that any buyer-side broker is paid out of the seller-side commission, not added on top.
Is a business broker worth the fee?
For most sellers above about $1 million in value, yes, because a good broker creates competition and keeps deals from dying in due diligence. The latest IBBA and M&A Source Market Pulse survey found that 83% of deals over $5 million attracted at least three offers in the first quarter of 2026. A second or third bidder can easily add more to your price than the entire commission. Below about $250,000, the math is tighter, and many owners sell directly to an employee or competitor with help from a CPA and attorney.
Before you talk to any broker, run your numbers through my free business valuation calculator so you can tell whether a broker’s pitch valuation is realistic or just designed to win your listing.
How the brokers and marketplaces I review charge
| Firm | Fee model | Best for |
|---|---|---|
| Earned Exits | Success fee paid only at closing; percentages quoted after a free valuation | Established US businesses with $1M to $40M in revenue |
| Website Closers | Success fee; does not publish its rates | Larger internet and technology businesses |
| Empire Flippers | Its own sliding commission schedule on the sale price | Vetted online businesses |
| Flippa | Listing fee plus a success fee that starts around 3% | Smaller online assets and do-it-yourself sellers |
I rank these and others in detail in my best business brokers list.
Prefer a broker who only gets paid when you do?
Earned Exits works on a success fee for established companies with $1M to $40M in revenue. Their free valuation is a no-cost way to see what your business would sell for and what the fee would look like before you sign anything.
How to negotiate business broker fees
- Interview at least three brokers. Compare fee schedules, minimums, tails and recent comparable sales.
- Negotiate the structure, not just the rate. A shorter tail and a fair sale price definition often matter more than one percentage point.
- Offer an incentive for performance. Some sellers agree to a lower base rate with a higher percentage on any amount above a target price.
- Get everything in writing. Verbal promises about fees or marketing do not survive closing.
- Have an attorney review the agreement. A one-hour legal review is cheap insurance on a six-figure fee.
My take
A fair broker fee is one of the best investments a seller can make, and a bad agreement is one of the most expensive mistakes. Expect roughly 10% on main street deals and a Double Lehman style schedule on larger ones, avoid big upfront marketing fees, and read the tail, exclusivity and sale price clauses as carefully as the commission rate.
Business broker fees: frequently asked questions
How much do business brokers charge?
What is the Double Lehman formula?
What is the difference between the Lehman and Double Lehman formulas?
Who pays the business broker fee, the buyer or the seller?
Are business broker fees negotiable?
Should I pay a business broker an upfront fee?
What is a tail period in a business broker agreement?
Is a business broker worth the commission?
Amine Rahal is an entrepreneur and investor. He is passionate about alternative investments, Bitcoin, precious metals and startups. He enjoys covering US politics, retirement investing, alternative investing and geopolitics.
