Typical Sell-Side Business Broker Fee

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by a searcher from Texas Christian University - Neeley School of Business
in Fort Worth, TX, USA

1yr ago

Typical Sell-Side Business Broker Fee

I'm looking to try and source deals directly from owners rather than going through sell-side brokers. I've gotten a lot of general information online that business brokers usually take an 8%-10% fee from the transaction. For people who have used or worked with a sell-side brokers, is this pretty accurate for companies that sell between $1M and $5M? I would like to make the case for selling directly as compared to working with a broker in between us, contingent on trust being established with the seller. Any additional thoughts on working directly with the owners instead of brokers is appreciated as well, both pros and cons.

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reply by a professional 1yr ago
from Texas A&M University in Dallas, TX, USA

It happens but it shouldn't. That will happen if the broker gets away with double Lehman scale. Single Lehman is often more than enough, especially given the level of work most brokers put in (almost none)

reply by a searcher 1yr ago
from Indian School of Business in Raleigh, NC, USA

From what I have heard from sellers as a searcher, 5-10% sounds about right in the $1-2m transaction size (usually toward the higher end of that range). Im sure others have much more experience/data points but just wanted to share what I can, since no one else has dropped any numbers so far.