The answer to what a business broker charges is written in one clause of the engagement letter, and owners tend to read the first line of it. There are five things in that clause worth reading closely, and the rate is the least informative. This page is what to look for, in the order that most often changes the number: what the fee is calculated on, the minimum, the retainer treatment, what happens if the price is paid over time, and what survives the end of the agreement.
What the fee is calculated on, and the minimum
Find the definition of the amount the rate applies to. Headline price, price net of debt, total consideration including anything deferred, or a defined enterprise value. Then find the minimum fee. Those two together, with your own expected price, usually settle what you will actually pay, and everything else adjusts around them.
The retainer, and deferred consideration
Is the retainer credited, partly credited or additional. Then: if part of the price is paid later, or depends on the business performing, is the fee due at completion on the whole amount or as the money arrives. That second question can leave a seller paying a fee at completion on money they may never receive, and it is a term worth understanding before it is agreed.
What survives the agreement ending
The tail. Its length, and what counts as an introduction that triggers it. This is the term that constrains what you do if the engagement does not work, and it is the one most often skimmed because it describes a situation nobody signing expects to be in. Asking for a written list of introductions makes its scope a fact rather than a later dispute. Read the clause once with your expected price in mind and once with a disappointing one. The terms that behave differently between the two readings are the ones worth negotiating, and they are rarely the headline rate.
Questions people ask about what do business brokers charge
Should a solicitor review the engagement letter?
It is a contract that can cost a significant share of your sale proceeds, so many owners do. What any clause means for your situation is your solicitor's to advise on; this page only says which clauses carry the money.
What if part of the price is an earnout?
Then how the fee treats deferred consideration matters a great deal. Ask specifically, and ask what happens if the deferred amount is never paid.
Is there a standard engagement letter?
No. They vary between firms in exactly the terms that carry the money, which is why reading yours beats knowing what is typical.