If your business earns about $2 million a year, a business broker will list it and take 10 to 15 percent of the sale price when it closes, with nothing up front. Above that, an M&A advisor runs a private process for a monthly retainer plus a smaller percentage at close, usually somewhere between 5 and 7 percent. The real question is not which title is better. It is which one can actually find the buyer who will pay the most for your business.
Everyone draws the same line, and nobody agrees where it is
Search this question and you get a confident answer: brokers handle small businesses, advisors handle large ones. Then look at where each source puts the border.
One says brokers stop at $500,000 in sales. One says $2 million in value. One says $3 million. One says $5 million in revenue. One says advisors do not start until $10 million. Those are the seven sources Google's own AI answer is built from, and they disagree with each other by a factor of twenty.
If you earn $1 million to $5 million a year, you are above every broker threshold in that list and below where some advisors say they begin. The advice sends you nowhere. This is not an accident. It’s what happens when everybody writes the general version of the answer and nobody writes yours.
What each one actually charges
This is the part most sellers are really asking about, and it is worth being specific.
A business broker works on straight commission. No retainer, no monthly fee, nothing owed if the business does not sell. The commission on a lower-middle-market deal runs 10 to 15 percent of the total transaction value. On a $5 million sale that is $500,000 to $750,000, paid entirely by you, the seller.
An M&A advisor charges a monthly retainer, commonly $10,000 to $50,000 in total across the engagement, plus a success fee at close of roughly 5 to 7 percent. The retainer buys a process that starts before there is a buyer: financial preparation, a target list, outreach.
Read those side by side and the broker looks cheaper, because zero up front feels cheaper than a retainer. That comparison is wrong in one specific way, and it is the way that costs sellers the most money. The broker's fee is larger, it is all yours to pay, and it is charged on a sale price that a public listing and an unvetted buyer pool tend to hold down. A percentage point of fee is worth less to you than five points of price.
How we charge, and why a seller pays less
We take the majority of our fee from the buy side. That means the seller pays less to sell than they would with a broker or with most advisors, and it is the single biggest difference between our engagement letter and the ones described above.
We don’t charge any retainer or up front fee to sell your business.
It also changes what the process looks like. We do not advertise your business online. Your employees, your customers, and your competitors do not find out you are selling from a listing site. Since we already have the buyers in our network, you meet the buyers yourself and vet them the same way they are vetting you.
The three things that actually differ at your size
Forget the titles. At $1 million to $5 million in revenue, three questions separate the two models, and all three decide your price.
1. Who finds the buyer. A broker puts your business on a listing platform and waits for inquiries. We source 85 to 90 percent of our transactions off-market, through cold outreach, a database we have built for years, and relationships with CPAs and attorneys. The difference is not marketing philosophy. It is whether the buyer who would pay the most for your business ever hears that it is for sale, because that buyer is usually not browsing listings.
2. Who runs the diligence. We do our Quality of Earnings work in house. A Quality of Earnings report is an independent examination of whether your reported profit is real and repeatable, and it is the document a buyer's lender leans on hardest. When it is run by the advisor rather than outsourced late, problems surface while they can still be fixed instead of during a renegotiation.
3. Who manages the lender. Most deals at this size do not die on price. They die in underwriting, weeks after everybody has shaken hands. Someone has to hold the lender, the accountants, and the lawyers to a calendar. A commission-only broker has no economic reason to be that person.
We keep about fifteen active searches at a time, on purpose. It is a small team and it is not a volume business.
When a broker is the right answer
Sometimes it is, and any advisor who will not say so is selling you something.
If your business earns a few hundred thousand dollars a year for you, if the buyer is most likely a local person who wants to run it themselves, and if you are not in a hurry, a good local broker with a real local list may serve you perfectly well. The commission will still be high at close. But the work an advisor does costs more than the extra price it would win you on a business that size.
The line is not a dollar amount. It is whether the best buyer for your business is someone who browses listings, or someone who has to be found.
What to ask before you sign either one
We wrote the long version of this elsewhere. If you are further along, what your broker isn't telling you about selling your services business walks through the five questions that reveal whose model is built for your business, and the seller's guide to 75-day closes shows what a managed timeline looks like against the industry's.
The short version is one question. Ask for their actual average time to close for businesses your size, and ask for the number, not the promise.
Frequently asked questions
What is the difference between a business broker and an M&A advisor?
A broker lists your business publicly and earns a commission of 10 to 15 percent when it sells, with nothing charged up front. An M&A advisor runs a private, targeted process for a retainer plus a smaller success fee, typically 5 to 7 percent. The broker's model is built to find a buyer who is already looking. The advisor's model is built to find the buyer who is not.
Which one do I need if my business earns $1M to $5M a year?
An advisor, in most cases. At that size your likely buyer is a private equity firm, a family office, an independent sponsor, or a platform builder, and none of them shop on listing sites. You are also above the size most brokers handle, which means you would be the largest and least familiar deal on their desk.
Is an M&A advisor more expensive than a business broker?
Not for the seller, in total. The advisor charges a retainer the broker does not, but the broker's commission is roughly double the advisor's success fee. We take the majority of our fee from the buy side, which lowers the seller's cost further. Compare what you keep at close, not what you pay at signing.
Can a business broker sell a company with $3M in earnings?
Some will take the engagement. The question is whether they can reach the buyers who pay the most at that size, and most cannot, because those buyers are institutional and are approached directly rather than through listings. A business earning $3 million a year is usually the biggest deal in a Main Street broker's pipeline.
Do I have to pay a retainer?
Not with us. We don’t charge any retainer or up front fee to sell your business. Many advisors do, which is why it is worth asking before you sign.
Will my employees find out I am selling?
Not from us. We do not list businesses on public platforms and we do not advertise online. Buyers sign a non-disclosure agreement and are vetted before they see anything about your company, and you meet them yourself.
