Broker fees

searcher profile

February 09, 2024

by a searcher in Chicago, IL, USA

What are the market normal fees for a broker to sell a small business? We have a Plumbing company and we are at around 900k EBITDA and I'm interested to learn the following:

1. What percentage do brokers normally charge on a deal this size?
2. Are there generally any upfront or monthly costs?

I welcome people to write about their experiences. Thank you

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commentor profile
Reply by an intermediary
from The University of Michigan in Bonita Springs, FL, USA
Same as John Burgess -- Double Lehman, no monthly fee. At the seller's option, on occasion we may recommend at third-party certified market appraisal, or some video work (note I stated "market" as far too many certified business appraisers have no clue what the market will actually bear for a small, privately held business). Anything the seller decides to pay for up front will be deducted from commission at closing.
commentor profile
Reply by a searcher
from Johns Hopkins University in Los Angeles, CA, USA
Most business brokers charge up to 10%, investment banks which specialize in larger transactions charge in the 5% range. Business Brokers take on dozens of clients and send out their listings to a wide range of buyers. Investment Bankers are more focused on their engagements. Happy to chat further if you like.
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