Business broker fees in Australia: what you will pay, and what the quote tells you

Somewhere between 2.5% and 12% of the sale price, plus an upfront fee, with a minimum that often matters more than the percentage. That is the honest answer, and the width of it is the first useful thing to notice.

Ask five brokers and the numbers are unlikely to match. That is not evasion on their part. A broker quoting you is pricing two things they cannot control: how long your business will take to sell, and whether it will complete at all. Both are set by the state of the business, not by their rate card.

Which means the quote you get is information about your business. Read it that way and it becomes useful, rather than just expensive.

How much do business brokers charge in Australia?

Three parts, usually.

A success fee, paid on settlement, as a percentage of the sale price. Across the Australian market the published rates run from about 2.5% at the low end to 12% at the high end, generally higher on smaller businesses and tapering as deal size rises. Above roughly $5 million it commonly falls into the 2% to 5% band.

An upfront engagement or marketing fee, usually somewhere between $2,000 and $15,000 depending on the business and how the broker works.

And a minimum fee, which frequently sits between $20,000 and $30,000.

The percentage gets the attention. The minimum decides what you pay on a smaller sale. On a business selling for $180,000, a $25,000 minimum works out at close to 14%, whatever the headline rate said. If your business is at the smaller end, the minimum is the number to negotiate.

Is 3% a good brokerage fee?

It sits at the very bottom of the range, and on its own it tells you almost nothing.

A percentage only becomes a cost once you know what it is applied to and what overrides it. A 3% quote with a $30,000 minimum on a business selling for $600,000 is not a 3% deal. Neither is a 3% quote sitting behind a large non-refundable upfront, or a twelve month exclusive period you cannot get out of.

So the number to interrogate is rarely the percentage. It is the minimum, the term of the agreement, and whether any upfront is credited against the success fee or kept regardless.

What the fee is buying

Brokers scale the percentage down as deal size goes up, because the work does not rise in proportion to the value.

So the things that change a quote are the things that change effort and probability. How readable the financials are. Whether the contracts and leases exist in writing. Whether a buyer can see who runs what. Whether the owner will still be answering every question personally at week ten of due diligence.

A broker looking at a business where all of that is in order is looking at a shorter process with a higher chance of completing. A broker looking at the opposite is being asked to carry more risk for longer, and prices accordingly. Neither quote is unfair. They are describing two different jobs.

Should I use a business broker to sell my business?

Most owners selling once should, and the reason is capacity rather than expertise.

A sale runs for months alongside the business still needing to be run. Buyer enquiries have to be screened, most of them tyre-kickers. Due diligence generates a couple of hundred questions. If you are also the person the business cannot run without, every hour you spend on the sale comes directly out of the trading performance the buyer is examining.

That is the trap worth naming. The more the business depends on you, the more you are needed on the sale, and the less capacity you have to keep the numbers steady while it happens. our guide to how a sale works walks through that loop.

Is it worth using a business broker?

Work out what you are left with, not what the broker takes.

The fee comes off your price, so the test is whether a sale they run puts more in your pocket than a sale you ran yourself, after you have paid them. On a business that is ready to sell, a good broker usually clears that bar: they reach buyers you would not reach, they run a process while you keep trading, and the price tends to hold. On a business that is not ready, you are paying a top-of-range fee for someone to carry risk you could have removed first, and negotiating the rate does not fix that.

our guide to selling a business privately covers the alternative honestly, including what it costs you in time.

What to ask before you sign

Four questions, in this order.

• What is the minimum fee, and at what sale price does it stop being the number that applies.
• Is the upfront fee credited against the success fee or is it kept regardless.
• How long does the exclusive period run, and what happens at the end of it.
• And what specifically will you do in the first sixty days.

Then one for yourself. If the quote came back at the top of the range, ask why. A broker pricing your business as a long, uncertain process is telling you something about the business that is worth hearing before you sign, because it is the same thing a buyer will price.

That is the part still within your control. The fee schedule is largely fixed by the market. What you bring to the table is not.

Frequently asked questions