What Is a Business Broker? Role, Process, Fees, and How to Work With One

Overview: What a Business Broker Does

A business broker is a professional intermediary who helps owners sell businesses and assists buyers in finding and acquiring companies, guiding both sides through valuation, confidential marketing, buyer qualification, negotiation, due diligence, and closing [1] [2] . They act as a mediator to keep deals moving efficiently and fairly while managing complex steps that many first-time sellers and buyers underestimate [3] .

Core Responsibilities and Why They Matter

Professional brokers handle a sequence of high-stakes tasks designed to protect confidentiality, maintain momentum, and improve deal outcomes. These include pricing guidance, preparing a blind profile (teaser) and a Confidential Information Memorandum (CIM), conducting targeted buyer outreach, screening inquiries, coordinating buyer-seller calls, managing negotiations, structuring terms, and overseeing due diligence through closing [1] [2] [4] .

For sellers, this work streamlines the sale, protects sensitive data, and can support a competitive process that may improve value and terms. For buyers, brokers help identify suitable targets, clarify valuation drivers, and facilitate a transparent diligence process so the acquisition decision is informed and timely [3] .

When You Should Consider Using a Broker

Owners commonly engage brokers when they want to sell while maintaining confidentiality, lack in-house M&A expertise, or prefer a guided, managed process rather than ad hoc outreach. Buyers may work with a buy-side broker to source opportunities, obtain market context, and coordinate evaluations when they have specific criteria but limited time to canvass the market [3] [4] .

How the Sale Process Typically Works

1) Preparation and Valuation

The process starts with an in-depth review of financials, operations, and market position to inform an asking range and deal structure considerations. Brokers help determine price guidance and gather documents needed for a buyer-ready package, including creating a blind profile (for confidential outreach) and a detailed CIM that presents history, financials, operations, and growth opportunities [1] [2] [4] . For buyers, brokers may conduct or coordinate valuation to assess fair market value based on assets, earnings, and future potential [3] .

2) Confidential Marketing and Buyer Outreach

Using the blind profile to protect the seller’s identity, brokers conduct targeted outreach to qualified buyers and manage listing exposure while controlling confidentiality via NDAs before releasing the CIM. This step reduces disruption to employees, customers, and suppliers while widening the funnel of credible prospects [1] [2] [4] .

3) Screening, Meetings, and Indications of Interest

Brokers screen buyer inquiries for financial capability and fit, manage Q&A, and arrange buyer-seller calls or meetings. They help organize and review Indications of Interest (IOIs) or Letters of Intent (LOIs), aligning stakeholders around valuation, structure (e.g., cash, seller notes, earnouts), and timelines before entering exclusive diligence [4] [1] .

4) Due Diligence and Deal Structuring

Once a preferred buyer is selected, brokers help keep diligence on schedule, coordinate document exchange, and work with attorneys and accountants to address issues. They assist in negotiations and structuring to bridge valuation gaps and allocate risks in areas like working capital, representations and warranties, and transition support, progressing toward closing [2] [4] .

5) Closing and Transition

Brokers support the final document review, closing logistics, and transition planning to help ensure continuity for employees and customers. For buyers, this may include assistance coordinating training or handover periods to protect post-close value creation [2] [3] .

Fees, Timelines, and Engagement Models

Brokers are typically paid a success-based commission (success fee) as a percentage of the sale price, with scope and services varying by firm and deal size. For smaller main-street transactions, brokers commonly handle end-to-end processes, while larger lower-middle-market deals may involve M&A advisors or investment bankers as company values increase beyond the smallest tiers [1] . Sales can take months; many small-business transactions can require six to twelve months or longer depending on industry, financial preparedness, and buyer financing [1] . Full-service brokers may manage listing, vetting, due diligence, document reviews, and closing coordination as part of a comprehensive mandate [4] .

How to Engage and Work With a Business Broker

Step-by-Step for Sellers

1) Clarify goals and timeline. Identify your desired exit window, role post-sale (if any), and priorities such as confidentiality or speed. 2) Gather documentation. You can assemble at least three years of financial statements, tax returns, an inventory of assets, customer concentration details, key contracts, and a high-level operations overview to accelerate valuation and diligence. 3) Conduct fit interviews. You can interview multiple brokers, asking about recent closed deals in your industry, buyer networks, valuation approach, marketing plan, and fee structure. 4) Define pricing strategy. With your broker, consider an asking range informed by normalized earnings and market comps, with flexibility to adjust based on buyer feedback. 5) Prepare marketing materials. Expect a blind profile and CIM, and establish a confidentiality protocol and NDA process. 6) Manage outreach and screening. Allow your broker to qualify buyers, schedule calls, and maintain a consistent Q&A log. 7) Compare IOIs/LOIs. Evaluate not just headline price but structure, contingencies, timeline, and the buyer’s operating plan. 8) Plan diligence. Assign internal owners to data requests and agree on a weekly cadence to prevent delays. 9) Coordinate closing. Involve legal and tax professionals early to optimize terms and minimize surprises [1] [2] [4] .

Step-by-Step for Buyers

1) Define criteria. You can specify industry, geography, EBITDA range, required licenses, and your acquisition thesis. 2) Pre-qualify financing. Many buyers obtain lender prequalification or verify proof of funds to streamline screening. 3) Engage brokers. You can register interest with reputable firms and be prepared to sign NDAs for CIM access. 4) Diligence with a plan. Build a diligence checklist covering financials, legal, operations, customers, suppliers, HR, and technology. 5) Submit IOIs/LOIs. Propose valuation and structure consistent with risks and growth plans. 6) Prepare for transition. Draft a 90-180 day integration plan for continuity and early wins [3] [4] .

Real-World Example Scenarios

â€¢ Main-street retail sale: A local retailer with stable cash flow engages a broker to price the business and prepare a blind profile. Within weeks, screened buyers review a CIM under NDA. After two management calls and store visits, the seller selects an LOI with a modest seller note to bridge valuation, completes diligence on inventory accuracy and lease assignment, and closes in four months. The broker’s coordination reduces disruption to staff by keeping the listing confidential until late-stage diligence [1] [2] .

â€¢ Service company acquisition: A buyer targeting recurring-revenue services works with a broker who shortlists opportunities that meet EBITDA and geography criteria. The broker arranges calls, helps compare churn metrics, and structures an earnout tied to retention post-close. Diligence focuses on customer contracts, labor availability, and licensing. Closing proceeds with a detailed transition plan for training and introductions [3] [4] .

Alternatives and Complementary Advisors

For very small or specialized transactions, some owners may attempt a direct sale, but this can increase confidentiality risks and prolong timelines without an established buyer network. As deal sizes grow beyond the smallest tiers, sellers may consider M&A advisors or investment bankers who focus on larger transactions; brokers typically concentrate on smaller businesses while higher-value companies attract different types of intermediaries [1] . Legal counsel and CPAs remain essential alongside brokers to manage contracts, taxes, and financial analysis in any pathway [2] .

How to Find and Vet a Qualified Broker

You can start by researching reputable regional and national firms with a track record in your industry and revenue range. Consider requesting recent closed-deal summaries, typical buyer profiles, sample marketing materials (with sensitive data redacted), and an outline of their outreach strategy. Ask about fee structure, minimums, and what services are included in the mandate. You may also speak with references-prior clients in similar industries-to understand responsiveness, confidentiality discipline, and negotiation support. If you are uncertain where to begin online, you can search for terms like “business broker [your city] references,” “sell-side business broker [your industry],” or “buy-side broker small business acquisition,” and then interview multiple candidates before engaging [4] [2] .

Key Takeaways

â€¢ A business broker serves as an end-to-end intermediary, improving confidentiality, deal momentum, and overall execution quality. â€¢ Core responsibilities span valuation support, confidential marketing, buyer screening, negotiations, diligence, and closing coordination. â€¢ Fees are generally success-based and timelines often run several months, with variability by industry and deal readiness. â€¢ Whether you are buying or selling, a structured, broker-led process with legal and financial advisors can reduce risk and increase the chances of a smooth outcome [1] [3] [4] .