Do I need a business broker to buy a business?

Who does the broker in a listing work for?

The seller. The listing broker signs an engagement with the seller, is paid by the seller at closing and is obliged to get the seller the best price and terms. That is not a criticism. It is the job.

A good seller's broker still helps buyers in practical ways. They prepare the package, collect documents, keep the seller calm and push the deal to closing, because they are paid only if it closes. But they are not your adviser. Anything you tell them about your budget, your urgency or how much you love the business can reach the seller.

Three habits protect you:

• Ask, in writing, whom the broker represents. If the answer is "both sides," understand what that means where you live before you share anything sensitive.
• Do not tell the broker your maximum price. Tell them the price you are offering and why.
• Verify everything in the package yourself. Broker summaries usually repeat the seller's numbers, including the seller's add-backs.

What does a buy-side broker do, and what does it cost?

A buy-side broker, sometimes called a buyer's representative, works for you. They look for businesses that fit your criteria, including some that are not listed, approach owners, help screen and may help negotiate.

You pay. Buy-side brokers usually charge either a flat fee or a success fee of 2–5% of the price. Ask exactly what triggers the fee, whether it applies to deals you find yourself, and how long the agreement lasts after you end it.

They are most useful when:

• You have a full-time job and cannot run your own search.
• You want a specific kind of business in a specific region, where most candidates are off-market.
• You are buying from out of state and need someone on the ground.

They are least useful when your buy box is broad, when most targets are listed anyway, or when the fee would come out of cash you need for the down payment.

Who do you actually need on your side?

Whether or not you hire a broker, you need people whose duty runs to you:

1. A lender, early. For SBA deals, a lender who does change-of-ownership loans regularly. Talk to them before you make offers. They will tell you what they will finance under the current rules.
2. An acquisition lawyer. Not a generalist. They draft or review the LOI and purchase agreement and handle the lease assignment and closing documents.
3. An accountant for diligence. Someone who can tie bank statements to tax returns to the profit and loss. For SBA deals with a purchase price of $3 million or more, the lender commissions an independent quality of earnings report, but smaller deals still need the work done.
4. An insurance broker and, if relevant, a landlord contact. Coverage and the lease often decide whether a closing date holds.

In one deal-cost survey with a median deal size of about $4 million, legal fees had a median of $28,500 and total costs were about 2% of the price. That is where a buyer's professional spend usually goes. See who should be on your deal team.

If you already own a business

You are less likely to need a buy-side broker. Your best targets are in your own industry and region, and owners will often take your call directly. Where a buy-side broker can still help is in approaching a competitor discreetly, when you do not want your name attached to the first contact.

Worked example: what each kind of broker costs on one deal

Take an $800,000 Main Street purchase. Fee ranges are from the sources below; your agreement will differ.

1. Seller's broker at 10–12%: $80,000 to $96,000, paid by the seller from the proceeds at closing. Many brokers also set minimum fees of $10,000 to $15,000.
2. The seller's fee is not on your closing statement, but it shapes the price. A seller who nets 88–90% of the price after commission has less room to cut it.
3. Buy-side broker at 2–5%: $16,000 to $40,000, paid by you.
4. If you finance with an SBA loan, the minimum equity injection is 10% of total project costs, which include fees and closing costs. A larger fee raises project costs, and so raises the injection.
5. A $40,000 buy-side fee is cash you cannot use for the down payment or working capital. Decide whether the broker will save you more than that in time, price or deals you would not otherwise see.

Where these numbers come from: seller's broker commissions and minimums are from Investors Club. Buy-side broker fees are from BizBuySell. Legal and total deal costs are from the Big Deal Small Business deal cost survey. The equity injection and QoE rules are from SBA SOP 50 10 8.1, summarized by Cantrell Firm. SOP 50 10 8.1 applies to loans that receive an SBA loan number on or after October 1, 2026 (SBA Information Notice 5000-880695).

Related questions

Can I buy a business directly from an owner without any broker?

Yes. Off-market deals often have no broker on either side. You then do the broker's work yourself: collecting documents, managing timelines and helping the owner understand valuation and financing.

Will a seller's broker negotiate on price?

They will carry your offer and argue for their client. A well-supported offer, showing the cash flow, the coverage test and the appraisal risk, gives the broker something to take back to the seller.

Is a buy-side broker the same as an M&A adviser?

Not quite. Buy-side brokers mostly find and screen Main Street businesses. M&A advisers usually work on larger transactions and may run structured processes, valuations and negotiations. Ask any adviser exactly what they deliver and how they are paid.

Do brokers favor certain buyers?

Brokers favor buyers who close. Show financing readiness, respond quickly and keep your word. See how to get brokers to take you seriously.

What comes next

Since the broker's fee affects the price you negotiate, the next question is who pays the business broker when you buy a business.

Related articles

• Who pays the business broker when you buy a business?
• How do you get business brokers to take you seriously?
• Why won't the broker share financials before an LOI?
• Where do you find good businesses for sale?
• How do you build a holding company for acquisitions?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.