What Is a Business Broker?
By Ian Folau and Byron Folau · Business Broker Brothers
Last updated:
A business broker is a professional who helps business owners sell their companies. They run the sale process end to end: putting a defensible price on the business, preparing the marketing materials, finding and screening buyers, negotiating offers, and keeping the deal on track through to closing. Most work for the seller — the owner of the business — rather than the buyer, and a smaller number also represent buyers looking to acquire their first company. Brokers are paid on commission, typically 8–10% of the final sale price, owed by the seller and paid at closing.
You'll hear the same job called a business intermediary, an M&A advisor, or a business transfer agent. The title changes; the work described here doesn't. If you're wondering what the income actually looks like, our business broker salary breakdown covers it per deal and per year.
What does a business broker do?
Business brokers handle five core activities on every deal:
- Find sellers. Most business owners don't call a broker on their own — brokers prospect directly to owner-operators in specific industries and geographies, building relationships before an owner is ready to sell.
- Value the business. Brokers translate financial statements into a defensible asking price using metrics like Seller's Discretionary Earnings (SDE) or EBITDA, multiplied by an industry-specific multiple.
- Market the deal. Brokers prepare a Confidential Information Memorandum (CIM) to help buyers evaluate the business, send anonymous teasers to potential buyers, manage NDAs, and run a competitive buyer outreach process.
- Qualify buyers. Brokers screen buyers for financial capacity, relevant experience, and timeline — keeping only serious candidates moving forward.
- Manage the closing. From the Letter of Intent (LOI) through due diligence, financing, legal, and the final wire transfer — the broker is the project manager who keeps every party on schedule.
How do business brokers get paid?
Business brokers earn a success fee — a percentage of the final sale price, paid at closing. Commission rates typically range from 8–10% for businesses under $5M in sale price.
| Sale Price | Commission at 8% | Commission at 10% |
|---|---|---|
| $500,000 | $40,000 | $50,000 |
| $1,000,000 | $80,000 | $100,000 |
| $2,000,000 | $160,000 | $200,000 |
| $5,000,000 | $400,000 | $500,000 |
Most experienced business brokers close 4–8 deals per year. The commission is almost always paid by the seller, not the buyer. For the full per-deal and annual picture, see our business broker salary breakdown.
How do you become a business broker?
Licensing: Most states do not require a real estate license to broker a business sale. A handful — including California and Florida — have specific requirements when real estate is involved. Check your state's requirements before taking your first listing.
Skills you need: Seller prospecting, business valuation, deal marketing, buyer qualification, and closing. These are all learnable — no finance degree or prior M&A experience is required.
How long it takes: Most brokers who follow a structured system close their first deal within 9–12 months of starting. Deals take 6–9 months from signed listing to close, so the pipeline you build in month one pays you in month 9–12.
What it costs to start: No franchise fees. No license required in most states. The primary investment is time and training.
Where to start: we lay the whole path out step by step in our guide to becoming a business broker.
What industries do business brokers work in?
Business brokers work across all industries — services, manufacturing, healthcare, e-commerce, distribution, construction, technology, and food and beverage. Most brokers eventually develop expertise in 2–3 industries, but no specific industry background is required to start.
Business broker vs. M&A advisor: what's the difference?
In practice, the two titles describe the same job at different scales. A business broker usually works on owner-operated companies — the kind that sell for a few hundred thousand to a few million dollars — where the seller is often the person running the business day to day. An M&A advisor usually works on larger sales, where a management team is already in place and the buyer pool tends to include other companies and investors rather than a single owner-operator. The process is the same either way: value the business, market it confidentially, qualify buyers, negotiate, and close. Many brokers use the titles interchangeably, and most people start on the smaller end of the market.
Business Broker Circle: Learn the System
Business Broker Circle is a training community and AI-powered toolkit for aspiring and active business brokers — built by Byron and Ian Folau, the Broker Brothers, who co-founded Torchline Advisors and have closed nearly $100M in business sale transactions.
The platform includes an 11-module curriculum covering every stage of the deal process, 9 AI tools built for brokerage work (valuation calculators, CIM builder, LOI analyzer, and more), scripts and templates, and weekly live Q&A coaching with the Broker Brothers. Compare Business Broker Circle with other training options in our business broker training comparison guide.