What Is a Business Broker?
Written and taught by Byron Folau and Ian Folau — Co-Founders, Baton Strategies · About the Broker Brothers →
A business broker is an intermediary who helps business owners sell their companies. They manage the entire sale process — from valuing the business and preparing marketing materials, to finding and qualifying buyers, negotiating offers, and coordinating the closing. Business brokers typically earn a commission of 8–10% of the final sale price, paid by the seller at closing.
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), 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.
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.
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 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 Baton Strategies 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.