A business broker lists your company and matches it with individual buyers, the right model below roughly $1m of EBITDA. An M&A advisor runs a competitive, multi-buyer sale process with a qualified buyer pool, managed diligence and negotiated deal structure, the right model from roughly $1m of EBITDA upwards. The difference is not the job title, it is the process. A broker sells a listing to whoever responds. An advisor manufactures competition between strategics, private equity and family offices, and that competition is what moves both the price and the terms you actually keep.
What does a business broker actually do?
A broker's model is volume. They carry many listings at once, publish them on business-for-sale marketplaces, field enquiries and introduce you to whoever turns up with financing. Pricing is anchored to seller's discretionary earnings (SDE), operating profit plus the owner's salary and personal add-backs, because the typical buyer is an individual buying themselves a job. In the lower mid-market, businesses with under roughly $500k of earnings get priced on SDE at around 1.8x to 4.2x.
That toolset fits that market: a teaser, an asking price, a match, a handover. What a broker does not do is create competition. If two buyers appear, you have leverage. If one appears, the usual case, you are negotiating against silence, and your asking price becomes a ceiling rather than a floor.
What does an M&A advisor do differently?
Sell-side M&A is a manufactured auction, and every stage exists to protect price and probability of close. Preparation comes first: restating the accounts to a defensible adjusted EBITDA, building the data room, and positioning the business for the buyers who will pay most. Then targeted outreach, not a public listing, but direct approaches to a researched pool of strategics, private equity firms and family offices, run in parallel so that indicative offers land at the same time. Then negotiation, where the advisor's job is structure as much as headline price: cash at completion, earnout terms, rollover equity, working capital pegs. Finally, managed diligence, the stage where unadvised deals most often die or get quietly re-priced.
This is how we run sell-side mandates at Leprince Group: an operator-led process run against a private network of 5,000+ verified buyers, with 93% of the mandates we take reaching close value. Run properly, expect six to nine months from mandate to completion.
Which should you use at your size?
Use earnings, not revenue, as the yardstick. Typical lower-mid-market bands:
- Under ~$500k of earnings. Broker territory. Buyers are individuals pricing on SDE at roughly 1.8x–4.2x, usually with bank debt, and a listing marketplace is genuinely the most efficient route to them.
- $500k–$1m EBITDA. The grey zone. Search funds and small platforms will look, but many advisers' minimum fees bite hard here. An advisor with genuine small-deal experience, or a high-end broker who runs limited competition between several buyers, can both work.
- $1m–$5m EBITDA. Advisor territory. The realistic buyers are private equity add-ons, strategics and family offices, and process quality moves you within the band: services and consumer brands typically trade at 3.5x–9x EBITDA, agencies at 3.5x–7.5x, distribution at 3.5x–7x.
- $5m+ EBITDA, or software at almost any scale. Always an advisor. Software and apps typically trade at 6x–15x EBITDA or 2x–4.5x revenue, and at these values a single turn of multiple is worth more than the entire fee bill.
The underlying test is simple: who is your likely buyer? If the realistic purchaser is one individual replacing you as operator, a broker's match model fits. If the realistic purchasers are companies and funds that buy businesses for a living, you need someone who negotiates against them for a living, and who can run four of them against each other on the same timetable.
How do the fees compare?
Brokers charge a success commission, typically 8%–12% of the sale price, paid at completion, usually with no retainer. That looks cheap because it is contingent, but it also means the broker's time flows to whichever of their listings is closest to a cheque, and a stale listing gets stale attention.
M&A advisors charge a monthly retainer or fixed work fee, roughly $5k–$15k per month in the lower mid-market, normally credited against the success fee, plus a success fee of 2%–6% of transaction value on a sliding scale, with a minimum fee. The retainer filters in both directions: it commits senior time to your deal, and it commits you to a real process rather than a speculative listing.
Compare on net proceeds, not fee percentage. A 4% fee on a competitive process that closes at 6.5x beats a 10% commission on a single-buyer deal at 4x by a wide margin, before you count the structure differences buried in the earnout and the working capital adjustment.
What should you ask before signing a mandate?
Whether broker or advisor, put these questions in writing before you sign anything exclusive:
- How many deals of my size and sector have you closed in the last 24 months? Closed, not listed. Ask for the count.
- What is your close rate on mandates taken? Anything below half suggests the firm signs mandates to build inventory, not to close them.
- Who runs my deal day to day? The person pitching you is often not the person calling buyers in month four.
- How many buyers will you approach, and how are they qualified? A named, researched pool of 50–200 beats "our database" every time.
- What is the full fee stack? Retainer, success percentage, minimum fee, and the tail period, how long after termination they still earn a fee on buyers they introduced. Twelve to 24 months is common; narrow it to named parties.
- How long is exclusivity, and how do I exit? Twelve months is standard; push for six to nine with a termination right if agreed milestones slip.
- How will you defend my adjusted EBITDA in diligence? If the answer is vague, your price will be too.
Good answers here predict a good process. So does your own homework: preparing the business before you appoint anyone is the highest-return work in the entire sale.
What to do next
Start with the number the whole decision hangs on. Our free 10-question valuation tool gives you an indicative range in minutes and tells you which side of the broker–advisor line you sit on. If you are at or above $1m of EBITDA, talk to us before you sign anything exclusive.
What is your business actually worth?
Run your numbers through our free valuation tool. Ten questions, an indicative range built on real transaction multiples, and the exact build-up behind it.
Get your free valuation ↗Frequently asked questions
What is the difference between an M&A advisor and a business broker?
A business broker lists a company and matches it with individual buyers, typically pricing on seller's discretionary earnings for businesses under roughly $1m of EBITDA. An M&A advisor runs a competitive process, approaching dozens of qualified strategic and financial buyers in parallel, managing diligence, and negotiating structure such as earnouts and rollover equity. The broker sells a listing; the advisor manufactures competition.
At what size should I use an M&A advisor instead of a business broker?
From roughly $1m of EBITDA, use an M&A advisor. At that size the realistic buyers are private equity firms, strategics and family offices, and a competitive process materially changes price and terms. Below roughly $500k of earnings, buyers are individuals pricing on SDE at around 1.8x to 4.2x, and a broker's listing model fits. In between, judge by who your likely buyer is.
How much does a business broker charge to sell a business?
Typically 8% to 12% of the sale price, paid at completion, with little or no upfront fee. Some brokers use a flat 10% or a minimum fee of $10k to $25k on small deals. The low upfront commitment cuts both ways: it costs nothing to list, but the broker's attention follows whichever of their listings is closest to closing.
How much does an M&A advisor cost?
In the lower mid-market, expect a monthly retainer or work fee of roughly $5k to $15k, usually credited against a success fee of 2% to 6% of transaction value on a sliding scale, the percentage falls as deal size rises, plus a minimum fee. On an $8m deal, total fees of 3% to 5% are typical. Judge cost against net proceeds, not the headline percentage.
Do M&A advisors get a higher sale price than brokers?
For businesses above roughly $1m of EBITDA, a properly run competitive process typically does, because parallel bids force buyers to compete on price, structure and speed rather than negotiate against silence. In our deals, the gap between first offer and closing offer in a competitive process is often measured in full turns of EBITDA, worth far more than any difference in fees.
Is selling through a broker faster than an advisor-run process?
Sometimes on paper, rarely on outcome. A broker listing can find a buyer quickly if the price is set low, but single-buyer negotiations stall in diligence with no competitive pressure. An advisor-run process takes 6-9 months and holds several buyers to one timeline, which is what protects both the schedule and the price.