What does a business broker do?

A business broker facilitates the sale of small businesses — typically under A$5–10 million in revenue — by listing the business, marketing it to individual buyers through databases and online platforms, managing confidentiality, and coordinating the transaction through to settlement. They do not run competitive auctions or access institutional buyers.

What is the difference between a business broker and an M&A advisor?

The key differences are transaction size, buyer universe, and process type. Business brokers suit transactions under A$3–5 million where the buyer is an individual. M&A advisors suit transactions above A$5–10 million where optimal buyers are PE funds, strategic acquirers, or international companies. M&A advisors run structured competitive processes that typically achieve higher prices than listing-based approaches.

How much do business brokers charge?

Business brokers typically charge 5–12% of the final sale price, often with upfront listing fees of A$2,000–10,000 regardless of outcome. M&A advisors such as Lyndon Advisory charge a success fee only — no retainer, no upfront costs — 2% of enterprise value, capped at US$300,000.

When should I use a business broker vs an M&A advisor?

Use a business broker if your business has revenues under A$5 million and the likely buyer is an individual or small investor. Use an M&A advisor if your business earns above A$1–2 million EBITDA, has an enterprise value above A$5–10 million, or needs a competitive auction with PE funds, strategic buyers, or international acquirers to maximise price.

Do I need a business broker to sell my business in Australia?

No — business brokers are not legally required. However, professional advisory is advisable for any business sale above A$1 million. For smaller businesses, a licensed business broker may suffice. For businesses worth A$5 million or more, an M&A advisor typically delivers better outcomes through competitive buyer processes and institutional-quality deal management.

Business Broker - M&A Glossary

What Is a Business Broker?

A business broker intermediates the sale of small businesses — most commonly owner-operated businesses with revenues under A$5–10 million and purchase prices typically below A$3–5 million. Business brokers list businesses for sale, market them to databases of individual buyers and small investors, manage confidentiality, and coordinate the transaction through to settlement.

In Australia, business brokers are typically licensed real estate agents (state-specific licensing applies) or AIBB (Australian Institute of Business Brokers) members. In Singapore and Hong Kong, brokers operate under general business licensing frameworks. In the US, business brokers are often IBBA (International Business Brokers Association) members.

Business Broker vs M&A Advisor: Key Differences

Business owners preparing for sale frequently ask whether they need a business broker or an M&A advisor. The answer depends primarily on transaction size, buyer type, and process complexity.

	Business Broker	M&A Advisor
Typical transaction size	Under A$5–10M	A$5M and above
Buyer universe	Individual buyers, owner-operators, SME investors	PE funds, strategic buyers, corporates, listed companies
Process type	Listing-based (databases, online platforms)	Structured auction or targeted outreach
Geographic reach	Domestic (city or state level)	Regional and international
Fee structure	5–12% of sale price, sometimes upfront listing fees	1–3% success fee, no retainer
Information memorandum	Standardised profile (1–4 pages)	Full investment-grade IM (30–60 pages)
Valuation methodology	Revenue multiple or simplified EBITDA	Detailed normalised EBITDA, DCF, precedent transactions
Due diligence management	Minimal — buyer manages their own	Active management of parallel due diligence streams
Regulatory complexity	Low — standard settlement	High — competition approval, foreign investment, SPA
Negotiation support	Limited	Full negotiation representation
Timeline	3–9 months	10–16 months

When to Use a Business Broker

Business brokers are appropriate for:

Small owner-operated businesses — cafes, retail stores, trade services, small franchises — where the buyer is typically an individual looking for a job replacement or lifestyle business
Transactions below A$3–5 million where PE and strategic buyers are unlikely to engage
Asset-light businesses with no meaningful IP, long-term contracts, or regulatory complexity
Sellers who prioritise speed and low process cost over maximum price competition

In these situations, a business broker’s database of individual buyers and standardised listing process is efficient and appropriate.

When to Use an M&A Advisor

An M&A advisor is appropriate when:

The business has EBITDA above A$1–2 million and enterprise value above A$5–10 million
The optimal buyer is a PE fund, corporate acquirer, or international strategic — not an individual
The transaction involves complexity: foreign investment, regulatory approvals, earn-out structures, share sale vs asset sale, or listed company involvement
The seller wants a competitive auction process to maximise price — not a bilateral listing
The information memorandum needs to meet institutional investor standards
The seller needs active representation through due diligence, SPA negotiation, and closing

The incremental fee difference between a business broker and an M&A advisor is almost always recovered through a better price, better terms, and a higher probability of completing the transaction at agreed terms.

Fee Comparison

Business broker fees typically range from 5–12% of the final sale price, often with upfront listing fees (A$2,000–10,000) regardless of outcome. Some brokers charge success fees only; many charge a combination.

M&A advisor fees (such as Lyndon Advisory’s fee structure) are success-fee only — no retainer, no upfront fee, no expense recharges. The fee is 2% of enterprise value, capped at US$300,000.

For a A$10 million transaction:

Business broker at 8%: A$800,000
M&A advisor at 3%: A$300,000

Beyond the fee comparison, M&A advisors typically achieve higher final prices by running competitive processes with multiple institutional buyers — the incremental value created by competitive tension typically exceeds the incremental advisory fee several times over.

Red Flags When Hiring a Broker

Not every broker problem is visible in the headline commission. Business owners should review the process mechanics before signing.

Red flag	Why it matters	What to ask
Long exclusive listing period	You may be locked into a weak process even if the broker loses momentum	How long is exclusivity, and how can it be terminated?
Broad tail provision	You may owe a fee after termination for buyers who had only minimal contact	Does the tail cover only buyers with substantive engagement?
Public listing by default	Employees, customers, suppliers, or competitors may learn the company is for sale	Can the business be marketed through a blind teaser instead?
No buyer qualification process	Unfunded buyers can waste management time and request sensitive information	What proof of funds, financing logic, and NDA process applies?
Junior execution	The person who sold the mandate may not run buyer outreach or negotiation	Who personally handles outreach, diligence, and negotiation?
Vague valuation logic	Asking price may be set to win the listing rather than close a credible transaction	Which comparables, EBITDA adjustments, and buyer types support the range?

If a broker is not responding, it may mean the business is too small, too owner-dependent, or not prepared enough for a brokered sale. See Business Broker Not Responding? What to Do for the practical route decision.

For specific engagement-letter concerns, see Business Broker Fees Too High?, Should I Pay a Business Broker Retainer?, Business Broker Tail Clause, Business Broker Exclusive Listing Agreement, and Questions to Ask a Business Broker Before Signing.

For process-quality concerns, see Business Broker Bringing Unqualified Buyers, Should I List My Business for Sale Online?, and How to Know If a Business Broker Is Good.

For deeper alignment concerns, review Business Broker Overvalued My Business, Business Broker Does Not Understand My Industry, Business Broker Confidentiality Breach, Business Broker Pressuring You to Accept an Offer, and Business Broker Conflict of Interest.

Business Brokers vs Business Broker Platforms

Online business-for-sale platforms — including BusinessesForSale.com, BizBuySell (US), SEEK Business (Australia), and BusinessForSale.sg — are listing marketplaces rather than advisory services. They provide exposure to a large pool of individual buyers but offer no advisory, negotiation, or process management.

For businesses worth over A$5 million, listing on a public marketplace signals a lack of buyer exclusivity and often attracts lower-quality buyers rather than the strategic and institutional acquirers who generate the highest valuations.

Choosing the Right Advisor

The right choice of advisor depends on:

Transaction size — Below A$3–5M: business broker may suffice. Above A$5–10M: an M&A advisor creates materially better outcomes.
Buyer type — Individual buyer: business broker. PE, strategic, or international buyer: M&A advisor.
Complexity — Standard asset-light business: broker. IP, contracts, regulatory approvals, cross-border: M&A advisor.
Price maximisation objective — A competitive auction run by an experienced M&A advisor is the most reliable mechanism for maximising price.

Lyndon Advisory advises business owners across Asia Pacific on sell-side M&A transactions. Submit a confidential valuation inquiry to help us assess process fit, likely timeline, and expected outcomes for your business.

Related owner guides:

Related Terms

LOI (Letter of Intent)

A partially binding document submitted by a prospective buyer after due diligence, setting out the proposed purchase price, key transaction terms, and a request for exclusivity to negotiate a definitive agreement.