You’ve crunched the numbers, put some feelers out, and you’ve come to the conclusion that it’s time to sell your business. But unless you have in-depth experience with the worlds of business and corporate finance, it’s almost certainly a good idea to work with an advisor to help you through the process.

There are multiple types of M&A professionals who you can work with during the transaction, including M&A advisors and business brokers. Yet while these terms are sometimes confused, they certainly aren’t synonymous. So what’s the difference between M&A advisors and business brokers, and how does the distinction affect you?

What Are Business Brokers?

Business brokers are M&A professionals who typically work with smaller businesses, with transaction sizes less than a few million dollars. These companies are often service-based businesses owned by an individual or small corporation, such as restaurants, independent retail stores, salons and barber shops, and home maintenance and repair companies. As such, business brokers usually opt to work with clients who are local to their area.

Business brokers often list your company for sale on websites and online databases, which opens you up to a wide range of potential buyers. Depending on the deal, business brokers may perform a dual role, working for both the buyer and the seller. In exchange for their work, business brokers may charge a commission after the deal is successfully completed, as well as an initial deposit.

If you choose to work with a business broker, you should know that they typically specialize in the “business” side of the deal—that is, actually getting your company sold. This likely means that you’ll have to do more work on your own getting ready for the sale, such as checking the books and preparing other financial information.

What Are M&A Advisors?

M&A advisors are skilled M&A professionals who work with medium to larger businesses: companies with roughly more than $1 million in EBITDA, and more than a few million dollars for the transaction itself. As a result, the M&A deal is usually longer and more complex. These individuals bridge the gap between small businesses, which are sold by business brokers, and large corporations, which are often handled by investment bankers.

M&A advisors usually target certain types of buyers: larger companies in the same industry, as well as private equity firms. The fees charged by M&A advisors are sometimes different from a simple commission. For example, they may use the Lehman Formula to calculate their compensation. This scale charges you a decreasing percentage of the total sale for every $1 million dollars (e.g. 10 percent for the first $1 million, 8 percent for the second $1 million, etc.). 

In contrast with business brokers, M&A advisors do more strategic planning and financial modeling. They may also help you draft the sales agreement and terms, as well as perform due diligence between buyers and sellers. If you work with M&A advisors, you’ll likely be able to let them handle more of the work and preparation.


Both business brokers and M&A advisors are business professionals who actively help you sell your company. However, there are several important differences between M&A advisors and business brokers: the types of organizations they choose to work with, the ways in which they conduct the sale, and the obligations on you as a seller.

In most cases, the choice between business brokers and M&A advisors will come down to the size of your company, the services you provide, and the potential buyers you want to target. If your business doesn’t have a valuation of at least a few million dollars, going with a business broker is almost certainly the better choice—in fact, M&A advisors may not even take you on. It’s only once your business has reached this threshold that using an M&A advisor might make sense for you.

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