How much does it cost to hire a business broker in Canada?
Business brokers are paid mainly by a commission on the sale price. The International Business Brokers Association (IBBA), a US-based association, says business broker commissions on Main Street sales can range from 8% to 15% of the final sale price and may be subject to an agreed minimum (IBBA, Your Guide to the Business Brokerage Profession, 2021). Most brokers work on a success-fee basis — you pay the commission when the business sells, not before.
Success Fee Commission Structure
Success-fee-only arrangements are the predominant pricing model for business brokers handling transactions under $5 million. The broker earns their fee only when the sale closes.
Many brokers set a minimum fee to ensure compensation on smaller transactions. For example, with a $10,000 minimum, a $100,000 sale at 10% would generate $10,000 in commission, while a $50,000 sale would trigger the minimum rather than a $5,000 commission.
Business broker commissions are subject to GST/HST as a taxable professional service. The broker remits GST/HST on top of their commission, which the seller pays.
For larger transactions, M&A advisors charge lower success-fee percentages that decline with deal size. The most common success fees in the same survey were 4.8% on a $5 million deal, 3.4% on a $20 million deal and 2.0% on a $100 million deal, with North American fees somewhat higher than these global figures (Firmex, Global M&A Fee Guide 2024-25). The classic Lehman Formula charges 5% of the first $1 million, 4% of the second million, and so on down to 1%; "Double Lehman" starts at 10% and falls to 2% (Firmex, Global M&A Fee Guide 2024-25). Fees may be negotiable, particularly on larger transactions where a lower percentage still yields substantial dollar compensation.
Upfront Retainer Fees
Some brokers charge an upfront fee, for example for a Broker Opinion of Value, which is then applied against the closing commission (IBBA, Your Guide to the Business Brokerage Profession, 2021). An upfront fee offsets the broker's initial costs for valuation, marketing materials, and buyer outreach.
M&A advisors handling larger transactions usually charge a work fee during the engagement. In a 2024–25 survey of 456 middle-market advisors (about half in North America), the most common monthly work fee was $5,000 to $10,000, and the most common fixed engagement fee was also $5,000 to $10,000 (Firmex, Global M&A Fee Guide 2024-25). These fees are separate from the success fee and may or may not be credited against it at close.
Additional Costs and Expenses
Sellers typically pay for business valuation reports, legal fees, accounting fees, and marketing expenses as additional costs beyond broker commissions.
No survey of Canadian CBV fees is published; the cost depends on the level of report (Calculation, Estimate or Comprehensive, with Calculation the least extensive under CBV Institute practice standards), the business's complexity and the valuation's purpose, so ask CBVs for written quotes (see what a CBV valuation costs). Engagements involving litigation or disputes cost more. The valuation establishes an asking price and provides documentation for buyers.
Legal and accounting fees during the sale process cover purchase agreement review, tax structuring, and financial statement preparation. These costs are separate from the broker's fee.
Fee Variations by Deal Size
Commission rates tend to be higher for smaller transactions and lower for larger deals due to the fixed work required regardless of transaction size. For example, a broker selling a $500,000 business performs similar work to one selling a $5 million business — preparing marketing materials, qualifying buyers, managing negotiations — but the smaller deal generates less commission at the same percentage rate.
This explains why minimum fees exist and why percentage rates decline on larger transactions.
What Affects Total Cost
Broker listing agreements typically include tail provisions of 6–12 months protecting the broker's commission if the seller transacts with a buyer introduced during the listing period. If you terminate the listing and then sell to a buyer the broker introduced, you still owe the commission.
The total cost to sell your business includes the broker's success fee, GST/HST on that fee, valuation costs, legal fees, accounting fees, and any upfront fee. For example, on a $1 million sale at a 10% commission, the commission is $100,000, plus HST on it (13% in Ontario, $13,000), plus your valuation, legal and accounting costs.
This article is for informational purposes only and does not constitute financial, legal, or business advice. Every business sale is different. Before making decisions about valuation, pricing, or engaging an advisor, consult a qualified professional familiar with your specific situation.
Ready to connect with a business broker? Browse business brokers and M&A advisors who can help you sell your business. Find advisors →