— Pillar · Brokers & advisors

Business brokers and M&A advisors.

When to use a broker, when to use an M&A advisor, and how to choose one that's actually right for your business.

Reading time: 12 minutes Last reviewed: June 2026
Direct answer

A business broker typically lists businesses publicly on marketplaces and earns 10-12% commission. Best for owners of sub-$1M Main Street businesses. An M&A advisor runs confidential, structured processes for businesses in the $1M to $25M+ range, earning a retainer plus 6-10% success fee. The right choice depends primarily on deal size, complexity, and confidentiality needs.

The difference, in practice

The labels overlap, but the actual processes are quite different. Brokers tend to operate transaction volume — many small listings at once, marketed publicly, sold to inbound buyers. Advisors tend to operate transaction depth — fewer engagements, run confidentially, with outreach to qualified buyers and structured negotiation.

When a broker is the right fit

  • Business value under $1M
  • Owner is comfortable with public listing
  • Simple deal structure (asset sale, cash at closing)
  • Few specialized buyers — the market is broad and price-driven
  • Owner wants a high-volume marketing approach

When an M&A advisor is the right fit

  • Business value between $1M and $25M+
  • Confidentiality is essential (employees, customers, competitors)
  • Deal will involve structured terms (earnout, seller note, working capital adjustment)
  • Buyer pool is narrow and needs to be sourced directly
  • Owner expects to negotiate, not just list

How to evaluate either

Things to ask before signing an engagement letter:

  1. How many businesses in my exact size and industry have you closed in the last 24 months?
  2. What is your typical timeline from kickoff to closing?
  3. What percentage of your engagements close?
  4. What is the average final price as a percentage of initial asking price?
  5. Will I work with you directly or with a more junior team member?
  6. How is your fee structured? Retainer? Success fee? Sliding scale?
  7. What is your confidentiality protocol during marketing?

Fees, in detail

TypeEngagement FeeSuccess FeeTotal on $2.5M Deal
Business brokerNone or $1-3K10-12%~$275K
M&A advisor (lower-mid)$5-15K retainer6-10% sliding scale~$165K
Investment bank$25-100K retainer3-7% sliding scaleNot typical at this size

Frequently asked

Do I need a licensed business broker?
Depends on the state. Some states (California, Illinois, Florida among others) require business brokers to hold a real estate license or business broker license to facilitate the sale of a business. Other states do not. M&A advisors operating under FINRA Series 79 or similar are regulated separately.
Can I sell without representation?
Possible but rarely advisable in the $1M+ range. You still need an attorney for the definitive agreement and a CPA for tax planning. The combined cost of a la carte representation often approaches advisor fees with substantially less coordination.
Are broker commissions negotiable?
Yes, particularly on larger or more straightforward listings. Standard rate cards exist but are starting points, not floors.

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