Should Business Brokers Consider Retainers Over Commission?

by Vanessa Lovie-Yousaf 7th of October, 2025

Should Business Brokers Consider Retainers Over Commission?

For decades, business broking has largely followed a real estate-style commission model: list the business, pay an upfront marketing fee, and earn a percentage of the sale once the deal goes through. It’s a structure that feels familiar and one that’s served the industry well.

But as business sales become more complex and advisory-driven, many are asking the question: is it time for business brokers to adopt a retainer model more aligned with other professional services like accountants, lawyers, and consultants?

The Commission Model Works, But Has Limits

In most business sales, a broker charges a marketing (or administration) fee of around $3,000–$5,000 upfront to cover listing preparation, appraisal, advertising, potential buyer identification, outreach, preparing an IM and other admin costs. The main incentive comes at the end of the sale with a commission of typically 5–10% once the business is sold.

While this success-based structure aligns the broker’s interests with the seller’s, it also has drawbacks. Deals can take months (sometimes years) to close, with hundreds of hours invested in valuations, negotiations, and buyer management all before the broker earns a cent. If the business doesn’t sell, neither does the broker.

It’s a high-stakes, all-or-nothing model that undervalues the strategic advisory work happening behind the scenes. As the broker’s role becomes increasingly consultative involving valuation, deal structuring, and vendor coaching it raises the question of whether pure commission still reflects the true value of the service provided.

On the flip side, is the issue of business brokers charging the marketing (or admin fee) and doing very little to actually try and sell the business. There have been numerous stories of business brokers who take on a business, list it on all the major business for sale websites, then sit back, doing very little to actually sell the business. They have made $5,000 and just need 4 businesses a month, for a $20,000 a month income. Unfortunately, these situations still exist.

How Other Professionals Charge

Accountants, lawyers, and consultants operate very differently. They charge for their time, expertise, and advice, not just outcomes.

Accountants get paid whether or not their client increases profit. Lawyers bill for reviewing contracts, not for “winning the deal.” Corporate advisors often use a hybrid model, a monthly retainer during preparation and negotiation, followed by a success fee once the deal closes.

This hybrid approach may offer a blueprint for brokers ensuring they’re compensated for their professional time, while still aligning incentives to achieve a successful sale.

Maybe it’s time business brokers were paid like advisors, not agents.

Why Business Broking Is Different to Real Estate

Even though they tend to be licensed together, selling a business is not the same as selling a property. A house has bricks, walls, and a fairly predictable valuation range. A business, on the other hand, is a living organism, a mix of people, processes, and profit. It takes deeper analysis, financial interpretation, and trust to sell successfully.

Real estate agents may handle dozens of listings at once. A business broker, by contrast, might manage just a handful, each one requiring detailed preparation, buyer screening, and deal management. The work looks more like professional advisory than sales and yet, the pricing model hasn’t caught up.

The Case for a Retainer Model

Introducing a retainer model such as a fixed monthly fee across the preparation and marketing stages could offer a fairer and more sustainable approach.

For brokers, it provides consistent cash flow and recognises the advisory work that happens long before a buyer signs a contract. For sellers, it creates a more transparent, partnership-style arrangement they’re engaging an advisor over time, not just paying a one-off marketing fee and waiting for results.

A hybrid model could look something like this:

Stage 1: Preparation Retainer – A monthly fee (e.g. $1,500–$2,000) covering valuation, preparation, and strategy.
Stage 2: Marketing and Buyer Management – Ongoing engagement, supported by marketing spend.
Stage 3: Success Fee – A reduced commission (4–6%) upon sale, keeping incentives aligned with the final outcome.

This system values expertise and commitment equally giving brokers fair compensation and clients more clarity on what they’re paying for.

Could Retainers Become the New Normal?

There is a lot of discussion amongst business brokers about this. They work hard for their sales, and not all sales lead to settlement. As business sales continue to professionalise, it’s not unrealistic to imagine the retainer model becoming part of the norm especially among brokers specialising in larger or more complex transactions.

Buyers and sellers are already accustomed to paying for professional advice in accounting, law, and valuation. Expecting the same level of professionalism from business brokers means recognising that their time, skill, and insight deserve structured compensation too.

Will we see this model integrated more widely in the coming years? Possibly. As the profession continues to evolve, so too will its pricing structures. The next generation of business brokers may very well charge like the professionals they are part consultant, part negotiator, part dealmaker.

And when that happens, the industry won’t just be selling businesses it’ll be selling expertise.

Tags: business broker tips selling