Short answer: our fees are mostly success-based. We get paid when your deal closes, not when you sign an engagement letter. On some more complex businesses we charge a modest upfront fee to cover preparation work. If that applies to you, we'll tell you before you commit to anything.
Owners ask about cost early, and they should. You're about to hire someone to run the biggest transaction of your working life, and "how do you get paid" is really a question about whether our incentives match yours. Here is the full structure.
How the Success Fee Works
Sell-side success fees in the lower middle market are usually a percentage of total transaction value. Most firms use some version of a sliding scale: a higher percentage on the first few million dollars of value, stepping down as the deal gets bigger. A $12M transaction and a $90M transaction don't pay the same rate, and they shouldn't. The work grows with deal size, just not in a straight line.
Your scale depends on deal size, how complex the business is and how much preparation it needs before it goes to market. We go through the exact numbers with you, in plain terms, before you sign anything. You should know precisely what you're agreeing to.
When a Retainer Applies
Most of our engagements carry no retainer. Sometimes a business needs real preparation before it can hold up in a competitive process, and a modest upfront fee covers that work. When we do charge one, it's credited against the success fee. That's standard practice, and it means you don't pay twice for the same work.
Ask us to walk through any part of the fee you don't fully understand. We would much rather do that before you sign than after.
What the Fee Actually Covers
The fee covers the whole process, start to close.
First, financial preparation: normalizing earnings, documenting add-backs and getting your numbers in shape before any buyer sees them. Our guide on preparing financials for a business sale goes through what that involves.
Then the buyer list and outreach. We build a qualified list and run a competitive process, which is very different from a mass mailing. Our post on finding the right buyer explains how the list gets built.
We manage confidentiality the whole way through with blind teasers, signed NDAs and information released in stages. Here is how we control confidentiality.
We negotiate the LOI, the purchase agreement, working capital targets and any earnout terms, and we push on those as hard as we push on price.
And we stay on every buyer conversation and every stage of diligence until the right deal closes, which isn't always the first one that shows up. Our post on the seven phases of a business sale covers the full timeline the fee spans.
Why Success-Based Pricing Works in Your Favor
An advisor paid by the hour, or paid just for signing you up, has no financial reason to test an unsolicited offer against the market, hold out for a better one, push back on a bad LOI clause or walk away from a buyer who isn't serious. When our fee depends on your deal closing on terms you're comfortable with, we have every reason to do all of those things. It's a small detail in the engagement letter, and it shapes how the whole process gets run.
How This Differs From a Business Broker's Commission
Business brokers usually charge a flat commission, often 10-12%, whatever the deal's complexity. Their process tends to mean listing the business widely instead of running a targeted, confidential search. That works fine for smaller main-street businesses. It works less well as a business gets larger and more complicated, which is a big reason both the fee and the process look different in the $10-$100MM range. Our post on M&A advisor vs. business broker has the full comparison, cost included.
If we don't think your business is ready to sell yet, we'll tell you that before any fee changes hands.