Published 2025-10-24 · Last updated 2026-01-06 · Reviewed by Valzura Editorial Team
Commission Calculator
See the commission on any sale and what a broker's fee leaves you with.
A commission is compensation paid as a percentage of a transaction's value, whether a salesperson's share of a deal or a business broker's fee on the sale of a company. A simple commission multiplies the sale amount by the rate. Business broker fees on larger deals often use the Lehman formula instead, a sliding scale of 5 percent on the first million dollars, 4 percent on the second, 3 percent on the third, 2 percent on the fourth, and 1 percent on everything above that.
The value of the transaction the commission is paid on.
The agreed percentage of the sale amount.
Commission
$80,000
An effective rate of 10.00% on the sale amount.
Net proceeds
$720,000
What remains after the commission.
What business brokers actually charge
On Main Street deals, businesses selling for roughly under 2 million dollars, brokers typically charge a success fee of 10 to 15 percent of the sale price, with 10 percent the most common quote. Most also set a minimum fee, usually 25,000 to 50,000 dollars, so a 150,000 dollar listing can carry an effective rate well above the headline percentage. The fee is earned at closing and paid from the seller's proceeds; reputable brokers charge little or nothing upfront. If you are weighing representation, you can get matched with a vetted business broker and compare fee structures before signing a listing agreement.
The Lehman formula and Double Lehman scale
Larger deals abandon flat percentages for a sliding scale. Under the classic Lehman formula, a 4 million dollar sale pays 50,000 plus 40,000 plus 30,000 plus 20,000 dollars, a 140,000 dollar fee and an effective rate of 3.5 percent. Because the original scale dates to an era of smaller deal values, most mid-market advisors today quote Double Lehman, which doubles every tier to 10, 8, 6, 4, and 2 percent: the same 4 million dollar sale pays 280,000 dollars, or 7 percent effective. The calculator above runs both scales plus a flat rate so you can compare proposals side by side.
A worked example on a Main Street sale
Suppose your business sells for 800,000 dollars with a broker charging a flat 10 percent. The commission is 80,000 dollars, leaving 720,000 dollars before taxes, legal fees, and any debt payoff. Notice how the structure matters at this size: under straight Lehman the same sale would owe only 50,000 dollars on the first million's 5 percent tier, which is exactly why brokers apply flat Main Street rates with minimums to smaller deals and reserve Lehman scales for larger ones.
Commission is only one line in your net proceeds
Sellers tend to fixate on the rate while ignoring the terms that move far more money: the sale price itself, how much of it is cash at closing, and how much sits in an earnout or a note you finance yourself, which you can model with the seller financing calculator. A skilled broker who runs a competitive process frequently adds more to the price than their entire fee. Our guide to selling a business covers the full sequence from preparation to closing.
Know your number before you negotiate the fee
Every commission conversation ultimately rests on the sale price, and a seller who walks in without an independent estimate is negotiating blind on both the price and the fee. Before you interview brokers, run a free business value estimate so you can judge whether a proposed listing price, and the commission attached to it, actually serves you.
Frequently Asked Questions
What is a typical business broker commission?
Business brokers on Main Street deals, meaning businesses selling for under a few million dollars, typically charge 10 to 15 percent of the sale price, with 10 percent the most common figure. Many also set a minimum fee, often 25,000 to 50,000 dollars, so very small deals can carry a higher effective rate.
What is the Lehman formula?
The Lehman formula is a sliding fee scale used on larger deals: 5 percent of the first million dollars, 4 percent of the second, 3 percent of the third, 2 percent of the fourth, and 1 percent of everything above four million. The Double Lehman variant, common among mid-market advisors today, doubles each tier to 10, 8, 6, 4, and 2 percent.
Who pays the business broker's commission?
The seller almost always pays the broker's commission out of the sale proceeds at closing, since the broker represents the seller and markets the business. Buyers generally pay nothing to the seller's broker, though buy-side advisors who charge the buyer do exist on larger transactions.
How do you calculate commission on a sale?
Multiply the sale amount by the commission rate expressed as a decimal. A 9,000 dollar sale at a 7 percent commission pays 630 dollars. For tiered structures like the Lehman formula, apply each tier's rate to its slice of the price and add the tiers together.
Are business broker fees negotiable?
Yes, within limits. Rates cluster around industry norms of 10 to 15 percent for small businesses, but the exact rate, the minimum fee, and the exclusivity period are all negotiable, especially on larger or easier-to-sell businesses. A broker's marketing plan and track record matter more than a single point of commission.
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