How Much Does a Business Broker Charge in Texas?

This is one of the first questions every business owner asks when they start thinking about selling. And it is a fair question. You have spent decades building this business. You want to know exactly what it costs to sell it.

Here is a straight, no nonsense breakdown of what business brokers charge in Texas, what you get for the money, and how to evaluate whether the investment makes sense for your deal.

Industry Standard Commission Rates

Business broker commissions in Texas vary based on the size of the deal. Here is the general landscape:

The percentage decreases as deal size increases because the dollar amount is still substantial. A 5% commission on a $10M deal is $500,000, which is more than enough to fund a comprehensive sale process.

The Lehman Scale

Some brokers and M&A advisors use a tiered structure called the Lehman Scale (or Modified Lehman Scale). It works like this:

• 5% on the first $1M of the sale price
• 4% on the next $1M
• 3% on the next $1M
• 2% on the next $1M
• 1% on everything above $4M

On a $5M deal, the Lehman Scale commission would be $150,000 (3% effective rate). The Modified Lehman (also called the Double Lehman) doubles each tier, which is more common for deals under $10M.

What Kingdom Broker Charges

At Kingdom Broker, we charge a 7-10% success fee on a sliding scale based on deal size. The larger the deal, the lower the percentage. We also offer a small upfront engagement fee that covers the cost of building your CIM (Confidential Information Memorandum), conducting the valuation, and initial buyer outreach. This fee is credited toward the success fee at closing.

Our philosophy is simple: we eat what we kill. The majority of our compensation comes from successfully closing your deal. If we do not sell your business, we do not get paid. That alignment of interest is important.

What You Get for the Fee

A good business broker does not just "find a buyer." Here is the full scope of what your commission covers:

Pre Market Preparation

• Comprehensive business valuation based on your financials and industry multiples
• Financial analysis including EBITDA normalization and add back identification
• Professional CIM creation (this alone would cost $10,000-$25,000 from an outside firm)
• Strategic pricing recommendation
• Deal structure advisory

Marketing and Buyer Sourcing

• Confidential marketing to qualified buyer database
• Targeted outreach to PE firms, family offices, and strategic acquirers
• NDA management and buyer screening
• Buyer qualification (financial capability, experience, intent)
• Facility tours and management presentations

Negotiation and Closing

• Offer analysis and comparison
• LOI negotiation
• Deal structure optimization (asset vs. stock, seller notes, earnouts)
• Due diligence management
• Coordination with attorneys, CPAs, and lenders
• Closing coordination

Confidentiality Protection

This is often overlooked but enormously valuable. Your broker manages the entire process behind the scenes. Your employees do not find out. Your customers do not hear rumors. Your competitors do not learn you are for sale. One leaked piece of information can destabilize your business and kill a deal.

Upfront Fees vs. Success Only

There are two models in the industry:

Success only (no upfront fees): The broker takes 100% of the risk. They invest their time and money into selling your business and only get paid if the deal closes. The tradeoff is that some success only brokers are less selective and may not invest deeply in preparation and marketing.

Retainer plus success fee: The broker charges an upfront engagement fee ($5,000-$25,000) that covers preparation costs, then a reduced success fee at closing. This model aligns incentives while ensuring the broker can invest real resources into your deal from day one.

Be cautious of any broker who charges a large upfront fee ($25,000+) without clear deliverables. And be equally cautious of a broker who charges nothing upfront and promises to sell your business for 15%. Quality advisory costs money, and the cheapest option is rarely the best option.

The Real Cost of NOT Using a Broker

Every owner considers selling on their own to save the commission. Here is what actually happens in most cases:

This is not theoretical. Study after study shows that businesses sold with professional representation sell for 15-25% more than those sold by owners. On a $3M deal, even a 10% higher price ($300,000) more than covers the commission and then some.

How to Choose the Right Broker

Not all brokers are equal. Here is what to evaluate:

• Deal size experience: A broker who sells $200K businesses is not the right broker for your $5M company. Make sure they have closed deals in your size range.
• Industry knowledge: Does the broker understand your industry? Can they speak intelligently about your business to buyers?
• Buyer access: How many qualified buyers can they reach? Do they have relationships with PE firms, family offices, and strategic acquirers?
• Track record: How many deals have they closed in the last 12 months? What is their average time to close?
• References: Can they connect you with past clients who will speak honestly about the experience?
• Communication style: You will work closely with this person for 6 to 12 months. Make sure the fit is right.

Get a free, no obligation valuation to see what your business might be worth before committing to any broker. Our valuation tool gives you a quick estimate in minutes.