Business broker fees in Chicago: what owners actually pay.
In Chicago, and across Illinois, business brokers typically charge a success fee of 8 to 12 percent of the sale price, paid at closing, and 10 percent is the number you'll hear most. Above about $2 million, sliding scales net 4 to 8 percent. Lakeshore charges 10 percent, agreed in writing before we go to market, with no retainer. Every other fee a listing can carry is below.
Know the number the fee applies to.
Two points of commission on a $1.5 million sale is $30,000. Unprepared books at diligence routinely cost a multiple of that. Start with a CPA-prepared value range and the gaps a buyer's accountant would find first, within two business days. Free, nothing to sign.
How the range is built, with the multiples by size, is on how much is my business worth.
Every fee a listing can carry, side by side.
Market figures are directional, not quotes from any firm. The Lakeshore column is what goes in our agreement. The long version, with the five questions to ask before you sign, is in broker listing agreement fees: what's normal and what isn't.
| Fee | What it is | Chicago market, typically | Lakeshore |
|---|---|---|---|
| Success fee, under about $2M | The commission, paid at closing. Usually applies to total consideration, including seller notes and earn-outs. | 8 to 12 percent. Ten is the number you'll hear most. | 10 percent, in the listing agreement before we go to market. |
| Sliding scale, above about $2M | Double Lehman: 10 percent of the first million, 8 of the second, 6, 4, then 2. | An effective 4 to 8 percent. A $3M sale pays $240,000; a $5M sale pays $300,000. | 10 percent at any size. On a large deal that is more than a sliding scale; better you see it here than at the LOI. |
| Minimum fee | A floor on the commission regardless of price. | $10,000 to $25,000 is common. A $25,000 minimum on a $180,000 sale is 14 percent. | On the businesses we serve, $1M to $15M in revenue, a minimum rarely comes into play. Ask, and it's answered in writing. |
| Upfront fees and retainers | A valuation or "packaging" fee before listing, or a monthly fee while the business is on the market. | $2,000 to $25,000 upfront at some firms, often non-refundable. Monthly retainers are common at M&A advisors on larger deals. | None. Preparation is separate and flat: the $4,500 Exit-Readiness Review, credited against the success fee if we later sell. |
| Tail clause | Commission still owed after the agreement ends, on any buyer the broker introduced. | 12 to 24 months. Fair with a written buyer list, unfair without one. | You approve the buyer list before we approach anyone, so the record of who we introduced is yours. |
Three clauses that cost owners money.
None of these is a scandal. The problem is finding out what they meant a year after you signed.
- Non-refundable upfront charges. Ask what happens to every dollar paid before closing if there is no closing. "Non-refundable" should be said out loud before you sign, not discovered after.
- A tail with no buyer list. Unfair when the broker decides later who counts as introduced. Get the list in writing and carve out, by name, anyone you already know.
- Commission on an offer you never accept. Some agreements convert the full fee into a debt if you withdraw after an offer arrives at the listed price, even one you'd never take. Read that clause twice.
What does the fee come to at each sale price?
On a $1 million sale in Chicago or anywhere in Illinois, a business broker's fee runs $80,000 to $120,000 at closing, $100,000 at the 10 percent most firms quote. Below about $2 million the percentage is flat; above it, Double Lehman steps the rate down. The table applies each structure to the same sale prices so you can compare the dollars, not the percentages.
| Sale price | 8 percent | 10 percent | 12 percent | Double Lehman |
|---|---|---|---|---|
| $250,000 | $20,000 | $25,000 | $30,000 | $25,000 |
| $500,000 | $40,000 | $50,000 | $60,000 | $50,000 |
| $1,000,000 | $80,000 | $100,000 | $120,000 | $100,000 |
| $2,000,000 | $160,000 | $200,000 | $240,000 | $180,000 |
| $3,000,000 | $240,000 | $300,000 | $360,000 | $240,000 |
| $5,000,000 | $400,000 | $500,000 | $600,000 | $300,000 |
Double Lehman: 10 percent of the first million, 8 of the second, 6 of the third, 4 of the fourth, 2 above that. The 10 percent column is what Lakeshore charges at any size. Three things change the arithmetic: a minimum fee (a $25,000 minimum on a $250,000 sale is the same 10 percent, on a $150,000 sale it is 17), whether the percentage applies to total consideration including seller notes and earn-outs (it usually does), and any upfront or monthly charges paid whether or not the business sells. Sliding scales and retainers are the M&A advisor's structure; which of the two fits a company of your size, with the same table worked through both ways, is in business broker vs. M&A advisor.
One Illinois point before you sign. Illinois regulates business brokers under the Business Brokers Act of 1995, administered by the Secretary of State's Securities Department. Ask any broker you interview how the Act applies to them, and get the answer in writing next to the fee. The price you keep after the fee also depends on the Illinois bulk-sales notices at closing, which are covered on selling a business in Chicago.
What is a fair success fee for a business broker?
A fair success fee for a business broker is 10 percent of the sale price, paid only at closing, on a business selling for under about $2 million, with no retainer, no fee if it doesn't sell, and a written buyer list behind the tail clause. Above $2 million, a sliding scale netting 4 to 8 percent is fair; a flat 10 percent costs more.
Fair is about the terms, not the percentage.
Two agreements can both say 10 percent and leave you with very different numbers. Run each one through these three questions before you compare the headline rate.
When is it paid? A fair fee is paid at closing, out of the proceeds, and nowhere else. Any dollar due before closing (a valuation fee, a packaging fee, a monthly retainer) is paid whether or not the business sells, so add it to the fee when you compare offers. On a nine-month listing a $2,500 monthly retainer is $22,500 on top of the commission.
What is it charged on? Most agreements apply the percentage to total consideration, which includes a seller note and an earnout, not just the cash at closing. That is normal. What should be in writing is when the fee on the deferred part is paid: at closing on money you haven't received, or as the note is collected. How a seller note or earnout is priced and taxed changes what that fee really costs you.
What does it buy? The fee pays for the price evidence, the blind profile, NDAs before any financials go out, vetted buyers, and someone managing diligence and closing so you can keep running the business. If a broker's agreement does not list those, the percentage is beside the point. What our 10 percent covers, step by step, is on how we sell a business.
The same two sales, five fee structures.
What you keep is the sale price less the broker's fee, before your attorney, debt payoff and taxes. Figures are directional, not quotes from any firm; the retainer row assumes nine months on the market.
| Fee structure | $1,000,000 sale: fee | You keep | $3,000,000 sale: fee | You keep |
|---|---|---|---|---|
| 10 percent at closing, no retainer (Lakeshore) | $100,000 | $900,000 | $300,000 | $2,700,000 |
| 12 percent at closing | $120,000 | $880,000 | $360,000 | $2,640,000 |
| 8 percent plus a $15,000 non-refundable upfront fee | $95,000 | $905,000 | $255,000 | $2,745,000 |
| 10 percent plus $2,500 a month for nine months | $122,500 | $877,500 | $322,500 | $2,677,500 |
| Double Lehman sliding scale | $100,000 | $900,000 | $240,000 | $2,760,000 |
Read the table honestly. At $1 million, the 8-percent-plus-upfront broker nets you $5,000 more than we do, if the business sells; if it doesn't, you are out $15,000 and we have cost you nothing. At $3 million, Double Lehman beats our flat 10 percent by $60,000, which is why we say so on this page rather than at the LOI, and why an owner at that size should read business broker vs. M&A advisor before choosing either. The fee that matters most is the one you never see in the agreement: a price set $150,000 too low because the books weren't ready. Start with the value range, then negotiate the fee.
Our fees, in the order you'd meet them.
Most owners use two of these, not all five. None is billed by the hour.
-
Confidential Value Range and Owner Consult: free
A CPA-prepared range within two business days, then thirty minutes by phone with a CPA on your timeline, your numbers, and which option we'd recommend, including waiting.
-
Exit-Readiness Review: $4,500 flat, two weeks
A scorecard across the five areas buyers examine, a defended value range, and a 90-day fix list. Credited against the success fee if we later list.
-
Sale-Ready Program: from $2,500 a month
For owners a year or more out. We implement the fix list with your team over six to twelve months. Not needed if you're selling within the year.
-
Sell a business: 10% success fee
Agreed in writing before we go to market, paid at closing out of the proceeds. No retainer, no monthly fee. If it doesn't sell, no fee. How the sale itself runs, month by month, is on selling a business in Chicago.
-
Sell to Lakeshore: no commission
No listing period, no marketing. If we want to buy, we say so in writing up front, and you stay free to go to market.
Your attorney's fees are yours, as always. Full terms on the services and fees page.
The cheapest fee is rarely the right question. Judge what you keep after the fee, the price, and the taxes.
Lakeshore Exit Partners · Chicago
Chicago broker-fee questions, answered.
How much do business brokers charge in Chicago?
Roughly 8 to 12 percent for main-street businesses in Chicago and across Illinois, often with a $10,000 to $25,000 minimum. Above about $2 million, sliding scales netting 4 to 8 percent. We charge 10 percent, in writing before market, with no retainer.
How much does a business broker charge in Illinois?
The same 8 to 12 percent of the sale price that Chicago owners pay, with 10 percent the figure quoted most and sliding scales above about $2 million. On a $1 million Illinois sale, expect $80,000 to $120,000 at closing. Illinois regulates business brokers under the Business Brokers Act of 1995, so ask how the Act applies to any broker you interview, and get the fee and the answer in writing together.
What is a fair success fee for a business broker?
For a business selling for under about $2 million, a 10 percent success fee paid at closing is the market norm, and fair when it comes with no retainer, no fee if the business doesn't sell, and a written buyer list behind the tail clause. Above $2 million, a sliding scale that nets 4 to 8 percent is common, and a flat 10 percent costs more.
Are broker fees negotiable?
Often, though rarely the headline percentage. The terms that move are the minimum, the exclusivity length, the tail period, upfront charges, and named carve-outs for buyers you already know. If a concession isn't written into the agreement, it doesn't exist.
Do I owe anything if my business doesn't sell?
With a pure success-fee broker, no commission. Upfront fees, retainers, and early-termination charges are usually non-refundable, though. With us, no success fee and nothing else, because there is no retainer to begin with.
What is the Double Lehman formula?
A sliding scale used above roughly $2 million: 10 percent of the first million, 8 of the second, 6, 4, then 2. A $3 million sale pays $240,000, an effective 8 percent. Ask whether it applies to total consideration, including earn-outs and seller notes.
What does a tail clause mean?
For 12 to 24 months after your agreement ends, the broker is still owed the full commission if you sell to any buyer they introduced. Fair when there is a written list of who was introduced. Ask for the list, and for carve-outs covering anyone you already know.
Choosing a Chicago broker The long version How we sell a business
Find out what it would sell for. Free.
A CPA-prepared value range and the gaps a buyer's accountant would find first, within two business days.
Prefer to talk now? (312) 278-2109, weekdays 9 to 5. A person answers.