A good business broker can make the difference between a successful exit and a costly mistake. Learn what to look for in a broker, what questions to ask, and how to spot red flags before appointing one.
A business broker acts as an intermediary between you and potential buyers. They handle confidential marketing, qualify buyers, negotiate terms, and manage the sales process from listing through to settlement. Brokers also provide valuation guidance and often coordinate due diligence with accountants, lawyers, and other advisors.
For a more detailed overview, see our guide: What Does a Business Broker Actually Do?
Broker licensing depends on the nature of the transaction. If the business includes real property, the broker may require a real estate licence under state-based property occupations legislation (e.g., in New South Wales, the Real Estate Agents Act 2003). Business-only sales without property may fall outside licensing requirements, though regulatory oversight applies if financial advice is given.
Emanda operates under Australian Financial Services Licence 405469 (held by Avenir Capital Pty Ltd), which allows us to provide general financial guidance in the context of business sale transactions. Always confirm your broker's licence status and credentials with your state's regulator before engaging them.
Thorough due diligence on a broker is time well spent. Use the questions below to evaluate candidates.
Ask for case studies or examples of businesses similar to yours that the broker has successfully sold. Request references from previous sellers. How many sales did they complete last year? What was the average time on market? Did most sales achieve the seller's price target?
Fees vary widely. Some brokers work on a pure success-fee model (you pay only if the business sells); others charge a retainer upfront plus a success fee. Request the full fee schedule in writing and ask what expenses (marketing, legal advice, valuation) are passed on to you. Avoid any broker who is vague about costs.
A strong buyer database is crucial. Ask how many qualified buyers the broker has access to, and how many are actively looking for businesses in your sector. A broker with a thin network may struggle to attract the right buyer, even if they market your business effectively.
What does the typical sales process look like? How long do they expect the sale to take (from appointment to settlement)? What happens if a buyer backs out? A professional broker should have a clear roadmap and realistic timelines based on your industry.
You will be working closely with your broker during a significant personal and financial transition. Do they return calls promptly? Are they proactive in keeping you informed? Do they listen to your concerns and goals, or do they push a one-size-fits-all approach? Trust your gut here; a good relationship matters.
If a broker cannot clearly explain what you will pay and when, walk away. Vague fees often hide aggressive add-ons or surprise charges later in the process.
Be wary of any broker who guarantees a specific sale price or promises to 'easily' achieve a multiple far higher than comparable sales. Every market has constraints; a professional broker gives realistic guidance based on hard data, not wishful thinking.
Exclusive agency agreements lock you into one broker. A trustworthy broker will give you time to review terms and speak with legal counsel before you commit. If they rush you or discourage you from reading the agreement carefully, that is a warning sign.
Most brokers are sell-side; they represent the business owner (the seller) and earn a fee from the sale. Some brokers also work buy-side, representing buyers looking to acquire a business. A broker may do both roles independently, or a single broker may switch roles from deal to deal.
When choosing a broker, understand which side they typically work and whether they have any existing buyer representation that could conflict with your interests. A transparent broker will disclose these relationships upfront.
Broker fees in Australia typically range from 5% to 10% of the sale price, though this can vary. The fee structure usually has two components:
Example: A broker might charge a 2% retainer on asking price plus 6% of the final sale price. Fees are typically negotiable, especially for larger businesses. Always request a written fee agreement and confirm whether GST is added and who covers costs like professional valuations or marketing materials.
You are not legally required to use a broker. However, brokers bring significant value: they have access to a pool of qualified buyers, handle confidential marketing (protecting your business reputation during the sale), and manage complex negotiations and due diligence. Many owners who sell alone struggle to find serious buyers or leave money on the table. See our guide on whether you need a broker for more detail.
Business broker fees typically range from 5% to 10% of the final sale price, often structured as a retainer plus a success fee. A common arrangement is 2% retainer plus 6% success fee. Fees may vary by broker, business type, and sale complexity. Always request the full fee structure in writing and clarify what expenses fall on you.
If the business sale includes real property, the broker should hold a real estate licence from your state's regulator (e.g., NSW, Victoria, Queensland each have their own property occupations authority). You can contact the regulator to verify the broker's standing. If the broker provides financial advice, they should hold an Australian Financial Services Licence (AFSL); check the ASIC registry online. Always ask for licence details upfront.
Brokers typically manage the transaction: marketing the business, qualifying buyers, and negotiating sale terms. Advisors offer strategic guidance on valuation, business preparation, tax planning, and timing. Many business owners work with both. A broker brings buyers to the table; an advisor helps you prepare for sale and understand your options.
This depends entirely on your engagement agreement. An exclusive agency agreement locks you in; if you want to switch brokers, you may lose retainer fees or face legal action. A non-exclusive arrangement allows you to work with multiple brokers or switch at will. Always read the engagement terms carefully, including any exclusivity clauses and exit conditions, before signing.
This article contains general information only. It does not constitute financial, legal, or professional advice and should not be relied upon as such. Your circumstances are unique, and the suitability of a business broker depends on your specific situation, timeline, industry, and goals. You should seek independent professional advice from a qualified business advisor, accountant, and lawyer before making any decisions about appointing a broker or selling your business.
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