How much does it cost to sell a business?

One of the first questions business owners ask when they start thinking about selling is, "What is this going to cost me?" It is a fair question. Between broker commissions, legal fees, and a handful of other expenses, the costs can add up. Understanding them upfront helps you plan better and avoid surprises at the closing table.

Here is a straightforward breakdown of every major cost involved in selling a business.

Business broker commission

For most sellers, the broker's commission is the single largest cost of the transaction. Commissions typically range from 8% to 12% of the final sale price. The exact rate depends on several factors, including the size of the deal, the complexity of the business, and how the broker structures their fees.

Generally, smaller deals carry higher commission percentages because the broker's workload is roughly the same regardless of whether the business sells for $300,000 or $3 million. On larger transactions (above $2 million or so), commission rates often drop into the 6% to 10% range.

Some brokers also charge upfront retainer fees, monthly marketing fees, or minimum commission amounts. These are not necessarily bad, but you need to understand exactly what you are paying and when. A retainer means you are paying the broker before your business sells, which shifts some of the financial risk onto you.

At Legacy Handoff, we work on a success-based model with no upfront fees. Our commission is earned at closing, which means our incentive is to get your deal done at the best possible price. If your business does not sell, you owe nothing.

Legal fees

You will need an attorney experienced in business transactions, and this is not the place to cut corners. Your attorney will review (or draft) the purchase agreement, handle any asset or stock transfer documents, review lease assignments, advise on non-compete clauses, and help you navigate any legal issues that surface during due diligence.

For a straightforward small business sale, expect legal fees between $5,000 and $15,000. If the deal is more complex (multiple entities, real estate involved, intellectual property transfers, or earnout structures), fees can run higher. Some attorneys work on a flat fee basis for standard transactions, while others bill hourly at rates between $250 and $500 per hour.

Ask your attorney for an estimate upfront and get clarity on what is included. The last thing you want is an open-ended hourly arrangement where every phone call and email adds to the bill without your knowledge.

Accounting and tax preparation

Before listing your business, your financials need to be clean, complete, and presentable to buyers. This often means having your accountant prepare or recast your financial statements to show the true earning power of the business. If your books have been loosely maintained, getting them in shape for a sale can require significant work.

Expect to spend $2,000 to $8,000 on pre-sale accounting work, depending on how organized your records are. This might include preparing adjusted or "seller's discretionary earnings" statements, normalizing your P&Ls to remove one-time expenses, and ensuring your tax returns match your reported financials.

You will also want to consult with a tax advisor about the sale itself. How the deal is structured (asset sale vs. stock sale, installment payments vs. lump sum) has enormous tax implications. A few hours of tax planning before the sale can save you tens of thousands of dollars after it. Budget $1,000 to $5,000 for tax advisory, depending on complexity.

Marketing costs

The good news here is that most business brokers include marketing as part of their commission. This typically covers listing your business on major marketplaces (BizBuySell, BizQuest, and others), creating a professional marketing package or blind profile, and outreach to their network of qualified buyers.

If you are selling without a broker, you will need to handle marketing yourself. Listing fees on business-for-sale websites run between $50 and $500 per month, depending on the platform and level of visibility you want. You might also invest in a professionally written listing or sales memorandum, which can cost $500 to $2,000 from a freelance writer or consultant.

The real cost of poor marketing is not the dollars you spend. It is the months you waste sitting on the market because your listing did not reach the right buyers or did not present your business compellingly.

Escrow fees

Most business sales use an escrow company to hold the buyer's deposit and coordinate the transfer of funds at closing. The escrow company acts as a neutral third party, making sure all conditions of the sale are met before money changes hands.

Escrow fees are typically split between the buyer and seller, though this is negotiable. The seller's share usually runs between $1,000 and $3,000, depending on the sale price and the complexity of the closing.

Some states require specific escrow procedures for business sales, so your broker or attorney can advise on what is standard in your area.

Transfer taxes and regulatory fees

Depending on your state and the type of business, there may be transfer taxes, filing fees, or regulatory costs associated with the sale. These can include bulk sale notices, liquor license transfers, health department approvals, franchise transfer fees, and state or local business transfer taxes.

These costs vary widely. A straightforward service business might have minimal transfer fees, while a restaurant with a liquor license could face several thousand dollars in licensing and regulatory costs. Your broker and attorney should be able to estimate these early in the process so there are no surprises.

The cost of NOT using a broker

Some sellers look at the broker's commission and decide to sell on their own to save money. That math can be tempting on paper, but it often does not work out in practice.

Studies from the International Business Brokers Association consistently show that businesses sold through brokers achieve higher sale prices than those sold by owners directly. The median difference is significant enough that even after paying a commission, sellers often net more than they would have on their own.

Beyond the sale price, consider the hidden costs of selling without help:

• Time. Selling a business takes hundreds of hours. Every hour you spend fielding inquiries, qualifying buyers, and managing paperwork is an hour you are not running your business. If your business performance dips during the sale process, it can reduce the final price.
• Confidentiality breaches. Without a broker's screening process, it is much harder to keep the sale confidential. If employees, customers, or competitors find out prematurely, the damage can be severe and sometimes irreversible.
• Deal structure mistakes. The purchase price is only one part of the deal. Terms like seller financing, earnouts, non-compete clauses, and transition agreements all affect what you actually walk away with. Inexperienced sellers often agree to terms that cost them far more than a broker's commission would have.
• Failed deals. The most expensive outcome is a deal that falls apart after months of work. Experienced brokers know how to keep transactions on track and solve problems before they become deal-killers.

Adding it all up

For a typical small business sale in the $500,000 to $2 million range, here is a rough budget for total selling costs:

• Broker commission: $40,000 to $200,000 (8-12% of sale price)
• Legal fees: $5,000 to $15,000
• Accounting and tax prep: $3,000 to $13,000
• Marketing: Usually included with broker
• Escrow fees: $1,000 to $3,000
• Transfer fees and regulatory: $500 to $5,000

All in, you should plan for total transaction costs of roughly 10% to 15% of the sale price. That might sound steep, but compare it to the alternative: selling for less than your business is worth, or spending a year trying to sell it yourself and failing.

The best way to manage costs is to understand them early, choose professionals who are transparent about their fees, and focus on maximizing your net proceeds rather than minimizing each individual expense.