Business sale advisers and fees explained
Sale advisers range from business transfer agents who list smaller businesses publicly to corporate finance and M&A advisers who run confidential, targeted processes. Fees usually combine some mix of upfront or monthly retainers and a success fee on completion; the right comparison is total likely cost, what is included and how 'transaction value' is defined.
Who does what
| Adviser | Typical role |
|---|---|
| Business transfer agent | Lists and advertises smaller businesses, often publicly, to a wide audience. |
| Business broker / sale adviser | Prepares, markets and negotiates the sale of SMEs, often confidentially. |
| Corporate finance / M&A adviser | Runs structured processes for larger or more complex transactions and funding. |
| Accountant | Prepares financial information, supports due diligence and completion accounts. |
| Solicitor | Drafts and negotiates legal documents and manages completion. |
| Tax adviser | Advises on structure, reliefs and personal tax position. |
Common advisory fee approaches
Retained engagement
An initial engagement fee with a lower success fee on completion.
Common where significant preparatory work is required.
Success fee
A fee calculated on the outcome, payable on completion.
The adviser's return depends on completing a transaction.
No upfront engagement fee
No fee before an intermediate stage; some advisers include a payment at Heads of Terms.
Terms vary. Always confirm in writing what is payable and when.
Common fee structures
An upfront or staged fee paid on engagement, usually non-refundable and sometimes credited against the success fee.
A recurring fee during the mandate.
A percentage of transaction value payable on completion.
A floor on the success fee regardless of sale price.
An intermediate payment due when Heads of Terms are signed, sometimes credited against the final fee.
An agreement that one adviser acts for a defined period; fees may be due if you sell to any buyer during or after it.
No engagement fee is charged at the outset; the adviser is typically compensated through a higher success fee and may charge interim fees at defined milestones.
What to read next
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Advisory approaches
Comparing advisory fee approaches
Retained advisory arrangements and no-upfront-engagement-fee arrangements allocate cost and risk differently. Neither is always cheaper or always achieves a better outcome; the right choice depends on your business, the likely transaction and the scope of service you need.
Points worth comparing
- Initial engagement fees, retainers and success fees.
- Any payment due at Heads of Terms and how it is credited against the overall fee.
- Exclusivity, scope of service and who carries the risk if a sale does not complete.
- Eligibility criteria and the total fees you might expect to pay.
An adviser can explain the available approaches before you decide. Full terms are always set out before any engagement.
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