Do you need a broker? A guide to M&A advisors for businesses under £5M

One of the most important decisions in a sale process is whether to use a broker or advisor, and if so, which one. In the small business market, quality varies enormously — and so do fees.

When a broker adds real value: A good M&A advisor will run a competitive process, approach multiple buyers, manage the information flow, and importantly, act as a buffer between you and buyers during negotiation. They know what buyers pay for businesses like yours, which buyers are actively acquiring in your sector, and how to structure a deal to protect your interests.

When you might not need one: Some businesses have a natural buyer — a competitor, a supplier, a customer — where a direct approach makes sense. If you have existing relationships with likely buyers and understand the process well enough to manage it, a direct sale can save the advisory fee.

What does a broker cost? Typical structures in the small business market:

Success fee only: Usually 5–10% of deal value. No upfront cost, but the advisor's incentive is to close a deal — any deal — rather than necessarily the best deal.

Retainer plus success fee: A monthly retainer of £1,000–£5,000 plus a reduced success fee (3–6%). Better aligned incentives, as the advisor is committed whether or not a deal happens.

Flat fee: Less common, sometimes offered for simpler transactions.

What to look for in an advisor: Sector experience matters enormously. An advisor who has sold five businesses like yours in the last three years is far more valuable than a generalist who'll approach it cold. Ask for deal references. Ask who will actually work on your transaction (not just who pitches for it).

The honest answer: for a business with £200K+ EBITDA and a clean DD profile, a good advisor will almost certainly generate more value than they cost. The key is getting to a position where your business is worth advising — which is exactly what ExitDiligence™ is designed to help with.