The True Cost of Selling Your Accounting Firm: Why Avoiding Broker Fees Matters

Selling an accounting firm is a major financial decision that requires careful planning and strategy. While brokers often play a role in facilitating sales, their services come at a significant cost—typically in the form of hefty fees that can eat into your profits. For accounting practice owners, avoiding broker fees can mean saving tens or even hundreds of thousands of dollars.

In this guide, we’ll break down the true cost of selling your accounting firm, explore how broker fees impact your bottom line, and show you why a broker-free sale is a smarter, more profitable option.

The Traditional Broker Model

Business brokers act as intermediaries, helping to connect sellers with potential buyers. While they can assist with tasks like marketing and negotiations, their services come at a price.

Typical Broker Fee Structure

Commission-Based Fees:
- Brokers charge a percentage of the sale price, typically between 5% and 12%.
- Example: On a $1,000,000 sale, a 10% commission equals $100,000.
Retainer Fees:
- Many brokers require an upfront payment for their services.
- Typical Range: $2,000–$10,000.
Success Fees:
- Some brokers charge an additional percentage of the sale price upon closing.
- Example: 1%–2% of the final sale price.

Sale Price	Commission (10%)	Retainer	Success Fee (2%)	Total Broker Fees
$500,000	$50,000	$5,000	$10,000	$65,000
$1,000,000	$100,000	$7,000	$20,000	$127,000
$2,000,000	$200,000	$10,000	$40,000	$250,000

Pro Tip: These fees are deducted from your final earnings, meaning less money in your pocket after the sale.

The Hidden Costs of Broker Fees

Beyond their direct costs, brokers can introduce hidden expenses and inefficiencies that impact the value of your sale.

1. Opportunity Costs

Brokers often handle multiple clients simultaneously, which can delay the sales process.
A slower sale may result in missed opportunities, especially if market conditions shift.

2. Overpricing Risks

To maximize their commission, brokers may push for an inflated asking price that deters buyers.
Overpricing can lead to your business sitting on the market for months, or even years.

3. Misaligned Incentives

While brokers aim to close deals, their primary motivation is their commission—not necessarily securing the best outcome for you.

Hidden Cost	Impact on Seller
Delayed Sale Timeline	Longer time to receive your payout, risking market changes.
Inflated Asking Prices	Reduced buyer interest, leading to fewer offers.
Lower Priority	Limited attention due to brokers juggling multiple clients.

How Broker Fees Impact Your Net Earnings

To illustrate how broker fees can significantly reduce your profit, let’s look at a real-world scenario:

Example:

You sell your accounting firm for $800,000. Here’s how broker fees would affect your net earnings:

Sale Price	$800,000
Broker Commission (10%)	-$80,000
Retainer Fee	-$7,000
Success Fee (2%)	-$16,000
Net Earnings	$697,000

By avoiding broker fees, you could save $103,000—money that could go toward retirement, reinvestment, or other financial goals.

The Case for Selling Without a Broker

A broker-free sale not only eliminates fees but also gives you more control over the process. Here’s why this approach works:

1. Keep More of Your Profits

Without paying a broker’s commission, you retain the full value of your sale price.
Even small firms can save tens of thousands of dollars.

2. Faster Sales Process

By marketing directly to buyers, you can streamline negotiations and close deals faster.

3. Greater Control

Selling directly allows you to set the pace and terms of the transaction.
You decide how to market your firm and negotiate the deal.

4. Confidentiality

Brokers often advertise widely to attract buyers, increasing the risk of employees or clients finding out.
A broker-free approach allows for a more discreet sale.

Steps to Maximize Value Without a Broker

Step 1: Understand Your Firm’s Worth

Start with a professional valuation to determine a fair asking price. Use a valuation method that considers:

Annual Gross Revenue (multiples of 0.8x–1.5x).
EBITDA (multiples of 3x–5x).
Market Comparables (recent sales of similar firms).

Metric	Example Value	Multiple	Estimated Value
Annual Gross Revenue	$750,000	1.2x	$900,000
EBITDA	$200,000	4x	$800,000

Step 2: Prepare Your Firm for Sale

A well-prepared firm attracts more buyers and commands a higher price. Focus on:

Organizing Financials: Update profit and loss statements, tax returns, and client lists.
Streamlining Operations: Address inefficiencies and document processes.
Showcasing Recurring Revenue: Highlight predictable income streams like bookkeeping or payroll.

Step 3: Market Your Firm Effectively

Market your firm directly to potential buyers through:

Industry Networks: Connect with larger firms or individual buyers in your industry.
Online Platforms: List your firm on reputable business-for-sale websites.
Social Media: Leverage LinkedIn to target professional buyers.

Step 4: Negotiate With Confidence

Handle negotiations directly to maintain control and maximize value:

Be Transparent: Share accurate financial data to build trust.
Emphasize Value Drivers: Highlight your firm’s strengths, such as high retention rates or recurring revenue.
Work With a Lawyer: Engage a legal professional to draft and review contracts.

Case Study: A Broker-Free Success Story

Scenario:
John, a sole practitioner in Sydney, sold his firm valued at $600,000 without using a broker.

Savings: John avoided paying $60,000 in broker fees.
Outcome: He closed the sale within 90 days, securing a full-price offer.

Selling Method	Broker Fees	Net Earnings
Using a Broker	$60,000	$540,000
Direct Sale	$0	$600,000

Conclusion: Why Avoiding Broker Fees Matters

The true cost of selling your accounting firm goes beyond just broker fees—it’s about retaining control, maximizing value, and keeping more of your hard-earned money. By skipping the broker and managing the process yourself, you can save thousands of dollars while achieving a successful sale.

Ready to explore a broker-free approach? Start with a free valuation from Acquire My Firm and discover how much you could save.

The True Cost of Selling Your Accounting Firm: Why Avoiding Broker Fees Matters​