Business brokers and corporate finance advisers both help owners sell their businesses, but they operate in different parts of the market, charge differently, and deliver materially different outcomes. For a UK business with revenues between £2.5m and £10m, understanding which type of adviser is appropriate. And what to look for. Is one of the most important decisions in the exit process.
The simplest distinction: business brokers typically handle smaller transactions (under £3m to £5m enterprise value), work on a success-fee-only basis, and operate broadly, often listing businesses on marketplaces. Corporate finance advisers handle mid-market transactions (£3m and above), typically charge a retainer plus a success fee, and run bespoke, confidential processes targeting specific buyers.
What does a corporate finance adviser do?
A corporate finance adviser manages the sale process from preparation to completion. This includes:
- Preparing the information memorandum. A detailed document describing the business, its financial performance, and its strategic positioning
- Identifying and approaching potential buyers. Typically 20 to 60 targets, on a confidential basis
- Running a structured process. Managing NDAs, initial meetings, indicative offers, due diligence, and exclusivity negotiations
- Leading the negotiation. On price, structure, warranties, earn-outs, and completion mechanics
- Coordinating the professional team. Solicitors, accountants, tax advisers
Good corporate finance advisers have transaction experience, sector knowledge, and active relationships with the buyer universe relevant to your business. They earn their fee by achieving a price and structure that a seller could not achieve without them.
What does a business broker do?
A business broker performs a similar role but typically at smaller deal sizes and lower price points. The main differences:
- Brokers often list businesses on platforms like Daltons Business or similar marketplaces, which brings inbound buyer enquiries
- Brokers typically do not charge upfront retainer fees. They work on success fee only (typically 4 to 8% of deal value)
- Due diligence coordination is less intensive
- The buyer universe tends to be individual buyers, management teams, or smaller trade acquirers rather than PE-backed buyers
Fee structures compared
| Adviser type | Retainer | Success fee | Typical deal size |
|---|---|---|---|
| Business broker | None (usually) | 4 to 8% of deal value | Under £3m to £5m EV |
| Corporate finance adviser | £5,000 to £20,000/month | 2 to 5% of deal value | £3m to £100m+ EV |
The retainer paid to a corporate finance adviser reflects the significant work involved in preparing and running a structured process. A success-fee-only arrangement sounds attractive, but it can create misaligned incentives. An adviser who earns nothing unless the deal completes may push for a quick deal rather than the best deal.
Which do you need?
For businesses with revenues below £2m to £3m and enterprise values below £3m, a good business broker is often the right choice. The cost of a full corporate finance process at this level can be disproportionate to the deal value.
For businesses with revenues above £3m to £5m and enterprise values above £3m to £5m, a corporate finance adviser will almost always deliver a better outcome. A higher price, a better structure, and a more professionally managed process. The retainer cost is typically recovered many times over in the improved outcome.
Frequently asked questions
How do I find a good corporate finance adviser? Look for advisers with genuine sector expertise and a track record of completed transactions at your deal size. Ask for references from sellers they have represented. Ask how many transactions they completed in the past 12 months and what the deal sizes were. A good adviser will be selective about what they take on. Be wary of any adviser who will represent anything.
Can I negotiate the retainer or success fee? Yes. Everything is negotiable. For smaller transactions, some advisers will reduce or waive the retainer. For larger transactions, the success fee percentage typically decreases as deal size increases. The total fee package matters more than the individual components. Focus on the total cost as a percentage of expected deal value.
Do I need a specialist in my sector? Sector knowledge helps. An adviser who knows your buyer universe and can credibly represent your business to PE-backed buyers in your sector will typically deliver a better outcome than a generalist. For niche sectors (healthcare, pharmaceuticals, specialist manufacturing), sector expertise is particularly important.
What is a dual track process? A dual track process runs a PE (MBO or investment) route and a trade sale route simultaneously. It maintains competitive tension and gives the seller optionality. It is more resource-intensive for everyone involved, but it often achieves the best outcome for a business that could attract both types of buyer.
What happens if my adviser leaves during the process? This is a real risk with smaller advisory firms or sole practitioners. Before appointing, understand who will actually manage your transaction day to day and what continuity looks like if that person becomes unavailable. Larger firms have teams; smaller firms have individuals.