Business Broker vs Investment Banker: What to Know

One of the most common questions we hear from Florida business owners preparing to sell is: "Should I hire a business broker or an investment banker?"

Both help you sell your business. Both get paid at closing. But they operate in very different markets, charge very differently, and bring different tools to the table. Choosing the wrong one can cost you time, money, or worse — the deal entirely.

This guide breaks down exactly how each type of advisor works, what deals they're built for, and how to decide which one fits your situation.

What Is a Business Broker?

A business broker is a licensed professional who helps business owners sell their companies — typically smaller businesses in the $500,000 to $10 million range, though many handle deals up to $25 million or more depending on the firm.

Business brokers in Florida must hold a real estate license, which is regulated by the Florida Department of Business and Professional Regulation (DBPR). This licensing requirement separates Florida from many other states and provides a layer of consumer protection for sellers.

Here's what a business broker typically does:

• Prepares a Broker's Opinion of Value (BOV) or Confidential Business Review (CBR) to establish market value
• Markets your business confidentially to qualified buyers — both in their proprietary network and on listing platforms
• Screens buyers for financial qualification before disclosing sensitive information
• Manages the letter of intent (LOI), due diligence, and closing process
• Coordinates with attorneys, CPAs, and lenders on your behalf

Business brokers earn a success-based commission, typically ranging from 8% to 12% for deals under $2 million and stepping down as deal size increases. There is usually no upfront retainer for smaller transactions, though some firms charge a modest engagement fee for larger or more complex listings.

If you're a Florida business owner with revenue under $10 million, a well-connected business broker or M&A advisor is almost certainly the right starting point. You can get a quick estimate of your business value or speak with our team to understand what your business would realistically sell for in today's market.

What Is an Investment Banker?

Investment bankers who work in M&A typically focus on the middle market — businesses with EBITDA of $5 million or more and transaction values starting around $25 million and going up to several billion dollars. Bulge-bracket investment banks (Goldman Sachs, Morgan Stanley, JPMorgan) work even larger transactions and won't take your call if your business generates less than $50 million in revenue.

That said, there is a large and growing segment of boutique investment banks — sometimes called lower-middle-market M&A advisors — that operate between the traditional business broker world and the full-service investment bank world, typically handling deals in the $10 million to $150 million range.

An investment banker working on a business sale typically:

• Prepares a detailed Confidential Information Memorandum (CIM) and financial model
• Runs a structured sale process — either a broad auction or a targeted process with specific buyers
• Manages management presentations with prospective buyers
• Negotiates deal structure including price, earn-outs, representations and warranties, and indemnification caps
• Coordinates between legal, accounting, and financing teams through closing

Investment bankers charge a retainer (often $5,000–$25,000 per month) plus a success fee calculated on a Lehman-scale basis — commonly 5% on the first million, stepping down on higher tranches. On a $30 million deal, the all-in fee might be $1.5 to $2 million. On a $100 million deal, it could reach $3 to $5 million.

Key Differences: A Side-by-Side Comparison

Which One Is Right for Your Florida Business?

The honest answer depends almost entirely on the size and complexity of your business. Here's a simple framework:

If your business generates less than $2 million in annual EBITDA or SDE, you are firmly in business broker territory. Investment banks won't work with you — not because you're too small to matter, but because the economics don't work for them. Your best path is a licensed Florida business broker or M&A advisory firm with a strong buyer network in your industry and deal size.

If your business generates $2 million to $5 million in EBITDA, you're in the crossover zone. A highly capable business broker or lower-middle-market M&A advisor can run an excellent sale process for you. Some boutique investment banks will take on deals this size, but you should weigh the monthly retainer cost against the value they realistically add at your deal size.

If your business generates more than $5 million in EBITDA, a boutique investment bank or sophisticated lower-middle-market M&A advisor makes sense. The deal complexity, buyer pool, and negotiation dynamics justify the higher advisory cost. At this size, the structured process an investment bank runs — management presentations, competitive bids, sophisticated deal structuring — can meaningfully increase your outcome.

At CBH Business Group, we work primarily with Florida business owners in the lower-middle market — typically $1 million to $50 million in transaction value. We operate as an M&A advisory firm, not a traditional listing broker. That means we run a targeted sale process, match your business to pre-qualified buyers (including private equity, family offices, and strategic acquirers in our network of 4,000+ buyers), and manage the full transaction through closing.

If you're curious where your business falls and what process makes sense, our business valuation service or a free introductory call is the right starting point.

Common Misconceptions to Avoid

"Investment bankers get better prices." Not necessarily. Prices are driven by the buyer pool you reach and the process you run. A well-connected M&A advisor with relationships in private equity and strategic buyers can outperform a brand-name investment bank that runs a generic process. The name on the door matters less than the depth of the network and the quality of execution.

"Business brokers just list your business online." This was more true 15 years ago. Today, the best business brokers and M&A advisors run confidential, targeted processes — not public listings. At CBH, we do not list your business publicly until after we've had direct conversations with matched buyers and confirmed serious interest.

"I need an investment bank to reach private equity buyers." Not true. Boutique M&A advisors regularly work with PE firms, especially in the lower-middle market where many PE groups actively pursue deals under $30 million. Our buyer network includes PE-backed platforms, family offices, and strategic acquirers across every industry we work in.

"The retainer means the investment bank works harder." A retainer aligns incentives differently, but it doesn't guarantee performance. Always evaluate advisors by their track record, buyer relationships, and process — not their billing structure.

Questions to Ask Any Advisor Before Signing

Regardless of whether you're speaking with a business broker or an investment banker, ask these before signing an engagement agreement:

• How many deals have you closed in my industry and revenue range in the last 24 months?
• How do you source buyers — listing platforms, proprietary network, direct outreach?
• How do you handle confidentiality during the sale process?
• What's your engagement fee structure, and what happens if the deal doesn't close?
• Can you provide references from sellers whose businesses were similar to mine?
• What's your realistic timeline from engagement to closing?

The answers to these questions tell you far more than any title or credential ever will.

The Bottom Line

For most Florida business owners, the business broker vs. investment banker debate is less relevant than finding the right M&A advisor with real buyer relationships, a disciplined process, and experience in your specific industry and deal size. The best advisors — whether they call themselves brokers, advisors, or bankers — share the same fundamentals: a deep buyer network, confidential deal management, and a track record of closed transactions.

CBH Business Group has worked with Florida business owners across healthcare, HVAC, roofing, landscaping, professional services, manufacturing, and beyond. We offer a free Broker's Opinion of Value for qualified sellers and a no-obligation introductory call to help you understand your options.

If you're thinking about selling in the next 12 to 36 months, now is the time to start the conversation. Call us at (407) 908-3845 or visit our Florida business sale page to learn more about our process. You can also use our free valuation calculator to get a ballpark estimate of what your business might be worth today.