TL;DR
- The mergers and acquisitions are poised for a boom in 2025, following the uptick in transactions in H2 2024, there is continued optimism about a shift to a pro-growth environment with less regulation.
- Using VeriFee can help businesses reduce payment processing-related expenses without making any changes to their existing vendors or hardware and, in turn, enhance profitability and valuation.
- By partnering with VeriFee, business brokers can reinforce their value by helping clients command a higher sale price that offsets their own fees.
In competitive mergers and acquisitions (M&A) markets, successful business brokers recognize that selling a business goes beyond just finding a buyer. Experienced brokers play a crucial role in helping their clients reduce expenses and maximize company valuations. While M&A volume declined from its pandemic-era highs, the second half of 2024 saw a sharp rebound in transactions. With a potential shift in administration and a renewed focus on reducing regulatory hurdles, 2025 is poised for a surge in M&A activity, fostering a more pro-growth environment. With such intense pressure on business owners to optimize their businesses for sale, brokers need to differentiate their offerings, bring added value and, ultimately, help clients command a higher sale price.
Payment processing cost optimization is a proven way to enhance profitability, but traditionally, it has been overlooked due to sensitivities around long-standing processor relationships—often tied to banking services, treasury management, or credit lines. Many companies hesitate to even address the topic, fearing potential disruptions or unintended consequences. Adding to the challenge, deep technical integrations with hardware, software, and eCommerce platforms often create the perception that cost reductions require switching providers, purchasing new equipment, or dedicating significant resources to implementation.
VeriFee disrupts traditional models, empowering business brokers to help their clients achieve frictionless cost reductions—without changing vendors, modifying hardware or software, or requiring any time and resource commitments from the company.
The math tells the story: VeriFee helps companies benefit from lower payment processing fees which directly impacts their bottom line, increasing valuation, and brokerage commission while offsetting the cost of brokerage services.
Let’s look more closely at how this can play out.
Average Business Sale Prices and Valuation Multiples
Business sale prices and valuation multiples vary widely based on size, industry, and profitability metrics. Mid-sized businesses typically sell for between 4x and 8x their cash flow or earnings before interest, taxes, depreciation and amortization (EBITDA).
Below is a generalized industry snapshot using common market data ranges:
| Industry | Typical Sale Price Range (For SMBs)* | Common Valuation Multiple (EBITDA or SDE)** |
| Manufacturing | $1M-$10M+ | 4.5x-6.0x EBITDA |
| Wholesale/Distribution | $500K-$5M+ | 4.0x-5.0x EBITDA |
| Professional Services | $200K-$3M+ | 3.0x-4.5x EBITDA |
| Healthcare Services | $500K-$10M+ | 4.0x-7.0x EBITDA |
| Technology (Software) | $1M-$20M+ | 6.0x-10.0x EBITDA |
| Restaurants | $200K-$2M+ | 1.8x-3.0x SDE |
| Construction | $500K-$5M+ | 3.5x-5.0x EBITDA |
*Ranges for SMBs, or small and medium-sized businesses, vary greatly based on company size, growth, market conditions and other qualitative factors.
**SDE, or seller’s discretionary earnings, is often used for smaller businesses; EBITDA is more common for larger, more established entities.
Sources: BizBuySell Insight Report, IBBA Market Pulse, DealStats by BVR
Savings Impact on Valuation
Let’s consider a company generating $10 million in annual revenue. They take your recommendation to partner with VeriFee to reduce their credit card and related payment processing expenses. The total savings equates to 0.5% of annual revenue, or $50,000.
Now, let’s assume the business is in a high-multiple industry, like tech, and is currently valued at 10x EBITDA. Here’s what that savings would translate to:
- Example: 0.5% (expense reduction) x $10M (current value) = $50,000 (additional EBITDA) x 10 (multiple) = $500,000 (valuation increase)
In this case, the savings from working with VeriFee added $500,000 to the company valuation.
Even a small 0.5% expense reduction can have an outsized impact on a company’s valuation and ultimate sale price — even in industries where businesses are valued using smaller multiples. Delivering that kind of value to your clients through a relatively small cost reduction is an incredible differentiator in a competitive market.
Offsetting Broker Fees and Enhancing Broker Value
The cost savings from VeriFee don’t just increase a company’s valuation — they directly increase broker fees. An added benefit of partnering with VeriFee — for business brokers and clients alike— is increased profit, which is the ultimate goal for any business, after all. By helping businesses save money in the short term, which offsets broker fees, and increases their eventual exit value in the long term, brokerages provide an invaluable service that will help them stand out in a competitive marketplace.
Typical Brokerage Commissions
Business brokerage fees commonly range from 5% to 10% of the business sale price. The 2024 IBBA and M&A Source Market Pulse Survey found, however, that the success fee for smaller businesses typically ranges from 8% to 12%, while mid-sized transactions ($2 million-$5 million+) fall in that 5% to 10% range.
For a broker earning a 10% commission, VeriFee’s savings can result in an additional $20K to $50K in commissions, depending on the industry multiple. This makes brokerage fees easier to justify while increasing client profitability.
Benefits for Clients
From the client’s perspective, increasing company valuation through frictionless cost reduction justifies the expense of working with a broker.
Let’s go back to our hypothetical $10 million tech company above.
- Partnering with VeriFee saves the business 0.5%, or $50,000, per year, which goes directly to its bottom line.
- That savings, multiplied by the company’s multiple (10x), equates to a $500,000 valuation increase.
- Assuming an average broker commission of 5%, or $500,000, the VeriFee partnership completely offsets the costs for the broker.
Benefits for Brokers
The benefits of partnering with VeriFee go beyond a single deal’s economics. The partnership may enhance the broker’s overall value proposition and brand reputation by providing a host of benefits. Some of these benefits may include the following:
- Offset Brokerage Fees: An increase in your business client’s valuation offsets the cost of your brokerage fee, despite your fee simultaneously increasing with the valuation. It’s a win-win.
- Effortless Cost Reduction for Clients: A business broker’s cost reduction can help with client retention, increasing the likelihood that they will work with you again. After all, many entrepreneurs sell multiple companies, and if you’re in the business of reducing their costs by increasing their valuation, that’s a great way to build trust.
- Differentiation in a Crowded Market: Offering a direct cost optimization solution positions you as a strategic advisor who brings innovative resources, not just deal-making expertise. Connecting clients with a tool like VeriFee, which not only saves them money but offsets the expense of working with you, is a unique differentiator.
- Higher Client Satisfaction and Referrals: When clients see measurable improvements in their sale price and net proceeds, they’re more likely to recommend the brokerage to peers, fueling a virtuous cycle of referrals. The ability to point to specific savings or valuation increases can enhance your credibility and attract more clients to your brokerage.
- Improved Deal Closure Rates: Enhanced valuations and profitability can attract more buyers, especially once you’ve built a track record of successful client deals. More interested buyers lead to smoother negotiations and potentially faster closings — beneficial outcomes for both clients and brokers.
- Long-Term Partnership Opportunities: Establishing a referral relationship or formal partnership with VeriFee can yield ongoing benefits across multiple transactions, reinforcing your role as a value-added partner in the M&A process.
A Frictionless Cost Reduction
One of VeriFee’s greatest benefits is its simplicity. We don’t require changes to software, credit card processing vendors, equipment, or payment processes, ensuring a frictionless experience. All it takes to get started is a review of a credit card processing statement.
Moreover, VeriFee works on a gain-share model which ensures that all our partnerships are truly aligned with client interests. There are no upfront fees, no risk, minimal time and effort required and the result is long-term savings.
Encourage Clients to Start Saving Today
By partnering with VeriFee, business brokers can connect clients with a value-added solution that reduces payment processing fees, boosts bottom-line profits, and enhances valuations. With a significant valuation increase, both businesses and brokers stand to earn more money, while the broker also gets the benefit of another satisfied customer likely to refer their services. And that’s a scenario that benefits all parties involved.
Don’t let your clients leave money on the table. Encourage them to explore frictionless cost reduction with VeriFee and get ready to maximize the value of your next deal.
Disclaimer: Valuation multiples, fee structures, and average sale prices vary widely depending on market conditions, business characteristics, and geographic region. The data and ranges presented here serve as a general guide.
