Business Brokers

Hi,

Since no one took a stab at this I'll give you my 2 cents...

I seriously looked into the opportunity a few years back and here's my impression of it.

My background was in Economic Development and I've seen just about every kind of transaction you can think of between businesses, including the sale of various businesses. I was also a licensed Real Estate Broker and packaged a few 'businesses' for sale.

First, like anything else, if you want to make it in that kind of business you have to be able to sell yourself and your services. Nothing sells by itself. If your bro-in-law is an accountant and doesn't have sales experience he will have a tough time adjusting- IMHO.

Second, if he's not a licensed real estate agent or broker he'll have to bring someone into the deal (in most states) to handle just the real estate side of the business transaction... which could seriously cut into his commissions.

Third, most businesses being listed and sold by 'business brokers' are in the Mom and Pop category with the majority selling in the $20,000 to $100,000 range-- mostly retail establishments and very small manufacturing co's. Which is fine, but the commissions are small.

Fourth, don't expect to see a commission check for at least 6 mo's (if you're lucky). A lot of businesses being sold are 'seller financed' and in some cases your commission is 'deferred' until the owner gets a certain percentage of the sale price. But also keep in mind that businesses take longer to sell than say, residential real estate, etc...there just mosre involved in a business sale, including the due diligence and packaging of the business for sale.

Fifth, the really big money is in the hands of M&A (mergers and acquisitions) Specialists who handle the sale of businesses $1,000,000 and up.

I never really got into it that much. Most 'business brokers' are commercial real estate brokers who do it on the side.

If you live in a large metro area, he might have better luck in business brokerage. When I live in Boston, I know there were some that really thrived.

But the area I'm in now (upstate NY) is pretty small by comparison and there isn't much demand for buisness brokers.

Anyway... those are just my observations and opinions...I'm sure others have a different point of view...

-Dave


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