Business Brokers

Thanks for the input Dave. I'm not sure what he's going to do. Times here are tough. I looked at the list of business's he got from the broker. There are 2 or 3 over 1.5 million. Ten or so from $500,000 to 1 mill. About 10 from the $100,000 - $500,000 range and the rest (about 5) under $100,000. He does have sales experience. BUT like you stated it takes a while to get your feet wet and I'm not sure if he can go 6 months to a year without income from this job. I use to sell real estate and you would see people coming in thinking they were going to make a killing in a couple of months. You need at least 6 months (preferably a year) worth of cash reserve to make it in the real estate business. I suspect its about the same in the business brokerage biz. The only thing I can do now is pray the he makes the right decision and give him what guidance I can. Anyway I appreciate and value your input. Thanks... Ron

> 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