What is a business broker...

So what is a business broker and what do they do? A business broker is a fully trained intermediary assisting business owners to sell their business in a confidential manner to qualified buyers. Not only do business brokers provide a vital service to business owners and buyers but they are also highly sought after by both sellers and buyers. While you are playing a vital role in the business community, it is also a very lucrative career for you – on average business brokers earn 8%-10% of the overall sales price that generally ranges between $250K to 2-3 million.

The history of business brokering traces back to the mid- 20^th century where the growth of small locally owned businesses rose from the advancement of better advertising channels spurred by technology. The original brokers were attorneys and accountants who sold these businesses in a confidential manner to an “old boy’s network” that they developed through their client base. But these “old boy’s networks” were usually very limited and the attorneys or accountants were not experts at – nor interested in – marketing the business.

From these origins rose true business brokers in the 1970’s specifically trained in processes designed to not just protect confidentiality but to also market businesses on an ongoing basis under these confidentiality restrictions. The marketing resources back then were still limited and the early business brokers found great difficulty in selling businesses – and making money in doing it. There was no Internet or electronic communication to share information so marketing was difficult and very expensive.

The 1980’s saw the Internet arrive and a boom in franchises offering business brokering services. But many of these franchises were not prepared for the interest and took in too many people without thought to the quality of the business brokering services being offered. So while some of these franchises have succeeded through today, many others were felled by their own greed for money and lack of education in training.

The 1990’s saw the evolution of business brokering related organizations and associations offering special certifications and designations that meant little other than a reference on a business card. This decade also started to see some states like Florida and California recognize the need to license business brokers under a real estate broker’s designation. In these states, real estate brokers began to cross over into business brokering.

The 2000’s came with the turn into the 21^st century – our decade – the decade of BSN. We have become the pioneers in independent brokering backed by a full support network and services. After our concept proved successful, many others have tried and failed since. Every year we have a competitor or two try then fall quickly while trying to mimic our success. There is only one BSN. Our decade has also seen the rise of “cheap” training through schools, associations and books but the success of these one-time sources is already showing to be limited as without support and ongoing training, these brokers are stalling and looking for new options like BSN.

Are business brokers and real estate brokers similar?

Sometimes business brokering and real estate brokering are considered the same career. This statement could not be further from the truth. A real estate broker is responsible for marketing and sales of a "real property based" residential or commercial property. By "real property based" we refer to the house-building or any other tangible assets attached with and included in the sale of the property. 

A business broker is responsible for the "asset based" marketing and sales of existing businesses. This may or may not include property but it does include all assets from the name itself to cash flow and ALL equipment and inventory etc. The largest difference between a business broker and real estate broker -and biggest marketing tool- is that business brokers have to obtain commitment on a sale under strict confidential and discreet procedures.

A real estate brokers sells the property and a business broker sells the business. They are not competitors rather they are allies.

Business brokers are not just needed THEY ARE SOUGHT AFTER! 90% of all business owners are not aware of a business broker's actual systems and procedures. They are not aware of the lengths brokers go to in protecting their confidentiality.