Is Business Broker a Good Career? All You Should Know

Small businesses comprise the majority of the US economy. According to the 2020 Small Business Profile issued by the US Small Business Administration, there are around 31.7 million small businesses which account for 99.9% of businesses in the US. However, not all of these businesses succeed and thrive. Some businesses exit on their first year, others on their fifth, and a few survive to their tenth year. Other companies re-brand, merge, or reinvent business while others change ownership. Historical data reveals that business exits are very common with about 7.5 percent of business closures every year. In 2020, the US Federal Reserve noted that the economic recession brought about by the COVID-19 pandemic further elevated the exit rate.

While business exits might seem a bad thing, it opens up a unique opportunity and a lucrative career. Buying and selling a company presents an income potential through a business brokerage.

In recent years, the business brokerage industry is a continuously growing field. It has an estimated market size of around $1 billion in 2019 and annual growth of 2.7%. Business brokerage companies are growing in number and the need for business brokers is also on the rise. Since business brokers earn by the commission, the higher valuation means more income, which makes it a good career.

Interested to join this lucrative industry? Here’s everything you should know.

What are business brokers?

Also called intermediaries or transfer agents, business brokers play a vital role in mediating business sellers and buyers. These brokers are not only proficient with the legalities necessary to ensure a successful sale but also in preparing the business and negotiating the deal. Through their networks, they can match the right sellers and buyers. They have local as well as national connections that enable them to search for perfect companies up for sale as well as buyers ready to pay the amount. Equipped with knowledge, skills, and experience, these brokers save business owners and buyers from making costly mistakes.

What do business brokers do?

Generally, business brokers assist business owners to sell their company. Their work involves:

·         Valuating the business

·         Assisting the business owner in the entire process of selling and transfer

·         Advertising and promoting the business for sale

·         Scouting and matching potential buyers

·         Conducting initial talks and negotiations with prospective buyers

·         Representing the business owner in all activities related to the sale

How much business brokers earn?

The average annual income of a business broker in the US is $57,993 which is significantly higher than the median personal income of Americans. According to an Orlando Business Broker, many factors can affect business broker income such as whether you are employed or working independently, the type and value of the business you sell, and the number of successful business sales. For example, Main Street-type businesses are sold at an average of around $300,000 or even more. At just around 5 percent commission, it would a sizable income.

Business brokerage is commission-oriented so earnings would depend largely on your success rate. Hence, qualifications, experience, and connections may have an impact on a broker’s earnings.

What are the job opportunities?

There is a steady growth in demand for business brokers in recent years as business brokerage firms scale up to meet demands. You can start as an employee with a brokerage firm where you can build experience, confidence, and connections. You can either decide to rise the corporate ladder or set up your brokerage. Plus, you’ll enjoy the perks of a flexible working schedule. It’s also rewarding when you can help business owners sell their company. The business broker industry offers a fast-paced and exciting career with lots of opportunities.

What are the requirements to be a business broker?

As of date, a business broker license depends on the state where you plan to practice. Some states require certain education and experience while others require sitting an exam. Check with your local state for any specific requirements.

In general, anyone can aspire to be a broker. However, you’ll have an advantage if you have some experience in running a business. Having a network of connections can help you navigate the industry more easily, find good sales opportunities, and potential buyers.

Likewise, a good business broker must have a strong ethical foundation, a background in finance and sales, and a business degree. Qualities such as patience, perseverance, commitment, and willingness to learn are also vital to succeed in this field.

Still Interested to Be a Broker?

Starting a career in the business brokerage industry can seem overwhelming. But if you’ve gotten this far, you’re motivated enough to learn more about the industry. Just continue researching your options, lay the groundwork, and prepare yourself. Soon you’ll be able to launch a career and be successful!