The outlook for business brokerage is very good and a successful business broker can make a very good income. According to IBISWorld, the business brokerage industry – revenues earned on the sale of businesses at a price of $2,000,000 and under — should surpass $1 billion in revenue in the next few years. The improving economy, increasing number of businesses, and more business owners reaching retirement age will drive continued growth. According to the 2013 Business Brokerage Press survey, an industry veteran should earn over $100,000. If you like business, being a business broker is an interesting career. You see many different businesses and management styles. No two days are the same. If you are thinking of becoming a business broker, here are some skills you need.
First and foremost, you need to have excellent sales skills to be a business broker. In the typical sale of a business, you need to convince a business owner to give you the exclusive right to sell their business and then you need to sell the business. We find that good b-to-b sales experience is essential for a business broker. But, you also need to have skills in selling to consumers. The majority of small business sales are to an individual. You are selling the sizzle and the steak. The buyer needs to be excited by the business and they need to see that the numbers work – that they will make an adequate income from the business.
In addition to having excellent sales skills, you need to enjoy sales. Selling is what you will spend most of your time doing. If you don’t enjoy it, it will quickly burn you out.
You also need to be able to work with financial statements – primarily the income statement and balance sheet – to become a business broker. You are not an accountant, but you need to understand financial statements and recast them to show a buyer how the numbers will look to them. You also need to understand financial statements to prepare market value reports to show an owner what their business is likely to sell for.
There are a few personality traits that will help you to be successful as a business broker. The ability to stay calm when dealing with a tense situation is important. Buying or selling a business is a stressful event in someone’s life. They will take out some of their stress on you. They are likely to become angry at the other party at times during the process. You are a buffer between the parties. You need to be able to resolve the differences without taking it personally. You also need to bring reality to the buyer and seller. Many times, they will bring unrealistic expectations to you. It will expedite getting a deal done if you can nip these in the bud. You also need to be able to relate to and deal with many different types of people with various ethnic backgrounds. Another skill that will increase your ability to close deals is “creative problem-solving”. If you can come up with creative ways to get by differences and obstacles, you will close more sales and make more money.
You need to have good communication skills, both in your speech and in writing, to become a business broker. You spend a lot of time talking to people. You need to be able to communicate your ideas clearly and in a manner that is acceptable. You will also write reports and emails. These need to be well written. If they are not, they may not communicate what you want to say. If poorly written, it will reflect poorly on you.
You need to be self-motivated and self-directing as a business broker. You need to be able to schedule your time by setting your priorities. Even if you work for a business brokerage agency, rather than on your own, it is unlikely that the owner of that company will want to micro-manage your schedule.
The final skill that I would suggest you have to become a business broker is the ability to work with technology to stay organized and be effective. A CRM system is essential for keeping track of clients and scheduling. A Smartphone enables you to stay in touch better and respond faster.
If you are thinking of becoming a business broker and have these skills, please contact me. I would be happy to talk to you more about what it takes to become a successful business broker.