Business Broker Industry Potential
As credit becomes more accessible and new businesses enter the economy, the business brokers industry continues expanding. From 2014 to 2019, the average industry growth rate climbed to 2.4 percent.
Market Size: $1bn [IBISWorld, 2019]
Higher valuations are resulting in increased commissions for brokers.
Business brokers aid in the buying and selling of privately held businesses. Working closely with sellers, you will help them:
- Prepare the business for sale
- List it on the market
- Solicit and screen potential buyers
- Assist with the due diligence process
- Recommend financing sources
Above all, your goal as a broker is to help ensure an overall smooth and successful closing process.
Main Street vs. Middle Market
Generally speaking, there is no definitive answer to where the main street market ends and where the middle market begins. However, we typically consider anything valued under one million dollars as a main street business.
For your efforts, you can expect to receive success fees based on the final sales price, which ties in your best interest with those of your seller or client. Your success fee potential is even more significant on Middle Market deals.
We sell more businesses than any other business broker firm. That’s why sellers choose to work with Sunbelt, and why it’s no surprise that potential franchise owners choose us, too.
“Due to higher access to credit and an increase in the number of businesses in the economy, the Business Brokers industry has expanded over the five years to 2018. The industry is currently characterized by an oversupply of potential small business buyers and an undersupply of high-quality businesses for sale. This has resulted in higher valuations for small businesses, increasing commissions for successfully-brokered business sales as a result. Higher borrowing costs, a decline in business sentiment, and deceleration in access to credit are expected to yield only marginal growth in industry revenue over the five years to 2023. As a greater share of the population reaches retirement age, a greater number of small businesses will be listed for sale, increasing opportunities for industry operators.” (IBISWorld, 2019)