Why can't I find one reason why starting a business brokerage is a bad idea

by an intermediary from University of Georgia

1 year ago

First post!! There are obvious industry tailwinds right now with boomers retiring + more people wanting to own their own business, a lack of quality brokers, 40-year-old brokerages that dominate the field, and it frankly seems like a fun opp with a ton of upside. What am I missing though?? Why aren't there more business brokers out there? Is it really hard to source quality deals? Is the sales cycle painfully slow? Is it just a well kept secret?? Any insight you can share would be super helpful.

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29 comments

searcher from The University of Chicago - Booth School of Business

Many sellers I speak to have been bombarded with emails from business brokers looking to represent them, so you need to find a way to stand out among a crowded field. Then, you've got to filter through to find the truly serious sellers. Without a retainer, you risk spending a lot of time representing an owner who is just testing the waters. Especially in the smaller end of the market, you may be dealing with flaky, unsophisticated buyers, so expect a more challenging transaction process. Lots of things can kill these types of transactions (messy financials, tax issues, financing falling through, unscrupulous buyers/sellers, etc.), so lots of potential for putting in work with no reward.

That said, I've met a few brokers whose approach I admire. The most successful I've seen have a narrower industry niche (e.g. dental practices, legal technology). That helps for a few reasons: (1) stand out relative to other brokers, (2) more efficient at compiling pitch materials, and (3) better ability to create a network of qualified repeat buyers.

1 year ago | like reply | 1 like

searcher from Clark University

Hi Hitesh, I am curious why you think tworld is the best bet?

1 year ago | like reply | 0 likes

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