How to Become a Business Broker
Running a business is hard work whether it’s brick and mortar or ecommerce. Working for yourself has plenty of perks, however. That’s why being a business broker is attractive for many entrepreneurs. Instead of running the day to day of the same operation, a business broker is always working with different people and companies to help them with what they need. They act as a middle-man between business owners who are looking to sell and interested buyers.
A good business broker, much like a real estate agent, handles every aspect of the deal, from prospecting for potential buyers to the final negotiation. This includes advertising the sale, coming up with the market value, and ensuring the buyer has the funding to make the purchase. The goal is always to make the entire process as easy as possible for the client, whether that be the seller or buyer. If this sounds interesting to you, then you are probably wondering how you can make it happen. Here’s a quick guide to becoming a business broker.
Get the Experience
Being a business broker can be an excellent career choice. It’s rewarding and challenging, but it’s not something you can simply decide to start doing one day. You need to have a lot of knowledge and insight, and the necessary skills to do the job well. If you have all of this, you might even end up finding yourself on lists of the top website business brokers. You will at different times act as an accountant, business analyst, sales professional, and negotiator. You will need some experience in the business world to be able to do all of these things well. You should also have relationships in place that you can leverage to build your brokerage business. You can also take courses to fill in any knowledge gaps, and do some research online to immerse yourself in the culture. The fact is, there is a lot of work to be done before becoming a broker, and a lot of it is simply learning the profession and getting the experience to be effective.
Research the Job Market
Your success as a business broker can depend on many factors, including some that are out of your control. The state of the economy can have an effect, and if you have a lot of competition, you may find it difficult to gain a foothold. Check out what markets may be ripe for your entry, whether it be ecommerce or brick and mortar. For instance, during a pandemic, you may find a lot of interest in on-line businesses. Keep up with trends in your “free time” by researching online and keeping yourself apprised of new innovations, technologies, and how you can use data to boost your business.
Know Your Potential Earnings
Part of understanding the market is knowing what you can expect to earn as a business broker. This will ultimately be the marker by which you decide whether or not to start your broker business. What you can make will depend on what types of businesses you are targeting. Brokers can demand up to 12 percent of the sale price, so you will make more for bigger sales, or through several smaller sales. Right now there are slightly under 2000 businesses for every broker, so there is room to find clients and grow your brokerage.
Work On Your Personal Attributes
Being a business broker means being multi-faceted. You need many skills, but you also need to develop many personal attributes that will help you be successful. This includes your soft skills, such as customer service. Sales is a big part of the profession, including selling yourself to potential clients, and selling businesses to potential buyers. You must have a superior customer service mindset to make sure that your clients and buyers are getting everything they need out of the deal. Since you’ll be working for yourself, you will also need to develop your independent work ethic. It will most likely not be a nine to five job that you can punch in and out of at scheduled times. You will need to be able to be self-motivated, and work odd hours at times, even if it’s just to be available for an important client call or meeting.
Create a Budget
Unless you are one of the very few people in the world who has money to burn, running your own business is risky. You need to make sure that you can handle the financial implications of no longer having a reliable income. Make a reasonable budget based on your research into the market. You may have to tweak some things here and there depending on how your business is doing. However, your initial budget should show that you can continue to pay your bills while taking on this new endeavour, and you always need to leave room for savings in case of unforeseen circumstances.
Working as a business broker can be a rewarding new chapter in your professional life. However, make sure that you take the right steps and develop the experience and attributes you need to find success.
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