“I am a recent graduate with a BS in business marketing and a
minor in finance. I have been offered a
position at a business brokerage. As it
stands I do not know an extraordinary amount about the business broker
profession and would be extremely grateful if you could answer some questions I
have regarding the profession.
I have been offered a position as an agent for a brokerage firm
which specializes in selling small companies.
Looking toward the future would this be valuable experience (when
eventually combined with an MBA) in seeking to gain an opportunity in a Firm
representing larger companies or moving into the field of mergers and acquisitions. Would this be an acceptable start to such a
career path or would other paths be a better background.
Also with the likely downturn of the
of the future outlook for the business broker profession.
I realize that Compass Point is not a typical brokerage firm but
nonetheless would truly value your opinion on these questions. Thank you for your time. – Chris”
First, you may want to read my post on becoming
a business broker.
Be aware that being offered a position in many small
business brokerages may not be what you expect. I’m generalizing, and not all are like this,
but many are based on the same model as real estate brokers and agents. It’s a numbers game, and the more agents they
have the more likely the broker is to make money. Many people
are just not cut out to be business brokers and there is a high turnover. Since the broker doesn’t actually pay you
directly (its all success-based commission), then there is an incentive for
him/her to add quite a few agents and hope that a few stick it out and complete
Training is the key.
If a broker realizes that it truly takes a substantial amount of
training and mentoring to make a good agent, then he also realizes that there
IS a cost to adding agents. The
brokerage houses that offer good training tend to select agents a little more
carefully, and those agents tend to last longer.
Marketing is also important.
In my opinion the broker should do some “house marketing” to assist all
agents. But make no mistake, even then
it is up to you to market the heck out of your services to get to business
owners. It isn’t easy. In fact, I’ll write a post about how brokers and M&A guys market themselves. Its pretty interesting.
So ask those two questions.
What training and/or mentoring program do they have, and what type of
marketing assistance do they provide?
You asked if business brokerage is a good step up into doing
larger deals. It can be, but there is a huge
difference between M&A (lots of financial analysis, deal structuring and
selling to other companies) and main street business brokerage (selling to
individuals, getting an SBA loan).
Still, the experience working with business owners would be good.
One big caution. It
takes quite a bit of time to make money as a business broker. It can take a year before you are closing
enough deals to make a living wage. It
can be a few years of work before your deal flow is decent enough to make good
money. If you really are thinking of
business school, keep this in mind.