Business Brokers

I remember when I joined the business brokerage profession several years ago, I had a very strong belief that the market for businesses for sale will grown dramatically in Canada as a result of baby boomer retirement. Now I discovered trough my experience that most of the businesses currently for sale are not been sold because of retirement. Why is the reality so different from most economic predictions?

Online Registration is now open for the IBBA Canada conference in September 2011. Please check the link for more details about the conference in the same IBBA Canada website. I strongly recommend that people interested in becoming business brokers in Canada join IBBA Canada and attend this conference.

The Canadian chapter of the International Business Brokers Association will organise its first conference in the 15-17th of September 2011. This conference is targeted at existing business intermediaries in Canada as well as individuals interested in becoming business brokers.

The International Business Brokers Association (IBBA) and its affiliate M&A Source had their biannual conference in November 17-20 2001. I have attended most of the seminars and it was a great learning experience for me. Business broker instructors openly shared their knowledge with their peers in order to take the profession to higher standards of professionalism.

One of the most challenging aspects of  business brokerage is the double mission of selling listing services to business owners and selling companies to buyers. This is very uncommon in other types of businesses since selling generally involves selling to a homogeneous type of customers. Buyers and sellers have different needs and perspectives so selling to buyers involves a different set of skills than selling to sellers. This explains the low percentage of beginners who don't make it in this profession.

Mergers and Acquisitions Brokers/Intermediaries/Advisers are generally small firms specialised in the sale of middle market companies, where Middle market companies are defined as companies with market value over $5M. While the M&A process tends to differ depending on the size of the businesses available for sale, it is very common that M&A brokers represent the interest of the sellers and are paid by sellers.

Business sellers are frequently confused about the term "Business Brokers" vs. "Mergers and Acquisitions Intermediaries". In general terms Mergers and Acquisitions Intermediaries deal with larger businesses, generally more than $5M in value while Business Brokers focus on small and lower middle market businesses with less than $5M in company value. Below are some basic differences between the two very similar professions:

Business brokerage is a growing industry thanks to the baby boomer generation getting ready for retirement. A large number of small businesses owned by baby boomers are expected to become available for sale in the next few years. The need for business brokerage services is expected to increase. Furthermore, statistics have proved that the average business broker in North America earns above average income. So, what do you need to do in order to join this promising profession and become a business broker?

The greater Toronto Area (GTA) is the largest metropolitan area in Canada with more than 5 million inhabitants. It is also one of the most buoyant business marketplaces in Canada with thousands of businesses changing hands every year. The purchase of a business in the GTA remains however a very challenging endeavour for the following reasons:

Business brokerage is a relatively unknown profession. Very few business sellers or buyers think of business brokers as service providers before buying or selling a company. Moreover, business brokers rarely advertise their services through the media simply because their clients principally business owners who are ready to sell their businesses and who's business is sellable. Furthermore, there is generally a few number of business brokers in every city.