Business brokers are a $1.8 billion growing U.S. market, boosted by the large number of businesses currently being sold by retiring Baby Boomers, Millennials and others. The market is 80% untapped as only 20% of businesses sold are sold by business brokers.
This industry is characterized by ease of entry and intense competition. Successful business brokers must possess a number of skills. Not only must they have sound financial knowledge and due diligence, but they must also be good at sales and effective negotiators.
The 5 most important things to know about business brokers
- Market size and growth: Marketdata estimates that the U.S. business brokerage industry will be worth $1.8 billion in 2023, with revenue projected to grow 8.5% annually through 2030.
- Demand: There are 33 million small businesses in the United States, and an estimated 12 million will be sold in the next 10 to 15 years.
- Industrial structure: The business brokerage market is fragmented and is home to over 1,500 brokerage firms employing 8,800 brokers. Brokers earn an average of $120,200 per year, and the “average” brokerage firm earns $396,000.
- Franchise significant in this industry. The top 4 companies (Transworld, Murphy Business, Sunbelt, First Choice) operate a total of 724 stores and have an average annual revenue of $861,000 per store, well above the industry as a whole.
- Competition: Many people are attracted to this profession because of the low start-up cost, high commissions of 8-12%, and in many states it does not require a license. However, the work is complex and deals can take 6-9 months. Many people go through. Strangely enough, many real estate agents often wander into this market calling themselves brokers, but they have no business skills.
Where to find out more
To learn more about this growing market, be sure to check out the new report titled The American Business Brokerage Industry by Marketdata LLC. This comprehensive report provides a market overview, industry outlook, demand data, traffic information, major competitor profiles and a reference list of industry information sources.
About the author: John LaRosa is president of Marketdata LLC and author of over 100 industry and market studies. His research appears in leading media such as ABC, CNN, Fox, Forbes, USA Today, The Wall Street Journal, The New York Timesand various trade journals.