While business brokerage has the potential to become an exciting and rewarding career path, the career takes considerable investment. You can expect to be working many years to create a buyer database, understand market fluctuations, and build a strong reputation before you are able to land the big clients. With that said, if you are considering biting the bullet, then keep reading as we unpack the ultimate question of – How to Become a Business Broker.

What is a Business Broker?

Simply put, a business broker assists people in selling their business. You can compare the work a business broker does to a real estate agent. Whereas a real estate agent helps with the sale of homes, a business broker managers the sale of a business. However, typically the process a business broker must go through is much more complex and lengthy.

One significant reason why business brokers have a more complex process is that often the business fails to sell despite heavy price discounts. For example, the business may have poor financial management or business structure making it overall unappealing.

In addition, managing a business sale requires a higher level of confidentiality. Most businesses will not want to publicly announce that they are looking to sell their business as this may lead to loss of employees or customers taking their business elsewhere. As well as that, when speaking to a potential buyer, you will need to supply sensitive company information that although a confidentiality agreement will regulate, it is safer to only supply sensitive information to feasible prospects. Thus, minimising the risk of confidential information in the wrong hands. On the whole, this highlights the added responsibility and processes a business broker must manage on top of the usual real estate agent.

What are the key steps to becoming a business broker?

  1. Secure your registration: Obtain a real estate licence.
  2. Get experience: this is a career that you can’t simply decide to start doing one day. You will need extensive experience in sales and negotiating, and the business world in general to be a good business broker. Along with a large network of business professionals which you may take years in the field to develop.
  3. Consistently upskill and stay educated: it is impossible to know everything about being a business broker from the start. You will learn a lot on the job, but it is important to spend time upskilling and researching key developments and fluctuations in the market.

“There are many large companies that provide business broking services, I would recommend contacting them to discuss what business brokers do and see what in house training they may be able to provide,” says Michelle Wright, Complete Business Brokers.

How to Become a Business Broker

What tasks does a business broker do?

It is the job of the business broker to handle the initial assessment all the way to the final settlement. This generally involves:

  • Finding prospective businesses for sale
  • Estimate the fair market value and analyse the performance of the businesses
  • Create sale listings and advertise the sale
  • Assess buyers’ needs and conduct research on prospective buyers
  • Facilitate meetings between the buyer and business owner
  • Negotiate purchase with buyers and manage compliance with terms and conditions
  • Ensure appropriate funding is acquired

What qualifications do you need?

The main qualification required to become a business broker is holding a real estate licence. You can study a registration course at institutes such as the Real Estate Institute of Queensland (REIQ) or its counterparts throughout Australia, such as REIT REIV and REINSW. Some business brokers also have university qualifications in related areas such as business, management and accounting. Alternatively, the Australian Institute of Business Brokers is another option for Brokers to obtain their licence.

Although not mandatory, the key skills important to a career in business brokerage include a strong understanding of accounting, legal and business dynamics. At a minimum, aspiring business brokers should have a good understanding of numbers, more specifically the principles of profit and loss.

Furthermore, good communication and interpersonal skills allow you to better understand the aims of buyers and sellers. Professional conduct and prudence are also crucial. Undoubtedly, the most critical asset a business broker can have is a large network of advisors and other business owners.

The basic areas to succeeding as a business broker include:

  • Professionalism: being professional means acting with integrity and being honest and fair from the beginning.
  • Selling and negotiating: since selling businesses is at the core of what you do on a day-to-day basis, you need to have the skill and ability to convince prospects to buy what you are offering.
  • Listings: quality listings is the make or break of your earning capacity. In this case you should prioritise quality over quantity. It may look great to have 50 listings, but if they aren’t priced at a fair market value or there is insufficient business information then buyers will move on. Focus on 10-20 listings that have detailed and accurate information on the business’ systems, processes and financial records.

Ready to take the leap?

Resilience and enthusiasm are critical on your path to becoming a business broker. It is a rewarding and challenging career in many ways. Whether you’re assisting the buyer or the seller, the result of your effort results in success for both parties. If you’re comfortable with and believe you’re capable of the idea of prospecting, then this career might be for you. This is a unique opportunity to gain professional satisfaction and create a financial future to be proud of.

Do you or anyone you know interested in selling or buying a business? BUSINESSNAV’s team of experts are here to help you find and acquire your next opportunity.