Career As A Business Broker
If you are interested in starting a career as a business broker in Canada there are some very exciting attributes to the profession
. There are also some realities that you must understand before embarking on a career in business brokerage.Much like a real estate agent, a business broker is involved as the intermediary in the sale of a business between a buyer and a seller. A business broker must be licensed by the Real Estate Council of Ontario (RECO) and is governed under the Real Estate & Business Brokers Act, 2002. Once properly licensed, a person must be then employed by a brokerage and is ready to embark on an exciting new career.
As a business intermediary, the career is similar to real estate but also much different in many important ways. It is similar to real estate in that you operate independently and assist in transactions. Business brokerage is much different though in that selling a business is a very different process than selling real estate. There must be no confusion around this. To sell a small business requires an understanding of financial analysis, business valuation, taxation implications, employment issues and experience in managing due diligence, among other things.
Marketing a business is much different too in that most businesses for sale are sold confidentially. A big misconception is that most businesses are sold on the MLS system. They are not. A business broker usually acts as a true intermediary and acts in a dual-agency capacity. This also means that he or she are responsible for finding the buyer for the listed business. This can be a quite daunting task. Each business is unique and, as such, has unique marketing needs in order to sell. A competent business broker will be able to identify how best to sell a company. For instance, a $400,000 fitness facility must be sold and marketed differently than a $3 million construction company.
There are some very good benefits to working as a business broker. You typically work independently and get to meet many wonderful people and companies. Most of the compensation is based on a commission so you can potentially make as little or as much as you put into it. In order to start out you will need a fair amount of capital as the time to sell a business is usually much longer than it takes to sell a piece of real property. You also need to have a fairly large sphere of influence consisting of lawyers, accountants, wealth managers, business owners and others who can refer business to you. They key to this business is deal flow. The more business listings, buyers and others you have in your professional sphere, the easier it becomes.
The work can be exciting but it is important to realize that this career is not for everyone. New business brokers have a very high failure rate because people enter the profession not anticipating the effort required.
If you are interested in a career as a business broker you should do your homework before you start. If you are in the Toronto, Ontario area please contact us or talk to others in the industry and take a frank personal assessment to see if this profession is right for you.
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