Business brokers play a very important societal role. Their services:

Increase market liquidity

Reduce employees’ dislocation

Improve the financial climate

Help business owners get cash for retirement or other enterprises

Florida market outlook for business brokers

According to the US SBA Office of Advocacy, 17,956 new businesses were created in 2019. In the meantime, 17,355 enterprises closed their doors. Statistically, 80% of startups go belly up during the first two years of their existence. Over the course of this year alone, about 3,500 companies have gone out of business for a variety of reasons. Some of those reasons are:

  • Owner’s health issues;
  • Owner’s retirement due to the age;
  • Family moving out of state.

Those 3,500 cases represent the size of an underserved market. Those companies could have been sold and continued their operations. Tens of thousands of jobs could have been preserved. Thousands of former owners could have placed millions of dollars into their retirement accounts. And, last but not least, some business brokers could have earned their commissions.

Liquidity for private equity

Small businesses have very limited liquidity. Venture capitalists (not mentioning institutional investors) shy away from private equity. There are investors who are willing to put their money into small firms. Often, however, they pull out of deals if businesses are not prepared for a change in ownership.

Business brokers provide a vital service to business owners, helping them bring their businesses to acceptable level and connect them to investors.

By helping business owners exit the right way, business brokers contribute to the health of the US financial market. With the ability to sell their business, owners get cash, which can be put into retirement accounts or invested somewhere else.

Business continuity

If an owner leaves their company without selling it, the business usually closes its doors. Employees lose their jobs. Clients no longer receive services. Vendors lose their sales.

When an owner manages to sell their business, all of those problems are solved.

Business brokers play the very important societal role of supporting business continuity. This reduces unemployment and other negative consequences of the closure of businesses.

Protection for business owners and investors

Selling a business is a complex task. The majority of business owners are simply afraid to do it because of the lack of knowledge behind how it has to be done.

Many investors are hesitant to put their money in private equity because those businesses are difficult to check, and the process of purchasing may be very cumbersome.

Business brokers have mastered all aspects of selling the business and can protect the interests of both sides – the buyers and the sellers.

By properly coordinating deals, business brokers reduce the chances of participants’ disappointment. This removes an illusion of something impossible from the process of selling business. It makes other business owners willing to put their business on market.

Cash for business owners

A business broker’s goal is to give business owners an opportunity to cash out on their major asset – their business.

Nowadays, fewer and fewer businesses are passed from generation to generation in the same family. By the time an owner is ready to retire his kids or even grandchildren are out of college, living their own lives.

In the meantime, the entrepreneur has zero experience in selling, which leads to hesitation to even start the process until it is too late.

By walking business owners through the process of selling their companies, business brokers help them overcome their fears and successfully accomplish the exit.

Some of those owners are relatively young and reinvest their cash into something else. The majority can retire with something more than a Social Security pension.

 

Learn this societally important trade at Business Brokers Academy.

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