30-40% of Business Brokers Are Real Estate Agents – That’s A Problem

Competence May Be Questionable

Tampa – WEBWIRE – Wednesday, February 12, 2025

John LaRosa, Research Director

Not all business brokers are created equal."

February 12, 2025… Marketdata LLC, a leading independent market research publisher of “off-the-shelf” studies about service industries since 1979, has published a new 64-page report entitled: The U.S. Business Brokers Industry. This new study examines the nature and operations of business brokers – the professionals that act as intermediaries between the buyers and sellers of businesses, a fascinating but little-analyzed sector.

According to Research Director, John LaRosa: “The term business broker is somewhat fuzzy. The sale of a business may be handled by a trained broker, a merger & acquisitions advisor, an attorney, accountant or a real estate agent. Hiring a real estate agent to sell your business is like hiring a painter to do plumbing repairs.”

Many businesses are now up for sale, as Baby Boomers are retiring in greater numbers. However, only 20% of the businesses sold are sold by a professional business broker. Part of the reason for this low participation may be due to the fact that many “brokers” are, in fact, real estate agents who try to sell a business as an adjunct to their main activity – selling houses. Many of them don’t have the knowledge and skills needed to properly value a business, market it, handle negotiations, and sell it at the best price.

Professional business brokers (certified business intermediaries) possess the expertise to assess financial statements, market conditions, and industry trends. They employ targeted marketing strategies to reach specific potential buyers, and have access to pre-screened, serious buyers. They vet buyers financially. Selling a business involves extensive paperwork and legal documentation. Brokers manage these administrative tasks, limiting access to confidential data.

Real estate agents who act as business brokers may gain this knowledge and experience by joining the IBBA (Intl. Business Broker’s Assn.), or one of the four franchises in the industry, or by taking courses from several training organizations. Some do this, but many do not. In addition, Realtors® rarely have knowledge of a variety of retail, manufacturing, healthcare, and consumer service sectors – the businesses they will be representing.

Major Findings:

* Market Size…Marketdata estimates that the U.S. business brokers industry was worth $1.8 billion in 2023, with revenues forecast to grow 8.5% annually to 2030.

* Demand… There are 33 million small businesses in the United States and over the next 10-15 years an estimated 12 million will be sold.

* Industry Structure… The business brokers market is fragmented and is populated by more than 1,500 brokerage firms, employing 8,000 brokers. Brokers earn an average of $120,200 per year and the “average” brokerage firm has revenues of $396,000.

* Competition… Many people are attracted to this profession due to the low start-up cost, high 8-12% commissions, and no requirement for any license in many states. However, the work is complex and deals can take 6-9 months to complete. Many deals fall through.

* Marketdata analysts found, from an analysis of brokers listed on the website BizBuySell.com, that 30-40% of business brokers listed are actually real estate agents.

* Franchising is significant in this industry. The top 4 firms (Transworld, Murphy Business, Sunbelt, First Choice) operate a combined 724 outlets, and have average earnings per outlet of as much as $861,000 per year.

* Trends… Technology and AI is increasing efficiency, shortening the time to do company valuations and due diligence, so that more deals get done in a year. More women are entering the field. Business sellers are younger as more Millennials exit their companies.

Acco rding to Research Director, John LaRosa: “This is an industry characterized by ease of entry and intense competition. Successful business brokers must possess several skillsets. Not only must they have a solid knowledge of finance and due diligence, but they must be good at sales as well as being effective negotiators.”

About The Report

The U.S. Business Brokers Industry , published in November 2024, is an independently researched market study. Covers: industry definition and nature, broker operations and key ratios, factors affecting demand, industry trends and issues, industry $ size from 2018-2030 forecast, status report/findings of interviews with industry CEOs, and in-depth profiles of top 4 franchisors. It is 64 pages long. Price is $995, purchase at: marketdataenterprises.com. A Table of Contents is available by email or the website. Contact: John LaRosa, Marketdata LLC, 7210 Wareham Drive, Tampa, FL 33647, 813-971-8080, or at: www.marketdataenterprises.com. A $99 Overview summary is available.

About Marketdata LLC

Marketdata LLC is a 46-year old market research and consulting firm.that specializes in tracking and analyzing a variety of commercial services, personal services, and healthcare services, publishing industry and market studies. Marketdata also performs custom research and consulting projects, business coaching, and content creation.