A recent industry survey directly from business brokers was just released last week. I have picked some of the things that surprised me that anyone wanting to sell their business would want to know.
Given that we are in the age of technology, I feel that this one surprised me the most and this is further proof that most business brokers wait for the phone to ring rather than marketing your business, being proactive and trying to sell your business.
With what frequency did you use each marketing service in 2013?
Email Marketing used by 72%
2x/mo+ monthly 1/4ly 2x 1x
19% 25% 13% 10% 05%
We will distribute your listing to our network of buyers, pull data on strategic buyers for your business, referral partners, attorneys and so many more to ensure that your business is exposed to the greatest number of potential buyers as possible.
79% of brokers have been in the business at least 5 years so a good website would be expected, with a blog – a place to write about and promote their businesses, right? Less than 1/3 are even utilizing a blog, while only 21% have been using one for over a year. Unfortunately the same thing goes for the most utilized social media site, Twitter.
How have you utilized the following professionally?
Using currently for 1year or more 21%
Using currently for less than 1 year 11%
Used previously, but not now 06%
Never used 61%
Using currently for 1 year or more 21%
Using currently for less than 1 year 7%
used previously, but not now 6%
Never used 66%
Nearly 2/3 of business brokers are sole practitioners so the average monthly expenditure on advertising is only $653 per month. So you are getting charged, 10%, 12% or maybe even 15% to sell your business; what kind of exposure are you getting for your money?
What does your office spend on advertising per month (not counting recruiting)?
- SP Average was $653.
- Office Average was $1575
- 81% of respondents spent $1000 or less.
On average most business brokers are using less than 2 sites to advertise your business while some do not use any internet advertising.
What NATIONAL internet listing exchange programs do you use?
do not use any 7%
This is real simple, over 50% of business brokers charge an upfront fee to take your listing. So if an average business broker is only spending $653 in advertising why would you pay them an upfront fee? For the trouble of taking your listing?
I am here to sell businesses, I am confident in our system and the amount of businesses that I sell and will risk my own funds, give a free evaluation and market the business.
Do you charge an up-front fee (not including those for valuation/pricing)?
Very Often 09%
This shows that at least 20% of business brokers are taking listings just to take listings, will tell you what you want to hear or are desperate and need listings. If a business broker is not trying to evaluate the business is worth, how can they confidently and professionally sell the business for what it is worth?
Do you perform an actual valuation, with or without a fee, prior to taking a listing?
Yes 79% 79%
No 21% 21%
Although it is good to see that over half do not charge for a valuation, the other half are charging in the range what a certified appraisal would cost for a main street business.
What do you charge for this valuation?
- 54% do NOT charge
Of those who do charge:
- MS Average $2008
With my marketing system we reach clients all over the country and all over the world. Proof that the system works is that well over 80% of my buyers are from another state or outside of the country. Why limit yourself to such a small pool of potential buyers?
Of the buyers WHO ACTUALLY BOUGHT a business from your office in 2013, what approximate percentage came from:
|From Own State||20%|
|Within the U.S.||19%|
|I don’t know||07%|
68% of brokers have cooperated with another broker less than 25% of the time.
I am here to expose your business to as many qualified buyers and brokers as possible. I am often times in the position of selling another broker’s listing because it is right for the buyer, likewise if another qualified business broker brings a qualified buyer I am happy to split a deal for the benefit of my seller. And many times I have found that this exposure brings more and better offers, which equals more money for you.
What percent of your deals were
co-brokered (outside of your own firm)?
0 to 5% 42%
6 to 10% 11%
11 to 15% 06%
16 to 25% 09%
26 to 50% 08%
51 to 75% 03%
76 to 100% 03%
I don’t co-broke 18%
I am in the top 5 of all business brokers in Florida according to the BBF, so I sell more businesses than the average office.
What was the total number of businesses sold in 2013?
Office Average 21 sold
SP Average 9 sold
Total Average 13 sold
One of the benefits of my marketing program is that I draw a large amount of international buyers. Over 80% of my deals are all cash allowing the seller to walk away without having to worry about payments.
What percentage of your 2013 transactions were financed by the following sources?
All Cash 27%
Seller Only 22%
Seller + SBA 16%
Seller + Bank 11%
After being able to see and evaluate information provided by other business brokers, it really should make any potential seller think about who they want to list their business with.
The facts are co-brokering/cooperating has proven effective, a solid marketing program proves to sell businesses as it shows in my numbers of sales and the amount of cash I get for businesses should make me your first and last call to sell your business.
1910 Park Meadows Drive, Suite 202
Fort Myers, FL 33907