The number of people who want to go into business for themselves is increasing every day. There are thousands of potential entrepreneurs and investors searching for new business opportunities daily. This provides you with the perfect opportunity to capitalize on this entrepreneurship frenzy. by becoming a business broker
What is a business broker
A business broker is an individual or company that assists mainly in the purchase and sale of small, main street businesses. Their tasks include helping companies to secure a favorable price, submit paperwork correctly, and fulfill any licensing and permitting requirements.
A business broker acts as an intermediary between an investor and a securities exchange. A broker can also refer to the role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.
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Overview of a business broker
There are two ways that you can approach this type of business. One is very simplistic; the other is more complex.
The simplistic approach to starting this business is by providing a listing of potential business opportunities on your Web site. To generate revenue, you can charge businesses a monthly or annual fee for having their business listed on your site.
You can then offer businesses the opportunity to purchase banner ads on your website or to enhance their listings with a company logo, e-mail links, or direct links to their Website. This is a very simple and easy approach to become a business broker.
The more complex approach to starting your own online business brokerage firm is by actively seeking business opportunities for business buyers and investors to review. This requires a more in-depth knowledge of business fundamentals and excellent sales skills, as you are ultimately negotiating to sell someone else’s business.
Revenue is typically generated on a percentage-of-sales basis when you operate at this level. You typically list the businesses that you are selling directly on your Website at no charge. You do this to expose the business opportunities to potential buyers.
How to become a business broker
The skills necessary to become a business broker vary depending on which approach you wish to take. If you go with the more simplistic approach, experience with marketing online would be a definite asset, as you are going to want to actively promote your Website and generate substantial traffic.
If you decide to take the more complex approach, knowledge of business valuations would be an asset. There are also several designations available for business brokers. If you were to obtain one of these designations, you would add tremendous credibility to your business brokerage firm.
Skills needed to become a business broker
- Sales Skills: If you ever want to succeed in becoming a business broker, then this is the first skill you should learn to become a business broker. If you must succeed as a business broker, you must have the skill and ability to convince people to buy what you have to offer.
- Negotiation Skills: This is another important skill you need as a business broker. You need to know how to negotiate well, that is getting the buyer and the seller to agree on favorable terms and a prize that is acceptable for both parties.
- Psychological Skill: As a business good business broker, you need to know how to read a person’s body language to get any hidden message that the person is not passing across; this will help you in your negotiations.
- Emotional Mastering: Not every deal or negotiation will close as sales no matter how likely it may seem; knowing how to master your emotions as a business broker even when the deal is not finally closed will serve as an added advantage to your career.
What is the cost to become a business broker
Since you are providing a service that has no tangible inventory, your initial costs will be minimal. You will need a computer and appropriate software, of course. Initial costs will also include the Webdesign and hosting of your Website.
The cost to become a business broker ranges from $1000 to $5,000. If you take the simplistic approach, you are going to face more extensive costs associated with the development of your website in that a database will need to be designed and developed to list the businesses for sale.
You will also need a strategy to develop considerable Website traffic, as people are not going to pay to have their site listed on a site that receives no traffic. If you take the more complex approach, you will face different costs: You will have to develop professional marketing collateral and invest more in research and business promotion to find businesses that are looking to sell.
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How many employees do you need to become a business broker
The number of employees needed to run this type of business will depend on which approach you take. The simpler approach can be started by one person part-time. The more complex business should have a full-time person ready and available to communicate with clients and meet with them at their convenience.
Online marketing techniques for a business broker
- Participating in newsgroups and discussion forums related to your target audience would be a great way to increase the traffic to your Website.
- Launching a strategic banner advertising campaign on business- and investment-related Websites would generate targeted exposure for your business.
- Develop links from as many Websites, directories, and meta-indexes related to business and investments as possible.
- Participating in mail lists and discussion groups related to business and investments would be a great way to communicate with your target market.
- Purchasing advertising in or contributing articles to e-zines related to your target market would help generate exposure and would enhance the professionalism of your brokerage firm.
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A business broker has strong international potential, as business investments are of interest to people all over the world. Using the Internet as a medium to promote this type of business makes the potential for international investment even greater.
If you decide to use a more simplistic approach to this type of business, you should do whatever you can to develop traffic to your Website. People are not going to want to purchase advertising or a listing on your site if you are not receiving any Website traffic.
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If you are taking a more complex approach to this business, you should monitor the quality of businesses that you are trying to sell. It can take months, even years, to close a business sale, so you want to ensure that you are not wasting any time on a business that will not provide you with a return on your investment.
This is especially important because you are typically receiving payment based on sales commissions.
Business broker addition income
In addition to providing brokerage services, you may also want to offer consulting services for struggling businesses. This would be a great way to earn additional income and would also add credibility to your brokerage services.
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You can provide business valuation services to businesses interested in selling, and you can help procure financing for those interested in purchasing a business.