Nov. 4, 2024
Marketdata LLC has published a new report covering the U.S. Business Brokers Industry, a little-researched service sector. This is a new, 60-page market analysis that looks at the profession of business brokers, professionals that act as intermediaries between the sellers and buyers of businesses, usually small ones up to $30 million in revenues.
The business brokers industry is poised for moderate-strong growth over the next five years, for several reasons: falling interest rates that make it easier to raise capital for buyers of businesses, industry maturation and better organization, huge demand from retiring Baby Boomers looking to exit their businesses, passage of the Broker Simplification Act of 2023, the growth of franchising, and technology/AI-related efficiencies that get deals done faster.
There is very little “official” information about this industry’s major statistics, such as the industry’s size, number of brokers and brokerage companies, etc. And, existing reports by IBIS World are simply inaccurate, with estimates not based on reliable sources such as the U.S. Census Bureau (there is no separate NAICS code for business brokers). By contrast, Marketdata has created what is believed to be the most accurate analysis of business brokers ever – based on interviews with leading CEOs of brokerages, consultants, trade journals, associations, coupled with new, primary research.
Major Report Findings:
- Market Size and Growth… 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 8,800 brokers. Brokers earn an average of $120,200 per year and the “average” brokerage firm has revenues of $396,000.
- 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 – much higher than the industry overall.
- 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 fall through. Oddly, many real estate agents often dabble in this market and call themselves business brokers, but lack the competency to do deals.
- The industry has grown steadily since the mid-1990s, except for 2008-2009, and the pandemic only affected it briefly during 2020.
- 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.
According 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.”
Learn More, Get This Report
The U.S. Business Brokers Industry, published in November 2024, is an independently researched market study. Covers: industry definition/nature, broker operations and key ratios, factors affecting demand, industry trends and issues, industry $ size from 2018-2030 forecast, status report/findings of interview with industry CEOs, and in-depth profiles of top 4 franchisors. It is 60 pages long. Price is $995.
The report may be purchased online, at: marketdataenterprises.com
A report Table of Contents is available by email: Contact: John LaRosa, Marketdata LLC, 7210 Wareham Drive, Tampa, FL 33647, 813-971-8080, or at: www.marketdataenterprises.com.