How much do Business Brokers Earn?
Are you considering a career in business brokerage and wondering: how much do business brokers make? Or maybe you are already in the field of business brokerage and want to know how your earnings stack up against the potential of other business brokers and whether you could be making more. Business Brokerage is an exciting field, and there is a potential to make a lot of money. However, business brokerage earnings vary quite a bit.
Which Business Brokerage firm you work for significantly impacts your earnings
We’ll discuss some of the factors below that can increase your earnings greatly depending on the business brokerage company that you work for. We have had business brokers that have come to us from other firms and seen their income triple or quadruple based on some of these factors:
Larger Deals lead to Bigger Paydays
Most business brokers work on a commission-only basis, and the commission they earn is a percentage of the selling price. So, if you are working on deals that are in the millions, the commission will be much larger than if you’re working on deals in the thousands. You have a much better chance of closing larger deals if you work for a business brokerage or M&A firm regularly selling larger companies. You will have access to these types of deals and a firm with a reputation for closing these sized deals. Some Business Brokerage firms deal with M&A-sized companies in the tens of millions, creating much larger earning potential.
What are the commissions that business brokers charge?
Business Brokerage fees are typically 10% for deals that are $2 million or less, and then the percentage decreases depending on the size of the deal. For a deal that is $20 Million, the fee might be 5% or 6%. So you can see that on large deals, the commission may be $1 million+ per deal.
Does a business brokerage firm provide you with potential buyers?
Some companies have large databases of buyers to pull from, so when you have a new listing, there are already many potential buyers for that listing. This is even more true if you work for a company that specializes in selling business in specific industries and has a long track record.
Comprehensive Marketing Program
You want to work for a company with a comprehensive marketing plan that includes digital advertising, email marketing, SEO expertise, direct mail, social media marketing, and more. This will greatly enhance the number of potential buyers that you have for a given assignment and greatly increase the chances of selling a business.
What is the reputation of the company that you work for?
If your business brokerage has a great reputation in the industry it will be easier to gain the trust of both buyers and sellers which should translate to more deals closed. You can look at the Google Reviews of the company as well how they are ranked or rated in independent ratings.
Does your business brokerage provide you with potential seller leads?
Making cold calls is a tough and time-consuming way to drum up business. However, if you work for a business brokerage that provides you with leads, that can greatly increase your earning potential.
Best practices from a successful business brokerage
Closing large deals in Business Brokerage or Mergers and Acquisitions is a complex process. It pays to have a company with a proven track record and knowledge of handling situations that inevitably arise that can derail a deal if not handled properly. Good business brokerage firms have processes in place to increase the odds of a deal closing.
Business Brokerage compensation structure?
Business Brokers typically split their commission 50/50 with their company. However, some companies, like Synergy Business Brokers, will have a tiered commission program so that at the beginning of the year, brokers start at 50%, and then the more they sell in a given year, the higher percentage they will keep. So, in our company, business brokers can keep up to 80% of the commission for some deals depending on how much they have sold that year. We have had some brokers who have made over $1 million in commission on a single deal.
How much do other Business Brokers in a Company make?
What other business brokers make in the company is a gauge of your earning potential. In some companies, the top business brokers might make $100,000 to $200,000. At Synergy Business Brokers, we are proud to say that every year, multiple brokers make between $800,000 and $1.2 million per year. Of course, this takes hard work and dedication, but over the last couple of years, 40% of our experienced brokers have made over $800,000 in a year.
How long does it take for business brokers to start earning commission?
Typically, it takes 6 to 12 months to start earning commission, so business brokers need to have money saved during this ramp-up period.
What does it take to make a lot of money as a business broker?
You need to have excellent personal skills. That is, you must be able to establish great relationships with business owners and potential buyers and communicate effectively. There are any number of ways a deal can fall apart, and you need to keep calm and talk everyone through the potential ways to overcome any stumbling blocks. You also have to have the talent and ability to understand financial information and deal structures and be able to establish trust by being open and honest. Needless to say, hard work and perseverance are important because deals can take a long time to close.
Synergy Business Brokers is hiring
Since we provide all of the above to our brokers, we are selective in the people that we hire. We are interested in people who have experience as business brokers, M&A Advisors or in buying or selling businesses. We are expanding throughout the United States, Europe, and Asia. In fact we have been on the Inc. 5,000 list of fastest growing companies in the country for multiple years. View our careers page for more information about what location we’re currently hiring for. To apply, please send your resume or LinkedIn profile and relevant work experience to careers@synergybb.com.