The Market

3. The Business Brokerage Market

As a Broker, who are my customers ?

(a) Business Sellers

Business Owners
It is very difficult to work out how many businesses are bought and sold per year. There are no figures of such. The figures for new business and wind-up/liquidation give indications that there is an approx. 10% change in status of businesses per year. In Northern Ireland this would be approx.12000 per year. Only a tiny fraction would be suitable for business sales, but it does provide an alternative to (a) start-up and (b) wind-up for many people.

(b) Business Buyers

Business Startup Wantabes
It is very difficult to work out how many businesses are bought and sold per year. There are no figures of such. The figures for new business and wind-up/liquidation give indications that there is an approx. 10% change in status of businesses per year. In Northern Ireland this would be approx.12000 per year. Only a tiny fraction would be suitable for business sales, but it does provide an alternative to (a) start-up and (b) wind-up for many peopleRather that do it the hard way of beginning and growing a business from scratch, for most people it is better to buy an established going concern. Examples of this would be pubs, hotels, guesthouses, and a lot of retail shops. It is a lot less risky option but a lot more expensive up-front.

Starting a Business 'v' Buying a Business	Start a Business	Buy a Business
Risk	Very High	Very Low
Start up Costs	50k	500k
Change of Success	8%	90+%
Time for P&L to become cash positive	9 months	Immediate
Time for P&L to breakeven	18 months	Immediate
Time to payback capital & time investment	2-3 years	2-3 years

Fresh Start (mice that rebel)

As many people hit their mid thrirties, there is in many cases a trigger that forces a review and stock-take of their position in life. Rather than contunually climb the corporate ladder, a penny drops and these people want to step out of corporate, status quo life and begin working for themselves. "want to make money working for myself, not other"

Redunancy & Early Retirement

Many are happy not to go back into employment but want to consider other alternatives. Owning and runing a small business is just for them. They have the cash to purchase and good experience to run it.

Senior Managers (Early retirees)

In their 50s, with 30 year senior management experience (but not usually ultimate control) and an early retirement settlement, who are not ready yet to retire. They want to be the absolute boss of perhaps a smaller entity that what they were used to, and have the experience and money to run and develop a smaller business into a bigger business.

Level 3, 4 & 5 Entrepreneurs

Having started, then ran a sucessful growth company, these people now now that to incease their wealth they need to jump the startup and development phase to acquire other companies where they can see opportunities and where they can apply their own unique skills to take the business to the next level.

High Net worth Individuals

To increase the value of their assets and it’s earning potential. Mostly hand’s off people who would replace current management with their own management team with clear business objectives.

Business Development Managers/Directors in medium/larger companies

As part of the Merger and Acquisitions strategy of that business. Usually concerned in business issues such as market share, and competition issues. Targets will tend to similar size range and be competitors / similar companies in other geographical markets.

Turnaround Management

Business Angels / Venture Capitalists

Who rather than invest in a company are also interested in partly/wholly (with others) owning the business and running it better that the current management team.

Acquisitions Mangers in larger companies

As part of the Merger and Acquisitions strategy of that business. Usually concerned with group diversification and wealth development. Targets will tend to be larger stand alone companies, which can operate as a SBU.

Back to The Market Menu...

<<<< Back

Next >>>