How to Find Good Brokers

searcher profile

June 14, 2022

by a searcher from Massachusetts Institute of Technology in New York, NY, USA

I am a self-funded searcher looking for a small business to acquire ($300k - $2m EBITDA) in the Connecticut, New Jersey, New York areas. To me, it seems like going through a broker makes the most sense for deals at this size. How have others found the best brokers for regional searches? I've reached out and spoken with a number of brokers already, but wasn't sure if there were any tips to find the better ones (which I suspect are out there, but haven't met yet). Thanks.

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commentor profile
Reply by a searcher
from North Carolina State University in Sykesville, MD 21784, USA
This is a great question. It has been addressed by many podcasts and basically comes down to work on your part. In these posts on my newsletter where I am journaling my path of business acquisition, I cover some aspects of this question.

https://jordannovgrod.substack.com/p/used-car-salesmen-and-business-brokers

https://jordannovgrod.substack.com/p/emails-are-flying

https://jordannovgrod.substack.com/p/email-paused

I am not convinced that cold emails to business brokers is an effective strategy. For me, it led to many conversations with brokers offering buy side assistance and getting on lists of some brokers who are clearly not the good ones. When small 60K SDE business are being offered up for $600K, you can almost guarantee the broker is not a good one.

Your time is better spent looking at listed deals and getting reps in with evaluating them to see if they are a good match with you. Also, you can evaluate the brokers by their listings, CIMs, and communication with you. I have run across great brokers and terrible ones.
commentor profile
Reply by a professional
from University of Southern California in North Palm Beach, FL, USA
Not sure what you’re seeing but I’ve found it rare for there to be a large enough (worthwhile) population of sellers represented by brokers for the amount of profit you seek. That’s why my clients go direct to owners. Otherwise, searchers must wait to be notified of broker opportunities. And then compete with all the other searchers the brokers are notifying.



And for the fun of it (not much) I just now searched bizbuysell to see how many listings report profit (or whatever indicator they use) of $1-2 million.



56 listings, most of which I doubt a well-prepared buyer would bid for.



Compare the 56 to how many firms exist of the size you want that are NOT for sale or are not pitched on the broker listings sites.
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