What’s most annoying or fearful about business brokers?

professional profile

March 01, 2025

by a professional from University of Southern California - Marshall School of Business in North Palm Beach, FL, USA

I’m asking because so many searchers and buyers complain about brokers. It might be useful to focus on what’s REALLY UNWANTED. Which you can do by commenting below. (Consider including what you see as the implications for what’s undesirable to you, and perhaps suggest workarounds or walkarounds?)

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Reply by a searcher
from University of Illinois at Urbana in Chicago, IL, USA
It hits on some themes other have spoken to, but I think a good broker needs to do basic financial and operational diligence on every client to ensure the materials they present to buyers don't have any glaring holes.

By glaring holes, I don't mean aggressive EBITDA addbacks or subjective concepts, I mean things like:
1.) Missing rent in P&L because business owner is also landlord
2.) Improperly recorded accrual revenue / both accrual and cash revenue booked in P&L
3.) Revenue-generating staff in services business that have departed not being adjusted out

If you don't do a good faith effort of adjusting for these as a broker as part of your materials/CIM prep, then as a buyer I am much less likely to take you and your client seriously, A good broker wants a good outcome for both seller and buyer.
commentor profile
Reply by a searcher
from Columbia University in Jacksonville, FL, USA
To me, when I see 60% of EBITDA is add-backs and the broker wants 7x for a $500K I often wonder if they are just passing information along or the one instigating this craziness. I guess I only really get upset when there is outright fraud and the broker has enabled it.
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