Business Brokerage Services
While there are no hard and fast definitions, we think of buying and selling businesses with less than $5,000,000 of revenue as business brokerage. While these transactions can be very similar to M&A transactions, there are differences. Individuals are the likely buyers for these businesses, more so than financial or strategic acquirers. Because more individuals are capable of buying these businesses, there are likely more prospects nearby. Consequently, we may market these businesses differently than much larger businesses for which there are fewer prospects.
Further, individuals tend to focus on Seller’s Discretionary Earnings (“DSE”) when assessing a business opportunity. They look for businesses that can provide them personal financial benefit in the low to mid-six figures. DSE assumes the owner will run the business on a day-to-day basis, it does not contemplate paying a high-level manager to fill this function. Further, DSE recognizes that sellers of smaller businesses may pay personal expenses through the business. In contrast, financial and strategic buyers are more likely to focus on companies with Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) running into the millions of dollars. Unlike DSE, EBITDA includes the expense of a full-time senior executive managing the business day-to-day.
We’re Capital Access. And with over 70 collective years of experience, we understand the nuances and complexities involved in all aspects of helping you sell or buy a business regardless of size.