2025 and Business Brokerage in Maine & New Hampshire
The state of the industry.
Happy New Year and Welcome to 2025!
First off, best wishes to everyone as we start 2025! Since COVID, the business brokerage industry has been unpredictable and volatile; we now feel like things are settling down. Valuations are within historical norms; buyer activity has been steadily increasing over the last 2 years, and business owners who have delayed selling due to market conditions are exploring their exit strategies. Much has changed in the last few years with the business brokerage market, giving Buyers and Sellers more resources, channels to connect and choices to utilize. Here are a few ways we’ve seen business brokerage change.
New Digital Markets. BizBuySell.com might be the largest and most well-known website for brokerage, there has been a slew of new websites that are trying to tap into the market. Some focus on industry specialization, regions, or deal size. Not all of them will prove to be effective, and BizBuySell dominates, but more channels can help improve the chance of finding the right business or identifying the right buyer.
More Business Broker Firms and Brokers. Ten years ago, there were half a dozen firms specializing in business brokerage in Maine and New Hampshire. Now there are 2-3x that amount. Some firms have multiple brokers while others are sole practitioners, but all create new choices for Buyers and Sellers. If you are considering working with a broker, please see my previous post on choosing the right broker: https://www.mainebusinessbrokers.com/news-and-events/news/from-brian/choosing-the-right-business-broker/
National Brokerage Franchises. There have always been large national Business Brokerage franchises with a presence in Maine and New Hampshire. In the past, a common business model was to charge a larger fee or retainer ($25,000 or more!) with the enticement that they were “reaching a larger, nationwide” buyer pool. Many didn’t even have local based brokers! I’ve worked with a number of business owners who were hoodwinked with the promise of out-of-state buyers with unlimited resources and a willingness to pay top dollar, only to have their business unsold after a year or two. Now it’s more common for these franchises to develop a local broker to serve their clients. That’s an improvement, but still no guarantee of quality of services.
Real Estate Brokers. With fewer real estate listings both residential and commercial brokers have dabbled with or jumped into business brokerage. As I’ve discussed in past posts, the systems of valuing, marketing, negotiating and selling businesses are VERY different from real estate. However, in many smaller markets, a realtor may be the only option for local representation. Again, ensuring that the broker is experienced and qualified in selling businesses is critical.
Education. 10 years ago, it was not unusual for me to encounter a business owner who didn’t even know that specialized “business brokers” existed! Overall awareness of business brokers has increased dramatically and while shows like “Shark Tank” can be a bit unrealistic, have given people a general overview of business valuation and value negotiations. For most people, buying or selling may be a once in a lifetime event, but the more informed, the better!
Off Market Deals. There has been an increase in off market deals, private sales to family offices/investor groups or Sellers opting for an ESOP exit strategy. Unfortunately, this further reduces the supply of businesses and removes the opportunity for Buyers to access attractive operating companies.
In summary, there is more awareness, education and knowledge among Buyers and Sellers about the process of business brokerage. There are also more active Business Brokers, but like any professional community, skills and experience will vary. These are mostly positive developments that will facilitate deals, manage Buyer and Seller expectations and, hopefully, allow for smoother transitions. Happy New Year!
