Why Younger People Have a Difficult Time Making It (Part 1 of 3)

20 Sep Why Younger People Have a Difficult Time Making It (Part 1 of 3)

It seems to me that the average age of a successful business broker has been increasing and, as they retire, there are a decreasing number of new brokers replacing them. Although I have tried over and over, during the past 12.5 years of running a successful business brokerage practice, I have never been successful in having a person younger than forty make it as a business broker in my office. Here are some observations:

• Business brokerage is a much more difficult profession than is apparent from the outside. I would not be surprised if the overall national average annual turnover rate is 25% to 30%. This would mean that the average person lasts an average of 4 to 5 years.
• It is a much higher turnover rate for younger people because they enter the profession with unrealistic expectations and are unprepared.
• Most do not have the financial “staying” power, and significantly underestimate the time it takes to earn their first commission.
•  In my experience, they significantly underestimate the time it takes to build a book of businesses and close transactions, even if someone tells them the average time requirements.
• They also spend their time, which is their real “inventory,” on listings that have a low probability of ever selling, so they get what they deserve: a low probability of a commission.
• Aside from unrealistic expectations, they are usually:

1. under-trained,
2. lack self-discipline,
3. don’t know how to manage their time,
4. are not well-organized,
5. don’t have the requisite skill sets (analytical, marketing, communicative, prospecting, ability to manage expectations of the parties, etc.), and
6. do not follow systems and standards that work.

 Next Tuesday’s posting will continue this article with more observations.