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:
- under-trained,
- lack self-discipline,
- don’t know how to manage their time,
- are not well-organized,
- don’t have the requisite skill sets (analytical, marketing, communicative, prospecting, ability to manage expectations of the parties, etc.), and
- do not follow systems and standards that work.
Next Tuesday’s posting will continue this article with more observations.
