If you plan to work as a business broker – or are currently working as one – you’ll likely be focusing on Main Street or lower Middle Market companies; businesses with revenue in the $500,000 to $25 million range. At the lower end of that range, most buyers are financial. But once you get up into the $2 million (revenue)-and-up neighborhood, strategic buyers begin to emerge. As I’ve written previously, the past two years has seen an unprecedented level of activity in business acquisitions. And though the typical buyers have been the usual suspects – individuals, partnerships, husband and wife teams and the like – we’ve seen an explosion of buying interest from professionals – private equity groups (PEGs), family offices and high net-worth individuals. These are buyers with management experience, plenty of capital and a vision to grow whatever business they buy. And this gets me back to the email I received this morning.

Incoming!

As I’ve written often lately, we get contacted all the time – two or three times every week – by private equity groups from throughout North America. Three or four times each month, we get an email from a family office – not one the size of the Rockefeller office but one of the thousands of more modest ones. About once a month we get an inquiry from a high net-worth individual. All these people have been and continue to be looking for businesses to buy. Almost all these inquiries state that the revenue levels they are looking for range between a low of $2 million to a high of $30 million. This morning, I received such an inquiry. What made this inquiry different is that it resoundingly underscored the contention of dozens of experts – including mine – that we are in one of the most robust business-for-sale markets in memory. How did this email do that? By stating that the buying group, a small PEG, would pay our firm a finders fee for any business we steer to them that they buy; and that fee was $100,000US. We wouldn’t have to do anything! No valuations, no marketing, no time invested, no ad costs, no mailing costs, no staff costs, no negotiations. Unbelievable! If any more evidence was needed to illustrate how frothy our industry is, this was it.