Bizz Ops
Is it just my area or are commercial brokers wary of doing business opportunity work? There's one guy i know that does both commercial sales and business brokering even though the two go side by side a lot of the time. Everyone else has tried to discourage me from doing both. I'd like to hear what you guys think about it. 
[{"id": "crnouin", "text": "...business brokering? Do you mean Tenant Rep work?", "replies": [{"id": "cro3klh", "text": "I mean selling/buying an existing business even when the land is not part of the deal. \n\nFor instance, I have this client that has a commercial store + owns the land, so I am selling his store and land together. No one has a problem doing that, every broker likes this.\n\nSame client wants to buy an existing business without buying the underlying property. So it's not tenant rep *exactly* , its buying an existing business, which is called a \"business opportunity\". THIS is what people I talk to have an issue with. \n\nThe client I have wont sell his commercial business/property without buying an existing successful business first. All the directors at my firm (5 of them, all top producers with decades of experience) have told me not to bother doing the business opp and to just refer it to a business broker.", "replies": [], "depth": 2}], "depth": 1}, {"id": "cro2zoy", "text": "Im not sure what you mean by that, but if you are referring to representing businesses in their office leasing, it is uncommon for brokers to do both (at least in larger markets). Sales and leasing are two different ball games. It is possible to do both, but I suppose brokers want to avoid being a \"jack of all trades and a master of none\".", "replies": [{"id": "cro3yqa", "text": "Yeah, I'm talking about buying and selling actual businesses without the underlying real estate. Like if there is an existing applebee's in the shopping center down the block and they already have their lease locked it, etc. and I know a guy who wants to buy that applebee's at a fair valuation, I represent him in that. I take the applebee's books, analyze everything, come to a fair valuation on the business, maybe add an industry multiplier to the business, and negotiate the acquisition of the existing applebee's. Does that make sense? ", "replies": [], "depth": 2}], "depth": 1}, {"id": "crod7i0", "text": "I actually understand pretty much exactly what you are asking here......\n\nI've been through this a few different ways.  I agree with the directors at your firm.  Unless there is just an unbelievable deal here stay far far away.  \n\nI'll tell you my experience.  \n\n1-  Trying to get CRE listings you do run into opportunities to sell businesses.   I'm sure this varies by state, but here its unregulated.  I can do that if I want.  So can the homeless dude down the street.  I got involved in some of them.  They were a ginormous time suck.  You talk about cre owners thinking their stuff is worth more than it is, oh holy god do business owners think there shit is worth multiple of what it is (and its commonly worth nothing).  \n\n2-  I semi learned my lesson, and stayed far far away.  What I did do was develop a relationship with a business broker.  I referred her the business side of listings I had with that component, and she let me market the real estate side of her listings. In theory that seems to work well.  We really are marketing to different folks, I have much more information and knowledge to deal with cre than she has, and like wise she really knows more than me about business sales.  In reality we never closed a deal.  Maybe she was a bad broker, I don't really know, but it wound up being a waste of time.  In reality the re was always the bulk of the combined value and they way over valued the business part, which made selling it difficult.  \n\n3- She left the business and now I just really don't deal with business sales.  I could, and if it was right I might, but it just doesn't come up much.  I'm good at selling CRE.  I'll leave the businesses to someone else.  I've been on the other side of this too where I had clients looking to buy CRE that could come with businesses.  Pretty much the same has happened.  We get to a real value on the CRE and they think their business that basically breaks even or is losing money is worth a fuckton because they were doing the job of 5 people for 0 pay for the last 5 years.  I've developed a relationship with some local business brokers and you should do the same.  Most of them are CPA's.  I'm a finance guy, but they really are better at businesses than me, and i get that.  If this came up now for me I'd have no hesitation to refer the business out.  \n\nI highly suspect business brokers decline a large amount of business.  They also commonly charge 10+% fyi.  Unless everything is perfect stay away.  More often than not a business listing is an albatross around selling the cre, rather than an extra asset for you to broker.", "replies": [{"id": "crohdql", "text": "This is exactly everyone's reasoning and advice to me as well. Business owners over valuing their business, or having money under the table that they never got taxed on but they want included in their revenue numbers lol. Thank you for your input, I really appreciate it. I'll refer the client to the business broker I know.", "replies": [], "depth": 2}], "depth": 1}]