Industry Overview (2003)

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Industry Overview (2003)

  1. 1. AN INDUSTRY OVERVIEW BY MURPHY BUSINESS & FINANCIAL CORPORATION Business Brokerage
  2. 2. The Population <ul><li>There are approximately 4,000 active Business Intermediaries in the United States today. </li></ul><ul><li>Some of those are not full time practitioners; </li></ul><ul><ul><li>Commercial Real Estate Agents </li></ul></ul><ul><ul><li>Work for Banks as Business Developers </li></ul></ul><ul><ul><li>Consultants </li></ul></ul><ul><li>47% are sole practitioners </li></ul><ul><li>53% work for a Firm </li></ul><ul><li>75% are one office Firms </li></ul><ul><li>55% are located in a major metropolitan area </li></ul>
  3. 3. Industry Information <ul><li>Average # of Engagements = 14 </li></ul><ul><li>Average Completed Transactions = 3 </li></ul><ul><li>Annual Gross Commissions </li></ul><ul><ul><li>Under $100,00 = 47% </li></ul></ul><ul><ul><li>Under $199,999 = 24% </li></ul></ul><ul><ul><li>Under $299,000 = 10% </li></ul></ul><ul><ul><li>Under $500,000 = 11% </li></ul></ul><ul><ul><li>Over $1mm = 8% </li></ul></ul>
  4. 4. Industry Information <ul><li>Breakdown of Industry by age </li></ul><ul><ul><li>Under 25 2% </li></ul></ul><ul><ul><li>26 – 35 6% </li></ul></ul><ul><ul><li>36 – 45 15% </li></ul></ul><ul><ul><li>46 – 55 33% </li></ul></ul><ul><ul><li>56 – 65 34% </li></ul></ul><ul><ul><li>65+ 10% </li></ul></ul><ul><li>Breakdown by Sex </li></ul><ul><ul><li>Male 90% </li></ul></ul><ul><ul><li>Female 10% </li></ul></ul>
  5. 5. Industry Information <ul><li>Franchised or Network Systems </li></ul><ul><ul><li>Sunbelt Business Brokers </li></ul></ul><ul><ul><li>VR Business Brokers </li></ul></ul><ul><ul><li>Empire Business Brokers </li></ul></ul><ul><ul><li>Business Brokers Network </li></ul></ul><ul><ul><li>Murphy Business & Financial Corporation </li></ul></ul><ul><li>Governing Bodies </li></ul><ul><ul><li>International Business Brokers Association (IBBA) </li></ul></ul><ul><ul><li>Texas Association of Business Brokers (TABB) </li></ul></ul>
  6. 6. Industry Information <ul><li>Three Market Segments </li></ul><ul><ul><li>Small Businesses </li></ul></ul><ul><ul><ul><li>Typically revenues of $5mm and down </li></ul></ul></ul><ul><ul><ul><li>Typically sell for less than $800,000 </li></ul></ul></ul><ul><ul><ul><li>Closing Ratio of less than 10% </li></ul></ul></ul><ul><ul><li>Mid Market Businesses </li></ul></ul><ul><ul><ul><li>Typical Revenues are greater than $10 million </li></ul></ul></ul><ul><ul><ul><li>Partnerships – Stocks are involved </li></ul></ul></ul><ul><ul><ul><li>Closing Ratio of less than 30% </li></ul></ul></ul><ul><ul><li>Mergers and Acquisitions </li></ul></ul><ul><ul><ul><li>Revenues of $50mm and greater </li></ul></ul></ul><ul><ul><ul><li>Closing Ratio of 20% </li></ul></ul></ul>
  7. 7. Industry Information <ul><li>Number of Businesses </li></ul><ul><ul><li>Dallas County 100,000 </li></ul></ul><ul><ul><li>Collin County 20,000 </li></ul></ul><ul><ul><li>Tarrant County 53,000 </li></ul></ul><ul><ul><li>Denton County 11,000 </li></ul></ul><ul><ul><li>Total 184,000 </li></ul></ul><ul><li>25% of the market will consider selling this year </li></ul><ul><li>10% of businesses will change ownership this year </li></ul>
  8. 8. From Our Perspective <ul><li>The industry comes with a general bad connotation </li></ul><ul><ul><li>Fragmentation </li></ul></ul><ul><ul><li>Non- regulated </li></ul></ul><ul><ul><li>Easy to enter </li></ul></ul><ul><ul><li>Lack of training </li></ul></ul><ul><ul><li>Lack of professionalism </li></ul></ul><ul><ul><li>Greed permeates throughout </li></ul></ul><ul><ul><li>Not much sharing or co-brokering </li></ul></ul><ul><ul><li>Lack of information to buyers and sellers </li></ul></ul><ul><ul><li>Low closing rates </li></ul></ul><ul><ul><li>Low earnings </li></ul></ul><ul><ul><li>Heavy Fall-Out ratio </li></ul></ul>
  9. 9. So we thought… <ul><li>What an opportunity! </li></ul><ul><li>Let’s build a better machine! </li></ul><ul><li>Let’s do it right! </li></ul><ul><li>Let’s do the things that eliminate mistakes and waste of time activities. </li></ul><ul><li>Let’s bring in a higher class of individual, </li></ul><ul><li>Let’s increase the closing percentages, </li></ul>
  10. 10. And… <ul><li>Let’s put them in a program that will make them succeed, </li></ul><ul><li>Let’s coach them through the start up time, </li></ul><ul><li>Let’s help them make money and enjoy their careers, </li></ul><ul><li>Let’s take out the back office – administrative functions, </li></ul><ul><li>Let’s give them the opportunity to close deals, </li></ul>
  11. 11. And… <ul><li>Let’s build a better website, </li></ul><ul><li>Let’s give them better tools, </li></ul><ul><li>Let’s build a pool of professional partners, </li></ul><ul><li>Let’s train them as much as possible, </li></ul><ul><li>Let’s co-pilot with them on their client calls </li></ul><ul><li>Let’s make an investment in their success, </li></ul><ul><li>Let’s Dominate The Market </li></ul>

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