Every year, thousands of companies change hands for various reasons – retirement, exploring new opportunities, lifestyle change, health reasons, or changes in the market.
The sheer number of businesses sold each year opens immense opportunities for business brokers. It’s not surprising why numerous prospective business brokers want to enter the profession.
If you aspire to become a business broker, you might be wondering whether you need a license for this job.
Does Business Brokerage Require a License?
In general, there is no such thing as a business broker license. However, most state laws require business intermediaries to hold a real estate and securities license. Why so?
This assumes that the lease is incidental to the business sale. Most states require a real estate license, so unlicensed brokers should not be part of any business sale or transaction. Hence, business brokers need to meet the real estate licensing requirements of the state where they intend to practice.
A real estate license requirement is not dependent on having a physical office. Even if a company operates fully online and does not have any office, the business broker still needs a real estate license. In states like California and Florida, state laws specifically require a securities or broker’s license, regardless of whether or not the sale involves real property. Business brokers generally need a securities license when selling large companies with stocks.
A license is a must in many states. However, some states like Georgia allow unlicensed brokers to sell a small business without real estate. If some intermediaries and advisors try to convince you that a license is unnecessary, be cautious as this can get you into trouble with the law.
While a business broker license is not generally required, there are several credentials worth earning that can help you start a successful career.
A bachelor’s degree in business or accounting is often a prerequisite in obtaining several industry credentials. Business sellers would surely prefer a college degree, especially for large contracts. But more than the credential, a bachelor’s degree best equips you with theoretical preparation to find lucrative contracts and be competitive. Better still, you can enroll in further studies by completing an MBA or Ph.D., which gives you even more credibility and clout.
You can boost your competitiveness and increase your career opportunities by earning a broker certification. Some organizations provide certification programs. For example, the International Business Brokers Association offers a certification program for a business intermediary. You can add this to your business cards, letterhead, and other marketing materials by completing this coursework. This assures prospective clients that you know what you’re doing. In addition, joining these professional organizations broadens your networking opportunities and continuous professional development through conferences, workshops, and training.
Valuation Analysts Certification
Business valuation is a crucial part of your job as a business broker. It is an added advantage if you have a valuation analyst certification. Likewise, clients would be more likely to pick you if you have this credential. The National Association of Certified Valuators and Analysts offers certification programs for qualified candidates.
Real Estate License
As mentioned above, most states require a real estate license to practice as a business intermediary. Make sure to check with your state real estate commission the requirements for business brokers. A real estate license enables you to offer clients a full service. You don’t need to hire a third-party realtor when selling or buying business properties. But most importantly, the theories and skills you’ll receive as you earn the real estate license will help you grow your practice.
An experienced Business Broker, Orlando, emphasized that if you intend to start a career in the business brokerage industry, earning a license should not be seen as an additional burden but a competitive edge. In a way, the industry self regulates. Business owners prefer to work with licensed brokers. With the accessibility of the real estate license database, it is easy for prospective clients to look at your name on the roster. Most likely, they will choose licensed business brokers over those without a license. A real estate license is your key in achieving a successful business broker career.