Business Brokerage Press 2003 Survey

2003 Survey, Part I
Published online February 1, 2004
by Business Brokerage Press

This past year brought some interesting changes to some of our projects. We should say one profound change - technology. As many of you who completed our annual survey know - this year's survey was done completely online. Not only were the survey questions - and your answers done online - so were the calculations. We did this with a great deal of trepidation. The survey is important and to change dramatically from the "good old paper" survey to just a click on the computer obviously caused a bit of concern. After all, if no one completed it, we would have lost a year. This year we also have placed our Industry Specialist program online with terrific results. If you are an expert in a particular industry or business type - visit our Web site www.businessbrokeragepress.com and click on Industry Expert for more information.

The survey online was a complete success and we know that next year will be even better. For many questions we had twice as many respondents as last year. The major problem was that when people got to some of the questions that required research on their part they skipped them. Towards the end of the time period for completing the survey, we prefaced it by informing them what they would need. Next year, we will obviously mention this at the very beginning so prospective respondents will be able to gather the necessary information. We did not use all of the survey questions in this report: some were for our use, some were too lengthy and some we will report on in a subsequent issue.

This year we used just averages - no median or mode. Every industry survey we have seen uses just averages. We want to present the information in as clear a format as possible and as usable as possible. We hope that it helps in analyzing your brokerage business.

We had business brokers from 39 states and six foreign countries participate. As you might expect the states of California, Texas and Florida had the most respondents - 30 percent. The breakdown was as follows: the Eastern States - 20 percent; the Southern States (includes both Florida and Texas) - 33 percent; the Central States - 20 percent; and the Western States - 27 percent.


1. Are you a Sole Practitioner?
46% are sole practitioners
54% are office owners


For Office Owners Only
1a. How many associates/agents do you have not counting yourself?

The average is 5.5 agents

19% have one agent
13% have 2 agents
9% have 3 agents
12% have 4 agents
11% have 5 agents
18% have 10 agents
17% have 11 or more agents

64% of the offices have less than 5 agents


1b. How many offices do you own?

83% have 1 office
11% have 2 offices
3% have 3 offices
2%
3% have 5 + offices


1c. Are you in production, in other words, do you list and sell?
Yes90%


1d. In 2002, approximately what percentage of your company's total gross commissions was a result of your individual listing and/or selling activities?
Less than 10% 13%
10 - 19% 12%
20 - 29% 11%
30 - 39% 4%
40 - 49% 13%
49% or less 53%
50 - 59% 13%
60 - 69% 5%
70 - 79% 10%
80 - 89% 7%
90 + 15%
50% or more 50%

Figures Rounded


1e. What is your basic commission/fee split with your agents? (Agents/Office)

Agent/Office
40/60 8%
50/50 44%
60/40 16%
70/30 9%
80/20 2%
Other 21%


1f. How long did it take for your newest broker/agent to have a closing or sale (in days)?

1 to 30 days 4%
31 to 60 days 10%
61 to 90 days 15%
91 + days 71%


2. Do you primarily consider your firm to handle:

General Business Brokerage
(businesses under $3 million in sales) 84%
Middle Market 16%


3. What percentage of your deals were general business brokerage and what percent middle market?
General Business Brokerage
Sole Practitioners 82%
Offices 82%

Middle Market
Sole Practitioners 18%
Offices 18%

They did come out the same.


4. Where is your office located (within a population radius of approximately 35 miles from your office?)
[figures rounded]

Major metropolitan area
(population over 1 million) 60%
Secondary metropolitan area
(population 500,000 to $1 million) 17%
Smaller city
(population 250,000 - 500,000) 11%
Rural market
(population under 250,000) 12%


5. Is your office located in a:
Professional/Office building 57%
Shopping or Strip center 7%
Stand-alone building 11%
Home office 25%


6. Approximately how many square feet are devoted to the business brokerage office?
Sole Practitioners 840 sq. ft.
Offices 1745 sq. ft.


7. Do you own your own building?
Yes No
Sole Practitioners 14% 86%
Offices 16% 84%


8. What is the rent for the space used for business brokerage?
Sole Practitioners $847/mo.
Offices $2206/mo.


9. Do you use a personal or administrative assistant?
Yes 41%


10. How many paid employees do you have (secretarial, receptionist, support staff) not counting a personal assistant?
1 employee 66%
2 employees 17%
3 employees 6%
4 employees 5%
5 + employees 6%


11. Does your office have an on-going annual direct mail program?
Yes 59%


12. In 2002, how many direct mail pieces did you mail monthly?Less than 100 13%
100 - 499 35%
500 - 999 18%
1,000 - 1,999 8%
2,000 - 2,999 9%
3,000 + 17%


13. Do you routinely mail to: (check all that apply)

The same businesses 70%
Different businesses 74%


14. Where do you get your mailing lists? (check all that apply)

Info USA* 41%
Dun & Bradstreet 39%
In-house 43%
Other 30%

*also referred to as American Business Lists


15. How do you send your direct mail? (check all that apply)
In-house 95%
Commercial Mail-house 25%
Other 10%


16. What do you mail

Company Letters 67%
Company newsletters 31%
Postcards 35%
Company brochures 25%
Other 32%

Note: The survey company figured the percentages by line item. In other words, they computed each item, i.e. Company Letters - 67 percent of the respondents used company letters; 31 percent used company newsletter, etc. This is why the total is greater than 100 percent. Figures are rounded.