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SELLING A BUSINESS

Apr 4, 2023

Business Brokers in Austin, Texas: Pick the Best Austin Business Broker for Your Business

Not quite ready to sell?

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Austin has exploded in growth over the past handful of years. According to a recent article on KXAN, Austin is the second fastest growing city in the United States. The state's business friendly taxes combined with an influx of technology entrepreneurs and capitalists have all contributed to a huge population growth.

With that growth has come a rise in entrepreneurs looking to buy local businesses. There are over 300 entrepreneurs registered on Searchfunder, a popular forum for "acquisition entrepreneurs", who are looking to buy in the Austin region alone.

As Austin business owners begin to receive inbound calls and emails from these entrepreneurs, we recommend reaching out to a local business broker in the Austin area.

Why use a business broker in Austin?

A small business broker is a professional who helps entrepreneurs buy and sell small businesses. Most business brokers focus on working the "sell-side", or representing business owners. These business brokers spend time building relationships with local business owners, assisting them in mapping out their business exit, and ultimately marketing and closing on a deal.

They use their knowledge and expertise to estimate a business’s fair market value, usually through using seller's discretionary earnings. After determing its value, business brokers will work with the owner to market the business opportunity to potential buyers and negotiate the best deal.

A good broker will understand the complexities of the process and help the owner avoid the common pitfalls of a transaction:

For owners of small businesses, their first business sale is often their first and last. By working with a seasoned business broker, owners can maximize their proceeds from a sale while minimizing the risks.

Types of business brokers in Austin

1. National business brokerage franchises

There are a number of national business brokerage franchises: Transworld Business Advisors (which has a Central Texas office), Murphy Business Brokers (which has offices in West, North and South Texas), Sunbelt Business Brokers and others. These franchisees undergo training in the world of consulting, business brokerage, franchise sales, and franchise development. Many come from a background in business ownership or corporate sales.

2. Local business brokers

In addition to national franchises, there are a good number of local business brokers in the Austin area. These are independent brokerages with a number of agents and 1-3 business brokers. They typically have been in business longer than your average national franchisee and have a strong network in the community.

3. Industry-specific brokers

Apart from national and local brokers, there are some that focus on a particular industry. In Austin, Molly Meier is a co-owner of Tinsley Medical Practice Brokers, a firm which exclusively helps medical practitioners sell their clinics.

4. Investment bankers

For owners of businesses that fall in the lower middle market ("LMM"), there are a number of local investment banks that may fit for your needs. Investment bankers typically work with owners of businesses which are worth at least $10M and use a different pricing model than your average business broker.

At Beacon, we work focus on "Main Street" businesses, so if we encounter an owner of a large business, we will refer them to investment bankers we are friendly with.

Aside from helping owners broker the sale of their business, investment bankers can also provide capital services (e.g., raising debt or equity to grow your business).

5. Real estate brokers and agents

Lastly, there are commercial real estate agents who broker the sale of small businesses on the side. In Austin, Frank Seely of Seely Real Estate and Jim Schaffrath of Realty Austin are both real estate brokers who offer business brokerage services as well.

We generally recommend owners to avoid working with a real estate agent as their primary advisor, as selling small businesses is not their bread and butter. They are an important party to a transaction, if a lease needs to be negotiated or a property is included in a sale, but they are not experts on valuing, buying or selling small businesses.

That being said, some real estate agents come from a background in business and know exactly what they are doing.

Best business brokers in Austin, TX

#1. Transworld Business Advisors

Transworld is a national business brokerage franchise with over 200 territories.

#2. Beacon

Beacon is a Texas-focused business brokerage with headquarters in Austin, TX.

#3. IBEX

IBEX is focused on business brokerage services for the middle-market. Based in Austin, the firm has closed over $600M worth of deals.

#4. Austin Business Brokers

Austin Business Brokers is an Austin-based firm that focuses on the Central Texas area, including the counties of Travis, Bell, Williamson, Hays, Bastrop, and Caldwell.

#5. CGK Business Sales

CGK has offices in 11 different metros across the U.S., with one focused on the Austin market.

#6. TMV Business Group

Beacon is a Texas-focused business brokerage with headquarters in Austin, TX.

#7. Intemedior Business Advisors

Intemedior is a relatively new firm on the block. It is a full-service M&A advisory firm, which works with Main Street and LMM businesses. It is headquartered in Austin, TX.

#8. Lion Business Brokers

Lion Business Brokers is a firm specializing in business sales, valuations and M&A. Headquartered in Austin, the team includes 7 advisors and is distributed throughout Texas, Oklahoma, Alabama and Kansas.

Questions to ask your business broker

How do you charge? Are there any upfront fees or retainers?

It's important to understand how business brokers will charge you. Do they require their entire commission upfront? Or are they willing to take it as you get paid, given that they recommended the buyer? Do they require a hefty upfront retainer? Do they have a minimum fee?

At Beacon, we earn a commission as the owner gets paid. That means that if there is an installment component to the sale, we share the same risk as our clients. In other words, we put our money where our mouth is.

What types of business buyers do you work with and know?

Some business brokers in Austin focus on international buyers, others like IBEX may know very large private equity funds. Depending on who your ideal buyer is, you should make sure that the business broker you're speaking with has experience finding and closing that type of buyer.

Will you perform a complimentary valuation?

Some brokerages require owners to pay for valuations. The price can range from $499 to more than $3,000. Ensure that you know what you're getting yourself into. Knowing your exit options is important before committing to a third-party sale with a business broker.

At Beacon, we provide complimentary valuations to owners. But, we do ask owners to pick us when they are ready to sell. As you can see, we like to pay it forward.

Can you provide a reference to an owner who recently worked with you?

We highly recommend asking for references from past clients of the broker. How accurate was the broker's valuation? How careful were they with vetting and selecting buyers to advance to meeting the owner? How helpful were they in helping close the deal after the initial offer was countersigned?

Some brokerages will provide testimonials on their websites, which can share color on how the brokers have helped their clients navigate business transactions.

What types of businesses do you specialize in?

If you have a unique business, make sure that the broker is capable of helping you sell. Some business brokers may focus on online or e-commerce businesses. Others may specialize in medical or manufacturing. Having a business broker who truly understands your business is key to achieving the ideal outcome.

Not quite ready to sell?

Subscribe to receive the latest resources for small business owners.

Anthony Schurz
Anthony Schurz
Marketing

Anthony is the Marketing Lead at Beacon. He previously spent his career working for software companies in Silicon Valley but is now focused on making it easier to buy and sell Main Street businesses. Anthony studied Economics at Brown University and resides in Austin.

Information posted on this page is not intended to be, and should not be construed as tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction.

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