The Business Brokerage Industry Has a Quality Problem. Business Owners Are Paying the Price.

A barber in Iowa needs 2,100 hours of training before they can cut your hair. A real estate agent needs 60 hours of coursework and a state exam before they can sell your house. A business broker? There are companies out there advertising that you can be certified in five days. Write a check, sit through a week of training, and start advising people on the biggest financial decision of their life.

That should bother you. It bothers me.

I spent 30 years as an entrepreneur before I ever sat across from a seller as a broker. I managed eight warehouses across the US and Canada. I owned distribution and manufacturing businesses. I started a software company. When I finally moved into brokerage, I brought all of that with me. Not because I am special, but because the job demands it. You cannot advise someone on selling their company if you have never built or operated one yourself.

But the industry does not see it that way. And business owners are the ones who get hurt.

The Five-Day Problem

There are franchise operations right now marketing business brokerage as a passive income stream. Let that sink in. The same lie they tell buyers about owning a business, they are now telling brokers about selling them. Pay fifteen thousand dollars, attend a five-day program, and you are a business broker.

What do five days teach you? They teach you how to fill out paperwork. Maybe some sales scripts. How to prospect for listings. What five days do not teach you is how to read a financial statement and know what questions a buyer is going to ask. They do not teach you how to sit across from a 62-year-old man who built his company from nothing and tell him his business is worth half of what he thinks. They do not teach you what to do when a deal starts falling apart at the closing table because someone got emotional.

Five days gives you a title. It does not give you judgment.

A Listing Is Not a Listing

Here is where the damage shows up first. An undertrained broker gets a seller to sign a listing agreement and counts it as a win. I get it. It feels like progress. But a signed agreement means nothing if the price is not real.

I just sent a seller a note telling him we could only relist his business if he took a serious haircut on the asking price. That is not a fun conversation. It is not a conversation a five-day broker is equipped to have, and it is not a conversation they are motivated to have. They need listings. They collect them like baseball cards. I would rather have five listings that can actually close than twenty that sit there making everyone look bad.

When a broker lets a seller set an unrealistic price, nobody wins. The business sits on the market. Qualified buyers pass because the numbers do not work. The seller gets frustrated and blames the broker. And eventually, the listing expires and the seller walks away thinking the market failed them. The market did not fail them. Their broker did.

The Pressure Play

“Now is the time to sell!” You have heard it. Maybe from a cold call, maybe from a mailer, maybe from a broker who showed up at your door. It is the brokerage equivalent of “passive income.” It is what you say when you do not have anything real to offer.

Selling a business is not a 50-meter dash. It is an ultra marathon. A serious broker will sometimes tell an owner the truth they do not want to hear: you are not ready. Your business is too dependent on you. Your financials need cleanup. Your key employees do not have the authority to operate without you in the room. Come back in two years when you have built something someone else can actually run.

No five-day broker is having that conversation. They need the commission now. They are not playing a long game because they were never taught that the game is long.

You Are Not the Client. You Are the Product.

The undertrained broker is just one version of this problem. There are at least two more, and they are arguably worse because they are designed to look like they are on your side.

First, the free listing sites. “List your business for free and we will bring you the buyers!” Sounds great. Costs you nothing. So you fill out a form, upload some details, and your business goes live on a website alongside hundreds of others. Then it sits. And sits. And sits. Nobody is working your deal. Nobody is qualifying buyers. Nobody is preparing you for due diligence. Nobody is picking up the phone. Your business is not on the market. It is in a warehouse. The site makes money from traffic and advertising, not from actually selling your company. You are not their client. You are their content.

Then there is the traveling seminar crew. These are the ones who roll into town, put on a polished presentation about how now is the time to sell, and tell you your business is worth a number that makes your eyes light up. “Your company? Easy. Three million dollars.” You write a check for fifteen or twenty thousand in retainer fees. They list your business at that fantasy price. No serious buyer bites because the numbers do not work. The listing sits. But the seminar crew already got paid. Their business model is retainers, not closings. They do not care if your business sells. They got what they came for.

That is the exact opposite of what a real broker does. I just told a seller he needed to take a serious haircut on his asking price if he wanted to relist with us. That conversation is not fun. It does not feel good for either side. But it is honest, and it is the only path to an actual closing. The seminar crew would have told him what he wanted to hear, cashed the retainer, and moved on to the next town.

In every one of these models, the business owner is not the client. The business owner is the product.

The free site sells your listing as content to generate traffic. The seminar operation sells your hope back to you at a premium. And the five-day broker sells the idea that anyone can do this job without earning it. The person who built the business is the one left holding the bag every time.

The Real Cost to Business Owners

Here is what an undertrained broker actually costs you. They do not know what they do not know. They cannot read a room during negotiations. They have never had to tell a seller something hard, so they avoid it. And the business owner, who trusted them with the most important transaction of their career, has no way of knowing what they are missing until it is too late.

I know a broker who spent thirty years in the military before he got into brokerage. He has been at it for about eight years now, and he is successful. He figured it out. Not because he had my exact background, but because he brought something real to the table. Leadership. Problem-solving. Reading people. Operating under pressure. And then he put in years of learning the craft on top of that foundation.

That is the distinction. It is not about gatekeeping. It is about whether something real is underneath. The five-day course does not give you that. It gives you a business card.

What Good Brokers Actually Do

Good brokers are problem solvers. They know how to spot issues before a buyer does. They know where the questions are going to come from. They know how to prepare you for meetings and discussions so you are not blindsided.

Here is what I mean. At some point in the process, a buyer is going to ask you a question that feels like they are calling your baby ugly. Why did revenue dip in 2022? Why did your best employee leave? Why is your biggest customer 40% of your revenue? If you have not been prepared for those questions, you take them personally. You get defensive. The deal falls apart because of ego, not economics.

A good broker has already walked you through every one of those questions before you ever sit across from a buyer. They have helped you build honest answers. They have shown you how to frame weaknesses as opportunities without being dishonest about them. That is preparation. That is the work.

Local matters too, and not just because of geography. When your broker lives in your community, they cannot hide behind email. They are in the room for meetings. They are at the coffee shop. They run into you at the grocery store. That accountability changes how a broker operates. You cannot just collect a commission and disappear when you are going to see that person at your kid’s baseball game.

I have spent my entire career in the upper Midwest. I know how Midwest companies work. The values, the handshake culture, the way deals get done here. But I have also worked with operations on the east coast, southeast, west coast, and in Canada. I know how they work too. That range matters when you are matching buyers and sellers who think differently about how business gets done.

The Bottom Line

The business brokerage industry has a quality problem. The barrier to entry is so low that people with no business experience, no operational background, and no real training are advising entrepreneurs on the most consequential financial decision they will ever make. And the people marketing brokerage as a passive income opportunity are making the problem worse.

If you are a business owner thinking about selling, ask your broker one question: What did you do before this? If the answer is “I took a five-day course,” keep looking. You deserve someone who has been where you are. Someone who has built something, operated something, and understands what it means to hand over something you have spent your life building.

Your business is not a line item on someone’s commission sheet. It is your life’s work. Treat it that way when you choose who represents you.