Perfect Business Brokers in Canada
How business brokerage in Canada compares to M&A
Ultimately, the objective of business brokers in Canada and M&A firms is to consummate deals. Business brokers and merger & acquisition advisors bring together buyers and sellers, assist with negotiations and foster a mutually agreeable deal for their clients.
One of the more important distinctions though is in regards to deal size. Most business brokers in Canada will work deal sizes up to $5 million in value while only very small M&A firms work in that deal space. There is some overlap though and it is sometimes a judgment call whether a professional firm or a business broker would be better to serve a particular client.
In some instances, intermediaries go from working in the M&A field to working for themselves as a business broker, and vice versa. The skill sets are very similar so this does occur, especially near larger financial centres such as Toronto.
Business brokerage and the real estate profession
Most people think that ‘business brokers’ or ‘business for sale’ are a distinct subsection of the real estate profession. The truth is that realtors and those that focus on selling businesses in Ontario are governed under the same statute, the Real Estate & Business Brokers Act, 2002. In fact, it is the exact same licensing and registration process to sell a business, home, commercial building or piece of real estate.
There is no provision in the Act that stipulates that a professional who sells businesses must have a certain level of education or know-how but in reality a person should have a certain level of skill in order to successfully know how to sell a company. The common nomenclature for real estate professional who sells businesses is often referred to as “business broker” just as “real estate agent” is often used for those that sell houses or buildings. The preferred terminology is sales representative, salesperson or broker – depending on their registration.
Most business brokers work for a large real estate brokerage with a brand name. Some focus exclusively on the sale of businesses and other take on commercial or some residential clients as they come up. For most business sales though, some conveyance of real estate usually happens (either a sale or lease assignment of some sort) so as a matter of practicality, the license to trade in real estate is certainly a benefit to the client.