Size, complexity, management model and the type of buyer are the key drivers to understanding why and how business brokerage and mergers & acquisitions (M&A) services differ.
Business brokerage typically handles smaller owner operated business. What used to be known as Ma and Pa Shops are what we now refer to as Main Street Businesses. The general manager of these businesses is usually the owner and they are involved in the day-to-day operation of the business. This means that the buyer for their business will most likely be an individual who will replace them as the new owner/operator of the main street business.
When a business owner has developed their business operation so that they are no longer required for day-to-day operations, a strategic or financial buyer is an option for their business. This requires a different approach to the marketplace. Understanding how the business can strategically improve another business through synergistic attributes allows the M&A process to take place. Potential buyers can be identified and the ‘packaging’ of the business opportunity becomes directed toward revealing these potentialities to the identified buyers.