Someone recently asked me about being a business broker (also called business transfer agents, or intermediaries that assist buyers and sellers of privately held businesses in the buying and selling process). And I afterwards thought what was really the best business model.

A middle-man is a intermediary or agent between two parties. This can be making a R1000 for finding a buyer for a friends car to making R1 billion setting up SAP and Oracle with  crooked politicians to sell the government software they don’t need.

Common examples of middlemen in SA (starting with most effort to least)
Estate agents: putting a advert on Property24 or and charging clients a 5% selling fee for the honour. Considering buyers have to pay a conveyancer a transfer fee to do the actual transfer this can be a good business and far less work than a broker in other business (property has less due diligence requirements). All you literally have to do is show people around a house and print out a offer to purchase.

And while we on property let’s cover the whole spectrum. PrivateProperty is on the lowest end. A online service that connects buyers (or the agents representing them) and sellers. And they charge advertising fees.

The middle ground between the two is a referring agent. This is a person (any person) that refers property for sale to estate agents and get a cut of the fee. They do less than the agent and will usually only get a fee once the property they referred is sold. This can be a fixed fee or a commission (a cut of the 5%).

There is also a very niche of a online agent which is a website that is more involved in selling your property that Property24 or PrivateProperty. I guess PropertyFox would fall into this area.

What business model is best?
It depends the more commission the more work will usually be required.
Online marketplaces are the cheapest and easiest to setup. But it depends on the type of industry. Not every industry has lots of listings like property and vehicles and they both have existing incumbents often the Afrikaner Broederbond I mean Naspers/Prosus (Property24, AutoTrader) or Tiger Global backed entrepreneurs. And it is very difficult to get a foot in. Other markets will be too small.

Marketplace ideas (can be general or niche but remember general already has many established competitors):
Holiday Accommodation
Day rentals

If you look at what LekkeSlaap (or Lekkerslaap like I prefer to call them) did, they started a business based on a language spoken by minorities. Why is there not a business in a language niche spoken by ANC supporters? They have enough numbers to vote in corrupt and incompetent criminals every five years but surprisingly there is not even one of their languages on product packaging. Makes no sense. Surely you can just translate a property portal to Zulu (12 million native speakers in 2011 census) and Xhosa (8.7 million native speakers in 2020) and make enough money to sit in Taboo and The Sands – or at the very least Konka – every week.

Bonus Business Ideas!!!
Yes, I am even including some business ideas.
Commercial vehicles
Have you ever seen trucks for sale on Gumtree and there is many different people repping the same vehicles? Some can even get you Eskom coal contracts. Don’t sit in the dark get your cut of the Eskom sabotage.

To summarise:
Agents or consultants will make the most money as they do the most work (but also take on some risk). Referrals is somewhere in between and marketplaces connecting buyers and sellers the least work with least reward.

I want to end this off that this can be a great business for someone starting out with little to no overheads. You just need to find someone with a product that they will allow you to sell on their behalf. I have done this with VHS tapes as a teenager for an auction house and printing machines for a guy that buys and sells business equipment. Somewhere in the hundreds of pages I may have mentioned how to start out at the bottom. I won’t go in too deep but basically don’t be a kak laaitie or entitled and people will do business with you. If people trust you they will allow you to find buyers and bring them to their premises and sell the goods.