How to be a business broker? It’s more than just matching buyers and sellers; it’s about navigating complex financial landscapes, mastering negotiation, and understanding the intricacies of various industries. This guide unravels the path to becoming a successful business broker, revealing the essential skills, legal requirements, and marketing strategies needed to thrive in this dynamic field. From mastering business valuation to building lasting client relationships, we’ll equip you with the knowledge to confidently navigate the world of business brokerage.
This comprehensive guide covers everything from understanding the industry’s nuances and obtaining the necessary licenses to mastering the art of negotiation and building a thriving practice. We’ll explore different business valuation methods, effective marketing strategies, and the legal considerations that are crucial for success. Learn how to identify profitable niches, manage client expectations, and adapt to the ever-changing market conditions. Ultimately, this guide aims to empower you with the tools and knowledge you need to build a successful and rewarding career as a business broker.
Understanding the Business Brokerage Industry
The business brokerage industry connects buyers and sellers of businesses, facilitating transactions that often involve complex financial and legal considerations. Brokers act as intermediaries, providing expertise and guidance throughout the process, ensuring a smooth and successful transfer of ownership. This role requires a diverse skillset, blending financial acumen, negotiation prowess, and a deep understanding of various business sectors.
Roles and Responsibilities of a Business Broker
Business brokers wear many hats. Their core responsibilities include business valuation, marketing the business to potential buyers, negotiating offers, handling due diligence, and overseeing the closing process. They must meticulously gather financial data, analyze market trends, and create compelling marketing materials that highlight the strengths and potential of the businesses they represent. Furthermore, they act as trusted advisors, guiding both buyers and sellers through the often-emotional and complex process of business acquisition or divestiture. A strong understanding of legal and regulatory compliance is also crucial.
Types of Businesses Handled by Business Brokers
Business brokers handle a vast range of businesses, from small, owner-operated enterprises to larger, more complex corporations. These can include retail stores, restaurants, manufacturing plants, service businesses, franchises, and online businesses. The specific type of business a broker specializes in often depends on their experience and expertise. Some brokers may focus on a particular industry, such as healthcare or technology, while others may work across multiple sectors. The size and complexity of the businesses also vary significantly, impacting the scope of the broker’s involvement.
Skills Needed for Success in Business Brokerage
Success in business brokerage demands a unique blend of hard and soft skills. Strong analytical skills are essential for accurate business valuation and financial analysis. Excellent communication and negotiation skills are vital for interacting with clients and navigating complex deals. Marketing and sales expertise are needed to effectively present businesses to potential buyers. Furthermore, brokers must possess strong organizational and time management skills to handle multiple transactions simultaneously. A thorough understanding of legal and regulatory frameworks is also critical. Finally, a strong network of contacts within the business community can significantly enhance a broker’s success.
Successful Business Brokerage Strategies
Effective business brokerage strategies often involve targeted marketing campaigns, leveraging online platforms and networking events to reach potential buyers. Building a strong reputation for integrity and expertise is crucial for attracting both buyers and sellers. Developing strong relationships with industry professionals, such as accountants and lawyers, can streamline the transaction process. Utilizing advanced valuation techniques and providing comprehensive due diligence support can enhance a broker’s credibility and attract higher-value clients. Finally, staying abreast of market trends and adapting strategies to evolving economic conditions is essential for long-term success. For example, a broker specializing in restaurants might leverage social media marketing to reach a younger demographic of buyers, while a broker handling manufacturing businesses might focus on building relationships with private equity firms.
Comparison of Business Brokerage Niches
| Niche | Valuation Complexity | Marketing Challenges | Regulatory Considerations |
|---|---|---|---|
| Retail | Moderate; relies heavily on inventory and location | Reaching the right buyer demographic; highlighting location advantages | Sales tax compliance, zoning regulations |
| Restaurants | High; dependent on intangible assets like brand reputation and chef expertise | Demonstrating profitability and consistent customer base | Food safety regulations, licensing requirements |
| Manufacturing | Complex; involves assessing equipment, intellectual property, and supply chains | Attracting buyers with expertise in the specific industry | Environmental regulations, labor laws |
| Service Businesses | Moderate; focuses on client contracts and recurring revenue streams | Highlighting client retention and potential for growth | Licensing requirements, professional liability insurance |
Licensing and Legal Requirements
Navigating the business brokerage industry requires a thorough understanding of the legal landscape. Licensing requirements vary significantly by jurisdiction, and brokers must adhere to strict ethical codes and legal responsibilities to protect both themselves and their clients. Failure to do so can lead to significant legal and financial repercussions.
Licensing Procedures and Requirements for Business Brokers
Licensing procedures for business brokers differ across states and countries. Some jurisdictions require brokers to obtain a real estate license if they are involved in the sale of commercial real estate alongside the business. Others may have specific business brokerage licenses or require registration with a relevant regulatory body. For instance, in California, a real estate license is often required, while other states may have a dedicated business brokerage license. Prospective brokers should research their specific state’s requirements through the relevant regulatory bodies, such as the state’s Department of Real Estate or a similar agency. These agencies typically Artikel the educational requirements, examination procedures, background checks, and continuing education needs to maintain a valid license. The application process itself can involve background checks, proof of education, and payment of licensing fees.
Ethical Considerations and Legal Responsibilities
Business brokers operate under a fiduciary duty to their clients, requiring utmost honesty, transparency, and fairness in all transactions. This includes disclosing all material facts about a business to potential buyers, avoiding conflicts of interest, and maintaining confidentiality. Legal responsibilities extend to ensuring accurate representation of the business being sold, adherence to fair housing laws (if applicable), and compliance with advertising regulations. Breaches of these responsibilities can result in legal action, reputational damage, and loss of license. For example, misrepresenting a business’s financial performance or failing to disclose significant liabilities can lead to lawsuits and significant financial penalties.
Potential Legal Pitfalls to Avoid
Several legal pitfalls can significantly impact a business broker’s career. These include: misrepresentation of facts, failure to perform due diligence, conflicts of interest, improper handling of client funds, and violations of antitrust laws. Thorough due diligence is crucial to avoid misrepresenting a business’s value or potential. Maintaining separate escrow accounts for client funds is essential to prevent accusations of misappropriation. Furthermore, understanding and avoiding antitrust violations, such as price-fixing or bid-rigging, is paramount. Staying informed about relevant legislation and regulatory updates is vital to mitigate these risks.
Importance of Professional Indemnity Insurance
Professional indemnity insurance, also known as errors and omissions insurance, is crucial for business brokers. This insurance protects brokers from claims of negligence, errors, or omissions in their professional services. Given the complex nature of business transactions and the potential for disputes, this insurance provides a critical safety net, covering legal fees and potential settlements arising from claims made against the broker. The cost of this insurance varies depending on factors such as the broker’s experience, coverage limits, and the types of transactions they handle. However, the potential cost of defending against a lawsuit far outweighs the cost of this essential protection.
Key Legal Documents a Business Broker Should Be Familiar With
A business broker needs to be intimately familiar with a range of legal documents. These include, but are not limited to, purchase agreements, non-disclosure agreements (NDAs), letters of intent, escrow agreements, bills of sale, and various financial statements (profit and loss statements, balance sheets, cash flow statements). Understanding the implications and legal ramifications of each document is crucial for effective negotiation and risk mitigation. A strong understanding of contract law is essential to ensure the protection of both the buyer and the seller.
Business Valuation and Financial Analysis
Accurate business valuation is the cornerstone of successful brokerage. Understanding the various valuation methods and conducting a thorough financial analysis are crucial for determining a fair market price and facilitating smooth transactions. This section details the key aspects of this critical process.
Business Valuation Methods
Three primary methods are commonly used to determine a business’s value: asset-based, market-based, and income-based. The most appropriate method depends on the specific characteristics of the business being valued.
- Asset-Based Valuation: This method focuses on the net asset value of the business, which is the difference between the fair market value of its assets and the amount of its liabilities. It’s particularly relevant for businesses with significant tangible assets, such as manufacturing companies or real estate holdings. The formula is generally: Net Asset Value = Total Assets – Total Liabilities. This method is less suitable for businesses with primarily intangible assets, such as software companies or consulting firms.
- Market-Based Valuation: This approach uses comparable company data to estimate the value of the target business. It involves identifying similar businesses that have recently been sold and adjusting their sale prices based on factors such as size, profitability, and market conditions. This method relies heavily on the availability of reliable comparable data. Finding truly comparable businesses can be challenging, requiring careful consideration of industry-specific factors.
- Income-Based Valuation: This method values a business based on its projected future earnings. Common approaches include discounted cash flow (DCF) analysis, which estimates the present value of future cash flows, and capitalization of earnings, which uses a multiple of the business’s earnings to determine its value. This method is often preferred for established businesses with a track record of profitability. For example, a business with a stable net income of $100,000 and a capitalization rate of 10% would be valued at $1,000,000 ($100,000 / 0.10).
Financial Analysis Process
A comprehensive financial analysis involves a detailed examination of a business’s financial statements, including the income statement, balance sheet, and cash flow statement. This analysis aims to identify trends, assess profitability, and evaluate the overall financial health of the business.
- Review Historical Financial Statements: Analyze at least three to five years of financial data to identify trends in revenue, expenses, and profitability.
- Assess Key Financial Ratios: Calculate and interpret relevant ratios such as profitability ratios (gross profit margin, net profit margin), liquidity ratios (current ratio, quick ratio), and solvency ratios (debt-to-equity ratio).
- Project Future Financial Performance: Develop realistic projections of future revenue, expenses, and cash flow based on historical data, market trends, and management’s plans.
- Identify Key Risks and Opportunities: Assess potential risks and opportunities that could impact the business’s future performance.
- Validate Financial Information: Verify the accuracy and completeness of the financial data through independent verification and due diligence.
Common Financial Ratios in Business Valuation
Several financial ratios provide insights into a business’s financial health and profitability. These ratios are used to compare the business to industry benchmarks and assess its overall value.
| Ratio | Formula | Interpretation |
|---|---|---|
| Gross Profit Margin | (Revenue – Cost of Goods Sold) / Revenue | Indicates the profitability of sales after deducting direct costs. |
| Net Profit Margin | Net Income / Revenue | Shows the percentage of revenue remaining as profit after all expenses. |
| Current Ratio | Current Assets / Current Liabilities | Measures the ability to pay short-term obligations. |
| Debt-to-Equity Ratio | Total Debt / Total Equity | Indicates the proportion of financing from debt versus equity. |
Negotiating Business Valuations
Negotiating business valuations requires a thorough understanding of the valuation methods, the financial health of the business, and the market conditions. Successful negotiation involves presenting a well-supported valuation, understanding the seller’s motivations, and finding a mutually acceptable price. A strong understanding of the business’s strengths and weaknesses, coupled with market comparables, provides a solid foundation for effective negotiation. For example, highlighting strong future growth potential could justify a higher valuation, while acknowledging weaknesses might lead to a lower, but still acceptable, price.
Comprehensive Due Diligence Process
Due diligence is a critical step in the business acquisition process. It involves a thorough investigation of all aspects of the target business to identify potential risks and opportunities.
- Financial Due Diligence: Verify the accuracy of financial statements, review tax returns, and analyze key financial ratios.
- Legal Due Diligence: Review contracts, licenses, permits, and intellectual property rights.
- Operational Due Diligence: Assess the efficiency and effectiveness of the business operations, including production processes, customer relationships, and supply chain management.
- Environmental Due Diligence: Identify any potential environmental liabilities or compliance issues.
- Regulatory Due Diligence: Ensure compliance with all relevant laws and regulations.
Marketing and Client Acquisition
Successfully marketing your business brokerage services requires a multi-faceted approach, combining targeted advertising with strategic networking and compelling marketing materials. Building a strong reputation and consistently generating leads are crucial for long-term success in this competitive field. This section details effective strategies for attracting clients and building a robust pipeline of opportunities.
Effective Marketing Strategies
Attracting clients in the business brokerage industry necessitates a targeted and consistent marketing strategy. This involves identifying your ideal client profile (both buyers and sellers) and tailoring your messaging to resonate with their specific needs and motivations. Digital marketing plays a crucial role, alongside traditional networking and relationship building. For instance, a targeted LinkedIn campaign focusing on business owners in specific industries could be highly effective, as could search engine optimization () to improve your online visibility. Furthermore, content marketing, such as informative blog posts or webinars on business valuation or the selling process, can establish you as a thought leader and attract potential clients organically. Finally, consistent branding across all marketing channels is vital for maintaining a professional and recognizable image.
Building a Strong Professional Network
A robust professional network is invaluable for a business broker. Networking allows you to access deal flow, gain referrals, and build credibility within the industry. Active participation in relevant industry events, such as conferences and trade shows, provides opportunities to connect with potential clients and fellow professionals. Building relationships with accountants, lawyers, and other business advisors can also lead to referrals. Regularly engaging with your network through email communication, attending industry events, and offering value-added services strengthens these relationships and fosters trust. For example, offering a free consultation or sharing insightful market reports can build rapport and position you as a valuable resource.
Channels for Finding Potential Sellers and Buyers
Identifying potential sellers and buyers requires a multi-pronged approach leveraging various channels. Online platforms such as industry-specific websites and business-for-sale listings are essential. Networking events and industry associations provide opportunities to meet potential clients directly. Direct mail campaigns targeting specific business owners can also be effective, particularly for niche markets. Furthermore, utilizing online advertising, such as Google Ads or LinkedIn Ads, can help reach a wider audience. Building relationships with commercial real estate agents can also generate leads, as they often encounter businesses that might be considering a sale or acquisition.
Creating Compelling Marketing Materials
Your marketing materials should clearly communicate your value proposition and expertise. A professional website showcasing your experience and success stories is crucial. Brochures and presentations should highlight your proven track record and emphasize your understanding of the business valuation process. Case studies detailing successful transactions can build credibility and attract potential clients. All marketing materials should maintain a consistent brand identity and professional tone. For instance, a case study might detail how you successfully negotiated a higher sale price for a client’s business by leveraging your market knowledge and negotiation skills.
Sample Marketing Plan
| Activity | Timeline | Budget | Metrics |
|---|---|---|---|
| Develop website and online presence | Month 1-2 | $5,000 | Website traffic, lead generation |
| Attend industry events | Ongoing | $2,000 per event | Number of contacts made, referrals received |
| Launch targeted LinkedIn campaign | Month 3-6 | $1,000 per month | Click-through rates, lead generation |
| Create and distribute marketing brochures | Month 2-3 | $500 | Number of brochures distributed, inquiries received |
| Develop and publish blog posts | Ongoing | $0 (time investment) | Website traffic, engagement metrics |
Negotiation and Deal Closing
Successfully navigating the negotiation process and expertly closing a business transaction are critical skills for any business broker. These stages require a blend of strategic thinking, strong communication, and a deep understanding of the legal and financial aspects of the deal. Mastering these skills directly impacts the broker’s success and the satisfaction of both buyer and seller.
Key Negotiation Techniques in Business Brokerage
Effective negotiation in business brokerage hinges on preparation, understanding the motivations of all parties, and employing proven techniques. Brokers must thoroughly analyze the business being sold, understand the seller’s reasons for selling (e.g., retirement, expansion into other ventures, financial difficulties), and assess the buyer’s objectives and financial capacity. This groundwork allows for a more strategic and effective negotiation process. Common techniques include active listening, identifying shared interests, exploring creative solutions, and employing various negotiation strategies like integrative bargaining (collaborative approach focused on finding mutually beneficial solutions) and distributive bargaining (competitive approach focused on claiming value). Understanding the seller’s “walk-away” point and the buyer’s maximum offer is crucial for setting realistic expectations and guiding the negotiation.
Steps Involved in Closing a Business Transaction, How to be a business broker
The closing process is a meticulous sequence of steps requiring precise execution. It typically begins with a signed Letter of Intent (LOI), outlining the key terms of the agreement. This is followed by due diligence, where the buyer thoroughly investigates the financial health and legal compliance of the business. Next, the broker assists in finalizing the purchase agreement, which details the purchase price, payment terms, asset transfer, liabilities, and other relevant conditions. Securing financing for the buyer, if needed, is a crucial step, often requiring collaboration with lenders. Once the financing is in place and all conditions are met, the closing occurs, involving the transfer of ownership and funds. Post-closing, the broker often assists with the transition process, ensuring a smooth handover of the business operations.
Common Challenges Encountered During Negotiations
Negotiations in business brokerage are rarely straightforward. Common challenges include disagreements on valuation, financing hurdles, concerns about undisclosed liabilities, and disputes over the terms of the purchase agreement. Buyers may be hesitant due to perceived risks, while sellers may be emotionally attached to their business, leading to unrealistic expectations. Conflicting legal interpretations and differing priorities between buyer and seller are also frequent obstacles. For example, a buyer might discover unforeseen environmental liabilities during due diligence, leading to renegotiation or deal termination. Similarly, disagreements on the allocation of working capital or the handling of existing contracts can significantly impede progress.
Strategies for Managing Conflict and Reaching Mutually Beneficial Agreements
Conflict resolution is a vital skill for business brokers. Active listening, empathy, and clear communication are essential for addressing disagreements. Framing issues constructively, focusing on shared interests, and offering creative solutions can help bridge gaps. Mediation may be necessary in complex or highly contentious situations. The broker’s role is to facilitate a collaborative environment, ensuring all parties feel heard and understood. Building trust and rapport is critical to fostering a positive negotiation climate and ultimately reaching a mutually agreeable outcome. A successful outcome often involves compromise and finding a solution that satisfies both parties’ core needs. For instance, a flexible payment schedule might satisfy a seller concerned about receiving full payment while accommodating a buyer with limited immediate cash flow.
Structuring a Comprehensive Business Purchase Agreement
A comprehensive business purchase agreement is a legally binding contract that protects both the buyer and the seller. It must clearly define the purchase price, payment terms (cash, financing, installment payments), assets included in the sale, liabilities assumed by the buyer, and the closing date. It should also address non-compete clauses, warranties and representations, indemnification provisions (protecting against future losses), and dispute resolution mechanisms. The agreement needs to specify the transition plan, including the handover of employees, customer lists, and operational details. Legal counsel should review the agreement to ensure its completeness and compliance with applicable laws. A well-structured agreement minimizes future disputes and ensures a smooth transfer of ownership. For instance, the agreement could stipulate a detailed process for the handover of intellectual property rights or the transfer of specific licenses.
Building a Successful Business Brokerage Practice: How To Be A Business Broker
Building a thriving business brokerage practice requires more than just mastering the technical aspects of valuations and negotiations. It demands a strategic approach to client relationships, efficient time management, leveraging technology, and continuous professional development. Success hinges on building a strong reputation, attracting high-quality listings, and effectively closing deals.
Client Relationship Management
Strong client relationships are the bedrock of a successful business brokerage practice. Repeat business and referrals are significantly more cost-effective than constantly seeking new clients. Building trust and rapport involves consistent communication, proactive problem-solving, and demonstrating genuine care for your clients’ interests, even beyond the immediate transaction. This means understanding their long-term goals, offering advice beyond the sale, and being available to answer questions and provide support. A satisfied client is more likely to recommend your services to others, leading to organic growth and a strong reputation within the business community.
Effective Time Management and Organization
The business brokerage industry is demanding, requiring efficient time management to juggle multiple clients, listings, and negotiations simultaneously. Effective organization is crucial. This includes prioritizing tasks, utilizing scheduling tools, and delegating when appropriate. Strategies such as time blocking, setting realistic deadlines, and utilizing project management software can significantly improve efficiency and reduce stress. For example, a broker might allocate specific time slots for client calls, market research, and administrative tasks, ensuring a balanced workflow and preventing burnout. The key is to create a system that works for you, optimizing productivity without sacrificing quality.
Essential Tools and Technologies
Successful business brokers leverage technology to streamline operations and enhance client communication. A Customer Relationship Management (CRM) system is essential for managing client interactions, tracking progress on deals, and storing vital information. CRMs such as Salesforce, Zoho CRM, or HubSpot provide tools for managing contacts, automating communication, and generating reports. Other useful tools include market research databases, financial modeling software, and secure document sharing platforms. Utilizing these technologies allows for better organization, improved communication, and more efficient workflows, freeing up time to focus on strategic activities.
Continuous Professional Development
The business brokerage landscape is constantly evolving. Continuous professional development is crucial for staying competitive and providing clients with the best possible service. This involves attending industry conferences, pursuing advanced certifications, networking with peers, and staying abreast of changes in regulations and market trends. Regularly reading industry publications, participating in online courses, and attending workshops keeps brokers updated on best practices and emerging technologies. For instance, a broker might pursue a Certified Business Intermediary (CBI) designation to enhance credibility and demonstrate expertise. Continuous learning not only improves professional skills but also enhances a broker’s reputation and attracts higher-quality clients.
Managing a Successful Brokerage Practice: A Checklist
Effective management of a brokerage practice requires attention to detail and proactive planning. The following checklist Artikels key tasks:
- Regularly review and update marketing materials.
- Network consistently within the business community.
- Proactively seek new business opportunities.
- Maintain meticulous records of all transactions and client interactions.
- Stay informed about industry regulations and legal requirements.
- Continuously refine valuation and negotiation strategies.
- Regularly assess the effectiveness of marketing campaigns.
- Invest in professional development and training.
- Monitor market trends and adapt business strategies accordingly.
- Build and maintain strong relationships with referral sources.
Understanding the Market and Industry Trends
The business brokerage industry is highly sensitive to macroeconomic fluctuations and evolving market dynamics. Understanding these trends is crucial for brokers to accurately value businesses, effectively market their services, and ultimately, achieve success. Factors such as interest rates, inflation, and overall economic growth significantly influence the number of businesses for sale, buyer demand, and ultimately, transaction prices.
Current Market Conditions and Their Impact on Business Valuations
Current market conditions exert a profound influence on business valuations. High inflation, for example, increases the cost of borrowing, making financing acquisitions more expensive and potentially reducing buyer demand. This can lead to lower valuations, especially for businesses with high debt levels or reliant on borrowed capital for operations. Conversely, periods of low interest rates can stimulate deal activity and potentially inflate valuations as buyers find financing more accessible. The availability of private equity and venture capital also plays a significant role, infusing liquidity into the market and potentially driving up valuations in specific sectors. For instance, the tech sector experienced a significant valuation surge fueled by venture capital investment during the early 2020s, only to see a correction later due to changing investor sentiment and interest rate hikes.
Economic Factors and Their Influence
Economic factors significantly influence the business brokerage industry’s performance. Recessions typically lead to a decrease in the number of businesses sold as owners are hesitant to sell during economic uncertainty. Conversely, periods of strong economic growth often see an increase in mergers and acquisitions, creating more opportunities for brokers. Government regulations, tax policies, and changes in industry-specific legislation can also affect business valuations and the overall transaction volume. For example, changes in environmental regulations might significantly impact the value of businesses in polluting industries, while tax incentives for certain sectors could boost their attractiveness to buyers. Furthermore, geopolitical events and global economic trends also have a ripple effect, affecting investor confidence and impacting business valuations. The war in Ukraine, for example, has caused significant disruption to global supply chains, impacting the profitability and valuations of businesses reliant on international trade.
Emerging Trends and Opportunities
Several emerging trends present significant opportunities for business brokers. The increasing use of technology in business operations and transactions is streamlining the process, allowing for faster deal closures and enhanced due diligence. The rise of online marketplaces for businesses is also expanding the reach of brokers and increasing access to potential buyers and sellers. Furthermore, specialization in niche markets allows brokers to develop expertise and cater to specific client needs, increasing their competitiveness. The growing interest in sustainable and environmentally conscious businesses is creating a new segment of the market with unique opportunities. Brokers specializing in this area can leverage this growing demand, focusing on businesses with strong ESG (Environmental, Social, and Governance) profiles.
Successful Adaptations to Changing Market Conditions
Successful business brokers adapt their strategies to changing market conditions. During economic downturns, some brokers focus on smaller, more resilient businesses that are less susceptible to economic shocks. Others might emphasize providing more comprehensive advisory services to clients, going beyond simple brokerage to offer strategic guidance and support. Technological adaptation is crucial; brokers who effectively utilize CRM systems, digital marketing strategies, and virtual deal-making platforms will be better positioned to succeed in a dynamic market. For example, a broker successfully navigating the 2008 financial crisis might have focused on distressed asset sales, offering expertise in restructuring and turnaround strategies. Alternatively, a broker thriving in the current tech-driven environment might leverage sophisticated data analytics to identify undervalued businesses and connect them with suitable buyers through targeted online marketing.
SWOT Analysis of the Business Brokerage Landscape
A SWOT analysis provides a comprehensive overview of the current business brokerage landscape:
Strengths: High demand for specialized expertise, potential for high earning potential, relatively low barriers to entry (compared to other professional services).
Weaknesses: Economic sensitivity, reliance on market conditions, intense competition.
Opportunities: Technological advancements, niche market specialization, expansion into international markets, increasing demand for advisory services beyond brokerage.
Threats: Economic downturns, increased competition from online platforms, regulatory changes.
