HOUSTON BUSINESS REVIEW

WHY A BUSINESS BROKER
By Ralph Fain

Ralph Fain is a principal in the brokerage firm, R/Fain Group. Mr. Fain also has over 20 years of broad business experience with Fortune 500 companies. R/ Fain Group is a professional business brokerage firm which confidentially represents the interests of various sellers and buyers. Each week Mr. Fain will give tips on Business Brokering, and how to sell your business.

Although it’s been a while since I have given significant thought to the reasons I became a business broker, I was recently asked “….of all the businesses available to you, how did you happen to choose the business brokerage business?” Searching my memory banks (which becomes more difficult each day), I was able to recall the primary motivations which propelled me to this very interesting and rewarding profession and I have listed them for you in the following:

- It was a good fit with my broad base of business experience and I thought this experience could be of benefit to business owners, sellers and buyers. Having served as President/CEO of several companies, I believed I understood the pressures (both good and bad) that come with being ultimately responsible for the well being of the company and its employees. I have a keen appreciation of the operational and cost efficiencies that are demanded of the business owner/leader and have in-depth knowledge of the sales/marketing efforts required to maintain and grow a business. I know that starting and growing a business is an emotional and subjective undertaking and requires the skills of a unique individual. In short, not only could I identify with what a business owner was going through in the day-to-day operations but also in decision making process to sell the company. I believed I could bring something to the table which would be of benefit to the owner both from an operational perspective and in the positioning and marketing of the company for sale.

- It (the brokerage business) was part of the Service sector and providing services to other businesses is an industry which will only grow. In addition, the confidentiality aspect of these services requires that you meet/interface with the business owner(s) and, to me, there is nothing more interesting than listening to business owners’ explanations as to how they got into the business, why they started it, what it’s meant to them to own/manage the business, what other enterprises they are involved in, etc. Getting to meet and discuss business/operational strategies and being able to provide valued added services to other business professionals is extremely rewarding from a mental and emotional standpoint.

- It fit the demographics. When I was looking for a business to purchase or industry to enter, one of my criterion was that demographics must have a favorable impact on the business or industry. With a very large number of business owners being baby boomers who are looking to sell their businesses as part of their retirement strategy, this requirement was easily fulfilled.

- It (business brokerage) is not a mature industry and is predominated by “Mom & Pop” operations. These two items are fairly critical in that they both indicate room for growth and expansion within that particular industry. Being an immature industry indicates a lack of market penetration with possibilities to help define and shape the growth and direction of the industry; a “Mom & Pop” predominance, in addition to the expansion possibilities, could indicate an opportunity to more readily differentiate your level of professional services from the “not-so-professional” competition whose main business is the selling of insurance and not the marketing/brokering of businesses.

- In summary, the main reasons I entered this business was to provide valued added services to a certain sector of the business community, to enjoy the meeting and interfacing with business owners (and buyers), and to hopefully be of significant benefit to my many clients and customers – both past, present and future. This is a business which is truly interesting and rewarding in all its various aspects.