Opening a business may not be everybody's dream but the entrepreneurial spirit is strong in Hong Kong, and to date about 98 per cent of the city's enterprises are small- and medium-sized businesses (SMEs), according to the Hong Kong Small and Medium Enterprise Association.
Edwin Lee, CEO and founder, Hong Kong Business Intermediary Co Ltd (HKBI) is living out his dream — he started his own business brokerage firm focusing on matching buyers and sellers of small businesses in Hong Kong.
Yet, what makes Mr Lee different from many other entrepreneurs is his foresight in using a new business model for a small business brokerage. Accordingly, he was named the Innovative Entrepreneur of the Year 2007 by the City Junior Chamber of Hong Kong.
Before founding HKBI, Mr Lee was an investment banker with Credit Suisse First Boston. He says the expertise he gained in handling large-scale mergers and acquisitions (M&A) deals in the investment bank was the spark for his first step towards starting a brokerage firm in Hong Kong.
"Just as with the large-scale M&A deals that I handled in the bank, small business buying and selling deals require seasoned selling, accounting and negotiation skills," Mr Lee says.
"While large deals requiring more emphasis on strategic planning and return on investment, small business deals can be more personal with the goal of realising a personal dream," he explains, adding that it is this goal-oriented attitude that makes his job satisfying.
"We're helping our clients to 'buy into a dream', to help them open a new chapter in their life" he stresses.
"The market for first-time entrepreneurship has huge potential because work fills a large part of your life, and the only way to be truly satisfied is to do what you believe in," Mr Lee enthuses.
However, while there are many ambitious and enthusiastic potential entrepreneurs out in the market hoping to realise their dreams, Mr Lee says the failure rate of new businesses in Hong Kong is high.
At the same time, there are potential sellers in the market who would like to make good returns from selling their businesses. As such, there is a gap or mismatch in the market, Mr Lee says.
"We take the role of a middleman to bridge the gap between sellers and first-time business owners and more importantly, we're there to minimise all the transactional risks for both parties," he explains. "Our statistics show that businesses sold through a brokerage have a five-time higher success rate than those starting from scratch."
Since the company started as a one-man office in 2001, HKBI has helped hundreds of clients wishing to own their small business be it cafe, florist shop, education centre, beauty salon or trading company to "transform into a new life", according to Mr Lee.
"You need to be keen on learning all the nitty-gritty of things"
In the seven years following HKBI's foundation, eight similar companies have been established.
What enables HKBI to outrun the competition is its focus on professionalism. "We're probably the only business broker that provides a fully integrated business service including a range of after sales service," Mr Lee says. "More than 80 per cent of the business buyers have no prior industry experience in the business they are buying and many of them are first-time business owners. So, we designed a two-year post-sale service to ensure a smooth handover with transition training and operational support ranging from marketing to supplies sourcing and human resources advice. It is our belief that we will be successful if our clients are successful."
Despite his executive role, Mr Lee enjoys being "hands-on", a quality that makes him a successful business consultant. His daily agenda always starts with the company's evaluation committee discussing the potential businesses for sale and purchase.
"My afternoons are usually packed with site visits, where I act as a mystery shopper to try the product or service of the business that appears on our new to-sell list," Mr Lee notes. "This is the way to get to know the real situation of the business and how we can help to repackage it to be a more profitable business for sale."
Mr Lee often closes his busy days with evening seminars, sharing his experience of running a business with potential entrepreneurs.
For youngsters who would like to break into the business brokerage field, Mr Lee says being motivated to learn how different small businesses operate is the essential. "You need to be keen on learning all the nitty-gritty of things from sourcing to renovation and promotion in different industries in order to assist clients to buy a successful business," he says.
Aside from this, Mr Lee believes interpersonal skills are indispensable. "We're helping clients to make an important life decision — to buy a dream, therefore we must be sympathetic to our clients needs all the time," he emphasises.