Small-business brokerage profits from shift in city's entrepreneurial culture
Technical skills can only get you so far. In the end, it is really the softer, intangible attributes that matter most.
This is certainly true for Edwin Lee, this year's Young Entrepreneur Award winner, who, at the age of 35, is at the helm of Hong Kong Business Intermediary, the city's first business brokerage specialising in the sale of small businesses.
The investment banker-turned-entrepreneur said it was the long hours, hard work and perseverance in the corporate trenches of Credit Suisse in New York and Hong Kong that shaped his work ethic, and, in turn, contributed to the success of his company.
In the past nine years, HKBI has grown from a one-man band to the largest business brokerage in the city, with 100 employees.
'The No 1 one challenge facing entrepreneurs in Hong Kong today isn't the rent or the costs, it's the fact that people give up too easily and return to the full-time employment market, especially when the economy is good,' he said.
In establishing HKBI in 2001, Lee not only created a professional platform on which small businesses could be traded, he also opened up very real opportunities for every aspiring entrepreneur.
The company, for a commission fee, matches prospective entrepreneurs with existing small businesses. For a one-off charge, it also sells small enterprises it has built from scratch.
'Research has shown the failure rate of buying an existing business is significantly lower than that of building one from scratch,' Lee said. 'It is much easier to take over a business with an established business model, infrastructure and staff.'
Of the close to 1,000 businesses the company has sold in the past nine years, around 60, focusing on retail, food and beverage and education, have been developed by HKBI. These include small cafes, education centres, convenience stores and confectionery shops.
Despite the excitement of setting up new businesses, Lee continues to look ahead, anticipating the needs of customers and honing the company's competitive edge to stay ahead of other brokerages.
HKBI has further integrated its services, and now offers a professional business brokerage platform with a range of after-sales services, loan financing and building businesses from scratch.
Additional services to customers include training business buyers to take over enterprises with no disruption; organising focus group meetings that allow owners to share experiences and facilitate peer support; and marketing and human resources consultation services.
'After all, the success of these businesses is our success too,' Lee said. Only about five per cent of its businesses have folded, while 20 per cent of buyers have returned to HKBI to resell their businesses within two years of the original sale.
Lee had also noticed a cultural shift in attitudes towards entrepreneurship. 'Older Chinese people believe it is a shame to sell your business, and that only bad businesses are up for sale, but this idea is slowly changing. People are beginning to understand the value of the small enterprises we sell,' he said.
With HKBI's business brokerage platform now on a roll, Lee plans to spend more of his time creating businesses from scratch. 'I want to build and invest in better businesses that feature operation manuals, turnkey projects and real estate,' he said.