When Ron Chernak was looking for a place to start a business, he considered several cities but chose Colorado Springs. He moved here and opened First Business Brokers, which specializes in assisting with buying and selling businesses.
The Colorado Springs lifestyle and market offerings seemed ideal, and apparently worked in his favor. This month he’s celebrating 30 years in business.
Chernak took some time this week to talk to the Business Journal about his company.
What led you to open First Business Brokers, and what were the biggest challenges getting off the ground?
My education and experience seemed to be ideally suited for what was then an emerging industry. I had an undergraduate degree in accounting from the University of Notre Dame and a law degree from Duke Law School. After law school, I practiced law with a large Chicago firm before taking a position with a small conglomerate headquartered in Pennsylvania. I was fortunate to work for a mentor who was a deal maker. After working on a number of transactions, I determined that I had an aptitude for completing deals. As my parents owned a business, I knew the risks and rewards of being an entrepreneur. Perhaps most importantly, my wife, Candy, was supportive of the concept.
Part of our decision to relocate here and start the firm was the fact that competition in Colorado Springs at the time was very fragmented. The city was considerably smaller then and most of the transactions were put together by a small group of realtors that occasionally brokered a business transaction. I believed that by specializing exclusively in the sale of businesses, the firm could capture market share. As a new industry, one of our biggest challenges was educating the market that specialized services were available to facilitate business transfers.
Of interest was the fact that we researched 40 cities before selecting Colorado Springs as the right place to grow a business and raise a family. On March 1 of this year, we celebrated the 30th anniversary of the firm.
How has the business-buying/selling market in Colorado Springs changed since you opened?
Like any other industry, ours has changed over the past 30 years. Our industry has become more regulated and technology has benefited our clients. For example, as a result of Internet marketing, last year we had a Chinese company visit one of our clients for consideration as a strategic acquisition.
What are some of your most memorable deals? Why?
Over the years, we have completed more than 900 transactions, but a few come to mind. One was the original sale of Walter Drake and Sons a number of years ago. It was not only memorable because the founder of the business, Walter Drake, had a unique personality, but because one of our goals was to keep the business in Colorado Springs. The company had more than 500 employees, and if the business relocated, many of those employees would have lost their jobs. We sold the business to a private equity group with approximately 18 portfolio companies, including other mail order businesses, and the jobs remained here until the business was sold again and relocated.
Another transaction that comes to mind was on we completed in January of this year. We originally sold this business in 1983 to a couple that was relocating to the Springs. They grew the business, put two sons through school, and now are retired. Most of our business comes from referrals, and we are proud that we have many repeat clients and customers. One client has completed five transactions with the firm, and one of his children has completed two transactions with us.
Every industry sees trends come and go. Which ones have been the most enduring in your industry? What’s emerging?
Over the years, we have seen a number of industry changes. For example, early in our history we used to see a large demand for hardware stores. In today’s world, there are relatively few privately owned hardware stores left as a result of big box stores, like Home Depot and Lowes. In today’s market, health care and technology businesses are in demand. Sometimes businesses need to change with the times. For example, the business that we sold earlier this year was, in 1983, making wooden boxes. When we sold it earlier this year, it was manufacturing complex containers used to store nuclear material.
Can you tell us about any plans for the future of First Business Brokers? Another 30 years?
I am fortunate to be surrounded by a great team of talented co-workers and enjoy what I do. In response to a stronger market and in anticipation of increased transaction activity resulting from retiring boomers and tax increases, we have recently added another broker associate to the team, hired a business analyst to enhance our back office capabilities, and taken on an intern to assist in market research. We also anticipate making a significant announcement relating to the expansion of our services before the end of the year.