06 Oct Renowned Expert Howard Brownstein Presents “Selling a Distressed Business” Webinar
Distressed businesses are avoided by many business brokers and M&A advisors. But the simple fact is that they may actually represent a substantial opportunity for you and your clients. In our recent Business Advisory Reboot, distressed business super-expert Howard Brownstein gave us an excellent overview of what is involved in working in distressed business sales. He also discussed what you should expect if you choose to represent distressed businesses.
It is safe to state that Brownstein, President of The Brownstein Corporation, is a true expert in the providing turnaround management and advisory services to companies, as well as their stakeholders. Brownstein serves as an independent corporate board member for both publicly held as well as privately-owned companies and nonprofits. During his career, he has been named a Board Leadership Fellow by the National Association of Corporate Directors (NACD) and served as Board Chair and President of its Philadelphia Chapter. He also serves as Vice Chair of the ABA Corporate Governance Committee and has been named a Fellow of the American Bar Foundation. It is important to note that only one percent of lawyers from any given state receive the recognition of Fellow of the American Bar Foundation.
Additionally, Brownstein serves on the Board of P&F Industries (NASDAQGM: PFIN). He is a Certified Turnaround Professional (CTP) and also served on the International Board of Directors of the Turnaround Management Association (TMA), and on the TMA’s Executive Committee and chaired its Audit Committee. In 2007, he received TMA”s “Outstanding Individual Contribution.” He has been a speaker at many of the world’s top universities including Harvard Business School and Wharton. Brownstein received his J.D. and M.B.A. degrees from the University of Pennsylvania.
Clearly, Mr. Brownstein is one of the world’s top experts in distressed businesses. He made some key initial points regarding why distressed businesses make for an excellent starting point. Brownstein believes it is essential to remember that not all distressed businesses are, in fact, the same. There is simply no way to know how bad things are for a given distressed business until one begins to “look under the hood,” and get a full view of what problems may lurk underneath.
Brownstein points out that while there are many, many reasons for a business to enter distress, two symptoms top the list. The first is cashflow issues and the second issue relates to management. Often it turns out that the management was simply not rigorous enough. He also notes that companies will tend to gravitate to external issues as a way to explain away their failure.
As Brownstein states, “Often we don’t know how bad it is until we get involved. And our job is to very quickly come up with one or more strategic alternatives, each of which will have different levels of risk and resources needed as well as time required.”
Brownstein firmly believes that distressed businesses can represent a real and often overlooked opportunity for business brokers and M&A Advisors. In our next article, we’ll take a deeper dive into Brownstein’s ample insights into distressed businesses and take a closer look at what he thinks you should know.