14/09/2007
Robert Leigh's idea for Devono, a commercial lettings firm that would represent the interests of tenants instead of landlords, met a stony reaction from the established lettings industry. Less than four years later, he is a major new player in the capital, having pioneered a concept that a great many in the sector wish they'd thought of first. He speaks to Matt Henkes.
The commercial property letting business is traditionally geared towards meeting the needs of landlords and while many agencies purport to represent tenants as well, the emphasis weighs heavily on pushing rents as high as they can go.
Robert Leigh, director and founder of commercial lettings firm Devono, spotted this bias. Finally, after years of working for someone else, unable to meet the needs of frustrated tenants, he decided to buck tradition and set up an agency that would represent them solely.
What had particularly vexed him during his time in the industry was the traditional conflict involved in representing both parties. Towards the end of 2002, Leigh decided there were too few reasons not to start up on his own, believing no other firms in London at the time offered a service that would represent the needs of tenants.
Unperturbed by the stern frowns and hostility he met within the industry, Leigh embarked on his business plan. It was probably one of the most difficult tasks, he says, but also one of the most beneficial.
The plan started as a laborious hoop to jump through in order to apply for a loan, but soon revealed itself to be infinitely useful in pulling his thoughts together. After a while, the fact that it was something investors required was just a bonus, he says,
If you do a business plan right, you find yourself doing it because you actually want to explore the possibilities as deeply as possible. After a while, the fact that it was something investors required was just a bonus.
Delivering the plan to investors is almost as important as actually writing it, so Leigh sought professional guidance on how best to approach this on the basis that whoever you're seeking funds from is going to look at you as an individual as much as examining the product. The only reason a great idea will fail is because of the individual that's running it, he says.
Gaining investment turned out to be relatively straight forward. Leigh visited HSBC and was offered an initial £40,000 loan under the government's Small Business Loans Guarantee Scheme, which assists small firms that might have few assets to offer in the way of security. For a cost of 2% on top of the balance of the loan, payable to the Department for Business, Enterprise and Regulatory reform, the scheme underwrites 75% of the loan in the event that the borrower has to default.
he says,I paid a slightly higher rate
but it was of greater value to me because the risks were reduced.
If Leigh had known that the loan would be paid off within four months, it's a safe bet he wouldn't have been so worried. When that happened, Leigh says, he knew he was really onto a winner.
The vast majority of commercial property companies in London are named after individuals. Leigh wanted a more modern sounding name that would stand out of this bland list and enable his target clients to pick him out.
The name Devono derived from the Latin word denovo, meaning new. It came about because of the number of other companies already using the Latin term. Leigh decided that he would rather not face potential problems in the future with another firm of the same name, but liked the way it scanned, so simply switched the n and v.
In-keeping with his fresh and modern idea, Leigh had very specific ideas about how he wanted the company website to look to appeal to his target audience. At around £10,000, it was one of his biggest start-up costs, but he says it was vital to get it underway as soon as he was up and running. He worked with a company he knew from his years in the industry and was confident they could turn his ideas into reality.
he explains.I wanted a very modern, down-to-earth site that demonstrated how we go about providing our service,
Devono started advertising, dipping our toes, before seriously investing. I think the best thing to do is spread your net, see which one works best, and then invest your money where the best results come from, he says I've seen it time and time again. People plough an absolute fortune into one area and it doesn't work out to be as successful as they want.
Leigh says he's happy now the initial frowns he received from the industry have turned into respect and admiration, following an extremely successful first three years. There must have been a certain amount of forehead-slapping around the sector as his success accumulated, he agrees.
he says.The firm's turnover has doubled every year since 2003. Last year we acquired more offices for businesses than any other company in central London,
The only reason a great idea will fail is because of the individual that's running it.
While the majority of Devono's business still comes from recommendations, some of the firm's first clients are beginning to return for their next move. Leigh says this bears out the standard of the service Devono provides.
he says.The cycle of relocating is probably around three to five years, and bearing in mind we're in our fourth year now, repeat business for us is a totally new revenue source,
Good things are going to follow.
Leigh isn't worried about more established companies stealing or adapting his idea.
he explains,Several property letting firms have tried to assimilate Devono's model of tenant representation,
he says. "They can't just say goodbye to their total client list".though with little success. Commercial agencies have all been built up through getting landlords as clients,
Some firms have opened up separate departments that work with tenants but Leigh believes that the old conflict of interests is still present. Tenants want lower rents, landlords want higher.
There's a huge amount of business in London which Leigh says he wants to tackle before expanding outside the capital. It's been an emotional ride and he admits there were times when the pressure almost got on top of him.
he says.Be prepared for the physical and the emotional strain and to give up your life for the first 12 to 24 months,