This Way Out?

“Traditionally, there has never been a really satisfactory way for successful independent agents to leave the business, without simply selling out to some big competitor and seeing the firm that they spent years building up effectively cease to exist. Now, for those who want to see their firms continue going from strength to strength under the original brand, there’s a real alternative.”

So says Jon Cooke, Managing Director of LSLi – the subsidiary of property services company, LSL Property Services plc (LSL), which already manages a network of over 400 agency offices under a number of brands including Reeds Rains and Your Move.

The new company was set up with the specific aim of providing quality independent agents with what they call exit strategies.

“The industry is changing fast,” says Jon Cooke, “and the old divisions between corporate and independents are starting to break down. Where successful independents traditionally managed to keep ahead of their corporate competitors by being quicker on their feet, these days they are increasingly coming up against big, privately-owned networks that are equally fleet of foot and infinitely better-resourced. For well-established independents, with strong local brands and strong management teams, with ambitions to achieve long-term growth but lacking the resources to match those ambitions, the future looked pretty bleak. That’s where we come in.”

LSL has ambitious plans to grow their agency network, by acquisition as well as organically. However, the company has no intention of repeating the mistakes of the 1980s.

“Unlike the old-style corporate buyouts, we’re not interested in merely acquiring dots on the map. It’s the people that are important. As a result, what we are looking for are precisely those successful, quality independents, where the owners and senior management are committed to growing their businesses and their brands .”

What LSLi effectively offers such agencies are all the resources and support they need in terms of things like IT and finance to grow their own businesses and successfully compete with the bigger networks – but crucially, without any heavy-handed interference from on high.

Payment is a two-stage affair: the first tranche upfront, and the second at a later date if and when the existing partners and directors eventually decide to bow out. Since the size of the final payment is directly related to the success achieved in the interim, business owners have a real incentive to stay on and drive future growth.

Not surprisingly, says Jon Cooke, agents who have already bought into the LSLi proposition are opting to stay on in charge for an average of five years in order to maximise their return on the deal.

“In effect,” he adds, “what we’re offering quality independent agents is a uniquely attractive proposition: if you want to grow, we’ll help you all the way with a joint venture. And when you finally decide to exit the industry, we’ll acquire the balance of the business and continue to operate it under the brand that you’ve worked so hard to build.”