Hilary Devey started out checking tachographs in a haulage firm. Now she has a £100 million-a-year business and a high-profile role as a small-business adviser on various successful TV shows. She told Simon Wicks what it takes to be a successful business owner
“The thing that's really amazed me since doing The Business Inspector is how many people start businesses with hearts so full of hope and heads so full of cotton wool. They think because they've been good at a hobby they can make it into a business.”
As she amply demonstrated in the Business Inspector, Hilary Devey is forthright to the point of making you wince. “I get lots of requests from people wanting help with their businesses,” she continues.
“50 per cent of the time I tell them, ‘Don't put your house on the line. This is a failing business and it's going nowhere’. I owe it to them and to myself to be honest.”
Over four episodes, Devey visited eight struggling businesses and did her best to knock them into shape. At times it made painful viewing as her no-nonsense demeanour cut through the dreams of the hopefuls and jarred them into acknowledging the realities of running a business.
“They all had the same problems,” she says, matter-of-factly. “They didn't realise what their gross profit should be, they had no sales and marketing experience and no brand awareness.”
The toughest business to tackle was, Devey admits, the one from her own industry, distribution. What she found at Kent haulage firm Rendrive was a poorly-run family business running at a monthly £10,000 loss, which was being propped up by the unquestioning generosity of the owner's mother.
Watching Devey calmly but firmly trying to persuade the mother that she was throwing her money away and doing her family no favours was one of the most touching moments of the series. All to no avail, however.
“It had all the problems inherent in family-owned businesses,” she explains. “The guy who owned it knew what was wrong but didn't have the guts to do it. It was a people problem, not a business problem - he had a strong balance sheet and an asset-based property. That business could have been turned around within a month with someone chopping out the dead wood.”
The long haul to business success
Toughness, making the difficult decisions and focusing almost ruthlessly on the bottom line are central to Devey's business philosophy. Born in Bolton, she grew up with business in the atmosphere. “My parents always ran small businesses,” she recalls. “I grew up with a degree of acumen around me, though running a business was never what I particularly aspired to.”
After school, she worked at a haulage company checking tachographs, and slowly “gravitated” towards logistics and transport. From there a corporate career opened up, first with Littlewoods, then Tibbett, Britten and Scorpio and finally seven years with retail distributor TNT. In 1996, she formed her own company, Pall-Ex.
Her revolutionary idea was to provide central hubs for distributors where they could swap small pallet-based loads, thus shortening journeys and ensuring lorries carried a full load both to and from delivery points. Hubs have become a model for the industry and, Devey stresses, have pushed hauliers' margins up from 1-2 per cent to an incredible 18-19 per cent, while also taking some 8,500 vehicles off the UK's roads.
Pall-Ex itself now has an annual turnover approaching £100 million. But it almost never got off the ground. “I'd not long started my business when the landlord revealed that the site we were using didn't have B8 use (planning permission for storage and distribution). We got a note from the council saying they were pulling the plug,” she recalls.
Rather than pack it in, Devey faced down the threat by defiantly phoning every Labour councillor in her area. “I said ‘Are you going to put all these people's jobs on the line?’ I got a stay of execution until I found new premises. I had to get through six months of turmoil and still had to motivate staff and put a front on. I needed those people.”
The making of an entrepreneur
The story underlines Devey's approach to business. She peppers her speech with words like “tenacity”, “enthusiasm” and “determination”. For her, being an entrepreneur means being utterly self-sufficient and working tirelessly to bring a “vision” to life, no matter what the obstacles.
“Not everybody has the same drive and staying power,” she admits. “Successful entrepreneurs have to be so good because there's no external support. The consultants I saw had not started a business and none of them gave me the kind of advice I needed.
“What do you do?” she continues. “You go to a bank and you find they're biased. So do you pay a consultant who charges exorbitant prices and doesn't know you as a business person?
“If I'd listened to my accountant in the early days, I wouldn't be where I am today. You've got to take risk,” Devey says urgently. “You've got to have a small degree of arrogance about you and say ‘Yes, I can do it’. Self belief - that doesn't cost anything.”
Success hasn't been without its price, however. A single mother, her son has had well-publicised problems with heroin. “I've had my challenges,” she confesses. “You do blame yourself for that, but I think he now understands my work ethic and what I provided for him.” It's a rare moment of self-doubt.
The business journey continues
But it doesn't last. Devey is quickly back to business, talking about her expansion into Italy and Eastern Europe and her plans to take Pall-Ex into fast-growing economies such as Malaysia, Russia, the United Arab Emirates and the Far East.
She is also developing a home-delivery arm to her business and is excited about her investment in Table Art, one of the firms that featured in The Business Inspector. It was owner Gary Martin's “enthusiasm” that attracted her. “I like to see Gary's enthusiasm and his vision - it's contagious. I can see it going worldwide and I want to be part of the journey.”
With such an entrepreneurial drive, why has she stayed in transport and logistics? Why not something more glamorous? “Once you're in, it's difficult to get out of,” she explains. “It's one of the largest employing industries in the world.”
But if you had your time again? “I'd probably go into a service industry with a model I could franchise, with low capital expenditure and high returns,” she says without hesitation. No frills, no nonsense, always the business brain tick-tick-ticking away.
From The Business Inspector to Dragons' Den and beyond
Devey replaced James Caan as the new Dragon on Dragons' Den in 2011. It was a natural next step for one of the UK's highest-profile business figures. Devey herself was delighted with the appointment, saying: "I would have loved the opportunity to have stood before the Dragons, and I will remember my own experiences and the realities of running a business today, when choosing to support - or reject - the budding entrepreneurs joining me in the Den."
Update: In June 2012, Devey announced she would be leaving Dragons' Den after the screening of the tenth series in autmn 2012 series. She is reported to be fronting a new Channel 4 series The Intern, as well as presenting Hilary Devey's Women at the Top on BBC2 in the autumn of 2012.