I’m only a viewer. I’ve never been on the show. But from watching a lot of it, it seems that despite this being the 9th series of the show, some people are still making mistakes which surely seem obvious to viewers.
I understand that each nerve-wracking negotiation can drag on for hours, before being cut down to a couple of minutes of entertaining TV, but unless it’s been edited into an unrecognisable state by the BBC, surely these days there can’t be any excuse for seemingly making some of these errors. With that in mind, here’s my top 8 tips for being successful on the show (in no particular order).
1. Know your figures.
You know Duncan Bannatyne is going to ask for your 2nd and 3rd year projections of turnover and profit, right? It’d be absolutely “ludicrous” and “ridiculous” to think otherwise.
If your company sells products, how much it cost you to make each, how much do you sell them for, and how much profit do you make?
If you sell them to a retailer who sells them on, how much do they sell them for, and how big are their orders? Are there regular or repeat orders?
Do you take a salary, and if so, how much?
You’re going to get asked all these questions, and you’ll look like a bit of a fool on national TV if you don’t know the answers. This is much more important than learning a complicated pitch with a dance routine. Which brings me nicely to…
2. Don’t come up the stairs and start singing and dancing.
Unless your business involves singing and/or dancing, coming up the stairs and doing either will get you compared to Levi Roots – one of the most successful results of an episode of Dragon’s Den, of all time. It’s setting their expectations so high that unless you’re already being stocked in every supermarket, you’re not going to live up to.
Oh and it’s also really cringeworthy if you’re not very good. According to Wikipedia, before being on Dragon’s Den, Levi Roots was nominated for a MOBO award. You probably weren’t.
3. Don’t overvalue your business.
If you ask for £100,000, for a 10% stake, you’ve just valued your business at £1 million. If you’ve only made £10,000 so far, you’ve set yourself up for a rather long grilling on exactly how you got to that valuation. That will likely be followed by them pulling faces and/or laughing at you, before they declare they’re all out.
And don’t try the old “the telecoms sector is worth £15 ka-trillion so I only need 0.01% of that market to be on the Times Rich List” nonsense either. Not without a plan or some proof that shows a demand or how you might get close to such a percentage.
4. Don’t sell them something old.
If your business has been running 20 years, and you’ve sold 15 of your products, it probably isn’t going to be something they’re interested in, nor is it “the right time to bring it to market”. Sorry.
5. What’s to stop other people copying it?
If you’ve got an invention with no proof of actual income, can you patent it? If so, have you? If you can’t, you’re probably out of luck.
If you’re doing something a lot of other larger companies could just add on, unless you’re making a profit now, you’re probably not going to get an investment.
6. What’s the market like?
How many other people are doing/selling this? If nobody else is selling it, maybe that’s because it isn’t needed. If lots of other people are selling it, why should someone buy yours instead of one of your competitors? Is there a market leader? How close to saturation is it?
They’re almost certainly going to ask you all of this.
7. Don’t offer a small part of a larger entity.
This happens a few times in every series. This week, when Evan Davis introduced someone as a “successful entrepreneur”, I knew he wasn’t leaving with any investment.
If your company sells shoes, and you’ve come up with a new type of laces, the logical thing to do is pair it with the shoes to sell it. Yet people come on every series and, despite their main company making £150,000 a year in profit, ask the dragons for £100,000 investment in their new product, which would clearly go well with their other products.
Peter Jones will ask you why you don’t just invest your own money back into it, if you believe in it. Then Deborah Meaden will ask why it isn’t an investment in the whole company – instead of just part of it – after which you’ll be back down the stairs again.
8. Don’t wear jeans.
Unless your company is a new brand of jeans, or something connected with jeans, don’t wear jeans. It seems to really piss them off.
So with that in mind..
I’m off to pester Duncan Bannatyne on Twitter. I’m offering him a 10% share in my company for £150,000. We’ve been selling underpants – that carry advertising – for 5 years, and there is nobody else in the world that has ever even thought about doing it. I say “we sell” them, we haven’t sold any yet – but they are the next big thing, definitely. It’s just the right time for this to come to market. Do you know how big the market is for underwear, worldwide? I’m only aiming for a 1% share. The brand is going to be massive. I’ve already written a song for it… “ohhh…Who wants cold calls? Use your balls. You need to hem, your CPM…”