0:00:02 > 0:00:04This is the Dragons' Den.
0:00:04 > 0:00:05Over the last six years
0:00:05 > 0:00:10nearly 700 entrepreneurs have walked up the stairs looking for investment.
0:00:10 > 0:00:14Before them, five of Britain's most successful business brains,
0:00:14 > 0:00:18collectively worth a reported £1 billion.
0:00:18 > 0:00:22Convincing them to part with their cash isn't easy but tonight
0:00:22 > 0:00:25they have agreed to share their tips for success.
0:00:27 > 0:00:31- From the initial idea to the pitch. - Are you ready for the alternative?
0:00:31 > 0:00:33From the business plan...
0:00:33 > 0:00:37Probably the tidiest patent I've ever seen.
0:00:37 > 0:00:40- ..to in the negotiation. - 5% each, 10% in total.- Oh!
0:00:40 > 0:00:46These are the business secrets that work outside the Den and within, revealed by the Dragons themselves
0:00:46 > 0:00:51and the brave entrepreneurs who have dared to stand before them.
0:01:02 > 0:01:06Over the last three weeks the Dragons have shared their wisdom on pitching...
0:01:06 > 0:01:08I've completely lost it.
0:01:08 > 0:01:10- ..negotiation...- 40%.
0:01:10 > 0:01:12- 30%. - ..and money-making ideas...
0:01:12 > 0:01:16I invented the toaster bag in 1999.
0:01:16 > 0:01:23Tonight on How To Win In The Den, we unlock the Dragons' secrets to a successful business plan.
0:01:25 > 0:01:29It absolutely staggers me when people come into the Den
0:01:29 > 0:01:35with a muddled business plan or actually sometimes without a plan.
0:01:35 > 0:01:38Now whether they have lost it coming up the stairs I do not know.
0:01:38 > 0:01:44Whether it's your household budget or family holiday, planning is a vital part of everyday life.
0:01:44 > 0:01:49And when it comes to running a successful business, it's no different.
0:01:50 > 0:01:54One of the most important predictors of whether a business will succeed
0:01:54 > 0:01:56is whether there's a plan.
0:01:58 > 0:02:03- What is your business plan? - I want to make this into something that will really sell.
0:02:03 > 0:02:06I want the £7 million turnover within five years.
0:02:06 > 0:02:11I've learned a lot about business planning is to have one.
0:02:11 > 0:02:13I didn't have one at the start!
0:02:13 > 0:02:14So you're probably admit to me that your business skills
0:02:14 > 0:02:19- probably would need a bit of help. - I would say that, yeah.
0:02:19 > 0:02:24It's so important to know who your market is, who your competition is.
0:02:24 > 0:02:29I know about stock, ordering, I studied chartered accountancy.
0:02:30 > 0:02:35It's so important to get that business plan spot on.
0:02:36 > 0:02:39Now the Dragons are catching up with their investments.
0:02:39 > 0:02:42One thing I want you to know from me is I would not want to be
0:02:42 > 0:02:47involved as a minority investor with all your family involved.
0:02:47 > 0:02:53And revisiting some of the entrepreneurs whose business plans failed to impress.
0:02:53 > 0:02:57- You've gone into the coffin business? - With a twist.
0:02:57 > 0:03:02So if you're an entrepreneur in the making, pay attention.
0:03:02 > 0:03:07- Investors expect your figures to be right.- Timing is everything.
0:03:07 > 0:03:09Set realistic goals.
0:03:09 > 0:03:12You really do need to be sensible.
0:03:12 > 0:03:15It's you that makes the plan come together.
0:03:15 > 0:03:20These are the lessons you need to run a successful business.
0:03:25 > 0:03:30Every entrepreneur who comes looking for a Dragon's investment must come prepared for battle.
0:03:30 > 0:03:35Going into the Den without a business plan is like getting into your car without insurance.
0:03:35 > 0:03:41But without the goods to back it up, a business plan is not worth the paper it's written on.
0:03:41 > 0:03:49I cannot imagine that you're ever going to see any part of your £200,000 recouped.
0:03:49 > 0:03:55So the Dragons' first lesson is set realistic targets.
0:03:57 > 0:04:00One of the important things for a plan to do
0:04:00 > 0:04:05is to just set out projections of where the business is going to go.
0:04:05 > 0:04:07What's your forecast going forward over the next three years?
0:04:07 > 0:04:15Next year it's projected at a combined turnover of 3.4 million with a £240,000 net profit.
0:04:15 > 0:04:20Now the key thing is that there must be some evidence, some reason
0:04:20 > 0:04:23for thinking what you're thinking about how much you can sell.
0:04:23 > 0:04:26Have you got anything that supports that 3.4 million growth?
0:04:26 > 0:04:33We've got an order, the contract value is between £2 million and £20 million a year.
0:04:33 > 0:04:40It's remarkable how many people will make a plan that comes really from nowhere at all.
0:04:40 > 0:04:42What do you reckon you're going to do this year?
0:04:42 > 0:04:43Erm...
0:04:46 > 0:04:53- A few million? - Are you making it up as we go along? - No, it could be 5 million.
0:04:57 > 0:05:02And when it comes to the Den, it's amazing how many people have set absolutely no targets at all.
0:05:04 > 0:05:08I am astonished about how many people actually turn up in the Den without a plan.
0:05:10 > 0:05:13The business you're asking us to invest in, though,
0:05:13 > 0:05:18- doesn't exist at the moment? - That's right.- So to set up a new website that doesn't exist yet,
0:05:18 > 0:05:22has no customers, no revenue, no barriers to entry, nothing that you'd call a business...
0:05:22 > 0:05:24- That's right. - And you want me to invest in that?
0:05:24 > 0:05:25Yes.
0:05:25 > 0:05:28They actually can't tell me what they're going to do with the money,
0:05:28 > 0:05:30never mind how they're going to make money.
0:05:30 > 0:05:35So how do I make my £100,000 back?
0:05:35 > 0:05:38It's a great question and I'm struggling to answer it.
0:05:38 > 0:05:42It isn't just about the numbers, it's how to get there.
0:05:42 > 0:05:46- How can you generate £150,000? - Five advisers answering five calls an hour.
0:05:46 > 0:05:51So you need 2,000 calls a week? How much money are you going to make, what are you going to turn over?
0:05:51 > 0:05:54If they're all customers like you, maybe not as much as I thought!
0:06:00 > 0:06:05Two entrepreneurs whose solid business plan caught the interest of all five Dragons back in 2010
0:06:05 > 0:06:08were Richard Blakesley and Chris Barnardo.
0:06:08 > 0:06:11Although it didn't harm that their product was pretty impressive as well.
0:06:14 > 0:06:18Hi, we're the wand company and we're here today to ask for
0:06:18 > 0:06:23£200,000 investment for a 10% stake in our company.
0:06:23 > 0:06:26Arthur C Clarke is famous for having said,
0:06:26 > 0:06:29"Any sufficiently advanced technology is indistinguishable from magic."
0:06:29 > 0:06:32The magic market, fantasy market is huge.
0:06:32 > 0:06:37We thought that Richard and I would get together and make some really magical products.
0:06:37 > 0:06:39Our first one is a real magic wand.
0:06:39 > 0:06:43I thought the magic wand guys
0:06:43 > 0:06:45were possibly the best I've ever seen on Dragons' Den.
0:06:45 > 0:06:47With this wand I can, for example...
0:06:47 > 0:06:50MUSIC PLAYS
0:06:50 > 0:06:55..play some music. I can rotate it to turn the volume up.
0:06:55 > 0:07:01I can give it a flick to change tracks. Stop the music.
0:07:01 > 0:07:03In fact, you can control almost anything in your house.
0:07:03 > 0:07:05Fantastic.
0:07:05 > 0:07:07Everyone wants to zap someone, you know?
0:07:07 > 0:07:10I can turn on the TV.
0:07:10 > 0:07:11Dab, dab, dab, dab, dab, dab...
0:07:11 > 0:07:13Rewind, pause.
0:07:13 > 0:07:15# Da-da, la-da, da-da, la-da, da-da-da... #
0:07:15 > 0:07:16Or even things like lighting.
0:07:16 > 0:07:20Fair play, that was a really good demo.
0:07:20 > 0:07:23We started the company last year and by Christmas
0:07:23 > 0:07:29we'd sold over 10,000 units but we feel that with your help, investment and expertise we could take
0:07:29 > 0:07:33The Wand Company to a revenue of about £18 million within three years.
0:07:35 > 0:07:38A good product rarely gains investment without a realistic business plan.
0:07:38 > 0:07:45And Theo Paphitis was keen to hear the duo's sales targets and how they were going to achieve them.
0:07:45 > 0:07:47How many do you really believe you can sell?
0:07:47 > 0:07:51Have you got the financial year?
0:07:51 > 0:07:55- We are projecting conservatively £1.2 million.- For?- This year.
0:07:55 > 0:07:59How much net profit are you going to make out of 1.2 million?
0:07:59 > 0:08:03- 50%, 0.6 million.- £600,000.
0:08:03 > 0:08:08What makes you think that you require my £200,000?
0:08:08 > 0:08:12We don't need the cash to make this worst-case forecast we're talking about
0:08:12 > 0:08:15but we're saying with your investment we can do say £3 million.
0:08:15 > 0:08:17- The worst case is 1.2 million?- Yeah.
0:08:17 > 0:08:20We're just concluding a deal with Target in the US
0:08:20 > 0:08:23and one of our distributors wants to put the product into SkyMall.
0:08:23 > 0:08:25- They are putting it into SkyMall. - Oh they are, OK.
0:08:25 > 0:08:27SkyMall, for example, is a magazine in the back of the seat
0:08:27 > 0:08:33of every internal US flight, pretty much 600 million people a year sit in front of that.
0:08:34 > 0:08:36With ambitious targets but more importantly
0:08:36 > 0:08:43a strategy of how to meet them, Duncan Bannatyne was sold on both the duo and their business plan.
0:08:48 > 0:08:53I'm going to make you an offer for all the money, the £200,000, but I want not 10%
0:08:53 > 0:08:55but 30% of the company.
0:08:55 > 0:09:01If you make £600,000 profit I'll give you 10% of the equity back.
0:09:01 > 0:09:03- Is that a deal?- Can we ask of anyone else is interested?
0:09:03 > 0:09:06You can if you want to but you'll be wasting your time.
0:09:06 > 0:09:08Thank you.
0:09:08 > 0:09:15I'd like to offer you the full amount of money for 25% of the equity.
0:09:17 > 0:09:21With the confidence that comes from having two offers already on the table,
0:09:21 > 0:09:26the duo even set their own targets when it came to the negotiation.
0:09:26 > 0:09:31What offer would you like from me that would make you happy?
0:09:31 > 0:09:3520%, going down to say 10 if we make 1.2 net profit.
0:09:35 > 0:09:37- Does that work for you? - That would work.
0:09:37 > 0:09:39I don't think we were
0:09:39 > 0:09:41playing them off against each other, we just wanted to understand what
0:09:41 > 0:09:45the range of deals available to us were going to be.
0:09:45 > 0:09:51It's a consumer retail product but I don't know everything about all of your businesses but my impression is
0:09:51 > 0:09:57that Theo and Peter have got the strongest connections in that market.
0:09:57 > 0:09:59You'd be wrong to assess that,
0:09:59 > 0:10:01that the other Dragons have more connections than me.
0:10:01 > 0:10:04Can either of you move at all on your offers then?
0:10:04 > 0:10:06I could actually feel they would have been happy to walk away
0:10:06 > 0:10:10rather than take a deal that wasn't working for them.
0:10:10 > 0:10:14So it was either make a better offer or lose the investment.
0:10:14 > 0:10:16OK, well, I'll improve mine
0:10:16 > 0:10:19and I'll drop to 10% if you make 1.2 million.
0:10:19 > 0:10:21OK.
0:10:23 > 0:10:29Deborah Meaden and former Dragon James Caan were also won over by the duo's strategy
0:10:29 > 0:10:35and made attractive offers and after a lengthy negotiation the entrepreneurs made their choice.
0:10:35 > 0:10:37Duncan, we'd like to accept your offer.
0:10:37 > 0:10:38Thank you.
0:10:41 > 0:10:47Anyone coming on Dragons' Den should watch their pitch, watch what they did before they come on Dragons' Den.
0:10:47 > 0:10:50I have to say they played that masterfully.
0:10:50 > 0:10:56It's a year since Chris and Richard appeared in the Den and business is booming.
0:10:56 > 0:11:02The duo say they've more met their targets, turning over a reported 1.8 million last year.
0:11:02 > 0:11:08We are well ahead of the worst-case forecast that we gave in the Den. We haven't quite hit
0:11:08 > 0:11:13the best-case scenario that we presented but we are pretty happy with how things are going so far.
0:11:13 > 0:11:14Just push it in.
0:11:16 > 0:11:22And now the company is Tokyo bound with a new target to go global.
0:11:22 > 0:11:27They say they've sold over 60,000 units worldwide with 10,000 of
0:11:27 > 0:11:33their magical products sold in their first ten weeks of trading in Japan.
0:11:33 > 0:11:37The Japanese love our product. They didn't to start with really understand it. They don't have
0:11:37 > 0:11:42a heritage of a magic wand but once they got the idea, they absolutely loved it.
0:11:51 > 0:11:55And the company's rapid international success has not gone unnoticed.
0:11:55 > 0:11:57Chris and Richard have been working closely with
0:11:57 > 0:12:01the Government's trade and investment organisation to help meet their international targets.
0:12:01 > 0:12:06They have a programme called the OMIS programme
0:12:06 > 0:12:11where you can commission reports for different countries where they list the retailers,
0:12:11 > 0:12:14list the entry into those retailers and help you get into that market.
0:12:14 > 0:12:17Today the boys have been invited to rub shoulders with some of the country's
0:12:17 > 0:12:24business VIPs at the UK trade and investment strategy launch.
0:12:24 > 0:12:30And one of the biggest names at this exclusive event is Government Business Secretary Vince Cable.
0:12:30 > 0:12:33- Nice to meet you. - I've heard about your exploits. - Really?
0:12:33 > 0:12:35- You've got it in Japan.- Exactly.
0:12:35 > 0:12:40Via the UKTI. We wanted to go there and it will probably be about
0:12:40 > 0:12:43- half our revenue this year. - In Japan?- Yeah.
0:12:43 > 0:12:49The Wand Company is an example of how Britain is going to recover and get out of its economic mess.
0:12:49 > 0:12:54They're a mini multinational already and they attribute a large part of
0:12:54 > 0:12:57their success, particularly in Japan, to their work with UKTI.
0:12:59 > 0:13:05The duo's realistic targets and solid approach have paved their way to success.
0:13:05 > 0:13:11The Wand Company, I see the two founders are in the front row, an amazing story...
0:13:11 > 0:13:18And it's all the more impressive given that they chose not to sign the deal with their Dragon investor.
0:13:18 > 0:13:22As it happens, within days they signed a new agreement with a distributor,
0:13:22 > 0:13:25but the Wand just started selling and flying off the shelves and they
0:13:25 > 0:13:31very politely turned round to me and said, "We are really sorry, Duncan, but we don't need you."
0:13:31 > 0:13:34I was very happy to let it go because they were right, they didn't need me.
0:13:34 > 0:13:36I think we'd have liked to have had his involvement.
0:13:36 > 0:13:41I think from our point of view, it has allowed us to take the company where we wanted to go without having
0:13:41 > 0:13:45to ask anybody else and I think we've done all right, actually.
0:13:53 > 0:13:57There's only one person responsible for turning a business plan
0:13:57 > 0:14:00into a successful venture, the entrepreneur.
0:14:00 > 0:14:04One of the things I say about investing is I've got to trust the people I invest in.
0:14:04 > 0:14:12So convincing the Dragons you can pull it off is absolutely essential.
0:14:12 > 0:14:13Investable as a person myself?
0:14:13 > 0:14:16No, absolutely not!
0:14:16 > 0:14:22So the Dragons' next piece of advice is YOU make it happen.
0:14:23 > 0:14:25# I'm on the right track, baby
0:14:25 > 0:14:28# I was born this way... #
0:14:28 > 0:14:33Once they like you, the Dragons will view everything you say positively.
0:14:33 > 0:14:38You are good and you've definitely got it so I expect we'll see you at some...
0:14:38 > 0:14:41You might even be sitting in one of these chairs one day.
0:14:41 > 0:14:45If they don't like you, it will be the reverse.
0:14:45 > 0:14:49I couldn't spend the time on my own dealing with you two, it would drive me round the bend.
0:14:49 > 0:14:51So what would happen now
0:14:51 > 0:14:56if I made you an offer and said I didn't want you two managing the company?
0:14:57 > 0:14:59And when it comes to the Dragons evaluating whether your business plan
0:14:59 > 0:15:06is going to sink or swim, the likeability factor is key.
0:15:06 > 0:15:10There is one individual that is going to make a business work
0:15:10 > 0:15:15and it is the entrepreneur that created the business plan in the first place.
0:15:15 > 0:15:16You could say to me, "Peter, if you were to put £100,000
0:15:16 > 0:15:20"into this product I will do nothing else until this works."
0:15:20 > 0:15:23This product does not require me working 100%.
0:15:23 > 0:15:26You might like that but it's not what it actually requires.
0:15:26 > 0:15:30It's important that they are determined, focused...
0:15:30 > 0:15:33- I've been self-employed since I was 13.- Doing what?
0:15:33 > 0:15:38I had a little car wash company that I sold to my neighbour for £10.
0:15:38 > 0:15:42They've got to have all the qualities necessary to deliver business success.
0:15:42 > 0:15:45Businesses don't fail, aeroplanes don't crash, pilots crash airplanes.
0:15:45 > 0:15:48- The people fail.- Is that true?- Yes.
0:15:48 > 0:15:50If you don't believe in a business plan,
0:15:50 > 0:15:53if you don't have the enthusiasm to carry it out, it won't work.
0:15:53 > 0:15:57To be honest with you, I am only now interested in becoming
0:15:57 > 0:16:02a business person, it's actually coming to me now, I can feel it.
0:16:02 > 0:16:04Tell me how!
0:16:04 > 0:16:10I was tunnel-visioned and focused for 11 years totally on succeeding.
0:16:10 > 0:16:13And I ran it to plan.
0:16:13 > 0:16:18How on earth do you expect anybody to invest in you?
0:16:18 > 0:16:20You would make my foot itch. I'm out.
0:16:28 > 0:16:30One trio whose sheer determination has turned their business into
0:16:30 > 0:16:34a success are Ray Duffy, Chris O'Nyan and Dean Walton.
0:16:36 > 0:16:40They entered the Den in 2009 looking for investment of £50,000
0:16:40 > 0:16:44for 10% of their novelty mask company.
0:16:44 > 0:16:47We are the Three Masketeers from Masquerade.com,
0:16:47 > 0:16:54we create personalised and character products for stag dos, hen dos, corporate events and charity events.
0:16:54 > 0:16:58So you think if I have a party I'll order 400 masks of myself?
0:16:58 > 0:17:02No, your friend would order masks of you.
0:17:02 > 0:17:05The idea is you walk into a room and everybody is wearing your face.
0:17:05 > 0:17:08Wow. Wouldn't you love that, Peter? Everybody would be you.
0:17:08 > 0:17:12I do quite like that, actually.
0:17:12 > 0:17:17In spite of an endorsement from a seemingly airbrushed Duncan Bannatyne...
0:17:17 > 0:17:20I think the masks are fantastic.
0:17:20 > 0:17:22For that reason, I'd like to invest.
0:17:22 > 0:17:28- ..the Dragons couldn't see money-making potential in their business plan.- I'm afraid I'm out.
0:17:28 > 0:17:31- Thank you very much.- Thanks, guys.
0:17:35 > 0:17:40Although the Dragons wouldn't invest, the entrepreneurial trio didn't give up on
0:17:40 > 0:17:42their business strategy and two years on their tenacity and vision
0:17:42 > 0:17:47has meant their company is growing into a successful brand.
0:17:47 > 0:17:50We sat down and plotted where we should be in three years
0:17:50 > 0:17:54and it is mirroring the conversation that we had.
0:17:54 > 0:17:56It's fantastic to realise where it's going.
0:17:56 > 0:18:00As part of their plan, the creative trio knew they needed
0:18:00 > 0:18:06an original marketing concept so they came up with a publicity-grabbing idea.
0:18:06 > 0:18:08Every time there was a celebrity in town, we always
0:18:08 > 0:18:13produced masks of them and set about going to meet them.
0:18:13 > 0:18:17The reaction has always been fantastic and we would follow that up with a photo,
0:18:17 > 0:18:20which we send to the local newspapers and nationals even.
0:18:20 > 0:18:25We have had an amazing success rate with our stories about celebrity encounters
0:18:25 > 0:18:31and our autograph mask collection, which is well over 100 and adorning our wall of fame.
0:18:31 > 0:18:37And the trio's business also benefited from the world's hottest ticket of 2011.
0:18:37 > 0:18:44We met a well-known chain store, they placed an initial order with us for Kate and William masks.
0:18:44 > 0:18:50They've now taken over 60,000 masks of us and they're selling like hot cakes at the moment.
0:18:50 > 0:18:57Last year the company reported a turnover £160,000 with a profit of £20,000
0:18:57 > 0:19:04but having already sold 300,000 masks this year, they say their profit is set to quadruple.
0:19:04 > 0:19:08But none of this would have happened without a bit of added grit and determination.
0:19:08 > 0:19:15This is our baby, our passion. It's what we've forsaken friends, family and everything for to build.
0:19:15 > 0:19:20The proof of the pudding is there in the figures and the amount our business increases month on month
0:19:20 > 0:19:24on month, it will make all the figures we thought it would and it will go above and beyond.
0:19:34 > 0:19:39If an entrepreneur wants their business plan to be taken seriously,
0:19:39 > 0:19:43they need to make sure their figures add up.
0:19:44 > 0:19:46Just praying everything sticks in my head and all the figures
0:19:46 > 0:19:50and everything look good in there, they are there when I need them.
0:19:50 > 0:19:56So the Dragons' next lesson is - get the numbers right.
0:20:02 > 0:20:04Some people come into the Den
0:20:04 > 0:20:07and show they really understand their business.
0:20:07 > 0:20:09How much profit did you make?
0:20:09 > 0:20:12We actually made a net of 170,000,
0:20:12 > 0:20:15but I invested 150 into the development of these products.
0:20:16 > 0:20:20And you get others who come to the Den who don't have the discipline
0:20:20 > 0:20:23to think about all the things that go into a business.
0:20:23 > 0:20:27And if you don't know your numbers, you don't know your business.
0:20:27 > 0:20:31- What's the return on that investment?- Considerable. - I'm looking for a number.
0:20:32 > 0:20:35- Turnover. - SHE SIGHS
0:20:35 > 0:20:38Everything's just leaving me right now.
0:20:38 > 0:20:42The sales were... I think the turnover was...
0:20:44 > 0:20:47Numbers isn't my strong point, to be honest.
0:20:47 > 0:20:49I gathered numbers weren't your strong point!
0:20:51 > 0:20:54Once the Dragons do hear an entrepreneur's calculations,
0:20:54 > 0:20:56they might have wished they'd never asked.
0:20:58 > 0:21:00From the confused...
0:21:00 > 0:21:03- How much?- 60. Wait, 20...?
0:21:03 > 0:21:05No, it's not, sorry.
0:21:05 > 0:21:07That would be 480. No, it wouldn't.
0:21:07 > 0:21:09..to the bemused.
0:21:09 > 0:21:13- What's going to be the turnover? - It should be about £100,000.
0:21:13 > 0:21:16The turnover was 200,000 and the profit was 100,000.
0:21:16 > 0:21:18He said 100,000 minute ago.
0:21:18 > 0:21:21- I know, but he's getting his figures mixed up.- Should I ignore you?
0:21:21 > 0:21:23A little bit, I think!
0:21:29 > 0:21:32One couple who left the Dragons to figure it out were Liz and Alan Colleran.
0:21:32 > 0:21:36The husband and wife team entered the Den this year
0:21:36 > 0:21:39looking for investment in their innovative caravan sleeping bag.
0:21:42 > 0:21:44Hello, Dragons.
0:21:44 > 0:21:47Our company's Raskelf Memory Foam, and we're pitching for £80,000
0:21:47 > 0:21:50for 10% of our business.
0:21:50 > 0:21:51We've been married 28 years
0:21:51 > 0:21:56and our company came about from a simple idea we had whilst we were out caravanning with the children.
0:21:56 > 0:22:00Our bestselling product is also our most innovative product -
0:22:00 > 0:22:01the Duvalay.
0:22:01 > 0:22:04The Duvalay sleep system is really simple.
0:22:04 > 0:22:09It has a special memory foam base which smoothes out
0:22:09 > 0:22:11the lumps and bumps in caravan seats.
0:22:11 > 0:22:14It's joined, it can't come off, you can't get a cold back or bottom,
0:22:14 > 0:22:18you can have one for single or simply put two together to make a double.
0:22:18 > 0:22:22So far, we've sold about 10,000 of these units.
0:22:22 > 0:22:25So that's sales of about £1 million on this product alone.
0:22:25 > 0:22:29In fact, we can't make them fast enough.
0:22:29 > 0:22:31And we need your help and expertise
0:22:31 > 0:22:34to help us break into the huge European and American markets.
0:22:35 > 0:22:37Thank you for listening. Would you like to come and try?
0:22:39 > 0:22:43Liz and Alan had delivered their vision for the business.
0:22:43 > 0:22:44It is quite cosy, that.
0:22:44 > 0:22:49But it was Deborah Meaden who wanted to drill down further into the company figures.
0:22:49 > 0:22:52Can you talk me through your P&L just for last year,
0:22:52 > 0:22:55just tell me what you're spending your money on.
0:22:55 > 0:22:59- We've got a factory, shop, show rooms.- Wages.- Wages, staff...
0:22:59 > 0:23:04- What kind of money are they, then? Factory?- Um...- That's 16,000 a year.
0:23:04 > 0:23:09A lot of entrepreneurs don't understand a balance sheet,
0:23:09 > 0:23:11don't understand a P&L.
0:23:11 > 0:23:14And don't really understand the numbers.
0:23:14 > 0:23:18- Staff?- Staff? We've got 10 staff. - 10 staff?- Don't know.
0:23:18 > 0:23:22'I think as soon as you start to stutter or blunder on it,'
0:23:22 > 0:23:24you're more inclined for the Dragons to think,
0:23:24 > 0:23:28"Do they really know what they're talking about?"
0:23:29 > 0:23:31I don't know.
0:23:31 > 0:23:34- You don't know? Don't know. - It doesn't sound good.
0:23:34 > 0:23:37'You have to know your numbers, and the profit and loss.'
0:23:37 > 0:23:40You HAVE to understand the fundamentals of your business.
0:23:40 > 0:23:42Erm...
0:23:42 > 0:23:45We don't know. We don't have those details, I'm afraid.
0:23:45 > 0:23:49Once that we couldn't get one of the figures out,
0:23:49 > 0:23:52that was it, Deborah really, you know, tore into us.
0:23:53 > 0:23:54I'm an investor.
0:23:54 > 0:23:57All I want to know from you
0:23:57 > 0:23:59is how your business works
0:23:59 > 0:24:02and things like what is your wage bill
0:24:02 > 0:24:07is pretty simple stuff.
0:24:07 > 0:24:09We were focusing on the product.
0:24:09 > 0:24:12We prepared the figures for the product and the sales.
0:24:12 > 0:24:15We probably neglected the fact the Dragons
0:24:15 > 0:24:18were going to invest in the business, not just the product.
0:24:19 > 0:24:22You should know. Absolutely you should know.
0:24:28 > 0:24:31Liz and Alan's lack of financial knowledge
0:24:31 > 0:24:33had gone down badly with the Dragons
0:24:33 > 0:24:36and three declared themselves out in quick succession.
0:24:36 > 0:24:38But would Deborah Meaden,
0:24:38 > 0:24:41who made her fortune in the holiday park industry,
0:24:41 > 0:24:44invest in the couple's caravanning business plan?
0:24:45 > 0:24:49You have got to give me a reason
0:24:49 > 0:24:52and enough information to want to hand you my money
0:24:52 > 0:24:55because I honestly... I promise you this,
0:24:55 > 0:24:58if you had, you'd have had an investment from me.
0:24:59 > 0:25:02I'm sorry, Deborah.
0:25:02 > 0:25:04And for that reason, I'm out.
0:25:05 > 0:25:09Only Hillary Devey remained, but would the new Dragon
0:25:09 > 0:25:13be able to overlook the duo's poor grasp of their finances?
0:25:14 > 0:25:18If I liked the product, and I could empathise with the people,
0:25:18 > 0:25:22and I can see a route to market, then I possibly would invest,
0:25:22 > 0:25:25even if they didn't have a business plan.
0:25:25 > 0:25:29You need some input into the business to help you
0:25:29 > 0:25:34with the direction, but because I do think it has got vision...
0:25:35 > 0:25:37..I'll offer you the full amount...
0:25:38 > 0:25:40..but I want 26%.
0:25:44 > 0:25:46- You couldn't make it 20%?- No.
0:25:46 > 0:25:48I'm sorry, I can't move from 26. No.
0:25:50 > 0:25:52Can we go and have a word?
0:25:55 > 0:25:59Liz and Alan had secured an offer, but not knowing their figures had cost them dearly
0:25:59 > 0:26:03as Hillary was demanding 16% more equity
0:26:03 > 0:26:05than they'd originally wanted to give away.
0:26:05 > 0:26:09You're making big decisions in there, very big decisions.
0:26:09 > 0:26:11We'd had built a business over seven years
0:26:11 > 0:26:14and we're giving 26% of it away.
0:26:14 > 0:26:17And, you know, it's not something you do lightly.
0:26:22 > 0:26:26Yes, please! We'd love it. Thank you.
0:26:26 > 0:26:28APPLAUSE
0:26:28 > 0:26:30'If I was to go back into the Den,'
0:26:30 > 0:26:33I would definitely make sure I knew those figures.
0:26:33 > 0:26:35You'd be foolish not to.
0:26:35 > 0:26:38- Look forward to working with you guys.- Thank you, we do as well.
0:26:43 > 0:26:47Once a deal has been agreed in principle in the Den,
0:26:47 > 0:26:52both parties go through the regular business process of due diligence before the contract is finalised.
0:26:52 > 0:26:53Is there a lot to go today?
0:26:53 > 0:26:57You've got one done? All sorted. Lovely.
0:26:59 > 0:27:02Four weeks on, Liz and Alan are itching to get their Dragon's input
0:27:02 > 0:27:05into the family business they run with their two sons.
0:27:05 > 0:27:09Hillary will bring to the business some focus.
0:27:09 > 0:27:14There's so many different ways our business could go and so many different ideas that we've got,
0:27:14 > 0:27:16it's hard trying to structure them all.
0:27:18 > 0:27:21Last year, the company turned over just under £800,000,
0:27:21 > 0:27:25making a profit of £108,000.
0:27:25 > 0:27:27But with their Dragon on board,
0:27:27 > 0:27:30the couple might one day be able to stump up the cash
0:27:30 > 0:27:33for a quaint little country retreat like Hillary's.
0:27:37 > 0:27:41- This is my home.- Lovely house. - This is lovely, yeah. Gorgeous.
0:27:41 > 0:27:45Today, Liz and Alan are meeting Hillary to discuss the best strategy
0:27:45 > 0:27:49- for taking the company forward. - Come on through, I'll make you a cup of tea.
0:27:49 > 0:27:53And the couple know exactly what they want out of their Dragon.
0:27:53 > 0:27:56'She's doing in Europe now what we want to do.'
0:27:56 > 0:28:01She's gradually expanding her business into different countries individually.
0:28:01 > 0:28:04'We need somebody to help us get into the other countries
0:28:04 > 0:28:07'and how to structure it there.'
0:28:07 > 0:28:10We need advice with that, there's no two ways about it.
0:28:12 > 0:28:17We did wonder what you'd think about our plans getting into Europe, what would be the best way forward.
0:28:17 > 0:28:22I think with your product is to find master licensors
0:28:22 > 0:28:26in each country to act as agents to sell the product.
0:28:26 > 0:28:29That way, they're paying the manufacturing costs
0:28:29 > 0:28:33and all you're taking is for every product sold,
0:28:33 > 0:28:35you're taking a royalty from it.
0:28:35 > 0:28:38- That's really interesting, isn't it?- It is.
0:28:38 > 0:28:40- It's easy and it's possible.- Yeah.
0:28:40 > 0:28:44Shaking hands with a Dragon comes with a wealth of benefits,
0:28:44 > 0:28:48but it also means you might have to make some difficult decisions.
0:28:50 > 0:28:53Before the deal is finalised with Liz and Alan,
0:28:53 > 0:28:56Hillary wants to voice her concerns about their future plans
0:28:56 > 0:28:59to hand the reins over to their two sons.
0:28:59 > 0:29:02One thing I want you to know from me is
0:29:02 > 0:29:05I would not want to be involved as a minority investor
0:29:05 > 0:29:08with all your family involved
0:29:08 > 0:29:11because I'd be displaced.
0:29:11 > 0:29:16I personally would prefer that we run it more of a commercial venture.
0:29:16 > 0:29:17You're only small now,
0:29:17 > 0:29:20but we're not going to be small, are we?
0:29:20 > 0:29:23In five years' time, we're going to be a substantial business.
0:29:23 > 0:29:27- Yep, yeah. - So what matters is bottom line.
0:29:27 > 0:29:30We've not said we are building this business up
0:29:30 > 0:29:35to just give it to our children because we've worked really hard, you know,
0:29:35 > 0:29:38and we make the decisions and we'll do whatever is right
0:29:38 > 0:29:40because we haven't worked this hard to fail.
0:29:41 > 0:29:46So we've got a lot of work to do and this has got to become
0:29:46 > 0:29:50- a big, big business with a big brand.- Yeah.- Absolutely.
0:29:52 > 0:29:55Hillary's ambitious plans for the Collerans' business
0:29:55 > 0:29:58also include an exit strategy that will benefit them all,
0:29:58 > 0:30:01so Liz and Alan have some serious decisions to make.
0:30:01 > 0:30:04'Deep down, we all want the same outcome'
0:30:04 > 0:30:08so if we can achieve what we all want, then perfect.
0:30:08 > 0:30:12I just hope they listen and take the advice,
0:30:12 > 0:30:15because I am investing in their future
0:30:15 > 0:30:17as well as trying to get a return back on my own investment.
0:30:30 > 0:30:32If you want to win in the Den,
0:30:32 > 0:30:34an impressive business plan is a must.
0:30:36 > 0:30:38So, these are six simple lessons from the Dragons
0:30:38 > 0:30:43that could help you start a moneymaking venture of your own.
0:30:48 > 0:30:53Putting a price on the hard work may seem impossible to an entrepreneur,
0:30:53 > 0:30:58but entering the Den with a racy valuation on your business plan
0:30:58 > 0:31:00rarely goes down well with the Dragons.
0:31:00 > 0:31:03You know, a company that loses money every year
0:31:03 > 0:31:07and has been valued at 2.5 million is quite ridiculous.
0:31:09 > 0:31:13So, the Dragons' next lesson is make sure the price is right.
0:31:17 > 0:31:23The mistake that some entrepreneurs make is to go too far down the road of projecting.
0:31:23 > 0:31:25£3 million you value this product at.
0:31:25 > 0:31:28We value it at more than that, to be honest.
0:31:30 > 0:31:33'Having so much faith in what they're doing,'
0:31:33 > 0:31:37so much self-belief that, actually, they just look faintly deluded.
0:31:38 > 0:31:41It's not worth £3, let alone £3 million, Fraser, and I'm out.
0:31:43 > 0:31:48We do get an amazing amount of people coming up with the most ridiculous valuations.
0:31:48 > 0:31:51You value your business at the moment at £1 million.
0:31:51 > 0:31:53We know it's worth diddly squat.
0:31:53 > 0:31:57- We've based it on projected turnover over the next three years.- Oh, OK.
0:31:57 > 0:32:02So, you want me to invest now based on a valuation in three years' time?
0:32:02 > 0:32:06When they're coming up with, "We need 100K, 200K,"
0:32:06 > 0:32:10that is what they think they need to get that product to market.
0:32:10 > 0:32:14That is not a valuation of what their product or business is worth.
0:32:15 > 0:32:19You've got a business that you value at half a million pounds. How?
0:32:21 > 0:32:23Come on, snap, snap. You should have the answer.
0:32:23 > 0:32:25'To be credible,'
0:32:25 > 0:32:29you've got to understand business valuations.
0:32:30 > 0:32:34You come in here and you say, "I value this at 1.5 million,
0:32:34 > 0:32:37"although I've only got £1,200 worth of turnover."
0:32:37 > 0:32:39'Otherwise I'm going to look at them'
0:32:39 > 0:32:41and think, "You haven't got a clue, have you?"
0:32:41 > 0:32:45I wouldn't give you £150,000 for 100% of it, at the moment!
0:32:45 > 0:32:49And, therefore, the next two words that come out of my mouth are...
0:32:49 > 0:32:50I'm out.
0:32:50 > 0:32:52..I'm out.
0:32:54 > 0:32:56One man who shocked the Dragons
0:32:56 > 0:33:00with the price he put on his company was Gavin Wheeldon.
0:33:00 > 0:33:03He entered the Den in 2007 looking for an investment
0:33:03 > 0:33:06in his online translation company.
0:33:07 > 0:33:09I'm here today to ask for £250,000
0:33:09 > 0:33:12for a 4% equity.
0:33:12 > 0:33:14'You could see visible shock.'
0:33:14 > 0:33:18Everybody sat back, and "Did he really just say that?"
0:33:18 > 0:33:21We've achieved a lot, we've had an aggressive growth in three years.
0:33:21 > 0:33:25We are set to do 3.2 million turnover this year.
0:33:25 > 0:33:28We need some help to do that and a bit of money as well.
0:33:28 > 0:33:30Gavin had an excellent turnover,
0:33:30 > 0:33:35but could he justify the £6 million valuation of his business?
0:33:35 > 0:33:38Your valuation, from where I'm sitting, looks like this -
0:33:38 > 0:33:4321-22 times prospective earnings.
0:33:43 > 0:33:44Uh-huh, OK.
0:33:44 > 0:33:47Do you expect me to feel a little bit uncomfortable?
0:33:47 > 0:33:51If you start putting such a high valuation on your business,
0:33:51 > 0:33:53you risk losing any sort of investment from the Dragons.
0:33:53 > 0:33:55At the end of the day,
0:33:55 > 0:33:58something's only worth as much as someone's prepared to spend.
0:33:58 > 0:34:02My intention is within five years to float for 60 million,
0:34:02 > 0:34:05so the 4% will give a 2.4 million return.
0:34:05 > 0:34:09Duncan Bannantyne saw potential in Gavin's business
0:34:09 > 0:34:12and offered him 50% of the money.
0:34:12 > 0:34:14If I'd invest £125,000,
0:34:14 > 0:34:16I'd want 9% of your company.
0:34:16 > 0:34:20He'd obviously sat quietly, done a few sums, and saw the value in it.
0:34:20 > 0:34:22But Gavin couldn't convince another Dragon
0:34:22 > 0:34:26to invest the remaining £125,000.
0:34:26 > 0:34:29The risk is too high for an investor.
0:34:29 > 0:34:31I think I might as well state now - I'm out.
0:34:31 > 0:34:35So, four years on, has Gavin managed to prove
0:34:35 > 0:34:37that the £6 million price tag was right?
0:34:42 > 0:34:46When I left the Den, I was determined I will prove you wrong.
0:34:48 > 0:34:49And that's what I've done.
0:34:51 > 0:34:56What we've achieved today as a business more than proves the valuation was absolutely right.
0:34:56 > 0:34:59What language would you like to book for the interpreter?
0:34:59 > 0:35:02Gavin says he's just secured a lucrative contract
0:35:02 > 0:35:07supplying translation services for the Ministry of Justice.
0:35:07 > 0:35:10We'll be up to 50 million turnover in the next two years.
0:35:10 > 0:35:12Now we're worth well over 30 million
0:35:12 > 0:35:15and by the time we expand this contract,
0:35:15 > 0:35:17we'll be worth well over 100 million.
0:35:17 > 0:35:24'Even if they'd have invested in the 4% for quarter of a million, they'd have made a massive return,'
0:35:24 > 0:35:26so big mistake there on the Dragons' part.
0:35:26 > 0:35:29I'd just like to say thank you to everybody involved.
0:35:29 > 0:35:31- Cheers!- (ALL) Cheers!
0:35:31 > 0:35:33And with his company continuing to grow,
0:35:33 > 0:35:37the Dragons better not get too comfortable.
0:35:37 > 0:35:40We're going to be up there, similar size to some of the Dragons
0:35:40 > 0:35:43in terms of turnover, so keep those chairs nice and warm!
0:35:54 > 0:35:56When launching a new business,
0:35:56 > 0:36:00you've got to make sure your timing is right on the money.
0:36:00 > 0:36:02I had my Eureka moment.
0:36:02 > 0:36:05It started to take shape about 2008.
0:36:05 > 0:36:09So, the Dragons' next lesson is it's all about timing.
0:36:13 > 0:36:15Business is as much an art as a science.
0:36:15 > 0:36:19The helicopter car combines two of the hottest big boys' toys -
0:36:19 > 0:36:22a remote-controlled car and a helicopter in one.
0:36:22 > 0:36:25If you can get the right idea, the right product,
0:36:25 > 0:36:28at the right time, you're well on your way.
0:36:30 > 0:36:33Wait for this economic climate to settle down a bit better,
0:36:33 > 0:36:35then launch your business.
0:36:36 > 0:36:39A good idea at the wrong time isn't going to work.
0:36:39 > 0:36:44Bright PC manufacture the world's most energy-efficient computer equipment.
0:36:44 > 0:36:48I know this market very, very well and you're 20 years behind.
0:36:49 > 0:36:55Lighting Emotions design, manufacture and sells glow-in-the-dark glasses.
0:36:55 > 0:36:59- I was selling light-up drinks in these...- Yes?
0:36:59 > 0:37:02..probably five years ago.
0:37:02 > 0:37:04Timing is everything.
0:37:08 > 0:37:12One entrepreneur whose business plan was timed to perfection
0:37:12 > 0:37:14was Patrick van der Vorst.
0:37:14 > 0:37:17The Belgian auctioneer entered the Den in 2010
0:37:17 > 0:37:20looking for a £100,000 investment
0:37:20 > 0:37:24for 20% of his online antique valuation business.
0:37:24 > 0:37:28The idea grew when I was working at Sotheby's
0:37:28 > 0:37:31that actually there's no easy way for people to find out
0:37:31 > 0:37:33what the value is of their items,
0:37:33 > 0:37:37of their art and antique. I think everybody at home
0:37:37 > 0:37:39has got a teapot or maybe a chair
0:37:39 > 0:37:42that they'd like to know the value of
0:37:42 > 0:37:44and I think maybe they might feel intimidated
0:37:44 > 0:37:47to pick up the phone to an auction house
0:37:47 > 0:37:49or go to see a dealer directly.
0:37:49 > 0:37:54So what we do is our customers come onto our website.
0:37:54 > 0:37:58They upload a photograph of their item and within 48 hours,
0:37:58 > 0:38:02one of our 28 experts will reply back to the customer.
0:38:05 > 0:38:07So many people have got things
0:38:07 > 0:38:09and they think, "It's an old bit of tat,"
0:38:09 > 0:38:13and it's worth hundreds or thousands, really worth money.
0:38:13 > 0:38:19You can find out, you know, do I have something that I can go out and flog and get myself a brand-new car.
0:38:19 > 0:38:22I thought that was a brilliant idea.
0:38:22 > 0:38:24It was an assured pitch, but Deborah Meaden
0:38:24 > 0:38:26wanted to know more about Patrick's business model.
0:38:29 > 0:38:33- What's your average transaction value?- Er...£4.50.
0:38:33 > 0:38:37Plus the additional revenue streams like the advertising.
0:38:37 > 0:38:40How many unique businesses do you think you're going to have
0:38:40 > 0:38:42to actually attract advertising revenue?
0:38:42 > 0:38:46Hopefully, we'll get about 100,000 unique visitors a month.
0:38:46 > 0:38:49How?
0:38:49 > 0:38:52- Through Google advertising.- How much are you going to spend on that?
0:38:52 > 0:38:56At the moment, I'm spending £4,000-£5,000 a month.
0:38:56 > 0:38:58How many unique visitors do you get at the moment?
0:38:58 > 0:39:03Unique visitors, we get 20,000 unique visitors a month.
0:39:03 > 0:39:06And we have a conversion rate of 3.6%.
0:39:06 > 0:39:09I'll tell you what's not adding up.
0:39:09 > 0:39:12- 20,000 unique visitors.- Yes.
0:39:12 > 0:39:153.6%. That's 720 customers.
0:39:15 > 0:39:19720 customers paying 4.99 is 3,600
0:39:19 > 0:39:25and if you're spending 5K a month on Google AdWords to get 3,600 worth of revenue, you haven't got a business.
0:39:26 > 0:39:29When it came to Peter, he really sort of drilled down
0:39:29 > 0:39:35deep into the figures and I think it was a pivotal moment in the pitch.
0:39:35 > 0:39:39Those figures are based on unique visitors.
0:39:39 > 0:39:43About 25% of the customers bring repeat business.
0:39:43 > 0:39:46We have got clients who have bought 15 or 20 times,
0:39:46 > 0:39:48sort of new credit.
0:39:48 > 0:39:54We had a customer last Friday who spent 350.
0:39:57 > 0:40:00Patrick had proved there were profits to be made,
0:40:00 > 0:40:03but was it enough to convince Duncan Bannatyne to invest?
0:40:06 > 0:40:09Patrick, what I am going to do is go home...
0:40:09 > 0:40:12In fact, I am going to go to all three of my houses,
0:40:12 > 0:40:14I am going to photograph all my antiques.
0:40:14 > 0:40:16I am going to send them to you.
0:40:16 > 0:40:18- Right.- And I'll get you to value them.
0:40:18 > 0:40:19Yes.
0:40:19 > 0:40:23I don't think it's an investable product, so I won't invest.
0:40:23 > 0:40:24For that reason,
0:40:24 > 0:40:29Patrick, I'm out, but were going to have a good time together valuing my antiques.
0:40:31 > 0:40:35Former Dragon James Caan and Peter Jones chose not to invest
0:40:35 > 0:40:39but would the last two multimillionaires think the time was right?
0:40:40 > 0:40:42Do you know what, I think in a time of austerity
0:40:42 > 0:40:45people will be looking at actually selling things.
0:40:45 > 0:40:49They will be looking at value.
0:40:49 > 0:40:52So I think you will get a lot more demand on your website.
0:40:54 > 0:40:56I actually like it.
0:40:57 > 0:41:00I think Theo hit the nail on the head,
0:41:00 > 0:41:04the timing for the concept and the website was exactly right.
0:41:04 > 0:41:07I am prepared to make you an offer.
0:41:07 > 0:41:12Half the money for 20%.
0:41:12 > 0:41:13Mmm-hmm.
0:41:14 > 0:41:16I completely agree with Theo
0:41:16 > 0:41:20that if this website was ever going to have its moment,
0:41:20 > 0:41:22it's going to be now.
0:41:23 > 0:41:25I'll match Theo's offer.
0:41:25 > 0:41:27OK.
0:41:28 > 0:41:32'They say while the iron is hot, you've got to strike.'
0:41:32 > 0:41:34When the time comes you've got to move with it.
0:41:39 > 0:41:43I have thought about it, and I would be delighted to proceed.
0:41:43 > 0:41:44Excellent.
0:41:44 > 0:41:48I firmly believe that if you have got the right time for that product,
0:41:48 > 0:41:52then you will find the right place to get that product to market.
0:41:59 > 0:42:03A year later, and Patrick has moved to new premises in Westminster,
0:42:03 > 0:42:06where he has proved the timing was perfect
0:42:06 > 0:42:07for his business to succeed.
0:42:09 > 0:42:11When I went into the Den a year ago,
0:42:11 > 0:42:13we had done 10,000 valuations.
0:42:13 > 0:42:16Now we have done 65,000 valuations.
0:42:16 > 0:42:19We had 6,500 customers, I believe.
0:42:19 > 0:42:22Now we've got 35,000 customers.
0:42:22 > 0:42:28We launched an agency service where we'll assist people going to auction.
0:42:28 > 0:42:30The most rewarding aspect of all that though
0:42:30 > 0:42:34is customers keep coming back to us, and there is a lot of repeat custom.
0:42:36 > 0:42:40Patrick is keen to capitalise on his website's growing market,
0:42:40 > 0:42:45but ensures he never takes his eye of how his business is performing.
0:42:45 > 0:42:48Today he's in Sussex to see if his latest valued lots
0:42:48 > 0:42:51have achieved the price they predicted,
0:42:51 > 0:42:56and one of his Dragon investors is here to discuss how the business is progressing.
0:42:56 > 0:42:59From the offset I could see where Value My Stuff could go,
0:42:59 > 0:43:02and I see this as an international business.
0:43:02 > 0:43:05Today is as much as about just seeing, was I right?
0:43:05 > 0:43:06Was this the right time?
0:43:07 > 0:43:09Hi, Patrick.
0:43:09 > 0:43:12- Hi, how are you? - Very well. How are you?
0:43:12 > 0:43:13Very well, thank you.
0:43:13 > 0:43:16It took me a while to get through, you've got some lovely stuff.
0:43:16 > 0:43:19Lovely paintings, very nice drawings as well.
0:43:19 > 0:43:23We have got two lots which we sold yesterday very successfully,
0:43:23 > 0:43:26on behalf of some of our clients who asked for advice, it is exciting.
0:43:30 > 0:43:32I'm going to start at £4,000.
0:43:32 > 0:43:37On average, Patrick says his website does up to 250 valuations a day
0:43:37 > 0:43:41and has over 50,000 unique visitors a month.
0:43:41 > 0:43:43Finishing at £4,800.
0:43:43 > 0:43:48And his customer base is continuing to grow at a steady pace.
0:43:49 > 0:43:52You've been in this industry for a long time.
0:43:52 > 0:43:55But you spotted the moment
0:43:55 > 0:44:00when you felt it was ready, and ripe,
0:44:00 > 0:44:02to do something different.
0:44:02 > 0:44:04What made you think it was the right time?
0:44:04 > 0:44:07From a technological point of view, five years ago,
0:44:07 > 0:44:09most people didn't have digital cameras.
0:44:09 > 0:44:11Now most people have a camera on their phones,
0:44:11 > 0:44:13so it is almost the first time
0:44:13 > 0:44:19that it is very easy for people to upload items onto the internet.
0:44:19 > 0:44:21I suspect if you'd done it five years ago...
0:44:21 > 0:44:23It wouldn't have worked five years ago.
0:44:23 > 0:44:26Now we are the first ones in there to try and capture the market.
0:44:26 > 0:44:31What's your dream? How big do you think this can get?
0:44:31 > 0:44:34We have a wonderful opportunity I think in China
0:44:34 > 0:44:35which at the moment I think
0:44:35 > 0:44:40already makes up for 45% of the global art market.
0:44:40 > 0:44:43For them, when I spoke to our contact there,
0:44:43 > 0:44:44he said actually
0:44:44 > 0:44:47people would be willing to pay
0:44:47 > 0:44:50double or triple the amount for a valuation,
0:44:50 > 0:44:54if the valuation could come with a printout
0:44:54 > 0:44:57or a photograph of the expert holding up the valuation.
0:44:57 > 0:45:00Interesting. In the UK it wouldn't make any difference.
0:45:00 > 0:45:04In the UK it wouldn't make a difference, over there in China...
0:45:04 > 0:45:05Great.
0:45:07 > 0:45:12Patrick says the company's turnover has grown three and a half times
0:45:12 > 0:45:15since his appearance on the Den, and with new markets emerging,
0:45:15 > 0:45:18the future is looking bright for his online service.
0:45:18 > 0:45:20Timing in business is very important.
0:45:20 > 0:45:22An uncle told me once years ago,
0:45:22 > 0:45:28he said the difference between a successful person and an unsuccessful person is one second.
0:45:28 > 0:45:29It's actually very true.
0:45:29 > 0:45:33When you can be the first person in there to capture a market,
0:45:33 > 0:45:36that is exactly the position that you want to be in.
0:45:36 > 0:45:39When Patrick came into the Den he believed the time was right.
0:45:39 > 0:45:41I thought the time was right,
0:45:41 > 0:45:44but actually as we stand here today,
0:45:44 > 0:45:48we have proved the time is right.
0:45:59 > 0:46:02If an entrepreneur's business plan fails to impress in the Den...
0:46:02 > 0:46:06You'll never make a penny from this market.
0:46:06 > 0:46:08- Fair enough.- I am out.- OK.
0:46:08 > 0:46:14..should they accept defeat or carry on regardless?
0:46:14 > 0:46:19I do honestly feel for somebody like that. He has tried everybody, everybody had said no.
0:46:19 > 0:46:21This is his last throw of the dice.
0:46:21 > 0:46:24And he needed the honesty today.
0:46:24 > 0:46:27Oh, he did. It was one of those moments he's feeling crushed
0:46:27 > 0:46:31and I think it's one of the best days of his life.
0:46:31 > 0:46:35So the Dragons' final lesson is - know when to stop.
0:46:40 > 0:46:45I think it is so important to get a realistic plan from the outset,
0:46:45 > 0:46:48and that makes it much easier for you to appraise where you are.
0:46:48 > 0:46:51Year five, which was 2011,
0:46:51 > 0:46:54I made a loss of just over 100,000.
0:46:55 > 0:46:59It also makes it a little bit easier for you to say to yourself,
0:46:59 > 0:47:01it is time to get out.
0:47:01 > 0:47:04Why would you want to invest in a business that doesn't make money?
0:47:04 > 0:47:06You have to invest to get to where you are.
0:47:06 > 0:47:10I have never, ever invested in a business
0:47:10 > 0:47:14and waited five years for it to start making money.
0:47:17 > 0:47:20But knowing when to give up is easier said than done,
0:47:20 > 0:47:24especially when an entrepreneur eats, sleeps and breathes their business.
0:47:24 > 0:47:27They clearly believe in it.
0:47:27 > 0:47:29You are going to sell your house to back this?
0:47:29 > 0:47:31I firmly believe in this product.
0:47:31 > 0:47:34And then you are just quashing their dreams.
0:47:34 > 0:47:38Do not sell your house for this.
0:47:38 > 0:47:42I don't know what makes them so passionate about something they can't see
0:47:42 > 0:47:46the obvious things that tell me this cannot work, can't make money.
0:47:46 > 0:47:49It can never, ever be a decent business.
0:47:49 > 0:47:52Have you had any response from anybody who wants to place an order?
0:47:52 > 0:47:54No, we haven't had any response.
0:47:55 > 0:47:59They still continue with that passion because they've got one idea,
0:47:59 > 0:48:03maybe they can't think of a second idea, they're just passionate about one idea.
0:48:03 > 0:48:09I urge you, urge you not to do this.
0:48:12 > 0:48:15Two entrepreneurs whose cute companion impressed the Dragons,
0:48:15 > 0:48:18but whose business plan sadly did not,
0:48:18 > 0:48:21were Stephen Mitchell and Michael Ehrenreich.
0:48:21 > 0:48:23They entered the Den last year
0:48:23 > 0:48:26looking for investment in their innovative buggy bike.
0:48:28 > 0:48:31We are looking for a £225,000 investment,
0:48:31 > 0:48:34and we are offering 6% of our company.
0:48:34 > 0:48:38The Zigo carrier cycle is a multi-mode cycle.
0:48:38 > 0:48:40It is very stable, great all-round vision,
0:48:40 > 0:48:45first mode as you see it now, child pod in front, cycle behind.
0:48:47 > 0:48:52You've put a rather large valuation on your product.
0:48:52 > 0:48:55I'm going to ask you, why?
0:48:55 > 0:48:58I'll take that.
0:48:58 > 0:49:02We're not a start-up company, exactly. We have previous investors.
0:49:02 > 0:49:04We've sold about 500 units to date,
0:49:04 > 0:49:09revenues for the last 12 months is approximately 400,000 US dollars.
0:49:09 > 0:49:12- You've spent all that?- Yes. - Have you borrowed any more?
0:49:12 > 0:49:14I've put in a substantial sum personally.
0:49:16 > 0:49:19We had a plan. The key thing we were never going to say
0:49:19 > 0:49:21was how much we spent on development.
0:49:22 > 0:49:26I've put in 1,300,000.
0:49:26 > 0:49:31You've put 1,300,000?
0:49:31 > 0:49:33- Yes.- Wow.
0:49:33 > 0:49:37At that point, I wished a trap door open and swallow me up.
0:49:39 > 0:49:43With such an enormous amount of money already invested,
0:49:43 > 0:49:48Deborah Meaden was curious to know how their business plan was panning out.
0:49:48 > 0:49:51So financially, by now, where did your backers
0:49:51 > 0:49:55believe they were going to be and where are they now?
0:49:55 > 0:49:58We expected it to be profitable by now, and we're not.
0:49:58 > 0:50:02- We're going to make a loss this year. - How much?- Approximately £200,000.
0:50:02 > 0:50:05'At that point, maybe he should have said, "Sorry, guys,
0:50:05 > 0:50:08"it's been a massive misunderstanding,"
0:50:08 > 0:50:13and he should have just tiptoed down the stairs, with a little bit of pride.
0:50:14 > 0:50:16'It was pretty...'
0:50:16 > 0:50:18It was terrible.
0:50:20 > 0:50:25With such an unprofitable track record, all five Dragons declined to invest.
0:50:27 > 0:50:30I think you're kidding yourselves. For that reason, I'm out.
0:50:31 > 0:50:35'Sometimes, you need that sharp shock.'
0:50:35 > 0:50:39You've had a go, it didn't work, cut your losses, go.
0:50:40 > 0:50:44It's been a year since Stephen and Michael entered the Den.
0:50:44 > 0:50:49But did the duo turn their back on their business plan?
0:50:49 > 0:50:55Did I feel like giving up? Well, in parts I didn't want to be there, but we're still running,
0:50:55 > 0:50:57they're still manufactured.
0:50:57 > 0:51:01We've sold just under 2,000 in the last 18 months.
0:51:01 > 0:51:06I've still got a very tiny stake in the business, it doesn't generate any cash for me.
0:51:08 > 0:51:11But Stephen's entrepreneurial spirit is still strong
0:51:11 > 0:51:14and he's just embarked on a new and very different business plan...
0:51:14 > 0:51:18a website that compares prices... for funerals.
0:51:20 > 0:51:26What we aim to do with Comparethecoffin.com is allow people to make a plan online,
0:51:26 > 0:51:30and then we send it to funeral directors, who bid for the business.
0:51:30 > 0:51:32This one is my favourite.
0:51:32 > 0:51:35Stephen's online service will be free,
0:51:35 > 0:51:40but he's hoping customers will choose to buy their coffins from him.
0:51:40 > 0:51:43There is very few occasions in business life
0:51:43 > 0:51:47where you get to change a whole industry, and this is going to be one of them.
0:51:50 > 0:51:55In fact, Stephen is so confident his new business plan is a dead cert
0:51:55 > 0:52:00that he's invited Theo Paphitis to his latest coffin catalogue shoot
0:52:00 > 0:52:04in the hope the Dragon will want to invest.
0:52:04 > 0:52:06'I would love to have Mr Paphitis as a partner,
0:52:06 > 0:52:09'I think he could bring a lot to the party.
0:52:09 > 0:52:13'You can carry on selling ladies' underwear
0:52:13 > 0:52:15'or come with me and change the world.'
0:52:15 > 0:52:19- Nice to meet you again, sir. - How are you doing?- Good, actually.
0:52:19 > 0:52:23- Where's your mate?- I left him in America, I thought it was safer.
0:52:23 > 0:52:27- And you have gone into the coffin business?- With a twist.
0:52:30 > 0:52:35Although Stephen's new business may not have the instant appeal of ladies' lingerie,
0:52:35 > 0:52:40he's hoping the profit potential in his stock will impress retail giant Theo.
0:52:40 > 0:52:42What does it sell for?
0:52:42 > 0:52:45- To the trader or the consumer?- Both.
0:52:45 > 0:52:51The trade price is roundabout 450, 500.
0:52:51 > 0:52:55The consumer price can be anything between 2,800 and 3,500.
0:52:55 > 0:53:01- Amazing.- It is. Do you know the average spend on a funeral in this country?
0:53:01 > 0:53:03- Go on.- £6,500.
0:53:05 > 0:53:09But is it enough to persuade the Dragon to part with his money?
0:53:09 > 0:53:13Looking around me, I'm seeing nothing but the grim reaper.
0:53:13 > 0:53:16I found it difficult to get passionate about death.
0:53:16 > 0:53:19- But isn't it unique? Nobody else... - Nothing is unique.
0:53:19 > 0:53:22Listen, if you were doing it and it was any good,
0:53:22 > 0:53:25there'd be 1,000 websites doing the same thing.
0:53:25 > 0:53:28If you make three years, you've got half a chance.
0:53:28 > 0:53:31On that note, I'm out.
0:53:33 > 0:53:37Theo may have passed on the chance to invest in Stephen's business,
0:53:37 > 0:53:41but there's no way this determined entrepreneur is giving up the ghost.
0:53:41 > 0:53:45I still think this is the best idea I personally have ever had.
0:53:45 > 0:53:49Like he said, it's just not for him. I think it would be for Peter Jones.
0:54:00 > 0:54:05We've learnt that a successful business plan is all about setting realistic targets.
0:54:05 > 0:54:09We are projecting, conservatively, £1.2 million for this year.
0:54:09 > 0:54:10OK.
0:54:10 > 0:54:13You making it happen.
0:54:13 > 0:54:14Knowing your figures.
0:54:14 > 0:54:16You should know.
0:54:16 > 0:54:17Absolutely, you should know.
0:54:19 > 0:54:22Pricing it right, timing, and knowing when to give up.
0:54:22 > 0:54:26I've put in £1,300,000.
0:54:26 > 0:54:28Wow.
0:54:28 > 0:54:30But after nine series of the Den,
0:54:30 > 0:54:33whose business plan ticked all the boxes?
0:54:33 > 0:54:37Well, there's one entrepreneur whose meticulous planning
0:54:37 > 0:54:40blows most of the competition out of the water.
0:54:46 > 0:54:49Imran had everything in place.
0:54:49 > 0:54:51He had a great pitch, got everything right,
0:54:51 > 0:54:54but above all, what he got right was his business plan.
0:54:54 > 0:54:57He managed to pull every cord, tie them all up in a beautiful not,
0:54:57 > 0:55:01and I think he had the dragons eating out of his hands.
0:55:01 > 0:55:06iTeddy brings the teddy bear into the 21st century by incorporating
0:55:06 > 0:55:08a personal media player...
0:55:08 > 0:55:11He gave a great visualisation of his product.
0:55:11 > 0:55:14And then he gave us a complete stepping-stone
0:55:14 > 0:55:17of all the things he would do to make his business successful.
0:55:17 > 0:55:21It's a very simple-to-use
0:55:21 > 0:55:23child-friendly menu system.
0:55:25 > 0:55:28I can put a movie clip on for you.
0:55:28 > 0:55:32If I wanted to go on to the audio player, just scroll to the audio player,
0:55:32 > 0:55:35and I can now play myself a bedtime story.
0:55:37 > 0:55:40I put together the strong plan.
0:55:40 > 0:55:42The initial idea, the product specifications,
0:55:42 > 0:55:45the technical aspects, how much I was going to make it for,
0:55:45 > 0:55:49how much I was going to distribute and retail it for.
0:55:49 > 0:55:53- Did you develop it? - Yes, from scratch.- From scratch?- Yes.
0:55:57 > 0:56:04- What price are you looking to sell it at?- For the MP4 version, £28. For the MP3 version, £20.
0:56:04 > 0:56:10We can make a 46% margin on the MP4.
0:56:10 > 0:56:12'He knew his margins,'
0:56:12 > 0:56:14he knew what the retailer margins were,
0:56:14 > 0:56:17he really had a solid business plan behind his product.
0:56:17 > 0:56:21The iTeddy, I would definitely have invested in.
0:56:21 > 0:56:25It's a sustainable business model, it can continue to create revenue
0:56:25 > 0:56:29and it can continue to innovate. Those are the best business models.
0:56:31 > 0:56:33Imran's impressive business plan
0:56:33 > 0:56:36generated offers from computer expert Peter Jones
0:56:36 > 0:56:38and retail giant Theo Paphitis.
0:56:38 > 0:56:41He made a joint deal with both the Dragons.
0:56:41 > 0:56:45If I had been sitting there as a Dragon, I would have invested in Imran.
0:56:45 > 0:56:49I think that's one of the best businesses I've seen out of Dragons' Den.
0:56:56 > 0:56:58Within months of leaving the Den,
0:56:58 > 0:57:03the company had signed an exclusive deal with one of the UK's leading high-street toy retailers,
0:57:03 > 0:57:06which they say enabled them to achieve its three-year sales forecasts
0:57:06 > 0:57:10in just the first six months of trading.
0:57:12 > 0:57:16From then on, we started selling in 45 countries around the world,
0:57:16 > 0:57:21it was a top-10 toy in quite a few countries around the world.
0:57:21 > 0:57:23You take one of these away...
0:57:26 > 0:57:29Imran's business plan has been so successful,
0:57:29 > 0:57:34he's now passing on his knowledge to up-and-coming entrepreneurs.
0:57:34 > 0:57:38Approach the market from a completely different angle from everything else out there.
0:57:38 > 0:57:43He's a shareholder in an organisation that helps start-up companies find investors.
0:57:43 > 0:57:48What I'm going to try and do from today is establish where the gaps are in the business plan
0:57:48 > 0:57:52and hopefully, between us, we can try and strengthen that up a bit.
0:57:52 > 0:57:57But with a reported £23 million worth of retail sales from his first product,
0:57:57 > 0:58:01what is the next step in Imran's business plan?
0:58:02 > 0:58:04The toy industry is a fashion industry.
0:58:04 > 0:58:08And once you've got a product that sells very well for two or three years,
0:58:08 > 0:58:13you have to quickly come up with a product that takes its place.
0:58:13 > 0:58:17We've got development on the table, we've got to make sure we get the technology right,
0:58:17 > 0:58:21when we bring it to market the timing is right,
0:58:21 > 0:58:22and we're very excited.
0:58:22 > 0:58:24Watch this space.
0:58:31 > 0:58:35If you think you've got what it takes to impress the Dragons, why not visit our website:
0:58:38 > 0:58:41Where you can apply to enter the Den online.
0:58:48 > 0:58:51Subtitles by Red Bee Media Ltd
0:58:51 > 0:58:54E-mail subtitling@bbc.co.uk