0:00:03 > 0:00:04Tonight on Dragons' Den...
0:00:09 > 0:00:10You're expecting to run this business
0:00:10 > 0:00:13on ?54,000 of overheads including marketing?
0:00:13 > 0:00:15It's not going to work.
0:00:15 > 0:00:17Wow, David, you're in a tough situation.
0:00:19 > 0:00:22The conversation is not for later, the conversation is now.
0:00:24 > 0:00:25I'm not prepared to do that today.
0:00:25 > 0:00:29Pardon? That's not the right answer. That's not the right answer?
0:00:29 > 0:00:33I'm, kind of, aligned with you and you're very good.
0:00:34 > 0:00:38This is a business I could get very passionate about.
0:00:38 > 0:00:40So, I'm going to add a bit of spice to it.
0:01:12 > 0:01:14Welcome to Dragons' Den,
0:01:14 > 0:01:17the place where entrepreneurs get just one chance
0:01:17 > 0:01:19to impress five industry big hitters
0:01:19 > 0:01:23who have the money and the power to change their lives.
0:01:30 > 0:01:33First to face the Dragons are transatlantic duo
0:01:33 > 0:01:35Tom Bell and Craig Bailey,
0:01:38 > 0:01:42with an invention they claim will revolutionise takeaway hot drinks.
0:01:44 > 0:01:46Don't forget to breathe.
0:01:47 > 0:01:51UK-based Tom is hoping he won't get a roasting from the Dragons.
0:01:53 > 0:01:57For me, going into the Den right now is just a part of this crazy journey
0:01:57 > 0:01:58that I'm on.
0:02:00 > 0:02:03I'm just holding on with my fingernails.
0:02:19 > 0:02:21Hi. My name is Tom.
0:02:24 > 0:02:26And this is FoamAroma.
0:02:26 > 0:02:31We're here today to ask you for an ?80,000 investment
0:02:31 > 0:02:36in exchange for 15% of our business, FoamAroma UK Ltd.
0:02:36 > 0:02:41In 2015, Britain spent ?7.9 billion in coffee shops,
0:02:41 > 0:02:45using approximately 2.5 billion lids like this.
0:02:45 > 0:02:47For many of us, this lid design is poor.
0:02:47 > 0:02:51Why? Because the drink hole and the vent holes are too small,
0:02:51 > 0:02:53stopping you from smelling your coffee,
0:02:53 > 0:02:56reducing the flavour and the flow.
0:02:56 > 0:02:59Our lid, in comparison - FoamAroma,
0:02:59 > 0:03:04is designed to give you a better on-the-go drinking experience.
0:03:04 > 0:03:07Hi, I'm Craig, inventor of the FoamAroma lid.
0:03:07 > 0:03:11In 2007, I had my very first cappuccino.
0:03:11 > 0:03:14Open ceramic cup - it was an amazing experience for me.
0:03:14 > 0:03:17The next day, I wanted to do that same thing.
0:03:17 > 0:03:19So, I go back to the same shop,
0:03:19 > 0:03:23I order the same drink, but I had to go paper cup and a lid.
0:03:23 > 0:03:24It was terrible.
0:03:24 > 0:03:27That disappointment inspired me to create a lid
0:03:27 > 0:03:30that gives you that sensory experience.
0:03:30 > 0:03:32The very first version of FoamAroma was this.
0:03:37 > 0:03:39And then, four years after this,
0:03:39 > 0:03:42I had prototypes which I introduced at a coffee trade show,
0:03:42 > 0:03:44and that's where I met Tom.
0:03:44 > 0:03:47Since 2013, through my existing company,
0:03:47 > 0:03:50I have sold 3.5 millions lids,
0:03:50 > 0:03:542.4 million of those lids have been sold in the last 12 months.
0:03:54 > 0:04:00Our current sales were ?55,000 last year at a gross margin of 30%.
0:04:00 > 0:04:04Your money and time will be used for marketing and development
0:04:04 > 0:04:07and reduction of our production costs.
0:04:07 > 0:04:09Thank you very much, Dragons, for listening to our pitch.
0:04:09 > 0:04:13We would love you to try a hot drink and try a FoamAroma lid.
0:04:15 > 0:04:19A pitch without froth from Tom Bell and Craig Bailey.
0:04:19 > 0:04:21With its larger holes,
0:04:21 > 0:04:24their unique coffee lid claims to offer both easier drinking
0:04:24 > 0:04:27and an enhanced aroma.
0:04:27 > 0:04:28One Americano.
0:04:28 > 0:04:31The entrepreneurs are looking for ?80,000 in return
0:04:31 > 0:04:35for 15% of the coffee lid distribution business.
0:04:36 > 0:04:39Food and drinks guru Sarah Willingham has
0:04:39 > 0:04:41a nose for these things.
0:04:41 > 0:04:43Will this invention win her over?
0:04:44 > 0:04:48I have an issue with the product, if I'm being completely honest.
0:04:48 > 0:04:51That is that fundamentally this is about smelling coffee
0:04:51 > 0:04:53as you drink it.
0:04:53 > 0:04:57But the majority of coffees that are sold in the UK are sold with milk.
0:04:58 > 0:05:01Actually, when you add milk to coffee
0:05:01 > 0:05:05the aroma disappears, because the smell comes from the moment
0:05:05 > 0:05:08the bean is ground and it only stays there if
0:05:08 > 0:05:11it is kept in its original form.
0:05:12 > 0:05:14It's a nice little marketing tool
0:05:14 > 0:05:16and a nice little story to tell people,
0:05:16 > 0:05:19but the reality is it doesn't actually improve
0:05:19 > 0:05:23my coffee-drinking experience and I'm a big coffee drinker.
0:05:23 > 0:05:25How is your feel around the mouth?
0:05:25 > 0:05:28Are you relaxed in your jaw?
0:05:28 > 0:05:29A kind of tension free?
0:05:31 > 0:05:37The tension in my jaw was no different drinking from this lid
0:05:37 > 0:05:40then drinking from every other lid I've ever drunk from.
0:05:42 > 0:05:46Surely not the response the coffee-lid creators had hoped for
0:05:46 > 0:05:49from the discerning foodie Dragon.
0:05:49 > 0:05:51But tech and telecoms giant, Peter Jones,
0:05:51 > 0:05:54is more interested in their sales figures
0:05:54 > 0:05:57than their quest for taste perfection.
0:05:59 > 0:06:03I'm going to have to get more into the business here, because,
0:06:03 > 0:06:07on the surface, a lid with, exactly as you described,
0:06:07 > 0:06:09a pen hole in the top of it,
0:06:09 > 0:06:11is strangely not doing it for me at the moment.
0:06:11 > 0:06:14But you have sold 2.4 million in the last 12 months.
0:06:16 > 0:06:17Yes.
0:06:17 > 0:06:20So, that's not bad. What's your business, Tom?
0:06:20 > 0:06:22Do you sell cups and lids already?
0:06:22 > 0:06:25I sell packaging products to retailers of both
0:06:25 > 0:06:28delicatessens and coffee shops.
0:06:28 > 0:06:30OK, and the size of that 2.4 million.
0:06:30 > 0:06:33What does that mean in revenue terms?
0:06:33 > 0:06:352.4 million is ?55,000 revenue.
0:06:36 > 0:06:40So, about ?1,000 a week in terms of sales.
0:06:40 > 0:06:41And, Craig, how do you make money?
0:06:41 > 0:06:46I sell to about 13 distributers in America and then I export to Tom.
0:06:46 > 0:06:48OK, this is getting complicated.
0:06:50 > 0:06:52Who owns this company? We own FoamAroma UK...
0:06:52 > 0:06:5470-30.
0:06:55 > 0:06:58FoamAroma Worldwide, who owns that?
0:06:58 > 0:06:59I do. Great.
0:07:00 > 0:07:02The pitch that you're asking for today
0:07:02 > 0:07:05is on FoamAroma Worldwide, yeah?
0:07:05 > 0:07:10FoamAroma UK Ltd, which includes the whole of the UK, whole of Europe,
0:07:10 > 0:07:12greater economic region of Europe, Russia...
0:07:12 > 0:07:16OK, why are we not being offered a piece of the whole?
0:07:16 > 0:07:18Well, I hope this is a positive experience
0:07:18 > 0:07:19with this company
0:07:19 > 0:07:24and that we would have that conversation down the road.
0:07:26 > 0:07:30No, no, I want to have that conversation today.
0:07:30 > 0:07:31That's not on the table. Why?
0:07:31 > 0:07:35If you're pitching this business, which is what your pitch was,
0:07:35 > 0:07:37and then you're going to say, "Oh, by the way,
0:07:37 > 0:07:39"it's just the UK and Europe in terms of distribution,"
0:07:39 > 0:07:41that's not very attractive.
0:07:44 > 0:07:46I am not prepared to do that today.
0:07:48 > 0:07:53Despite a grilling from Peter Jones, the inventor is holding his ground.
0:07:54 > 0:07:58And Deborah Meaden is next to test out Craig's resolve,
0:07:58 > 0:08:00turning the spotlight on to his design.
0:08:01 > 0:08:05Craig, Tom, you have your patent?
0:08:05 > 0:08:08Yes, I do. Which is the patentable step?
0:08:08 > 0:08:14The whole three-dimensional design and form of that lid is patented.
0:08:14 > 0:08:17So, the whole thing? Yes.
0:08:17 > 0:08:21But what makes a patent valuable is when it's difficult to overcome it.
0:08:21 > 0:08:24I'd be amazed if I couldn't come up with something very similar.
0:08:24 > 0:08:25I could flatten it off,
0:08:25 > 0:08:28I could move two holes, so I get independent flavours
0:08:28 > 0:08:34in each nostril, which I think is a really, really good idea.
0:08:34 > 0:08:37I just worry that the valuable bit, which is what you're relying on -
0:08:37 > 0:08:40that you've got a valuable something here -
0:08:40 > 0:08:41actually is not that valuable.
0:08:44 > 0:08:48With fermenting discomfort about the lids legitimacy
0:08:48 > 0:08:50and if it can be protected,
0:08:50 > 0:08:53Peter Jones turns up the heat another notch.
0:08:55 > 0:08:57I go back to the attractiveness of this deal.
0:08:57 > 0:09:01You're currently selling ?1,000 worth of this product a week
0:09:01 > 0:09:06at a 30% margin. That's ?300 per week.
0:09:07 > 0:09:08Yes.
0:09:09 > 0:09:12You are asking for ?80,000
0:09:12 > 0:09:16and you're valuing your company at nearly ?500,000.
0:09:18 > 0:09:20You need to use the hole in this and smell it?
0:09:21 > 0:09:23I do every day.
0:09:23 > 0:09:26Well, you need to wake up, then, because this isn't working
0:09:26 > 0:09:28at the moment financially for me as an offer.
0:09:33 > 0:09:35Peter Jones clearly needs some convincing
0:09:35 > 0:09:38on the coffee lid's potential to make a good enough return
0:09:38 > 0:09:40on his investment.
0:09:40 > 0:09:42And now, Nick Jenkins also has doubts
0:09:42 > 0:09:46about the transatlantic duo's business proposition.
0:09:51 > 0:09:53I don't think this really makes much sense
0:09:53 > 0:09:56from an investment point of view.
0:09:56 > 0:09:59It's not really very attractive for a number of reasons.
0:09:59 > 0:10:01One, you already have another business,
0:10:01 > 0:10:04so you're not 100% dedicated to this new business.
0:10:06 > 0:10:08Secondly, we don't own the intellectual property.
0:10:08 > 0:10:10I just think you'd be better off doing this yourself.
0:10:10 > 0:10:14I don't really see why you're trying to raise money.
0:10:14 > 0:10:18So, it makes no sense from my perspective to invest in this,
0:10:18 > 0:10:19so I'm out.
0:10:22 > 0:10:23Can I tell you where I am?
0:10:23 > 0:10:26I actually couldn't have put it better than that.
0:10:26 > 0:10:27I think that was a wonderful explanation
0:10:27 > 0:10:29why it's virtually uninvestable.
0:10:29 > 0:10:31I won't be investing either.
0:10:31 > 0:10:32I'm out.
0:10:35 > 0:10:40That speedy double shot has left the entrepreneurs reeling.
0:10:40 > 0:10:44But distribution and retail magnate Touker Suleyman isn't ready to ditch
0:10:44 > 0:10:45the deal just yet.
0:10:48 > 0:10:51Craig, I'm going to give you a chance to rethink what Peter said.
0:10:51 > 0:10:53Are you willing to put the patent
0:10:53 > 0:10:59and the US business in with this one to create one business
0:10:59 > 0:11:02which may encourage the remaining Dragons to invest?
0:11:05 > 0:11:08As I said, I'm open for that conversation...
0:11:08 > 0:11:12The conversation is not for later, the conversation is now.
0:11:13 > 0:11:15So, I'm asking you a direct question.
0:11:15 > 0:11:18I'll give you one last chance.
0:11:22 > 0:11:25You know my answer. Yeah.
0:11:29 > 0:11:31I'm not prepared to do that today...
0:11:31 > 0:11:33No. Pardon? That's not the right answer.
0:11:33 > 0:11:34That's not the right answer?
0:11:37 > 0:11:39The answer is, yes, you will consider it
0:11:39 > 0:11:43and you will strike a deal if we want a deal.
0:11:48 > 0:11:49Be strong.
0:11:49 > 0:11:51Be strong, it's the right thing to do.
0:11:51 > 0:11:53He's an inventor, he needs a little push.
0:11:53 > 0:11:54It's the right thing to do.
0:12:06 > 0:12:07Yes.
0:12:15 > 0:12:15Craig? Yes.
0:12:16 > 0:12:16Craig? Yes.
0:12:18 > 0:12:21I think you've just made this a little bit more interesting.
0:12:25 > 0:12:28It's a dramatic turnaround in the Den.
0:12:28 > 0:12:31Will Sarah Willingham be more tempted to invest
0:12:31 > 0:12:35now that the US company is finally on the table?
0:12:39 > 0:12:44Is the reason why your turnover's only 55,000 in the UK,
0:12:44 > 0:12:47despite the enormous size of the market...
0:12:47 > 0:12:48I'm sorry to say this,
0:12:48 > 0:12:51but is it because it doesn't actually make that much difference?
0:12:51 > 0:12:54We get an enormous amount of feedback from people
0:12:54 > 0:12:56who try the lid.
0:12:56 > 0:12:58I've come to realise people love to be able
0:12:58 > 0:13:01to taste their coffee properly as they would in store.
0:13:01 > 0:13:04The problem is that your numbers don't reflect that.
0:13:04 > 0:13:07We've got a really strong coffee culture here in the UK
0:13:07 > 0:13:09and if you can't sell the product here...
0:13:09 > 0:13:13It's basically down to I haven't marketed really, or advertised.
0:13:13 > 0:13:15I've done a couple of trade shows and that's about... That's...
0:13:15 > 0:13:18I think the fact that you've been trying to sell it
0:13:18 > 0:13:20for two or three years in the UK...
0:13:20 > 0:13:24When I look at the numbers and ten grand's worth of this product...
0:13:24 > 0:13:26I'm sorry, it's not investible for me.
0:13:26 > 0:13:29So, I'm afraid, I wish you all the best, but I'm out.
0:13:31 > 0:13:36Sarah Willingham becomes the third Dragon to exit the deal.
0:13:36 > 0:13:38Having convinced the entrepreneurs
0:13:38 > 0:13:40to include the US company in the offer,
0:13:40 > 0:13:44will Touker Suleyman now consider it a big enough opportunity
0:13:44 > 0:13:46to take the plunge?
0:13:46 > 0:13:48Guys, I can tell you where I am.
0:13:48 > 0:13:49I do like the lid.
0:13:52 > 0:13:54But the business is far too small
0:13:54 > 0:13:56and I don't think that's investible for me.
0:13:56 > 0:13:59And, for that reason, I'm out.
0:14:10 > 0:14:13I think you made it slightly more attractive, Craig,
0:14:13 > 0:14:16by at least conceding that there's an opportunity
0:14:16 > 0:14:18to discuss with the main holding company.
0:14:18 > 0:14:20That was hard to do. No, I could see it was.
0:14:21 > 0:14:24But I think, at least, that got me to think
0:14:24 > 0:14:27because I think you're in a very, very tough place.
0:14:27 > 0:14:30You are a great example of an inventor
0:14:30 > 0:14:33that has come up with something that is quite a unique product.
0:14:37 > 0:14:40But even when you start to grow this business,
0:14:40 > 0:14:43I don't think you're going to produce a serious return.
0:14:45 > 0:14:48So, for that reason, I'm going to say I'm out.
0:14:48 > 0:14:50Thank you. Thank you very much.
0:14:50 > 0:14:53As Peter Jones declines the deal,
0:14:53 > 0:14:58he puts the final lid on Tom and Craig's coffee takeout revolution.
0:15:00 > 0:15:02That was hard. Mm. Unlucky. Yeah.
0:15:03 > 0:15:07I was proud of Craig for actually taking my advice in there
0:15:07 > 0:15:09and offering for the global share.
0:15:09 > 0:15:11That was hard. I think it was a brave thing for him to do.
0:15:11 > 0:15:14It's something I've been working on for a long time.
0:15:23 > 0:15:27Next in the den are opera singing sisters Tina and Claire O'Brien,
0:15:27 > 0:15:30who are hoping their dulcet tones will soothe the Dragons
0:15:30 > 0:15:31into making a deal.
0:15:32 > 0:15:37We were inspired by singing and that enabled us to have a great career.
0:15:37 > 0:15:42We realised that we wanted to offer that same opportunity to children.
0:15:42 > 0:15:43I hope we'll all fit in!
0:15:45 > 0:15:47I'm really delighted that I've been given numbers...
0:15:47 > 0:15:49Yes, brilliant - figures.
0:15:49 > 0:15:53So, I've been doing my times table revision all week.
0:15:57 > 0:15:58Oh, look at them!
0:16:02 > 0:16:04CHILDREN: Hi!
0:16:05 > 0:16:09MUSIC: King by Years Years
0:16:09 > 0:16:13# Cut cover, take that test Hold courage to your chest
0:16:13 > 0:16:15# Don't wanna wait for you Don't wanna have to lose
0:16:15 > 0:16:21# All that I've compromised to hit another high
0:16:21 > 0:16:25# I've got to keep it down tonight
0:16:25 > 0:16:27# And ooh
0:16:27 > 0:16:32# I was a king under your control
0:16:32 > 0:16:36# And ooh
0:16:36 > 0:16:39# I wanna feel like you've let me go
0:16:39 > 0:16:40# So let me go. #
0:16:46 > 0:16:48Amazing!
0:16:48 > 0:16:50CHILDREN: Bye, Dragons! Bye!
0:16:59 > 0:17:01We've done it!
0:17:01 > 0:17:03Hello, we're Claire and Tina O'Brien
0:17:03 > 0:17:06and we are co-founders of Little Belters.
0:17:07 > 0:17:11Little Belters groups offer fun, affordable,
0:17:11 > 0:17:16quality singing tuition for children aged 5 to 11 years old.
0:17:16 > 0:17:19We've taken the idea of a children's choir
0:17:19 > 0:17:20and we've turned it on its head.
0:17:20 > 0:17:24We're looking for a ?45,000 investment
0:17:24 > 0:17:26for a 15% stake in our company.
0:17:28 > 0:17:29For one hour a week,
0:17:29 > 0:17:32our members learn all about singing through our specially designed
0:17:32 > 0:17:35fun, fast-paced programme.
0:17:35 > 0:17:39They develop a great vocal technique and also grow in confidence.
0:17:39 > 0:17:41These sessions are led by our
0:17:41 > 0:17:45fully-trained, professional freelance singers.
0:17:45 > 0:17:47We launched our first group in 2013
0:17:47 > 0:17:51and we now have seven groups operating across Greater Manchester.
0:17:51 > 0:17:54We would like to grow from seven groups to 100 groups
0:17:54 > 0:17:57and that's why we need your help.
0:17:57 > 0:18:01We have a proven business model and a strong brand.
0:18:01 > 0:18:05Investment costs are low and we're a profitable business with no debt.
0:18:05 > 0:18:08We really hope you'd like to invest in Little Belters
0:18:08 > 0:18:11and we're more than happy to take any of your questions.
0:18:12 > 0:18:15A note-perfect pitch from the sister act
0:18:15 > 0:18:18who are looking for an investment of ?45,000 in return for 15%
0:18:18 > 0:18:24of their children's choirs company, Little Belters.
0:18:24 > 0:18:27The children's polished performance impressed the Dragons,
0:18:27 > 0:18:30but Peter Jones wants Tina and Claire to give
0:18:30 > 0:18:34an off-the-cuff demonstration of their teaching skills.
0:18:35 > 0:18:38You're both singers. Yeah. What I want you to do is,
0:18:38 > 0:18:43you're taking a class and, in front of you, you have five Dragons.
0:18:44 > 0:18:46Do you want us to give you a lesson, then?
0:18:46 > 0:18:47I think it's quite important
0:18:47 > 0:18:50to get an understanding of what this is all about? I agree.
0:18:50 > 0:18:53Right, Dragons, today we are going to focus on something
0:18:53 > 0:18:54that's very important in singing.
0:18:54 > 0:18:57That's having that lovely big space at the back of your throat.
0:18:57 > 0:18:59So let's all try and yawn. Just...
0:19:00 > 0:19:04Can you see how that opens up the back of your throat there?
0:19:04 > 0:19:06Now try that yawn, but you're hiding the yawn
0:19:06 > 0:19:09and feel that space at the back of your throat.
0:19:09 > 0:19:12That space is where you're going to allow your
0:19:12 > 0:19:14beautiful sound to come from.
0:19:14 > 0:19:17Now, Dragons, you're not the only monsters in this room.
0:19:17 > 0:19:20Over there, over that hill, there's a monster!
0:19:20 > 0:19:21We want you to sing,
0:19:21 > 0:19:24# What's that coming over the hill? Is it a monster? #
0:19:24 > 0:19:27So, the words are, "What's that...?" What's that coming over the hill?
0:19:27 > 0:19:29Coming over the hill is it a monster?
0:19:29 > 0:19:31Is it a monster?
0:19:31 > 0:19:34OK. One, two, three, four...
0:19:34 > 0:19:36# What's that coming over the hill?
0:19:36 > 0:19:38# Is it a monster?
0:19:38 > 0:19:41# Is it a monster? #
0:19:44 > 0:19:47The show's finally over now that everyone has sung
0:19:47 > 0:19:49and it's time to get down to business.
0:19:50 > 0:19:53Sarah Willingham is first to explore how the company works.
0:19:55 > 0:19:57You talk about the proven business model.
0:19:57 > 0:19:59Yeah. What is the business model?
0:19:59 > 0:20:02What you spend, what you get back, how you get your customers.
0:20:02 > 0:20:05Basically, we identify an area through market research
0:20:05 > 0:20:08that will be a good area for a Little Belters group.
0:20:08 > 0:20:12We then employee, recruit and train a professional singer.
0:20:12 > 0:20:17We place them in a venue and we recruit all the members.
0:20:17 > 0:20:22The children pay ?35 and they have three public performances a year
0:20:22 > 0:20:25and they rehearse every week in term time.
0:20:25 > 0:20:27So, it's only operating for 39 weeks of the year.
0:20:27 > 0:20:30We're not operating on a franchise model.
0:20:30 > 0:20:32So the marketing, the finance,
0:20:32 > 0:20:35the administration is all managed centrally.
0:20:35 > 0:20:37Is there another business that exists
0:20:37 > 0:20:40that uses this business model that has done it successfully?
0:20:40 > 0:20:43Yes. Yes, but only for adults. That is Rock Choir. OK.
0:20:43 > 0:20:46And they have over 600 groups in the country.
0:20:46 > 0:20:48And how long's it taken them to get to 600
0:20:48 > 0:20:49and how have they done it?
0:20:49 > 0:20:52Ten years. Ten years to do that. They started in a similar way to us.
0:20:52 > 0:20:55They started with one group in Surrey
0:20:55 > 0:20:58and then they expanded slowly in a sort of wave effect
0:20:58 > 0:20:59across the country.
0:20:59 > 0:21:02The obvious question, why haven't they done it for kids?
0:21:02 > 0:21:04I mean, they've already got the infrastructure,
0:21:04 > 0:21:06they've already got the teachers and parents,
0:21:06 > 0:21:09why on earth aren't they doing it for kids?
0:21:10 > 0:21:12After a strong start,
0:21:12 > 0:21:15the news that a more established company could potentially
0:21:15 > 0:21:19run with their idea has struck a worrying cord.
0:21:19 > 0:21:22Now, Peter Jones wants to see
0:21:22 > 0:21:25if they have the commercial savvy to match their teaching skills.
0:21:28 > 0:21:30How good are you at business?
0:21:30 > 0:21:34Erm. OK. For ten years, I worked in the arts.
0:21:34 > 0:21:35I worked in arts management.
0:21:35 > 0:21:38I was head of development both in Manchester and London
0:21:38 > 0:21:41for a big arts organisations. Right, so give me that sample.
0:21:41 > 0:21:46One group, 12 months, costs of operation, income...
0:21:46 > 0:21:52For one group, based on 35 children in a half term,
0:21:52 > 0:21:55you would be getting... Erm...
0:21:58 > 0:22:01Oh, my gosh, this is where my mind has gone blank.
0:22:03 > 0:22:04Erm...
0:22:07 > 0:22:12Basically, every group brings in under ?7,500 per year,
0:22:12 > 0:22:14that's the turnover. We're paying somebody...
0:22:14 > 0:22:17Claire, I'm very worried you can't add up.
0:22:17 > 0:22:20It's just my mind. No, joking aside, you want to run a business.
0:22:20 > 0:22:22It's all well and good to go and sing. Yes.
0:22:22 > 0:22:25But you need to demonstrate now that you can at least add up. Yes.
0:22:27 > 0:22:29OK, so ?35.
0:22:32 > 0:22:36And there's 35 children.
0:22:36 > 0:22:39So, in a half term, they would be bringing in...
0:22:39 > 0:22:43We would bringing in ?1,000 per half term, roughly. Circa ?1,000.
0:22:43 > 0:22:45You need to get that number for me exactly.
0:22:49 > 0:22:56It's ?35 times 30 or 35 kids, however many you have, times by six.
0:22:56 > 0:22:59It's six half terms. Of course, yeah, six half terms.
0:22:59 > 0:23:02Yeah. Right, OK. Six half terms and everyone pays ?35 a half term
0:23:02 > 0:23:05and there's a minimum of 30 kids in the room.
0:23:05 > 0:23:07Which is just over six grand.
0:23:09 > 0:23:12Right, that's a total of ?6,000 per year.
0:23:13 > 0:23:14Per group.
0:23:14 > 0:23:18What do you have to pay out to generate ?6,000 of income?
0:23:18 > 0:23:19?3,500.
0:23:20 > 0:23:23Right, so you make ?2,500 gross. Mm.
0:23:24 > 0:23:27So, at the moment, you've got seven of those occurring each year?
0:23:27 > 0:23:30Yes. So, you're generating under 20K.
0:23:30 > 0:23:32So, 17/18K. 18K gross profit.
0:23:32 > 0:23:35You want to go to 100? Mm.
0:23:35 > 0:23:39Yes. But even if you have 100 groups, which is utopia,
0:23:39 > 0:23:41that is mega success,
0:23:41 > 0:23:46the maximum net income you could generate is 200,000.
0:23:46 > 0:23:47Yes.
0:23:49 > 0:23:51Dragons are always hungry for profit
0:23:51 > 0:23:55and Peter Jones' assessment has highlighted a potential ceiling
0:23:55 > 0:23:59on the cash this business could generate.
0:23:59 > 0:24:01Now, Nick Jenkins takes up the baton.
0:24:05 > 0:24:07I'll tell you what my concern is,
0:24:07 > 0:24:09if you look at 100 groups and you say,
0:24:09 > 0:24:12"100 groups, we'd be making ?250,000 profit."
0:24:13 > 0:24:16The problem is, that isn't taking into account marketing.
0:24:16 > 0:24:19You've got to be spending money on attracting kids into those groups,
0:24:19 > 0:24:21because they will come, they will go.
0:24:21 > 0:24:23We do have that in our forecast.
0:24:23 > 0:24:25OK, well, let's talk about your forecast.
0:24:25 > 0:24:27What's your forecast at 100 groups?
0:24:27 > 0:24:30100 groups would be ?680,000 turnover.
0:24:30 > 0:24:35OK. ?257,000 gross profit and ?203,000 net profit.
0:24:35 > 0:24:38OK, basically, ?54,000 of overheads?
0:24:40 > 0:24:42You're expecting to run this business on ?54,000 of overheads,
0:24:42 > 0:24:44including marketing.
0:24:46 > 0:24:49That's including both your salaries and all of your marketing?
0:24:49 > 0:24:50It's not going to work.
0:24:52 > 0:24:56The fun-filled atmosphere in the Den has disappeared,
0:24:56 > 0:25:00with two Dragons questioning the company's prospective profitability.
0:25:01 > 0:25:06And Deborah Meaden also has concerns about taking it to the next level.
0:25:07 > 0:25:11This type of business is very, very expensive and difficult to roll out
0:25:11 > 0:25:13because it's all about replicating you.
0:25:13 > 0:25:15And you're going to spend your life
0:25:15 > 0:25:20constantly having 20% of the people working for you disappointing you.
0:25:22 > 0:25:26The group leaders will learn how to deliver our lessons.
0:25:26 > 0:25:29We've designed a very specific lesson plan
0:25:29 > 0:25:32and the lesson plan becomes the group leader's script.
0:25:32 > 0:25:35If they follow this script,
0:25:35 > 0:25:38our quality, our style will be maintained.
0:25:39 > 0:25:41But they just won't be you.
0:25:41 > 0:25:44Trust me, I do think you've underestimated that
0:25:44 > 0:25:45and I think the problem is here
0:25:45 > 0:25:47that, whilst you can make a business of it,
0:25:47 > 0:25:50I just don't think there's room for an investor.
0:25:50 > 0:25:52I won't be investing. I'm out.
0:25:54 > 0:25:56It's a speedy exit for Deborah Meaden,
0:25:56 > 0:25:59who's the first Dragon to turn down the deal.
0:26:00 > 0:26:04The entrepreneurs have already revealed a competitor
0:26:04 > 0:26:07in the marketplace and now Nick Jenkins wants to find out how much
0:26:07 > 0:26:10they know about this other choir business.
0:26:13 > 0:26:14Can I ask you more about Rock Choir?
0:26:14 > 0:26:16Have you looked at their accounts?
0:26:16 > 0:26:19No. OK, because you could have done that.
0:26:19 > 0:26:22Yes. You could have looked that up online before you came here.
0:26:22 > 0:26:24The reason why I ask that is,
0:26:24 > 0:26:27because what would make this work would be if one of you
0:26:27 > 0:26:29had that kind of real commercial drive.
0:26:29 > 0:26:32Of course, one of us could provide that,
0:26:32 > 0:26:34but we'd have to work full-time on it.
0:26:34 > 0:26:36It's what makes the difference between one of these things
0:26:36 > 0:26:38succeeding and one of these things not succeeding.
0:26:38 > 0:26:40Because you haven't done that,
0:26:40 > 0:26:43it would just end up being more work than I'd be prepared to put in.
0:26:43 > 0:26:45I can't be sure enough that you're the right team
0:26:45 > 0:26:47to make this scale up.
0:26:47 > 0:26:48And, I'm afraid, I'm out.
0:26:51 > 0:26:55Nick Jenkins lacks confidence in the sister's ability to run a company.
0:26:56 > 0:27:01And an equally sceptical Peter Jones is ready to state his position.
0:27:03 > 0:27:06The reality is, you're coming in asking for my money
0:27:08 > 0:27:11for a business idea to back you.
0:27:12 > 0:27:15When we start digging down into the detail of the business model,
0:27:15 > 0:27:19who's in the market? What's the competition out there?
0:27:19 > 0:27:21What have you researched?
0:27:21 > 0:27:23You've really let yourselves down.
0:27:25 > 0:27:28You've got to start knowing a lot more about your business model
0:27:28 > 0:27:31and a lot more about your competition and how you're
0:27:31 > 0:27:33going to make this business work,
0:27:33 > 0:27:35if you want to be successful in business.
0:27:35 > 0:27:37So, as harsh as that may sound...
0:27:38 > 0:27:39..I'm hoping it's a reality check,
0:27:39 > 0:27:42because I think that's what you do need.
0:27:42 > 0:27:43So, I'm going to say that I'm out,
0:27:43 > 0:27:47because you haven't given me any reason to think about investment.
0:27:50 > 0:27:54With Peter Jones' words still ringing in the entrepreneurs' ears,
0:27:54 > 0:27:58will they find retail mogul Touker Suleyman any more forgiving?
0:28:01 > 0:28:04I love what you do and I think you're very talented,
0:28:04 > 0:28:09but there's a big gap between being talented and a business.
0:28:09 > 0:28:12I do not believe that, if you go down the route
0:28:12 > 0:28:16of expanding to 100 units, you are going to make any money.
0:28:16 > 0:28:19If anything, you'll make less than what you're making now,
0:28:19 > 0:28:20because your overheads will grow. Mm.
0:28:20 > 0:28:23I think there's not a business there
0:28:23 > 0:28:25that's viable for an outside investor.
0:28:25 > 0:28:27And for that reason, girls, I'm out.
0:28:30 > 0:28:32Touker Suleyman withdraws from the deal,
0:28:32 > 0:28:36unable to see enough revenue from the business going forward.
0:28:36 > 0:28:38Now, only Sarah Willingham can save
0:28:38 > 0:28:42the quavering pitch from falling flat on its face.
0:28:48 > 0:28:51Fundamentally, you know, I'm a mum of four young kids,
0:28:51 > 0:28:52I love what you do.
0:28:53 > 0:28:58But there are a lot of little groups of the after-school clubs that work
0:28:58 > 0:29:02extremely well locally and a lot of them want to go nationally
0:29:02 > 0:29:03and it's very difficult to do.
0:29:05 > 0:29:06I'm not saying it's not doable,
0:29:06 > 0:29:10but, as an investment, it's such a slog and it's very risky, actually.
0:29:11 > 0:29:15I'm afraid I'm out. All right, thank you very much.
0:29:15 > 0:29:17Good luck. Thank you. Bye-bye.
0:29:17 > 0:29:20After a tough session in the Den,
0:29:20 > 0:29:23it looks like the sisters will have to take their business forward
0:29:23 > 0:29:25without the help of a Dragon.
0:29:29 > 0:29:31Well, that went well. Oh, that was harsh.
0:29:32 > 0:29:35That was really, really hard going.
0:29:35 > 0:29:36Next!
0:29:38 > 0:29:41It was almost like they saw what they thought was weakness
0:29:41 > 0:29:42and attacked.
0:29:45 > 0:29:48But you know what we've always got over the Dragons?
0:29:48 > 0:29:50Is their singing was dreadful!
0:29:57 > 0:29:58Come on, baby.
0:29:58 > 0:30:00Hoping for better success in the Den
0:30:00 > 0:30:04were plumbers Allen Scriven and Michael Caine from London.
0:30:05 > 0:30:07They wanted ?80,000 for a 20% stake
0:30:07 > 0:30:11in their dating app with a difference, Fuzzy Banter.
0:30:12 > 0:30:16The photo we've used was of you five lovely dragons.
0:30:16 > 0:30:18Once you're happy with your photo, it's instantly made fuzzy.
0:30:18 > 0:30:20It's about your personality.
0:30:20 > 0:30:22You just cut me out! You won't be later, Peter.
0:30:22 > 0:30:24It's just cos you're so tall.
0:30:24 > 0:30:27Their unique selling point was that you get to chat,
0:30:27 > 0:30:30but you don't get to see the person you're chatting to.
0:30:31 > 0:30:32A message will come through.
0:30:32 > 0:30:35This is at the stage where you can now reveal yourself.
0:30:35 > 0:30:38So, as you can see, the picture comes through clear
0:30:38 > 0:30:40and this is what we see.
0:30:40 > 0:30:41Again, we can see you now, Peter.
0:30:41 > 0:30:44The entrepreneurs were keen to show they were
0:30:44 > 0:30:46avid users of their own product.
0:30:48 > 0:30:49We've been using it in London.
0:30:49 > 0:30:52Obviously, we're London based and there's lots of people in London.
0:30:52 > 0:30:55Can I just check, are you married or not? I was going to say that!
0:30:55 > 0:30:58Are you? Yes, I'm married, Deborah, but it's purely just for research.
0:30:58 > 0:31:01LAUGHTER
0:31:01 > 0:31:03I've just given you the opportunity
0:31:03 > 0:31:05to get yourself out of a lot of trouble.
0:31:07 > 0:31:08But back to business,
0:31:08 > 0:31:12Sarah Willingham was not convinced the app was the next big thing.
0:31:13 > 0:31:18I love banter and I would love to think that we lived in a world
0:31:18 > 0:31:21where people were not at all influenced by looks.
0:31:22 > 0:31:25It's just not the reality.
0:31:25 > 0:31:27I don't think you will become
0:31:27 > 0:31:32the number one dating website in the world.
0:31:32 > 0:31:35And, after a moment of clarity,
0:31:35 > 0:31:38it was left to Peter Jones to jilt the pair of plumbers,
0:31:38 > 0:31:39turned matchmakers.
0:31:39 > 0:31:41This is really good banter, isn't it? Yeah.
0:31:41 > 0:31:44But your business is really fuzzy.
0:31:44 > 0:31:46I like it! The reality is,
0:31:46 > 0:31:50Fuzzy Banter works until it becomes clear.
0:31:52 > 0:31:54I won't be investing. I'm out.
0:31:54 > 0:31:56OK. Thank you for your time. Cheers.
0:32:02 > 0:32:03Still to come...
0:32:04 > 0:32:06An entrepreneur under pressure.
0:32:06 > 0:32:08I'm not looking for excuses...
0:32:08 > 0:32:10No, sorry, no... I'm just looking for the numbers.
0:32:10 > 0:32:11No, I can appreciate that.
0:32:11 > 0:32:13And will the Dragons do a deal?
0:32:13 > 0:32:15I'm going to make you an offer.
0:32:15 > 0:32:17I think I might pitch in with an offer as well.
0:32:17 > 0:32:18I'm going to make you an offer
0:32:18 > 0:32:22and it's definitely an offer that I think you should accept.
0:32:24 > 0:32:26Our next entrepreneur in the Den
0:32:26 > 0:32:29is hairdresser David Audsley, from Yorkshire.
0:32:29 > 0:32:34He spotted a problem in his profession and invented a solution.
0:32:34 > 0:32:37Now, the Dragons have already rejected one invention tonight.
0:32:37 > 0:32:41So, will they blow hot and cold on seeing David's design?
0:32:47 > 0:32:50In terms of launching a new product, it's all completely new to me.
0:32:52 > 0:32:54I've borrowed so much money to do this.
0:32:54 > 0:32:58Last year, at one point, I thought I potentially could lose everything.
0:33:00 > 0:33:03It's cost a lot more to develop than we ever imagined.
0:33:03 > 0:33:06One of the things I'm most scared of is falling at this last hurdle.
0:33:06 > 0:33:08That's me. All or nothing, unfortunately.
0:33:08 > 0:33:09It's kind of go big, go home.
0:33:19 > 0:33:23Hi, Dragons. My name's David Audsley and I'm the inventor of the DAIO.
0:33:23 > 0:33:25The Daily Appliance Intelligent Organiser.
0:33:25 > 0:33:28I'm here today to pitch for a ?75,000 investment
0:33:28 > 0:33:30for a 20% share of my business.
0:33:31 > 0:33:35A staggering 650,000 house fires reported in the UK
0:33:35 > 0:33:38are caused directly from unattended hair straighteners,
0:33:38 > 0:33:41tongs and, in some cases, even hairdryers.
0:33:41 > 0:33:43One of the reasons I invented the product is children
0:33:43 > 0:33:46that are admitted to hospital with a burn as a direct result
0:33:46 > 0:33:49of coming into contact with a heated hair appliance in the home.
0:33:49 > 0:33:51These products get to temperatures of 220 degrees
0:33:51 > 0:33:52in less than 20 seconds.
0:33:53 > 0:33:56I really believe that DAIO is the total solution,
0:33:56 > 0:33:58offering safety, convenience and peace of mind
0:33:58 > 0:34:02to all of our customers. Let me take you through it.
0:34:02 > 0:34:06So, the DAIO consists of two 300 degree, heat-resistant silicone cups
0:34:06 > 0:34:08that will fit pretty much most of the hair appliances
0:34:08 > 0:34:11that are available on the market today.
0:34:11 > 0:34:12They fit nice and securely
0:34:12 > 0:34:16into the 230-degree, heat-resistant fire-retardant chassis.
0:34:17 > 0:34:19Quite often, you'll see a lot of people
0:34:19 > 0:34:21leaving their straightening irons on a mat.
0:34:21 > 0:34:24A lot of children can just come along and pull them off.
0:34:24 > 0:34:26With the DAIO, it's designed to be child-proof,
0:34:26 > 0:34:29so, even when they waggle it, they can't get them out,
0:34:29 > 0:34:31because they're designed to collapse.
0:34:31 > 0:34:34They can't burn themselves and they can't pull them out.
0:34:34 > 0:34:38We launched in March last year and, within the first three months
0:34:38 > 0:34:39of launching the product,
0:34:39 > 0:34:41we were featured on ITV This Morning,
0:34:41 > 0:34:43in conjunction with Child Safety Week,
0:34:43 > 0:34:45in a piece called Gadgets To Keep Your Kids Safe.
0:34:45 > 0:34:47Thank you very much for listening.
0:34:47 > 0:34:49Can I hand you some DAIO's? Is that OK?
0:34:49 > 0:34:53Hoping for investment and not a heated debate is David Audsley,
0:34:53 > 0:34:58with 20% of his company on offer, for ?75,000.
0:34:59 > 0:35:00Thank you very much. No problem.
0:35:00 > 0:35:02The first to explore the nuts and bolts
0:35:02 > 0:35:06of the safety-conscious creation is Peter Jones.
0:35:09 > 0:35:11So, you've clearly got a lot of PR.
0:35:11 > 0:35:12If you've been on This Morning,
0:35:12 > 0:35:14it's going to sell as much as it's going to sell, isn't it?
0:35:14 > 0:35:17Well, I mean, I think we sold about 70 in the first five or six
0:35:17 > 0:35:19minutes and then the website crashed.
0:35:19 > 0:35:20Nobody's working on this full-time.
0:35:20 > 0:35:23I work 50 hours behind a hairdressing chair...
0:35:23 > 0:35:25David, I'm not looking for excuses. No, sorry...
0:35:25 > 0:35:27I'm just looking for the numbers. No. I can appreciate that.
0:35:27 > 0:35:30Year one sales of 26,000. Pounds? Yes.
0:35:30 > 0:35:34And a net of -25. -25K.
0:35:34 > 0:35:36And then what year are we in now?
0:35:36 > 0:35:38Well, we've just finished year one. Our books were just audited.
0:35:38 > 0:35:40How much money have you invested in this?
0:35:40 > 0:35:44So far, me and Pat, my marketing director,
0:35:44 > 0:35:46we've put ?171,000 into it so far.
0:35:49 > 0:35:50Wow!
0:35:50 > 0:35:53You've put ?170,000 of your own money into this?
0:35:53 > 0:35:57I've put about 70,000 of my own money into it.
0:35:57 > 0:35:59I've borrowed so much that I stand and cut more hair
0:35:59 > 0:36:02than I've ever cut before to make the loan repayments.
0:36:05 > 0:36:08Wow, David, you're in a tough situation.
0:36:11 > 0:36:14The early revelation of the amount of money David has spent on
0:36:14 > 0:36:19developing the product so far has left Peter Jones shocked.
0:36:19 > 0:36:27And now Deborah Meaden wants to dig deeper into the business' finances.
0:36:27 > 0:36:29Is this a director's loan in the company?
0:36:29 > 0:36:32Yes, from me and from Pat. Pat's put 80,000 in.
0:36:32 > 0:36:34And who put in the rest?
0:36:34 > 0:36:38I actually borrowed 20,000 from one of my clients.
0:36:38 > 0:36:40OK, and what are the terms of that director's loan?
0:36:40 > 0:36:42How do those get paid back?
0:36:42 > 0:36:44There aren't any terms in place at the moment,
0:36:44 > 0:36:46because we really want to see it out there.
0:36:46 > 0:36:49To be honest, I'm happy to join the back of the queue.
0:36:51 > 0:36:53David... I...
0:36:56 > 0:36:59I think you've got something in your idea.
0:36:59 > 0:37:01How much stock have you got?
0:37:01 > 0:37:05At the moment, we've got in retail probably ?100,000 worth left.
0:37:06 > 0:37:08I believe in the product.
0:37:08 > 0:37:10I went up to meet a buyer at Lakeland,
0:37:10 > 0:37:13but they wanted to pay about ?9 or ?10 for it
0:37:13 > 0:37:15and we make it for ?12.95 plus VAT.
0:37:15 > 0:37:18To see whether or not this is a market,
0:37:18 > 0:37:20you kind of need to test with somebody.
0:37:20 > 0:37:22And say, "OK, I'll sell them to you for ?9.
0:37:22 > 0:37:24"Now, let's see how many you sell."
0:37:24 > 0:37:29Yeah. Because, for me, you're already so in debt.
0:37:29 > 0:37:30And what worries me about that -
0:37:30 > 0:37:33just so you know, it isn't just the cash,
0:37:33 > 0:37:36it's the fact that your state of mind has allowed you
0:37:36 > 0:37:40to get into that much debt and, therefore, I know...
0:37:40 > 0:37:44I KNOW that, if I put money into your business,
0:37:44 > 0:37:45we could get into further debt.
0:37:45 > 0:37:48Because that's the place you come from.
0:37:50 > 0:37:54Deborah Meaden's assessment leaves the entrepreneur on shaky ground.
0:37:54 > 0:37:56But it's not the debt,
0:37:56 > 0:38:00but the design that Nick Jenkins is weighing up.
0:38:01 > 0:38:05It's a really solidly well-made product. Yeah.
0:38:05 > 0:38:08I'm just a little bit concerned that it might be over engineered.
0:38:11 > 0:38:12It's quite a lot of product.
0:38:12 > 0:38:14It sits. It takes up quite a lot of space.
0:38:14 > 0:38:17I just can't believe that there isn't something,
0:38:17 > 0:38:21a single moulded piece of silicon that could do the same thing.
0:38:21 > 0:38:24This is the thing, you see, we are developing the single.
0:38:24 > 0:38:25We want to develop the single unit...
0:38:25 > 0:38:29David, you are already spending more money developing the next product,
0:38:29 > 0:38:31because the first product doesn't work.
0:38:31 > 0:38:34No... I promise you, when that product doesn't sell
0:38:34 > 0:38:36like you think it's going to sell, you'll be thinking,
0:38:36 > 0:38:40"Ah, well, if I change this and I add that, it might work."
0:38:40 > 0:38:44I'm really sorry, I'm going to tell you now, David,
0:38:44 > 0:38:46I won't be investing in you. I'm out.
0:38:49 > 0:38:51It's a cutting critique from Deborah Meden,
0:38:51 > 0:38:53who withdraws from the deal
0:38:53 > 0:38:56convinced she'd get her fingers burned.
0:38:56 > 0:39:02Will Sarah Willingham chance her arm and back the embattled entrepreneur?
0:39:02 > 0:39:04What are you going to do if you don't get the investment?
0:39:04 > 0:39:07What is the plan? We're managing the payments.
0:39:07 > 0:39:10We don't owe any of our manufacturers any money.
0:39:10 > 0:39:13We've got stock to sell and I've put my life and soul into it.
0:39:13 > 0:39:15But at the moment, you're crushed by this.
0:39:15 > 0:39:18And, actually, it means you can't think straight and that becomes
0:39:18 > 0:39:22debilitating, not just for you, but also for the business.
0:39:22 > 0:39:25There are things that are out there on the market
0:39:25 > 0:39:28which are sleeves effectively...
0:39:28 > 0:39:30Yes. ..for hair straighteners and you can fit tongs in it.
0:39:30 > 0:39:33The challenge is people aren't buying that.
0:39:33 > 0:39:35And that's a very simple, very basic product
0:39:35 > 0:39:38that's actually dead cheap.
0:39:38 > 0:39:40So, when you then come out with something which is
0:39:40 > 0:39:44an all-singing, all-dancing version, it's not a proven market yet.
0:39:44 > 0:39:47I think, for you, it's about sell your stock,
0:39:47 > 0:39:50pay back as much debt as you possibly can.
0:39:50 > 0:39:54Don't spend loads more money on developing more and more products.
0:39:54 > 0:39:55Yeah.
0:39:56 > 0:39:59I'm sorry, I'm out.
0:39:59 > 0:40:00Another Dragon is out,
0:40:00 > 0:40:04questioning whether David's invention is mainstream
0:40:04 > 0:40:07or a niche product.
0:40:07 > 0:40:09Will retail tycoon, Touker Suleyman,
0:40:09 > 0:40:13rescue the entrepreneurs floundering hopes of investment?
0:40:15 > 0:40:19I agree it's over engineered.
0:40:19 > 0:40:22But I would say to you cash is king. Yeah.
0:40:22 > 0:40:25You've got 8,000 pieces in stock? We've actually got...
0:40:25 > 0:40:27I think there's about 3,000 pieces in stock.
0:40:27 > 0:40:29You said there was ?100,000 worth of stock.
0:40:29 > 0:40:33Yes, retail. 39.99. It's quite expensive for what it is.
0:40:33 > 0:40:36I'd say turn that stock into cash.
0:40:36 > 0:40:41Stop and think. Is this a pipe dream that I'm going to chase?
0:40:41 > 0:40:43But this thing's potentially going to stop house fires
0:40:43 > 0:40:45and children getting burned. I know. But let's be honest,
0:40:45 > 0:40:47the sales just speak for themselves.
0:40:47 > 0:40:48There's not a business there.
0:40:48 > 0:40:52So, for that reason, I'm not going to invest in you and I'm out.
0:40:52 > 0:40:56Three Dragons down in quick succession.
0:40:56 > 0:40:59Nick Jenkins was earlier impressed with the product,
0:40:59 > 0:41:03but is now worried that it's not the ideal safety-first solution.
0:41:03 > 0:41:06The thing that staggers me is that people are
0:41:06 > 0:41:10allowed to sell heating tongs... Yeah. ..without some device
0:41:10 > 0:41:13to stop it burning the surface that it's sitting on.
0:41:13 > 0:41:17I mean, in a day and age when I'm not allowed to climb a ladder
0:41:17 > 0:41:21without doing a course on how to climb a ladder, it's staggering.
0:41:21 > 0:41:24My concern is, I want to invest in businesses that have a future.
0:41:24 > 0:41:27I hope the solution ultimately, in the long term,
0:41:27 > 0:41:30lies with the legislation and the appliance manufacturers,
0:41:30 > 0:41:33rather than with a retrospective solution.
0:41:33 > 0:41:35So, for that reason, I'm out.
0:41:36 > 0:41:37Four Dragons are out
0:41:37 > 0:41:40as Nick Jenkins acknowledges the problem,
0:41:40 > 0:41:42but not David's answer to it.
0:41:42 > 0:41:46Will Peter Jones swim against the tide of rejections
0:41:46 > 0:41:48and tie up a deal with the ambitious hairdresser?
0:41:48 > 0:41:52I actually think the product's really good. Do you?
0:41:52 > 0:41:55It's the sort of thing that definitely has a use.
0:41:55 > 0:41:58Overengineered, so what does that really mean?
0:41:58 > 0:42:00It means that obviously the cost of the product is an issue for you.
0:42:00 > 0:42:02Yep.
0:42:02 > 0:42:04You are going to have to look at this realistically and say,
0:42:04 > 0:42:07"Look, I've not created a business, I've created a product.
0:42:07 > 0:42:09"It's not quite worked out for me."
0:42:09 > 0:42:13And you need to give this over to people that understand
0:42:13 > 0:42:16how to place products into the consumer marketplace.
0:42:16 > 0:42:19Licence it and carry on with your day job.
0:42:19 > 0:42:21I can't invest in something like this,
0:42:21 > 0:42:23but I do think it's a good product.
0:42:23 > 0:42:26David, I'm not going to invest and I'm out.
0:42:26 > 0:42:29OK. Thank you. Thanks, David.
0:42:29 > 0:42:30In the end,
0:42:30 > 0:42:34although David's invention won the Dragons' admiration,
0:42:34 > 0:42:37they couldn't get past the debts he's incurred in creating it
0:42:37 > 0:42:41and he leaves the Den without the backing he was hoping for.
0:42:44 > 0:42:47Wow, didn't see that coming.
0:42:47 > 0:42:50Maybe the pitch wasn't as good as it has been.
0:42:52 > 0:42:54I believe in the product 100%.
0:42:54 > 0:42:56We will come back bigger and stronger.
0:43:00 > 0:43:04Time for our final entrepreneur tonight, Jacob Thundil.
0:43:04 > 0:43:07Now, in a crowded market, it's hard to make your mark,
0:43:07 > 0:43:10particularly when it comes to any kind of food or drink.
0:43:10 > 0:43:13But Jacob has an on-trend product range that he thinks will
0:43:13 > 0:43:15tickle the Dragons' taste buds.
0:43:20 > 0:43:21Jacob is a man on a mission,
0:43:21 > 0:43:24excited to share his lifelong obsession
0:43:24 > 0:43:28with the multimillionaire investors.
0:43:28 > 0:43:30I'm very passionate.
0:43:30 > 0:43:32I couldn't do even one day without my own products.
0:43:32 > 0:43:38Imagine liking chocolate and getting paid to eat it, that's how I feel.
0:43:38 > 0:43:40I'm a fan of the Dragons.
0:43:40 > 0:43:42Everybody has a different skill set
0:43:42 > 0:43:45and we feel the Dragons can help us to take it to the next level.
0:43:56 > 0:43:58Hello, Dragons. I'm Jacob Thundil.
0:43:58 > 0:44:00Chief nut at the Cocofina, the coconut experts.
0:44:02 > 0:44:05We produce coconut products to eat, drink and cook with.
0:44:05 > 0:44:07I was born in a place called Kerala
0:44:07 > 0:44:11and Kerala means in Sanskrit land of coconuts.
0:44:11 > 0:44:12Cocofina was my destiny.
0:44:12 > 0:44:15As a young boy, I was fascinated with the amount
0:44:15 > 0:44:17of uses out of coconut.
0:44:17 > 0:44:20And today, I use coconut products every day.
0:44:23 > 0:44:28The market for coconut oil and coconut water alone in the US
0:44:28 > 0:44:31is worth around ?750 million and, in the UK, ?50 million
0:44:31 > 0:44:33and doubling annually.
0:44:33 > 0:44:36Our turnover figures over the last three years
0:44:36 > 0:44:42has been 1,600,000 and 300,000 respectively, rounded up.
0:44:42 > 0:44:45A net profit of 70,000, 50,000 and 12,000.
0:44:47 > 0:44:48I'm offering 5% for ?75,000.
0:44:48 > 0:44:53We would welcome a Dragon to join the coconut experts
0:44:53 > 0:44:55to build a super brand for coconuts.
0:44:55 > 0:44:57I would welcome you to try our products.
0:44:59 > 0:45:03It's a passionate pitch from Jacob Thundil,
0:45:03 > 0:45:06who is offering 5% of his food and drink business
0:45:06 > 0:45:10for a ?75,000 investment.
0:45:12 > 0:45:15With a wide range of coconut products, from water and milk
0:45:15 > 0:45:17to snack bars and oils,
0:45:17 > 0:45:22can Jacobs enthusiasm penetrate the Dragons' impermeable shells?
0:45:23 > 0:45:25First up is Deborah Meaden,
0:45:25 > 0:45:30who wants to know about Jacob's current route to market.
0:45:30 > 0:45:33So, talk me through who you are selling through at the moment.
0:45:33 > 0:45:35So, we're selling to Harrods, Fenwick,
0:45:35 > 0:45:37DAS Farms, Diversifying Foods,
0:45:37 > 0:45:41Holland and Barrett, 700 stores for the coconut water alone.
0:45:41 > 0:45:45And we export to 25 countries outside of the UK.
0:45:45 > 0:45:48So, how much is export of your turnover?
0:45:48 > 0:45:5145% is export. Right. 55% is UK.
0:45:51 > 0:45:55And who's your target retailers that you want to be working with?
0:45:55 > 0:45:57So, now I want to get into pharmacy.
0:45:57 > 0:46:00But this morning, I got an e-mail from Superdrug saying,
0:46:00 > 0:46:03"I'm a big fan of your products and I'd like to meet you."
0:46:03 > 0:46:08I want to get into Boots and then Marks Spencer's and Waitrose.
0:46:08 > 0:46:10It's a confident start from Jacob,
0:46:10 > 0:46:15with big-name retailers already on his books, as well as in his sights.
0:46:15 > 0:46:19But Peter Jones, who has fingers in several foodie pies,
0:46:19 > 0:46:23is interested in how the entrepreneur developed his company.
0:46:26 > 0:46:28You started three years ago, is that right?
0:46:28 > 0:46:31Originally, started 11 years ago
0:46:31 > 0:46:34and working full-time and working part-time on the business.
0:46:34 > 0:46:35What did you do 11 years ago?
0:46:35 > 0:46:39I started with coconut water and did ?30,000 worth in a year.
0:46:39 > 0:46:46Nobody knew what coconut water was. 11 years ago? Yeah.
0:46:46 > 0:46:48Why so many products?
0:46:48 > 0:46:51I want to make sure that I show innovation to the customer.
0:46:51 > 0:46:54I want to establish myself as a coconut expert.
0:46:54 > 0:46:56So, for example, the soya sauce alternative,
0:46:56 > 0:46:58I've only started making them in less than a year,
0:46:58 > 0:47:02but I've sold around 15,000 bottles of them.
0:47:08 > 0:47:09Really nice bar. Thank you.
0:47:10 > 0:47:15It's rare for an entrepreneur to pass the Peter Jones taste test,
0:47:15 > 0:47:18but it looks like Jacob has done it.
0:47:18 > 0:47:20Now, Touker Suleyman wants to know more
0:47:20 > 0:47:24about the business structure behind the self-professed chief nut.
0:47:25 > 0:47:28Describe your organisation to me.
0:47:28 > 0:47:32So, there's me and then there's a lady that started with me.
0:47:32 > 0:47:35She's a 50% shareholder of the business.
0:47:35 > 0:47:37What's her name? Manisha.
0:47:37 > 0:47:40Tell us a little bit more about her and her background.
0:47:40 > 0:47:43She's here and I met her at a trade show in France.
0:47:43 > 0:47:46I was doing a stand there and she was inspired by the product.
0:47:46 > 0:47:49So, she said, "Could I come over to the UK to work on an internship?"
0:47:49 > 0:47:53And then she never left.
0:47:53 > 0:47:57Can we meet her? Yeah, sure. She's downstairs.
0:48:00 > 0:48:03There's a momentary pause in proceedings
0:48:03 > 0:48:07as camera-shy Manisha Solanki agrees to join Jacob in the Den.
0:48:08 > 0:48:12Having discovered she's an equal partner in the company,
0:48:12 > 0:48:15the Dragons want to assess the part she plays in running it.
0:48:18 > 0:48:20Hi, Dragons. Hello.
0:48:20 > 0:48:24Manisha, I apologise for dragging you out with no notice,
0:48:24 > 0:48:27but it's obvious that you're a very important part of this business.
0:48:27 > 0:48:30What I'd like to understand is how you divide the roles.
0:48:30 > 0:48:33I'm sales, marketing, purchasing.
0:48:33 > 0:48:34Manisha is all operations.
0:48:34 > 0:48:39So, logistics, all the deliveries, everything like that. Great.
0:48:39 > 0:48:43Basically, once he has made the sales, I take care of everything.
0:48:46 > 0:48:49The Dragons now have a more complete picture of the company
0:48:49 > 0:48:53and, so far, it seems to be ticking their boxes.
0:48:53 > 0:48:56But food and drinks guru Sarah Willingham
0:48:56 > 0:49:00is concerned that their next target is pharmacies, not supermarkets.
0:49:02 > 0:49:03What I'm really interested in
0:49:03 > 0:49:05is the direction you want to take the business,
0:49:05 > 0:49:08because what's great about coconut at the moment
0:49:08 > 0:49:10is it is going into mass-market.
0:49:10 > 0:49:14But when we ask you the direction you want to take the business in,
0:49:14 > 0:49:19your answer was pharmacy. And that really flummoxed me.
0:49:20 > 0:49:24Yes, if we go into mainstream, we need to have a plan.
0:49:24 > 0:49:29We met Tesco. They said, "Can you sell all these products to us?"
0:49:29 > 0:49:32So, I'm thinking, how do I keep my existing customer base,
0:49:32 > 0:49:36not upset them and try and build from there?
0:49:36 > 0:49:39That really interests me, because I know Tesco very, very well
0:49:39 > 0:49:42and this is exactly the kind of product that they are looking for
0:49:42 > 0:49:45and it's exactly what I thought when I saw you.
0:49:45 > 0:49:49That would be the direction I would want to take the business in.
0:49:49 > 0:49:55We're open to change, because we're not a big business that...
0:49:55 > 0:49:57But would you see that as change, though?
0:49:57 > 0:49:59I would see it as a risk.
0:50:01 > 0:50:04You said you want to be in Marks Spencer's. Yes.
0:50:04 > 0:50:07I've got great connections with Marks Spencer's.
0:50:07 > 0:50:12They have a delicatessen department. Might be your first great step.
0:50:12 > 0:50:13That's what I mean, yes.
0:50:13 > 0:50:18But then it's 2% of the market compared to 30% of the market.
0:50:21 > 0:50:25The tension is palpable as the two Dragons pitch rival retail plans
0:50:25 > 0:50:27for the products.
0:50:27 > 0:50:31But Deborah Meaden is about to take the Den by surprise and cut through
0:50:31 > 0:50:33the charged atmosphere.
0:50:36 > 0:50:39Jacob, I'm going to break cover. OK.
0:50:39 > 0:50:47You might be a bit cautious, but it makes you stop and work stuff out.
0:50:47 > 0:50:50I actually think you've taken a good route.
0:50:50 > 0:50:53I only say that, because a lot of businesses I get involved with
0:50:53 > 0:50:57rush to the big supermarkets, not necessarily ready.
0:50:57 > 0:51:00And actually, as soon as you hit those shelves, your margins drop.
0:51:00 > 0:51:03Yes. And I always think there's a proving time.
0:51:03 > 0:51:08So, I'm aligned with you. And you're very good.
0:51:08 > 0:51:09Thank you.
0:51:09 > 0:51:13So, I'm going to make you an offer.
0:51:13 > 0:51:16I'm going to offer you all of the money.
0:51:16 > 0:51:18I want 20% of the business.
0:51:19 > 0:51:23And I want 20% of the business, because there is,
0:51:23 > 0:51:25A, obviously the contacts that I can bring.
0:51:25 > 0:51:27But I think the development side.
0:51:27 > 0:51:31I think there's a little bit of work that needs to be done on that.
0:51:31 > 0:51:34But I think we are the team that can do it,
0:51:34 > 0:51:35so that's my offer to you.
0:51:37 > 0:51:40Leaving the other Dragons in her wake,
0:51:40 > 0:51:43Deborah Meaden's sudden, but decisive offer
0:51:43 > 0:51:46is a welcome breakthrough for Jacob and Manisha.
0:51:46 > 0:51:50But at 20%, it's four times more than the entrepreneurs
0:51:50 > 0:51:52want to give away.
0:51:52 > 0:51:55Will another Dragon sweeten the deal?
0:51:57 > 0:52:01Well, I think I might pitch in with an offer as well.
0:52:01 > 0:52:03I love the passion that you have for the product.
0:52:03 > 0:52:06There's a really authentic basis to this business,
0:52:06 > 0:52:09but what you haven't done very much of is really
0:52:09 > 0:52:12developing your brand.
0:52:12 > 0:52:16That's something that I've a reasonably good understanding of.
0:52:16 > 0:52:18And know the kind of people that you'd need
0:52:18 > 0:52:21to be able to drive that forward.
0:52:21 > 0:52:26So, I'm going to match the offer, all of the money for 20%.
0:52:30 > 0:52:33I really like what you've said.
0:52:33 > 0:52:38I like the way you've tackled the questions.
0:52:38 > 0:52:41And I'm such an enormous user of the product.
0:52:41 > 0:52:43I love it.
0:52:43 > 0:52:46I'd really like to work with you on this.
0:52:46 > 0:52:52I think this is a business I could get very, very passionate about.
0:52:52 > 0:52:55So, I'm going to match the offer.
0:52:55 > 0:52:59All of the money for 20% of the business.
0:53:01 > 0:53:03And Sarah Willingham makes three,
0:53:03 > 0:53:05giving Jacob and Manisha a lot to think about.
0:53:07 > 0:53:10Will Touker Suleyman make it four in a row?
0:53:13 > 0:53:17The path you're taking in making a luxury product is definitely right.
0:53:17 > 0:53:23My background is production, distribution, contacts.
0:53:23 > 0:53:26And I appreciate you've got all these offers.
0:53:26 > 0:53:30So, I'm going to add a bit of spice to it.
0:53:30 > 0:53:33You're seeking 75,000, aren't you? Yes.
0:53:33 > 0:53:35I'm going to give you 100,000.
0:53:37 > 0:53:42I want 25%, but you can have the 5% back when I get my money back.
0:53:42 > 0:53:43Thank you.
0:53:44 > 0:53:48By offering more cash than entrepreneurs pitched for,
0:53:48 > 0:53:53Touker Suleyman is clearly hoping to trump the other three Dragons.
0:53:53 > 0:53:56But Peter Jones, who turned a Den sauce investment
0:53:56 > 0:54:03into a multi-million pound business, is still mulling over the deal.
0:54:03 > 0:54:07I feel that I know a lot about this type of market.
0:54:07 > 0:54:09I'm knowledgeable enough to understand
0:54:09 > 0:54:13where the market pitfalls are and what happens as you try to grow
0:54:13 > 0:54:16a business such as this.
0:54:16 > 0:54:21My issue, actually, potentially for you, is your brand.
0:54:21 > 0:54:23Have you got any product
0:54:23 > 0:54:28that you can see can go mainstream and scale,
0:54:28 > 0:54:31whilst not desecrating your brand?
0:54:31 > 0:54:33Yeah, the glass jar with the coconut milk
0:54:33 > 0:54:35will definitely go mainstream, because coconut milk
0:54:35 > 0:54:38is such a huge market, because everybody uses it.
0:54:38 > 0:54:39But it doesn't come with the convenience
0:54:39 > 0:54:41of returning it back to the fridge.
0:54:41 > 0:54:43I agree with that. Anything else?
0:54:43 > 0:54:45The snack bars.
0:54:45 > 0:54:47We started 18 months ago. Yes.
0:54:47 > 0:54:51And we've now sold around 200,000 bars this year.
0:54:55 > 0:54:56I'm going to make you an offer.
0:54:59 > 0:55:03And it's definitely an offer that I think you should accept.
0:55:03 > 0:55:07I'm going to offer you all of the money for 20%.
0:55:07 > 0:55:11I like it enough to say that I would split it with another Dragon.
0:55:13 > 0:55:15Can I ask you a question, though?
0:55:15 > 0:55:19If we were to buy the shares back from you for double the money
0:55:19 > 0:55:23in three years' time, would you give up 10% back to us?
0:55:23 > 0:55:25Erm, I can say no.
0:55:28 > 0:55:32I think that you would be seriously undervaluing the fact
0:55:32 > 0:55:34that I could pick the phone up to Boots
0:55:34 > 0:55:37and I could help immeasurably with your business.
0:55:41 > 0:55:45Just so you know, my position would be absolutely the same.
0:55:50 > 0:55:54I don't have an issue with the idea that if you come in at 20%
0:55:54 > 0:55:56and you say, not after three years, but after one year,
0:55:56 > 0:55:59that you say, "Right. Actually, I want to reduce you down to 10%"
0:55:59 > 0:56:03and it's going to cost you ?75,000, I don't have a problem with that.
0:56:03 > 0:56:05That would be enough by that point to have done the things
0:56:05 > 0:56:07I can do for you in terms of developing the brand.
0:56:07 > 0:56:12And I think this brand can be developed. Thank you.
0:56:12 > 0:56:14I would just want to add one thing,
0:56:14 > 0:56:19that I would very much be prepared to split it with another Dragon.
0:56:19 > 0:56:21Sarah, would you be prepared to split on the terms that I suggested?
0:56:21 > 0:56:24Yes, I would. I would be prepared to split it with Nick.
0:56:24 > 0:56:28I think, between the two of us, you get two for the price of one.
0:56:34 > 0:56:39I don't think we need to discuss further. Right. OK. Brilliant.
0:56:39 > 0:56:41Brilliant. Great. Thank you.
0:56:41 > 0:56:43And sorry. Hug! Brilliant!
0:56:47 > 0:56:50Brilliant. Well done. Oh, that's great.
0:56:50 > 0:56:54I think you made a big mistake by not choosing me.
0:56:54 > 0:56:55He always thinks that.
0:56:55 > 0:56:58Thank you from the land of coconuts. Well done. Great, well done.
0:56:58 > 0:57:00Thank you, bye-bye.
0:57:00 > 0:57:02Jacob and Manisha have done it.
0:57:02 > 0:57:05And they leave the den with two Dragons on board.
0:57:05 > 0:57:08They've given up 20% of their company,
0:57:08 > 0:57:11but agreed a deal that means they could potentially buy back
0:57:11 > 0:57:1710% of the equity in 12 months' time.
0:57:17 > 0:57:19I really liked him. Yeah, a good solid business.
0:57:19 > 0:57:23He's not as sharp as I thought he was at the end. No.
0:57:23 > 0:57:26It was amazing! It was an incredible experience.
0:57:26 > 0:57:30My heart just cannot stop beating, actually.
0:57:31 > 0:57:34We feel it's an incredible combination,
0:57:34 > 0:57:36because you have one person with food and the other
0:57:36 > 0:57:37person with online.
0:57:37 > 0:57:41So, what more can you ask for? So, it's a dream team for us.
0:57:45 > 0:57:48Well, it's been a tough old night in the Den,
0:57:48 > 0:57:52with two very different inventions swiftly rejected by the Dragons.
0:57:52 > 0:57:54And despite the sound of music,
0:57:54 > 0:57:58the singing sisters also exited the Den empty-handed.
0:57:58 > 0:58:02But one pitch struck all the right notes and got five Dragons
0:58:02 > 0:58:07fighting for the slice of a coconut company. Who would have thought it?
0:58:07 > 0:58:10Bramble, jump! Before you say anything, there's my money.
0:58:10 > 0:58:12Coming up next time...
0:58:12 > 0:58:16There's a grave. You are now two foot in the grave.
0:58:16 > 0:58:18It's pink silicone.
0:58:18 > 0:58:21It would look more at home in Ann Summers. What?
0:58:21 > 0:58:23I'm flabbergasted by that.
0:58:23 > 0:58:25I feel very, very conflicted.
0:58:25 > 0:58:28I have to come clean, I'm also very conflicted.
0:58:28 > 0:58:32And would you believe it? I think I'm conflicted.
0:58:32 > 0:58:34I'm a businessperson, not a magician.
0:58:34 > 0:58:38As the brand, I love it and I'm going to make you an offer.