0:00:25 > 0:00:31These are the Dragons, five of Britain's wealthiest and most enterprising business leaders.
0:00:31 > 0:00:35Over the coming weeks, they'll make or break the dreams
0:00:35 > 0:00:38of dozens of budding entrepreneurs.
0:00:40 > 0:00:47- Passion doesn't create profit. - If I invested in this, I wouldn't be doing what you're doing.
0:00:47 > 0:00:53There's been some great inventions in this world which have made no money.
0:00:53 > 0:00:57You don't have the experience, you don't have any brand.
0:00:57 > 0:01:00It isn't making money. You value that business at one million.
0:01:00 > 0:01:04I've got confidence in you guys, and in the product,
0:01:04 > 0:01:06so I'm going to make you an offer.
0:01:11 > 0:01:15The multi-millionaire investors have each built up their fortunes
0:01:15 > 0:01:17from scratch.
0:01:18 > 0:01:21Hotel and health club owner Duncan Bannatyne.
0:01:21 > 0:01:24Leisure industry expert Deborah Meaden.
0:01:25 > 0:01:27Retail magnate Theo Paphitis.
0:01:28 > 0:01:31Telecoms giant Peter Jones.
0:01:31 > 0:01:34And new Dragon Hilary Devey,
0:01:34 > 0:01:36who made her millions in the haulage industry.
0:01:36 > 0:01:41The Dragons have the credentials, the contacts, the commitments and the cash
0:01:41 > 0:01:43ready to invest.
0:01:43 > 0:01:45But only in the right business.
0:01:45 > 0:01:49Will any of these hopeful entrepreneurs walk away with their money?
0:01:58 > 0:02:00Welcome to the Dragons' Den.
0:02:00 > 0:02:07Entrepreneurs have come here looking to secure an all-important cash injection for their business.
0:02:07 > 0:02:09There's just one obstacle -
0:02:09 > 0:02:12persuading our five multi-millionaire Dragons to invest.
0:02:12 > 0:02:15The best will come away with the backing they need,
0:02:15 > 0:02:17the rest leave with nothing.
0:02:17 > 0:02:21Our first entrepreneurs, husband and wife team Meena and Tim Carlya
0:02:21 > 0:02:23and inventor Tricia Tierney
0:02:23 > 0:02:27have already established sales in the US with their product.
0:02:27 > 0:02:31But will the Dragons foresee success this side of the Atlantic?
0:02:40 > 0:02:42Hello, Dragons!
0:02:42 > 0:02:44Hello!
0:02:45 > 0:02:47Hello, Dragons.
0:02:55 > 0:02:59Hello. My name is Meena. I'm very pleased to be here today.
0:02:59 > 0:03:06I seek £75,000 in return of 20% shares in my company.
0:03:06 > 0:03:11I'm Tim Carlya, Meena's husband, and operational manager for the Rascal Dog Litter Box Company.
0:03:11 > 0:03:17I'm Tricia Tierney, owner of the USA division of the Rascal Dog Litter Box and creator of the product.
0:03:17 > 0:03:22- Meena, who needs a Rascal Dog Litter Box?- Good question.
0:03:22 > 0:03:24Anyone who owns a dog. As you see, I love dogs.
0:03:24 > 0:03:29Every dog owner is looking for a simple solution to their dog's toilet needs.
0:03:29 > 0:03:34Rascal Litter Box is the answer to those problems.
0:03:34 > 0:03:36Let's face it,
0:03:36 > 0:03:42I cannot hold my bladder and it's a bit harsh to expect your dog to hold his bladder for hours on end.
0:03:42 > 0:03:46- Right?- Exactly. If I could take a minute to show you the product.
0:03:46 > 0:03:49The box can be used three different ways. That's the beauty of it.
0:03:49 > 0:03:53First, the sides, for male dogs, which contain the mess in the box.
0:03:53 > 0:03:56It can be used with the machine-washable grass pad.
0:03:56 > 0:04:01It also has a pet-friendly grate if you just want to use the grate.
0:04:01 > 0:04:04It also has a laundry bag to machine-wash the grass in.
0:04:06 > 0:04:11We had tremendous sales, phenomenal sales of 480,000
0:04:11 > 0:04:16- in just 27 months. - OK, that's about it. We hope to get you on board today.
0:04:16 > 0:04:19Thank you for your time. We're ready for any questions.
0:04:23 > 0:04:28A lively but somewhat unruly pitch from Staffordshire-based Meena and Tim Carlya
0:04:28 > 0:04:31and their business partner Tricia Tierney.
0:04:31 > 0:04:34In return for a cash injection of £75,000
0:04:34 > 0:04:40they're willing to give away a 20% stake in their new toilet-training system for dogs.
0:04:40 > 0:04:43Hilary Devey is first to question the trio.
0:04:48 > 0:04:54Meena, I'm Hilary. I love dogs and I've got lots of them.
0:04:54 > 0:04:59- You and me both!- I have a problem with two Teacup Yorkies.
0:04:59 > 0:05:04When I take them for a walk, they won't actually do it outside because they're shy.
0:05:04 > 0:05:07So how would this help?
0:05:07 > 0:05:09Very good question, Hilary.
0:05:09 > 0:05:12- Tricia?- This is a training spray that comes with it.
0:05:12 > 0:05:15Every dog wants to be the top dog.
0:05:15 > 0:05:19That's why fire hydrants are popular. They all want to go on top of each other.
0:05:19 > 0:05:23- So this product mimics that. - Right. OK.
0:05:23 > 0:05:26What is so different about this product?
0:05:26 > 0:05:30There's no real competition. There's three different ways you can use it.
0:05:30 > 0:05:35You can have the pet-friendly grate here. All the urine and everything...
0:05:35 > 0:05:40No, what I'm trying to do is - what is the difference other than it's a piece of...
0:05:40 > 0:05:42One is the training spray...
0:05:42 > 0:05:45You can buy spray that attracts them to the same spot.
0:05:45 > 0:05:50- Yes.- Meena, so that spray's irrelevant.- But that's... Yes. Sorry.
0:05:50 > 0:05:54- You haven't invented that spray, correct?- The big selling... - Am I correct?
0:05:54 > 0:05:58Can you use that spray on that mat or box, anywhere you want?
0:05:58 > 0:06:02- Yes...- So that spray is not the answer. It's not what you're selling.
0:06:02 > 0:06:08- But it's...- It's included.- Meena, can I just say talking and talking and talking and talking
0:06:08 > 0:06:11- over a question...- OK. - ..doesn't make you right.
0:06:14 > 0:06:18An uncomfortable start for the excitable entrepreneurs.
0:06:18 > 0:06:23Can they show more measure under the scrutiny of Theo Paphitis?
0:06:26 > 0:06:30- There's two questions I'd like answered.- Sure.
0:06:30 > 0:06:34What's going to be the turnover and profit to 2011?
0:06:35 > 0:06:39I think it should be in the region of ten to £15,000.
0:06:40 > 0:06:44No, the question was the turnover and the profit.
0:06:44 > 0:06:45Sure.
0:06:45 > 0:06:49- Turnover.- The turnover should be about £100,000.
0:06:49 > 0:06:52So turnover £100,000.
0:06:53 > 0:06:55Yes or no?
0:06:55 > 0:06:57No, I think I've got my figures slightly wrong.
0:06:57 > 0:07:01- Just take a deep breath and think about it.- Take a deep breath.
0:07:01 > 0:07:06- You've got your figures slightly wrong.- What's the turnover and what's the profit?
0:07:06 > 0:07:102011 the turnover should be about £30,000.
0:07:10 > 0:07:13And we made a paper loss of £13,000
0:07:13 > 0:07:17against the... Obviously - sorry - against the investment we put in.
0:07:17 > 0:07:22Now I'm going to allow you to make a forecast going forward.
0:07:22 > 0:07:27- It should be about £100,000. - Turnover is...- Give him time to talk.
0:07:27 > 0:07:33- And profit of?- About 25... 20 to - about 20,000.
0:07:33 > 0:07:38- The turnover was 200,000 and profit was 100,000. We've been speaking... - No, no.
0:07:38 > 0:07:42That's what I asked him. The turnover was 200,000? He said 100,000 just now.
0:07:42 > 0:07:46- He's getting his figures mixed up. - Shall I ignore you?
0:07:46 > 0:07:48A little bit, I think.
0:07:50 > 0:07:56Things don't bode well for the trio as their financial acumen is called into question.
0:07:57 > 0:08:01Will Deborah Meaden offer them an opportunity to salvage their pitch?
0:08:04 > 0:08:10Meena, Tim, Trish, I don't like the idea. I think a pad is much better.
0:08:10 > 0:08:15Pads should be used for training your dog to eventually go outside.
0:08:15 > 0:08:19The feedback we're getting from our customers, testimonials,
0:08:19 > 0:08:22we know we haven't even gone into retail yet...
0:08:22 > 0:08:25OK, I phrase it in a different way.
0:08:25 > 0:08:27Often people take their dogs for an exercise
0:08:27 > 0:08:32and if you just say, "We won't take the dogs for exercise, we'll just leave that in the corner.
0:08:32 > 0:08:38- "We don't need to take our dog out." - In the UK and Europe there is no similar product with...
0:08:38 > 0:08:42Meena, I've got a horrible feeling you're going to say what you were just about to say.
0:08:42 > 0:08:49- Can't you see the potential... - A lot of them are...- Because... - Meena, don't say anything.
0:08:51 > 0:08:58Tim, sometimes I feel I've got a little voice in my head. You don't have a voice. Your voice is Meena.
0:08:58 > 0:09:03- Not really...- Talking to you all the time.- No, I do love her and obviously she's good at something.
0:09:03 > 0:09:08- Tim, she's lovely. Can I say I think Meena's lovely.- Thank you.
0:09:08 > 0:09:12It's very nice that you're defending her, but she would drive me potty!
0:09:12 > 0:09:16- I'm not that bad! - I do agree. I do agree.
0:09:16 > 0:09:18Thank you!
0:09:18 > 0:09:22- Thank you.- I'm not always speaking. I'm not that bad.- You're doing it again!
0:09:22 > 0:09:28- I am excited about it. Look at the sales...- Meena, stop. I need to tell you I won't be investing.
0:09:28 > 0:09:31- I'm out.- Thank you, Deborah.
0:09:32 > 0:09:36The likeable characters may have made an impact in the den,
0:09:36 > 0:09:39but so far it's not been a productive one.
0:09:39 > 0:09:42And now Duncan Bannatyne has made up his mind too.
0:09:45 > 0:09:50Let me tell you where I am, Tricia, Tim, Meena. Look,
0:09:50 > 0:09:54some people will buy this. Some people will like this.
0:09:54 > 0:09:58But not the majority and not what you said, "Every dog owner".
0:09:58 > 0:10:01Believe me, there are people who would find this very useful...
0:10:01 > 0:10:05- There are people who would find that useful...- We get a lot of orders in and out of London
0:10:05 > 0:10:08- that haven't got...- Meena. - ..back yards...- Meena!
0:10:08 > 0:10:12When we're in the house and the dog wants to go to the toilet, the dog waits
0:10:12 > 0:10:16because it's got a bladder designed differently from human bladders.
0:10:16 > 0:10:21It's like a family member. Why wouldn't you have a toilet-trained dog at home?
0:10:21 > 0:10:25- Do you see no purpose...- Thank you very much. Thank you very much!
0:10:25 > 0:10:29Thank you! Thank you very much. Thank you very much! I am out!
0:10:29 > 0:10:30Thank you.
0:10:30 > 0:10:35- I don't always speak that much. It's nerves.- It's just nerves.
0:10:35 > 0:10:37- Shh!- Meena.
0:10:37 > 0:10:39- OK.- You've said too much.
0:10:42 > 0:10:45I personally wouldn't have one of those in my home.
0:10:45 > 0:10:48What if I had a dinner party and that stuck in the corner!
0:10:48 > 0:10:52- It would stink! I like a nice home. - I really want to make it clear
0:10:52 > 0:10:55I would in no way want the dogs to just get trained to this.
0:10:55 > 0:11:00I'm not going into another diatribe, Meena. Passion doesn't create profit.
0:11:00 > 0:11:02I wish you luck on your journey
0:11:02 > 0:11:04but I'm out.
0:11:07 > 0:11:12The cordial atmosphere disappears and frustration comes to the fore.
0:11:12 > 0:11:15With just two Dragons remaining,
0:11:15 > 0:11:19will Meena, Tim and Tricia find salvation from Peter Jones?
0:11:24 > 0:11:29Tricia, unfortunately, Tim and Meena have let you down as an inventor of this product.
0:11:29 > 0:11:32The only person that's going to lose is you
0:11:32 > 0:11:35- because it's your product and your business.- Right.
0:11:35 > 0:11:40So you've failed by allowing two people to represent your product.
0:11:40 > 0:11:45- They talked more than you, and that was wrong.- Because they're the UK company.
0:11:45 > 0:11:47No matter. This is your product and your life.
0:11:47 > 0:11:51Sit down with them and work out how you can make this happen.
0:11:51 > 0:11:55Because they will be successful with their passion and enthusiasm.
0:11:55 > 0:11:57You need to put that together.
0:11:57 > 0:12:00At the moment, you're totally uninvestable.
0:12:00 > 0:12:03That's why I can't possibly give my money over.
0:12:03 > 0:12:05- So I'm declaring myself out. - Thank you.
0:12:07 > 0:12:10We've been talking about this for God knows how long
0:12:10 > 0:12:15and I still haven't understood
0:12:15 > 0:12:17what the dog's expected to do.
0:12:17 > 0:12:19When it does it on that grass,
0:12:19 > 0:12:23- what do I do?- You can rinse it off outside. You can rinse it off.
0:12:23 > 0:12:25Is it me, but that sounds like a right mess!
0:12:25 > 0:12:30- The laundry bag is there as well. - I'm not going to stick that in Mrs P's washing machine!
0:12:30 > 0:12:32She'll go mental!
0:12:32 > 0:12:36- It gives you an option... - Tim, it just wouldn't happen.
0:12:37 > 0:12:43- This is not for me. So I'm going to say...- But please do...- Tim!
0:12:43 > 0:12:45What I'm saying is actual people have...
0:12:45 > 0:12:48- DEBORAH:- There you go, Theo. It's clear!
0:12:51 > 0:12:55Has anybody got a white flag? I surrender! It's relentless.
0:12:55 > 0:12:57I...am...
0:12:57 > 0:12:59OUT!
0:12:59 > 0:13:01OK.
0:13:01 > 0:13:03- Thank you.- Good luck, guys.
0:13:03 > 0:13:05An opportunity missed.
0:13:05 > 0:13:08The trio never came close to bagging an investor.
0:13:08 > 0:13:10They leave with nothing.
0:13:11 > 0:13:13Hang on, what's that I can hear?
0:13:13 > 0:13:15It's silence!
0:13:17 > 0:13:19As much as you try to rehearse the pitch,
0:13:19 > 0:13:22when you're in there and your nerves are frazzed,
0:13:22 > 0:13:27- it's easy to get off a little bit. - The figures got mixed up and that put them off a little.
0:13:27 > 0:13:31But I might have got over-enthusiastic or nervous.
0:13:31 > 0:13:33I kind of gave them a headache!
0:13:39 > 0:13:44The Dragons expect to see a wide range of entrepreneurs walking up the stairs
0:13:44 > 0:13:49offering them a stake in a wide range of business ideas.
0:13:49 > 0:13:54But it makes a pleasant change when occasionally they get an offer of an altogether different sort.
0:13:55 > 0:13:58- Before we start, would anyone like a drink?- What wine is it?
0:13:58 > 0:14:02- Cabernet Sauvignon. - I'll have a glass of that.
0:14:02 > 0:14:05- Gin and tonic for me. - I'd normally ask for a shandy!
0:14:05 > 0:14:11Drinks in hand, the Dragons then heard 21-year-old barman Dan Thompson from Vauxhall
0:14:11 > 0:14:16offer them 45% of his "all-you-can-drink" private members club.
0:14:16 > 0:14:19The price to the customers, £15.40 a week.
0:14:19 > 0:14:22The main draw is the fact there will an open bar
0:14:22 > 0:14:24on house spirits, beers and wines.
0:14:24 > 0:14:27Alarm bells rang from the outset when Dan explained
0:14:27 > 0:14:31his aim was to target corporate membership.
0:14:31 > 0:14:35Why would I want all of my staff to be a member of a club
0:14:35 > 0:14:38that kept them out drinking all night?
0:14:38 > 0:14:43Do you not think my rate of sickness might go up? Quite a few hangovers in the morning?
0:14:43 > 0:14:47- That's how you run your company. - I think Deborah would be taken to a tribunal.
0:14:47 > 0:14:52- Would I?- When she fired them, they'd say, "It's her fault" and take you to a tribunal!
0:14:52 > 0:14:55"She made me do it! She bought me membership!"
0:14:55 > 0:14:58But the atmosphere soon got serious
0:14:58 > 0:15:02when the full ramifications of Dan's business model became clear.
0:15:02 > 0:15:05I can't understand where you're going with this.
0:15:05 > 0:15:09With all the discussions about how bad alcohol is for you,
0:15:09 > 0:15:11and binge drinking, et cetera,
0:15:11 > 0:15:14and you're putting a business concept forward
0:15:14 > 0:15:17that may exacerbate that problem.
0:15:18 > 0:15:22I've had bars and restaurants and there are people that go to the pub every day.
0:15:22 > 0:15:27But you're over-incentivising with a commodity that unfortunately is incredibly addictive.
0:15:27 > 0:15:32We can actually add on plenty of other sales to them. Food...
0:15:32 > 0:15:35They'd be too drunk to eat food. And that's why I'm out.
0:15:35 > 0:15:37- DUNCAN:- See you soon with your next idea.
0:15:39 > 0:15:42Peter Hart from Poole used to run a fruit and veg market stall
0:15:42 > 0:15:45before becoming a Bluecoat entertainer.
0:15:45 > 0:15:48He's next in the den, along with his wife Michelle.
0:15:48 > 0:15:52They both manage to run a company and raise their seven children.
0:15:52 > 0:15:57It's a fun business, but will it earn an investor serious profits?
0:16:27 > 0:16:32Hi, I'm Michelle. This is my husband and business partner, Peter.
0:16:32 > 0:16:35We're here today to ask for a £100,000 investment
0:16:35 > 0:16:39for a ten per cent stake in our company, Fun Fancy Dress Ltd.
0:16:39 > 0:16:43We've been a limited company for over three years and have so far generated a turnover
0:16:43 > 0:16:45of over £900,000
0:16:45 > 0:16:49with a net profit of around 142,000.
0:16:49 > 0:16:54We currently employ seven people and hold stock worth over £100,000.
0:16:55 > 0:16:59Our website receives over 45,000 unique visits per month
0:16:59 > 0:17:01with an average order value of £29.
0:17:01 > 0:17:04We opened two stores across 2010.
0:17:04 > 0:17:08The first store was in Poole, Dorset.
0:17:08 > 0:17:10Our second store in Bedworth, Warwickshire.
0:17:10 > 0:17:15We need your investment to help increase the market share of our online business,
0:17:15 > 0:17:19plus help us roll out a franchise programme.
0:17:19 > 0:17:24We aim to open two pilot stores this year, five next year and ten the year after.
0:17:24 > 0:17:28We feel that with an investor on board, we can improve this performance
0:17:28 > 0:17:31and become the first national branded chain of party stores.
0:17:32 > 0:17:37Thank you for listening. We look forward to answering your questions.
0:17:39 > 0:17:44A colourful pitch from Peter, Michelle and members of the Hart family.
0:17:44 > 0:17:48In return for a 10% stake, they need £100,000
0:17:48 > 0:17:50to franchise their fancy dress business
0:17:50 > 0:17:53and turn it from a local to a national brand.
0:17:54 > 0:17:58Duncan Bannatyne is first to question the couple.
0:17:59 > 0:18:03OK, just so I get this in my head.
0:18:03 > 0:18:06Do you hire costumes or just sell them or a mixture of both?
0:18:06 > 0:18:09- A mix of both.- And you do some of that on your website
0:18:09 > 0:18:11and some in stores as well?
0:18:11 > 0:18:14It's only hire costumes in store at the moment.
0:18:14 > 0:18:17- Right. On the website you sell? - Yeah.
0:18:17 > 0:18:22- Purely retail.- What percentage of the money you've turned over, 900,000,
0:18:22 > 0:18:24came from the website?
0:18:24 > 0:18:27The year ending March this year
0:18:27 > 0:18:30the website took just over 150,000.
0:18:30 > 0:18:32Now the stores. Give me them individually.
0:18:32 > 0:18:37Only one of the stores has completed its first year, the one in Poole, Dorset.
0:18:37 > 0:18:40- That turned over just over 113,000. - OK.
0:18:40 > 0:18:46Can a shop turn over 113,000 in a year and make a profit?
0:18:46 > 0:18:50Yes, we have. The net was around 18 to 20 per cent.
0:18:52 > 0:18:56Encouraging figures and an encouraging start from Peter and Michelle.
0:18:56 > 0:19:01But what of the business plan? Theo Paphitis wants to know.
0:19:01 > 0:19:04Hello. I'm Theo.
0:19:04 > 0:19:08- Theo.- Hello.- OK. Tell me what your franchise model is
0:19:08 > 0:19:12and why it would be attractive to me as a franchisee.
0:19:12 > 0:19:15The brand, which we'd build in time.
0:19:15 > 0:19:18- The brand is?- Fun Fancy Dress Ltd.
0:19:18 > 0:19:22Fun Fancy Dress, that nobody knows at the moment. What else?
0:19:22 > 0:19:25Access to our suppliers at the prices we purchase at.
0:19:25 > 0:19:29- Beneficial purchasing from your suppliers.- Yes.- OK.
0:19:29 > 0:19:33- How much would you charge me? - In the region of 20 to 40,000.
0:19:33 > 0:19:39- That would include the shop fit. - How do you make your money from then onwards?
0:19:39 > 0:19:43We'd charge a license fee of the turnover of around eight per cent.
0:19:43 > 0:19:44OK. So what would my margin be?
0:19:44 > 0:19:49We'd expect you to turn over between 100 and 130 in the first year.
0:19:49 > 0:19:53So you should be able to net in the region of 20 per cent in the first year.
0:19:53 > 0:19:55No, my gross margins.
0:19:58 > 0:19:59- How do you mean, sorry?- It's easy.
0:19:59 > 0:20:01My sales less my purchases.
0:20:04 > 0:20:05Um...
0:20:05 > 0:20:08You'd probably, I think...
0:20:09 > 0:20:1150,000? 60,000?
0:20:11 > 0:20:14So 40, 45%, is that what you're saying?
0:20:14 > 0:20:16If I understand you correctly, yes.
0:20:16 > 0:20:18Well, it's very simple.
0:20:18 > 0:20:21Through the till, my sales.
0:20:23 > 0:20:27Less what it cost me to buy the product that I sold.
0:20:27 > 0:20:29You'd be left with about 70%.
0:20:29 > 0:20:32- So you make 70%?- Yep.- OK.
0:20:32 > 0:20:35And you're going to charge eight per cent.
0:20:35 > 0:20:39What per cent benefit would I get in my purchasing
0:20:39 > 0:20:42compared to what I could buy for myself?
0:20:42 > 0:20:44About 15, 20 per cent.
0:20:44 > 0:20:46Peter, you've not thought this through.
0:20:47 > 0:20:52The fact is, what you're going to charge me when you gross it up is practically no different
0:20:52 > 0:20:55to what I'd get if I didn't get your buying power.
0:20:58 > 0:21:01Except I'd end up paying over the top for a shop fit.
0:21:03 > 0:21:08A complex and somewhat tense exchange as Theo Paphitis questions the deal on offer
0:21:08 > 0:21:11to potential franchisees.
0:21:11 > 0:21:15And it doesn't look like the couple are about to find any solace from Peter Jones.
0:21:18 > 0:21:21- Peter, Michelle.- Peter.- Hi.- Hi.
0:21:21 > 0:21:23If I was to invest in this opportunity,
0:21:23 > 0:21:27I wouldn't be doing what you're doing at all.
0:21:27 > 0:21:31If I look at this model, I've got £113,000-worth of revenue.
0:21:31 > 0:21:36And I'm going to generate about 18% net before I take my salary.
0:21:36 > 0:21:40So I'm going to make...
0:21:41 > 0:21:43..25,000 a year.
0:21:43 > 0:21:45Or...
0:21:45 > 0:21:49I could go round the corner and get a job without any hassle,
0:21:49 > 0:21:52without any worries, without sleepless nights.
0:21:52 > 0:21:59So your incentive for somebody else to become entrepreneurial and make it happen for themselves
0:21:59 > 0:22:01doesn't make commercial sense.
0:22:01 > 0:22:06So it's coming across as though it's a wing and a prayer at the moment.
0:22:06 > 0:22:10You haven't really gone into the detail of having a franchise operation.
0:22:10 > 0:22:16No, we've never launched a franchise business. We've only been in business ourselves for three years.
0:22:16 > 0:22:18- Yes.- Maybe we're showing our naivety.
0:22:18 > 0:22:22We need more experience to go down the franchise route.
0:22:22 > 0:22:27But part of us coming here and asking that was that you guys have experience.
0:22:27 > 0:22:29How much money did you want from us?
0:22:29 > 0:22:32- 100,000.- For how much of the business?- Ten per cent.
0:22:32 > 0:22:36So that makes this business where you don't have the experience or a brand,
0:22:36 > 0:22:38it isn't making enough money.
0:22:38 > 0:22:41You're valuing that business at one million.
0:22:41 > 0:22:44Until that point, you could even have empathy.
0:22:44 > 0:22:46I could even think, "Maybe I can help."
0:22:46 > 0:22:52But then you ask me to buy into your business for £100,000 which values it at one million.
0:22:52 > 0:22:57- We do understand.- Have a reality check. How does it sound?
0:22:58 > 0:23:01Michelle, how does it sound to you?
0:23:01 > 0:23:04Um, it sounds feasible.
0:23:04 > 0:23:08We started two shops from scratch.
0:23:08 > 0:23:12We kitted them out, we stocked them out.
0:23:12 > 0:23:16- We didn't borrow any money.- It's not a franchise. It's a chain of shops. Two shops.
0:23:16 > 0:23:21- So far.- We do have a successful business that we've been running for three years.
0:23:21 > 0:23:26- Peter...- I know we don't fully understand franchises.- It's not that you don't fully understand.
0:23:26 > 0:23:32You don't understand at all. I won't be investing. I'm out.
0:23:32 > 0:23:33Thank you.
0:23:33 > 0:23:37A scathing assessment from Deborah Meaden
0:23:37 > 0:23:39and a crushing blow to the husband and wife team.
0:23:39 > 0:23:46An irritated Theo Paphitis has now made up his mind, too.
0:23:46 > 0:23:49I'm lost... Lost for words.
0:23:49 > 0:23:54- I invest in businesses. I don't give you my money and then run it for you.- Of course not.
0:23:54 > 0:23:59If you were to invest and then say this franchise plan is not the way forward...
0:23:59 > 0:24:02You know, you have this experience.
0:24:02 > 0:24:06- No, I'm not going to tell you...- An investment of £100,000...- Peter!
0:24:07 > 0:24:11You're asking me to completely remodel your business plan,
0:24:11 > 0:24:15reorganise you, tell you how to make money with my money.
0:24:15 > 0:24:20If I was going to do that with 100 grand, I could do it myself.
0:24:20 > 0:24:25- So I'm going to tell you right now that I'm out.- Thank you, Theo.
0:24:25 > 0:24:28Peter, Michelle,
0:24:28 > 0:24:32what you need to do is go and read up on franchising.
0:24:32 > 0:24:38Go and understand what you need to do to be able to franchise a brand, a product,
0:24:38 > 0:24:40a retail outlet.
0:24:40 > 0:24:44Really, you are here too precipitously.
0:24:44 > 0:24:51- We're not stood here with a plan in stone, saying...- You're not stood there with any plan!
0:24:51 > 0:24:54You made the franchise model up downstairs before you came up!
0:24:54 > 0:24:57- I'm out.- Thank you.
0:24:59 > 0:25:02Two more Dragons walk away from the deal
0:25:02 > 0:25:06and Peter and Michelle have just two multi-millionaires left
0:25:06 > 0:25:08to rescue their dreams of investment.
0:25:08 > 0:25:10Peter Jones is ready to show his hand.
0:25:13 > 0:25:18Peter and Michelle, I'm not going to repeat what everybody said cos I totally agree.
0:25:18 > 0:25:25But I congratulate you on having a business that is at least a lifestyle business.
0:25:25 > 0:25:30And that is a business of which two individuals can support a family.
0:25:30 > 0:25:34- But it's not investable for me, and that's why I'm out.- Thank you.
0:25:37 > 0:25:41OK. That just leaves me, Peter, Michelle.
0:25:43 > 0:25:45How do you think it's gone so far?
0:25:45 > 0:25:47Can we start again?
0:25:48 > 0:25:51I think you got a really hard time there.
0:25:51 > 0:25:56Definitely don't drop the franchise idea. It's the way to expand. You have a franchise model.
0:25:56 > 0:26:00- It's the only way I can see us growing it at the rate we want. - Yeah.
0:26:00 > 0:26:06There was a lady came here called Denise Gosney who had a franchise business Razzmatazz Stage Schools.
0:26:06 > 0:26:10All our Dragons had a go at her and declared themselves out.
0:26:10 > 0:26:14I invested in her and it is international, worldwide.
0:26:14 > 0:26:18That franchise model is doing absolutely fantastic.
0:26:21 > 0:26:25So with that in mind, I'm going to make you an offer. OK?
0:26:25 > 0:26:29I'll offer the full amount you've asked for, £100,000.
0:26:29 > 0:26:34But one thing they're all right about is you have valued the company too high.
0:26:34 > 0:26:37And I can't offer you less.
0:26:37 > 0:26:42So to offer you £100,000, I need to have 60% of the company.
0:26:46 > 0:26:49We can't go to 60%.
0:26:50 > 0:26:55I think we'd really like to keep the stake below 50%.
0:26:55 > 0:26:56Um...
0:26:56 > 0:26:58to be honest.
0:26:58 > 0:27:00I think he was thinking more 40.
0:27:00 > 0:27:04- Was he?- She knows exactly... What can you do?
0:27:07 > 0:27:10Would it be possible for us to meet at 45?
0:27:17 > 0:27:22No. My best offer is £100,000 for 50%.
0:27:22 > 0:27:29- Yeah?- OK, we'd like to accept that offer.
0:27:30 > 0:27:34Against all the odds, Peter and Michelle have done it.
0:27:34 > 0:27:36I think we'll do well.
0:27:36 > 0:27:41They won the confidence and the money of an experienced Dragon investor.
0:27:45 > 0:27:48It's a lot more than we wanted to give away, definitely.
0:27:48 > 0:27:53But like he says, he's got a lot of experience in that sector.
0:27:53 > 0:27:57We've got Duncan as a business partner now. This morning, we didn't.
0:27:59 > 0:28:02So good times ahead and hopefully very profitable times.
0:28:06 > 0:28:10The Dragons have seen hundreds of pitches in the den
0:28:10 > 0:28:14so entrepreneurs have to make theirs stand out from the crowd.
0:28:14 > 0:28:18Leon Leigh from Kent certainly adopted a high impact approach
0:28:18 > 0:28:22when he asked for £100,000 to develop his range of weight-loss clothing.
0:28:24 > 0:28:27My product is...
0:28:27 > 0:28:29the ICV technology.
0:28:29 > 0:28:33With resistance bands in place over major muscles,
0:28:33 > 0:28:37the wearer burns up to 10% more calories every 15 minutes.
0:28:37 > 0:28:40This is scientifically proven at Preston University.
0:28:40 > 0:28:42- Can we have a look at it?- Yeah.
0:28:46 > 0:28:49Very good. I'm impressed!
0:28:49 > 0:28:53Yeah, I can see your pecs and abs. Lovely!
0:28:55 > 0:28:59- Feels quite tight. What are these ribs doing to me?- They're resistance bands.
0:28:59 > 0:29:05When caused in motion or movement, any activity causes resistance to the wearer.
0:29:05 > 0:29:13Health club owner Duncan Bannatyne was the first to dent Leon's hopes of investment.
0:29:13 > 0:29:19- How much time do you spend in the gym?- Three to four times a week. - For an hour or two?- Yeah.
0:29:19 > 0:29:24Eight hours a week in the gym. That's how you get your figure, not by using one of these.
0:29:24 > 0:29:29In the end, no matter how high the impact or how innovative the clothing range,
0:29:29 > 0:29:33it was an old Dragon sticking point that did for Leon.
0:29:33 > 0:29:38I've got a guy that looked sensible wearing a shirt and trousers
0:29:38 > 0:29:44and the rips his shirt off and tells me he's got something worth a million pounds.
0:29:44 > 0:29:49It's predicted figures, so it's all potential.
0:29:49 > 0:29:53- OK, I'll just tell you where I am. - Yeah.
0:29:53 > 0:29:55- I'm out!- Thanks very much.
0:29:56 > 0:30:00So far tonight, the Dragons have backed just one business.
0:30:00 > 0:30:03We'd like to accept that.
0:30:03 > 0:30:08If you'd like to find out why Duncan decided to invest in Peter and Michelle,
0:30:08 > 0:30:12press the red button at the end of the programme.
0:30:13 > 0:30:18Many entrepreneurs spend months thinking about how they'll make an impact in the den.
0:30:18 > 0:30:22Fortunately for Serbian-born Alexander Tomich,
0:30:22 > 0:30:25his product creates an immediate spectacle.
0:30:25 > 0:30:29But as we know, that's not all it takes to secure the Dragons' cash.
0:30:56 > 0:31:00Hi. My name is Alexander Tomich from Serbia.
0:31:00 > 0:31:03I'm here to ask you for £80,000
0:31:03 > 0:31:05in return for 25% equity.
0:31:07 > 0:31:09Company name, Philharmonic Lights.
0:31:09 > 0:31:14Purpose, developing the functioning and installation of Philharmonic Lights technology
0:31:14 > 0:31:16in the entertainment industry.
0:31:16 > 0:31:21Our focus is cruise liners, unknown numbers of luxurious hotels
0:31:21 > 0:31:24and amusement parks.
0:31:24 > 0:31:27BREATHES HEAVILY
0:31:27 > 0:31:31STRUGGLES FOR COHERENT ENGLISH
0:31:31 > 0:31:34..with artistically choreographed music...
0:31:34 > 0:31:36with dancers.
0:31:40 > 0:31:42That's completely wrong.
0:31:45 > 0:31:50I don't know. Every time I'm doing the pitch myself, it's fantastic.
0:31:50 > 0:31:52But here it's...
0:31:52 > 0:31:55I'm wishing that I can start again.
0:31:55 > 0:31:57Carry on.
0:31:57 > 0:32:03So I would like to show you a mini demonstration of the Philharmonic Lights in action.
0:32:11 > 0:32:14MUSIC PLAYS IN SYNC WITH LIGHTS
0:33:01 > 0:33:02Wow!
0:33:05 > 0:33:10A stuttering start, but former electronics engineer Alexander Tomich
0:33:10 > 0:33:13certainly makes up for it with a dramatic demo.
0:33:13 > 0:33:15Can I have one of those?
0:33:15 > 0:33:19But will that be enough to get an £80,000 investment
0:33:19 > 0:33:21in his prototype portable wireless lights.
0:33:22 > 0:33:26Theo Paphitis is first to question the entrepreneur.
0:33:26 > 0:33:29Alexander, how many lights can you control?
0:33:29 > 0:33:34- Unlimited.- With one piece of kit or...- With exactly this piece of kit.
0:33:34 > 0:33:36Millions of lights you can control.
0:33:36 > 0:33:41- Maximum distance?- Ten miles. Range.
0:33:41 > 0:33:44Ten miles guaranteed, but it should be 18 miles.
0:33:44 > 0:33:50- In a built-up area?- No, it must be line of sight.- Line of sight.
0:33:50 > 0:33:55- What if it's not line of sight? - Then no point because you'd not see the lights.
0:33:55 > 0:34:00Alexander, I feel like I'm missing something here.
0:34:00 > 0:34:04I'd like you to explain what's unique, what's special about this?
0:34:04 > 0:34:08My patent choreographs inside the lights.
0:34:08 > 0:34:11Other competition uses different methods.
0:34:11 > 0:34:17They send from central computer by radio command to all the lights.
0:34:17 > 0:34:22OK. So I now understand what it is that you're doing.
0:34:22 > 0:34:26But listen, ten years ago, all my holiday parks had systems
0:34:26 > 0:34:29where the music and lights were synchronised.
0:34:29 > 0:34:34- Yes.- So you're trying to take me out of that and into this.
0:34:34 > 0:34:39So how much would those systems cost versus this system?
0:34:39 > 0:34:41Uh...
0:34:41 > 0:34:44That... That... That will cost...
0:34:44 > 0:34:45Uh...
0:34:45 > 0:34:48I think that, uh...
0:34:48 > 0:34:52Definitely more expensive. £150,
0:34:52 > 0:34:54for example, to build my lights.
0:34:54 > 0:34:59And the competition to have the same range £1,150.
0:34:59 > 0:35:04But what is the situation using fixed installation
0:35:04 > 0:35:08then really, you should continue to use the competition.
0:35:08 > 0:35:11Because this is lower cost.
0:35:13 > 0:35:16Alexander's mobile lights may be cheaper,
0:35:16 > 0:35:22but the admission that venues would be better off using a fixed lighting rig doesn't go down well.
0:35:22 > 0:35:26Duncan Bannatyne is not looking impressed.
0:35:27 > 0:35:32I'm sorry, but the ability to synchronise music with lights
0:35:32 > 0:35:35and music with fireworks and music with fountains
0:35:35 > 0:35:38has been developed for years.
0:35:38 > 0:35:40So there's nothing new here at all.
0:35:40 > 0:35:43All I think you're doing here really
0:35:43 > 0:35:46is showing that you can do it.
0:35:46 > 0:35:49- You're right, yes. - Thank you. I usually am.
0:35:49 > 0:35:54- Yeah. But it's not right... - Alexander, it's really important what Duncan's saying.
0:35:54 > 0:35:58He's putting words in your mouth and telling you your product is not new
0:35:58 > 0:36:01and your pitch is telling us that it is.
0:36:01 > 0:36:04- So either tell him he's wrong...- I will explain.- ..or agree with him.
0:36:04 > 0:36:10- If you agree with him, I'll say those final words.- I will explain. - Do you agree with him?- No.
0:36:10 > 0:36:15- Right.- It is new, because there's no way the competition will do 100 lights
0:36:15 > 0:36:18with the same reliability as my lights can do.
0:36:18 > 0:36:22Alexander, I'll tell you where I am.
0:36:22 > 0:36:25You might be a fantastic engineer, fantastic electrician
0:36:25 > 0:36:27or whatever it is you are,
0:36:27 > 0:36:31but you've invented or come up with nothing new here.
0:36:31 > 0:36:34- I'm not going to invest and I'm out. - Thank you.
0:36:36 > 0:36:41A first blow for Alexander and a damning critique of his product.
0:36:41 > 0:36:46But Theo Paphitis wants to know more about the man behind the invention.
0:36:48 > 0:36:51Alexander, how did you end up in the UK?
0:36:51 > 0:36:58Well, I came here for honeymoon with my wife and...
0:36:58 > 0:37:03- You didn't go back.- I didn't go back because the war started in Serbia.
0:37:03 > 0:37:05The war started.
0:37:05 > 0:37:10So what is happened. 1999. We were waiting that everything is finished
0:37:10 > 0:37:12so we can return.
0:37:12 > 0:37:16And our first child was born
0:37:16 > 0:37:21- and then it started to be more difficult.- How did you survive and keep body and soul together?
0:37:23 > 0:37:24Well, it's, uh...
0:37:24 > 0:37:27I have quite a few skills.
0:37:27 > 0:37:30So I find a job and that's it.
0:37:32 > 0:37:37What I also... The reason why I stay here
0:37:37 > 0:37:42is because I find... It's very difficult to explain to English people,
0:37:42 > 0:37:45but it's... You feel like in home.
0:37:49 > 0:37:50A heartfelt exchange perhaps,
0:37:50 > 0:37:54but it takes more than that to impress these Dragons.
0:37:55 > 0:37:58Can Hilary Devey find a reason to invest?
0:38:00 > 0:38:04- Can we go back to the business, the commercial...- Yes.
0:38:04 > 0:38:05Some numbers.
0:38:05 > 0:38:08Actually turning your lights into a business.
0:38:08 > 0:38:14What my plan is, the first year to sell five units. Just five.
0:38:14 > 0:38:16The second year to sell 20.
0:38:16 > 0:38:21And the following third year 40 of these units.
0:38:28 > 0:38:31I'm struggling to find your market.
0:38:31 > 0:38:37I can't find you a market that would be sustainable
0:38:37 > 0:38:40and that would be regular.
0:38:40 > 0:38:43I just don't think you've got this quite right.
0:38:43 > 0:38:45I'm out.
0:38:45 > 0:38:47OK, Alexander, listen.
0:38:47 > 0:38:51There's been some great inventions in this world
0:38:51 > 0:38:53which have made no money.
0:38:56 > 0:39:00There's no point in spending years and years of your life developing something
0:39:00 > 0:39:03that nobody will buy.
0:39:03 > 0:39:04Yeah.
0:39:04 > 0:39:08- I love your lights.- Thank you.
0:39:08 > 0:39:11- But I'm going to say those words. - Yes.
0:39:11 > 0:39:13- Well done, but I'm out.- Thank you.
0:39:13 > 0:39:18Alexander, unfortunately there is something available that is cheaper.
0:39:18 > 0:39:23I think you'll sell a few of these but I'm not convinced
0:39:23 > 0:39:29that you're going to have a massive market and the type of market that you think.
0:39:29 > 0:39:32- So for that reason, I'm out. - Yeah, OK. Thank you.
0:39:34 > 0:39:40Three more Dragons out, and Alexander's time in the Den looks to be coming to a close.
0:39:40 > 0:39:46Will Peter Jones offer him the financial lifeline he desperately needs?
0:39:47 > 0:39:48Alexander,
0:39:48 > 0:39:53I don't buy into the scale of the lights that you're talking about
0:39:53 > 0:39:57in terms of...demand.
0:40:00 > 0:40:04But I do buy into what you've created here.
0:40:06 > 0:40:09It clearly works beautifully.
0:40:10 > 0:40:16I would urge you to talk to companies that are out there that are already doing these things.
0:40:16 > 0:40:19This could be a very good small business for you.
0:40:19 > 0:40:21For that I wish you the best of luck.
0:40:21 > 0:40:25- But as an investment to make money...- I understand. - I can't get there.
0:40:25 > 0:40:29- Thank you.- That's the reason I'm out. Thank you, Alex.- Thank you.
0:40:30 > 0:40:34A disappointing end. Alexander leaves with the Dragons' goodwill,
0:40:34 > 0:40:37but it was their money he really needed.
0:40:40 > 0:40:42It's not the end of the story.
0:40:42 > 0:40:44I not expect millions to make.
0:40:44 > 0:40:47But at least a nice life for my family.
0:40:47 > 0:40:50For my kids, of course.
0:40:50 > 0:40:54You know at least with some things I can go out!
0:40:58 > 0:41:02Other entrepreneurs who tried and failed in the den
0:41:02 > 0:41:05included former Army officer Justin Potter
0:41:05 > 0:41:08who needed £50,000 to continue protecting the nation
0:41:08 > 0:41:11from a lesser but still hazardous issue.
0:41:12 > 0:41:17I'd like you to imagine you're at home, filling a hot water bottle.
0:41:17 > 0:41:20You're in danger of pouring boiling water over your hand.
0:41:20 > 0:41:25Very simply you can put the bottle into the neck, take your hands away
0:41:25 > 0:41:27and you can fill it up.
0:41:27 > 0:41:30At first, the Dragons were intrigued not by the invention
0:41:30 > 0:41:33but by the inventor himself.
0:41:33 > 0:41:35How long were you in the military?
0:41:35 > 0:41:4023 years. I was in the Royal Artillery. I retired at 42 as a lieutenant colonel.
0:41:40 > 0:41:44- What have you done since you left? - I set up a training company
0:41:44 > 0:41:48which over five years I grew from two of us to 85 staff,
0:41:48 > 0:41:50turning over just under seven million pounds.
0:41:50 > 0:41:53But having impressed the Dragons with his past,
0:41:53 > 0:41:57they couldn't see a financial future in his present venture.
0:41:57 > 0:42:04- I don't think you're going to sell many.- OK.- But you could completely change my mind
0:42:04 > 0:42:10- if you've got some evidence.- I've looked at the size of the market and where hot water bottles are used.
0:42:10 > 0:42:14- The question I can't answer is how many people will buy this. - Absolutely.
0:42:14 > 0:42:20Which I would have thought you'd understand in any business the only question to answer is
0:42:20 > 0:42:24how many people will buy one. I'm afraid, Justin, I'm out.
0:42:24 > 0:42:26Right.
0:42:28 > 0:42:30Mother and daughter Rachel and Carmen John
0:42:30 > 0:42:34transformed the den with their impressive range of knitwear.
0:42:34 > 0:42:37They needed £100,000.
0:42:37 > 0:42:41With our big knitting, we recently did a window for Stella McCartney.
0:42:41 > 0:42:45These are the first in the world examples
0:42:45 > 0:42:49using 95 strands of yarn. Never seen before in history.
0:42:49 > 0:42:52We intend to build up the manufacture of our tools
0:42:52 > 0:42:57because people are now looking at this as a new basic in knitting.
0:42:57 > 0:43:01The textile display brought back some happy memories for one Dragon.
0:43:01 > 0:43:07My old grandmother, Elatha, her name was, was a great crocheter and knitter.
0:43:07 > 0:43:13She would have huge knitting needles. So will all due respect,
0:43:13 > 0:43:15it's been going on a very long time.
0:43:15 > 0:43:17That's true.
0:43:17 > 0:43:19But not at this level.
0:43:19 > 0:43:22This is a new level of craft.
0:43:22 > 0:43:26It seems more that it's a hobby rather than a business concept.
0:43:26 > 0:43:30I'm a tool maker, I'm an inventor.
0:43:30 > 0:43:32That's not a hobby to me. That's a lifestyle.
0:43:32 > 0:43:39Unfortunately for Rachel and Carmen, it was a lifestyle that none of the Dragons could imagine transforming
0:43:39 > 0:43:42into a big enough business.
0:43:42 > 0:43:48One thing that retailers do well. If somebody wants this in large volume, they'll create their own.
0:43:48 > 0:43:50- I can't invest in that and I'm out. - Thank you.
0:43:54 > 0:43:58There's nothing that investors like more than innovative products
0:43:58 > 0:44:02combined with entrepreneurs who have a proven track record in business.
0:44:02 > 0:44:06Next into the den are two brothers, Jim and Richard George from Worcestershire,
0:44:06 > 0:44:09who think they score on both counts.
0:44:09 > 0:44:11Will the Dragons agree?
0:44:29 > 0:44:32- I'm Jim George.- I'm Richard George. - We're from Post Saver.
0:44:32 > 0:44:38We're looking for £160,000 for a 20% stake in our business.
0:44:38 > 0:44:43This timber fence post has failed after only three years in service.
0:44:43 > 0:44:45As a solution to this problem,
0:44:45 > 0:44:49we've developed, patented and manufactured a unique
0:44:49 > 0:44:51dual layer sleeve system
0:44:51 > 0:44:54that protects the vulnerable part of the post.
0:44:54 > 0:44:59To apply, simply heat-shrink the sleeve onto the post.
0:45:10 > 0:45:13The result of this is a double life fence post.
0:45:13 > 0:45:16Double life fence posts will save consumers
0:45:16 > 0:45:20at least 40% of the life cycle cost of their fencing.
0:45:20 > 0:45:24We launched Post Saver onto the UK market two years ago.
0:45:24 > 0:45:28Following more and more premature fencing failures,
0:45:28 > 0:45:31our sales are growing month on month.
0:45:31 > 0:45:36We believe Post Saver represents an excellent investment opportunity for the Dragons.
0:45:36 > 0:45:37Thank you.
0:45:40 > 0:45:45An assured pitch from brothers Jim and Richard George.
0:45:45 > 0:45:49To increase production of their fence post preservation sleeve,
0:45:49 > 0:45:52they need a £160,000 cash injection
0:45:52 > 0:45:54in return for 20% of their company.
0:45:54 > 0:45:59Theo Paphitis is first to question the Worcestershire siblings.
0:46:00 > 0:46:05- Richard, Jim. "Premature fencing failure."- Yes!
0:46:05 > 0:46:07It's never kept me up at night!
0:46:07 > 0:46:10No! But if you've just bought a nice new fence,
0:46:10 > 0:46:17and paid x thousand pounds for it and after three years the fence posts rotted,
0:46:17 > 0:46:19you wouldn't be very happy!
0:46:19 > 0:46:24Just explain how it works. I understand if you cover something, it protects it.
0:46:24 > 0:46:28- Yes.- But the pointed bit is still in the ground.
0:46:28 > 0:46:33Just to give you some background. Ground level was about here on this product.
0:46:33 > 0:46:36Below this band, the timber's totally intact.
0:46:36 > 0:46:42So it's two or three inches below ground level where you get the high rates of decay.
0:46:42 > 0:46:45It does seem, if I'm doing a small amount of fencing, DIY,
0:46:45 > 0:46:51- I'm not going to have the equipment to use this.- We do have a growing number of stockists and contractors
0:46:51 > 0:46:55and two large saw mills starting to take the product
0:46:55 > 0:46:56and roll it out.
0:46:56 > 0:47:00So you could buy the post with the sleeve already on it.
0:47:00 > 0:47:03- Is that the market?- That is the primary market, yes.
0:47:03 > 0:47:06The market size on the UK market
0:47:06 > 0:47:12is somewhere between 40 and 80 million posts go into the ground every year.
0:47:12 > 0:47:15We've got global IP protection
0:47:15 > 0:47:19in France, Germany, US, Canada, Australia and Japan.
0:47:20 > 0:47:22Thank you.
0:47:25 > 0:47:28Confident claims, and the Dragons are clearly impressed.
0:47:28 > 0:47:32Now Hilary Devey wants to drill down into the finances.
0:47:34 > 0:47:37Talk me through the numbers and your projections.
0:47:37 > 0:47:40Our target for this year is about 240,000.
0:47:40 > 0:47:43Next year we're looking at 510,000.
0:47:43 > 0:47:46Where are you going to double that growth from?
0:47:46 > 0:47:52Natural organic growth which we're seeing more of. We're learning how best to tackle the market.
0:47:52 > 0:47:57- It's...- When you say you're learning all the time, you've run businesses before.
0:47:57 > 0:48:01We've had two businesses. We were manufacturing door products which we sold.
0:48:01 > 0:48:06About ten years ago. There have been other products that we've developed.
0:48:06 > 0:48:12We licensed that to a large German company and sold the IP to them about two years ago.
0:48:12 > 0:48:17We made about 400,000, which we've ploughed into the development of Post Saver.
0:48:17 > 0:48:21Jim, Richard, hi, I'm Deborah.
0:48:21 > 0:48:28So you talked about turnover, which is great, but I'm much more interested in profit!
0:48:28 > 0:48:33The first year we're looking at a net profit of just over 30,000.
0:48:35 > 0:48:37Next year, 160.
0:48:37 > 0:48:41Then year three, just over 380,000 on that.
0:48:41 > 0:48:45OK, so in this year, what's your pipeline looking like?
0:48:45 > 0:48:50We received an order from a saw mill this week, for six or £7,000.
0:48:50 > 0:48:55We're getting regular orders from farmers, fencing contractors, online orders.
0:48:55 > 0:48:59We're currently in discussions with Network Rail
0:48:59 > 0:49:02who are responsible for all line-side fencing.
0:49:07 > 0:49:09I'm going to make you an offer.
0:49:12 > 0:49:16I'm going to offer you all the money.
0:49:16 > 0:49:18And I want 35% of the business.
0:49:23 > 0:49:25Jim?
0:49:25 > 0:49:29It's a very kind offer, but I don't think we could.
0:49:29 > 0:49:32We've put so much into it and got so much confidence in it.
0:49:36 > 0:49:41An early offer, but an early rebuttal, too, from the confident duo.
0:49:41 > 0:49:44Will Duncan Bannatyne choose to enter the fray?
0:49:48 > 0:49:50Richard, Jim.
0:49:50 > 0:49:55Where are you in your percentage? What's negotiable?
0:50:00 > 0:50:02Up to 25% I would guess.
0:50:04 > 0:50:08We've got a lot of confidence in the product and the market.
0:50:08 > 0:50:13I've got a lot of confidence in you guys and confidence in the product.
0:50:13 > 0:50:16I'm not convinced, though,
0:50:16 > 0:50:20that there's enough profit because you have to sell so many of them
0:50:20 > 0:50:23- in order to get such a big return. - Yes.
0:50:26 > 0:50:28I'd find it difficult
0:50:28 > 0:50:33to offer you more than your £160,000 for 30 per cent.
0:50:33 > 0:50:39But I'm happy to offer you half the money and split it with another Dragon if anyone wants to split it.
0:50:39 > 0:50:41OK.
0:50:43 > 0:50:47Unable to match the brothers' percentage demands,
0:50:47 > 0:50:51Duncan Bannatyne gives them two further investment options.
0:50:51 > 0:50:55Will Theo Paphitis choose to undercut his rivals?
0:50:59 > 0:51:03What are you looking for out of this?
0:51:04 > 0:51:07Essentially, we're looking to establish the product,
0:51:07 > 0:51:12build up the business with good value in it. At that point, there are lots of options.
0:51:12 > 0:51:14Give me an idea of a timeline.
0:51:14 > 0:51:17Five years is the period we're looking at.
0:51:17 > 0:51:19OK.
0:51:23 > 0:51:26I will offer you all the money.
0:51:28 > 0:51:33I would also be wanting 30%.
0:51:34 > 0:51:36OK.
0:51:40 > 0:51:42- HILARY:- Can I ask you one question?
0:51:42 > 0:51:46Would you be happier with two Dragons?
0:51:46 > 0:51:48Possibly, yes.
0:51:48 > 0:51:49Yes.
0:51:55 > 0:52:02If Duncan's happy, I'm happy to split the equity and split the investment.
0:52:02 > 0:52:04OK.
0:52:04 > 0:52:1080,000 each and 30% between us.
0:52:10 > 0:52:12So you get us both.
0:52:12 > 0:52:13OK.
0:52:16 > 0:52:19Jim and George now have four offers on the table
0:52:19 > 0:52:22but all for more equity than they want to give away.
0:52:22 > 0:52:26Can Peter Jones find a way of matching their valuation?
0:52:31 > 0:52:35Jim, Richard, I think you're model presenters.
0:52:35 > 0:52:38You're experienced, you've been there and done it.
0:52:38 > 0:52:41You are an investor's dream as individuals.
0:52:41 > 0:52:46But £160,000 for a 25% circa investment,
0:52:46 > 0:52:50I think the business will struggle to make the level of return
0:52:50 > 0:52:55in terms of the opportunity with this. For those reasons, I won't invest and I'm out.
0:53:04 > 0:53:08OK, I'm going to give you a second option on this.
0:53:09 > 0:53:12I am prepared to look at the percentages.
0:53:12 > 0:53:17But I personally think I would add an awful lot of value.
0:53:17 > 0:53:23And I am just going to struggle to get below 30%.
0:53:25 > 0:53:27But what I would do
0:53:27 > 0:53:29is say to you
0:53:29 > 0:53:33that if you hit the targets you've given us
0:53:33 > 0:53:37I would hand you back five per cent of the shares.
0:53:39 > 0:53:41So you get to your 25 per cent.
0:53:45 > 0:53:47Can we talk about that briefly?
0:53:47 > 0:53:48Thank you.
0:53:53 > 0:53:56THEY WHISPER
0:53:59 > 0:54:0125 is 25, isn't it?
0:54:01 > 0:54:04I don't know. I'll leave it to you.
0:54:05 > 0:54:07Think carefully.
0:54:14 > 0:54:18We've decided to stick to our guns on the 25%.
0:54:22 > 0:54:25What you've just done is illogical.
0:54:26 > 0:54:30You have given me a set of targets that you are going to meet
0:54:30 > 0:54:32- so you've got your 25%.- Yes.
0:54:39 > 0:54:44The tension mounts as the sure-footed entrepreneurs again refuse an offer
0:54:44 > 0:54:46from Deborah Meaden.
0:54:46 > 0:54:50Will the remaining Dragons now be prepared to negotiate down
0:54:50 > 0:54:53to meet the brothers' steadfast equity demands?
0:55:03 > 0:55:05I agree with what Deborah's just said.
0:55:05 > 0:55:08OK.
0:55:09 > 0:55:13Just that one act
0:55:13 > 0:55:16I think your actions was one step too far.
0:55:18 > 0:55:22That could either make you a million-pound deal,
0:55:22 > 0:55:24or lose it you.
0:55:27 > 0:55:30I've just lost confidence in you, really.
0:55:35 > 0:55:38I'm out, now.
0:55:44 > 0:55:48- Do you want to ask me if I want to improve my offer?- Uh-huh.
0:55:48 > 0:55:49Ask me, then!
0:55:49 > 0:55:51Do you want to improve your offer?
0:55:53 > 0:55:54Having considered,
0:55:54 > 0:55:56I've decided not to.
0:56:00 > 0:56:02I'm out.
0:56:12 > 0:56:14I'm going to give you one last chance.
0:56:15 > 0:56:21I'm actually prepared to share the last offer that Deborah made you.
0:56:25 > 0:56:26And you get two Dragons.
0:56:36 > 0:56:41Hilary was absolutely right. There's a moment sometimes in a deal where you think,
0:56:41 > 0:56:44"It's... I don't want it now."
0:56:48 > 0:56:50You made a very poor decision there.
0:56:55 > 0:56:58I'm sorry. My offer doesn't stand.
0:57:00 > 0:57:01I'm out.
0:57:01 > 0:57:05You had four Dragons who were prepared to support you.
0:57:05 > 0:57:09But we all live and die by decisions we take in life.
0:57:09 > 0:57:12Gentlemen, I'm out.
0:57:13 > 0:57:18Jim and George leave having failed to negotiate a deal.
0:57:18 > 0:57:23It's not often that entrepreneurs turn down six different offers from the Dragons!
0:57:27 > 0:57:31Well, guys, had you come in with 25% as your limit?
0:57:31 > 0:57:32Essentially, we had, yes.
0:57:32 > 0:57:39We've put so much into the business so we were fairly firm about that from the outset.
0:57:39 > 0:57:42You could have had 25% if you hit your projections.
0:57:42 > 0:57:47They thought you can't believe your own projections if you turned down the offer.
0:57:47 > 0:57:51To have accepted Deborah's offer it would have been additional pressure on us.
0:57:51 > 0:57:55- But you do believe your projections? - We do, but it's racheting up the pressure.
0:57:55 > 0:57:58Whether we'll live to regret it, possibly.
0:58:06 > 0:58:10It's certainly been a remarkable end to the day.
0:58:10 > 0:58:15Not many entrepreneurs have the confidence to say no to one Dragon, let alone four!
0:58:15 > 0:58:18But that's what Jim and Richard George have done.
0:58:18 > 0:58:20Showing that in the den, as in life,
0:58:20 > 0:58:24if you don't like a deal, you can always walk away.
0:58:24 > 0:58:28If you'd like to know more about why the brothers turned down the Dragons
0:58:28 > 0:58:30press the red button now
0:58:30 > 0:58:35where you'll also find behind-the-scenes interviews with our millionaires. Goodbye!
0:58:36 > 0:58:39Next time on Dragons' Den:
0:58:39 > 0:58:41Let's get some Mexican flavours going.
0:58:41 > 0:58:48Your mum is very happy with her pancake shop. You have got ants in your pants!
0:58:48 > 0:58:51I feel like you've got a shield up and you're deflecting
0:58:51 > 0:58:54the only answer that I'm trying to get to.
0:58:54 > 0:58:57- Three million you value this product at?- More than that.
0:58:57 > 0:59:01I know the other Dragons will think I've lost my marbles
0:59:01 > 0:59:03but I'd like to make you an offer.
0:59:23 > 0:59:25Subtitles by Red Bee Media Ltd