Episode 5 Dragons' Den

These are the Dragons,

five of Britain's most wealthy and enterprising business leaders.

Over the coming weeks, they'll make or break the dreams

of dozens of budding entrepreneurs.

If I was going to invest, I'd want a material part of the business.

You spent no time at all, no time at all,

telling us where the business was.

Giving you advice and giving you money,

and for 20 percent, doesn't stack up.

I have never invested in a business

and waited five years for it to start making money.

It's a long, hard road.

Think about it.

The multi-millionaire investors have each built up their fortunes from scratch.

Hotel and health-club owner, Duncan Bannatyne,

leisure-industry expert Deborah Meaden...

..retail magnate Theo Paphitis...

..telecoms giant Peter Jones...

..and Hilary Devey, who made her millions in the haulage industry.

The Dragons have the credentials, the contacts,

the commitment and the cash ready to invest -

but only in the right business.

Will any of these hopeful entrepreneurs

walk away with their money?

Welcome to the Dragons' Den.

We have five self-made multi-millionaires

ready to invest their own money in the best entrepreneurs

and the most profitable business ideas.

For those that come before them, it's a challenge and an opportunity,

especially in these tough economic times.

First in the den is former actor Darren Maddison

and fellow director Helen Wright, from Lincolnshire.

They're putting on a show for the Dragons,

but will the multi-millionaires find a successful business behind the scenes?

-Hello. My name's Darren Maddison.

-My name's Helen Wright.

We are equal partners in Polka Dot Pantomimes.

We hope you enjoy our pitch.

LIVELY MUSIC PLAYS

-Hello, everyone!

-Hello, Buttons!

-Buttons! Oh, Buttons!

-Oh, it's the girl of my dreams,

-my very own Deborah Meaden!

-There you are!

Oh, Buttons, if only I could find a handsome prince

or a fairy godmother who would be willing to invest

£100,000 in return for ten percent of the company!

Oh, then we really could expand the business,

-and I could go to the ball!

-No chance of that round here.

-Oh, yes, there is!

-Oh, no, there isn't!

-Oh, yes, there is!

-Really?

-Where?

-There!

Oh, they're behind you!

Cinderella!

-Cinderella!

-Oh, no, it's Minger and Munter!

Quick, leg it!

CHILDREN BOO

Oh, shut your faces!

Here, sis, look at all those men out there!

We might be able to get ourselves a date.

I'm going to wear my lottery dress.

My numbers come up, I'm sure to get a rollover.

Here, Cinderella! Any news of an investor?

No, I'm afraid not! Oh, if only we could find someone to invest,

then we could all live happily ever after.

Ooh! Hello, boys and girls.

Fairy Fortune here!

So, boys and girls, what do you think?

Should the Dragons now invest? Is it a worthwhile gamble?

-The answer, of course, is...

-Yes!

CHILDREN CHEER

Last year, one of the leading pantomime production companies

grossed £18.5 million in box-office sales.

This year we shall be producing six pantomimes.

Next year our aim is to produce eight,

-and the following year, 11.

-Your £100,000 investment

will enable us to secure larger venues,

and ultimately deliver the growth and profitability

as outlined in our business plan, and before we welcome any questions,

we'd like to thank the cast and children as they leave the Den.

Theatricality of this kind rarely finds a place in the Den,

but business partners Darren Maddison and Helen Wright from Lincolnshire

have certainly made an impact with their pitch.

But is it an opportunity worthy of a £100,000 investment?

Duncan Bannatyne looks confused.

Um, Darren, Helen...

Hello.

I don't really get it.

OK. Well, we produce professional static pantomimes,

and we started in 2005 with one pantomime.

In 2009 we decided to tender for more theatres.

That resulted in us doing three pantomimes last year,

and this year we've already secured six venues.

What does it cost you to put on a pantomime?

Between £30,000 and £40,000 to put on.

And what return do you get for that?

Um, we... Er... Our turnover was £125,000 last year,

with a profit of £29,000.

And what would you do with £100,000, then?

-With your £100,000?

-My £100,000. Well done.

We'd spend £45,000 of it on the scenery and props,

£20,000 on costumes,

£10,000 on marketing, and £25,000 on special effects.

The really good thing about that investment, though,

is once you've secured all the equipment, you can use it year on year,

so your investment would last between ten and 15 years.

Businesslike responses from the theatrical entrepreneurs.

Peter Jones is next to interrogate the duo.

Darren, Helen, you value your business at the moment

at £1 million.

-What...

-We've based it on projected turnover

-over the next three years.

-Oh, OK. So you want me to invest now

based on a valuation in three years' time.

-That's not very good, is it?

-Well, we do, er...

Shouldn't we invest today for today's value,

then reap the reward of the value in three years' time?

Absolutely, but we would be able to give you your £100,000 back,

if you wanted it, in February.

So you're saying you're going to guarantee

my £100,000 back next February?

If that's what you wanted.

I mean, our net profit for year one would be £130,000.

Would I still own the share in the business then?

What we'd like to do is for you to stay with us,

-because it would give you a much better...

-Trust me,

if I invested 100,000 today, and you gave me my money back in February,

I'd be staying with you for a long time.

Darren and Helen cleverly sidestep concerns about the valuation

by offering some very preferential terms for an investor.

Deborah Meaden knows this sector well.

Um, so, what's the biggest theatre deal that you've done

as a company so far?

This year, in December, we shall be producing one in Clacton

which is our biggest, which is an 850-seater theatre.

Historically we've done anywhere between 210 seats and 350.

-So the biggest one you've done yet is 350.

-That's right.

-Yes.

-OK. And was it a sell-out?

We go at about 75 percent in terms of sell-out.

And, when you've got to fill an 850-seater,

how are you going to do that?

Well, we're looking for a celebrity to appear in it,

and do a big marketing campaign from that.

So, you're now looking at larger theatres,

-so you become more of the traditional-style panto.

-Absolutely.

And what is the seasonality? How long is your season?

It takes place in December, for about four weeks in each theatre.

-So only December?

-Yes. Yeah.

We started working on these pantomimes in March.

We get in touch with all the local schools

within a 15-mile radius of the theatre.

-We get those all booked on...

-OK.

-But all of your revenue comes in December?

-Absolutely.

-That's quite seasonal, isn't it?

-Yes.

Businesses that make their money in such a narrow time period

provide an extra challenge for even the most experienced of entrepreneurs.

Theo Paphitis looked concerned.

-Guys...

-THEO SIGHS

I just want to say that you are looking at things

with rose-coloured glasses on.

And in business, while that's great, you've also got to be realistic.

And coming here with a million-quid valuation

for a business that doesn't make any money,

basically it's just you two hoping to make something happen

in the future.

It's not very realistic.

It's not an investable deal for me at these levels,

so I'm going to say I'm sorry, but I'm out.

Thank you, Theo.

A first blow for the business partners,

as Theo Paphitis walks away from the deal.

And Duncan Bannatyne has made up his mind too.

Helen, Darren, when somebody says...

"We guarantee your investment back," as you have just done,

that's pretty exciting. But you've got to be crazy,

completely crazy,

if you're going to give away 20 percent of your company now

with the knowledge that if you wait, you'll have the £100,000 in profit,

so you can keep 100 percent of your company.

You don't need an investor.

So I've got to say,

-I'm out.

-Thank you.

Darren, Helen, looking down the list of your expenditure,

you don't really need all those things immediately.

You could actually wait for the special effects.

You could actually wait for new costumes.

So why give away 20 percent of your company?

What we are looking to do is try and find bigger theatres,

and we're looking for the expertise and guidance

that you could offer to make more theatres take our pantos.

If we had 15 theatres, that would be fantastic,

and obviously the profit margins would soar.

And I think your passion will probably get you there.

But I've got to say...

I'm out.

Two more Dragons fail to find money-making potential

in the duo's business plans.

Will leisure-industry expert Deborah Meaden

take a different view?

I think you've got real issue with seasonality.

It is very, very difficult, when you've got such a tight season.

But other companies out there do touring pantomimes

throughout the summer season, to places like Pontins and Butlins

and Haven.

I... I've got to say, even in the holiday parks,

you're going to find they've often got their own entertainments teams.

They're busy in the summer, and they want to keep themselves busy

in the winter, and even in my businesses,

we put on pantomimes in the winter, but that was through using the people we currently had,

and we kept them on the books and we wanted to,

so I think that it's unlikely that they'll take you for a summer run.

So I'm afraid that, because of my experience in this,

I can't honestly see that it's going to give me a return

-on my investment. I'm out.

-Thank you for your advice. Thank you.

Darren, Helen, I thought that presentation, visually,

was the best we've ever had. Even the kids were perfect.

And clearly...

this is a passion of yours as much as anything,

and I've always said "follow your passion",

because you don't mind working those extra hours.

But as an outside investor, I don't necessarily want to spend

all those hours the way you do, for little return.

So I'm unfortunately not going to invest today, and I'm out.

Thank you, Peter.

Darren and Helen walk away with a ringing endorsement of their pitch,

but not of their business proposition.

They leave with nothing.

The Dragons always like to see an entrepreneur walking up the stairs

with some tasty fare in their hands.

Bristol-based chef Paul Da Costa Greaves

certainly whetted their appetite

with his range of flavoured chocolate bars.

He needed £50,000.

I make chocolate using essential oils and herbs,

which can either be beautiful, maybe sexy, or sensual.

Or if you're feeling gorgeous, maybe seductive...

I suppose I'm sort of massaging you from the inside.

The multi-millionaires were particular about picking their favourite flavour.

I don't fancy being a mistress.

But Paul's financial history wasn't quite so appetising.

I've made a loss of just under 30,000,

but year five, which was 2011,

I made the loss of just over 100,000.

I don't get it. Why would you want to invest in a business

-that doesn't make money?

-But you have to invest money

to get to where you are.

I have never, ever invested in a business

and waited five years for it to start making money.

Paul... So, how many products have you got?

-I've got 15 bars.

-15 bars!

-Yeah, 15 bars in the range.

I do little packs of 12...

-12s.

-..and I do a little pack of 48.

Wow! We're building up quite a range, aren't we?

-Busy boy.

-You are a busy boy.

There is very successful chocolate companies out there

that don't have that many. Ranges have to be tight,

because you can't control your costs.

You've not been focussing on the things that matter in business,

-and that's making a profit. I'm out.

-OK. Thank you very much.

As usual, the Dragons were forthright with their views.

But why did Paul think he walked away empty-handed?

They didn't get me.

I'm not the most academic bloke

and I'm not the most switched-on geezer,

so when you start chucking everything at me, my head goes off in a mash. It's a shame.

You win some, you lose five.

When the Dragons invest, they look at the product,

the person and the pitch.

First-time inventor and mother of two, Kate Castle from Winchester,

is hoping to impress with all three.

Hi. My name's Kate Castle. I'm here to ask for £50,000

for a 15 percent share in my business.

Back in 2008, whilst camping in Dorset,

lying awake and desperate for the toilet,

I decided there had to be a better option

than trekking across a dark, cold campsite.

It took two years of patent applications,

product design and sourcing to get to what we see today.

BoginaBag is a lightweight portable toilet.

It can also be used as a stool.

But when you want to use it as a toilet, you remove the cover,

take one of the specially designed degradable bags.

This then goes into the central section,

and completely seals the seat.

Within each bag is a highly absorbent pad

that absorbs any liquid. Once you've finished,

you remove the bag...and dispose.

I started selling BoginaBag predominantly through my own website.

I then attended the Outdoor Trade Show in October,

and here I took a further 20 retail orders.

Since then retail orders have continued to grow,

and in March this year I took my first international retail order

from a supplier in France.

Thank you for your time, and now I'd be happy to take any questions

on me, my business or my product.

A thorough pitch from the Winchester-based mother of two,

Kate Castle. In exchange for 15-percent equity,

she wants a £50,000 cash injection

to start mass-producing her low-tech portable toilet.

Peter Jones looks bewildered.

-Kate...

-Yes?

Where do I start?

I just want to make sure that I've still got my sanity,

because I've just seen a person present a chair with a hole in it

and a bin liner, and wants £50,000 for it.

Isn't that, in essence, all you've got here?

-No.

-What have you got that's different?

A portable toilet that weighs less than one kilo,

and there's nothing else like it on the market.

But why couldn't I do that with my portable chair?

If you put a standard stool there, you'll see

that this is a lot sturdier. I mean, these can take up to 125 kilos.

I'm just trying in my head to work out...

..how can you really make some serious money in this?

-Yeah.

-I can't see hundreds of thousands of people

buying this product.

I think that I could sell hundreds of thousands

on an international basis, especially with the growing trends

in, kind of, camping. I do think there's a huge market.

A very confident opening exchange from the fledgling entrepreneur.

Now leisure-industry expert Deborah Meaden

wants to drill down into the business itself.

So, are you planning to carry on retailing,

or would you say most of your business is going to come through wholesale?

Long-term, I want to wholesale. I want to go...

I want to be in big retailers.

And talk me through the margins if you're selling to retailers.

I sell for 19.95. I'd sell to a retailer

for £9, and I purchase for £2.60.

And are retailers buying at £9?

The retailers that I'm selling to at the moment

do tend to be independents, mail-order and online,

and at the moment, yeah, they're happy to purchase at £9.

Your price points, your ratios, are way out.

If you're going to sell masses of them, and go to the retailers,

they need to make a much better margin than you're offering them.

-So either you're going to reduce your margin or your costs.

-Yeah.

-Which one's it going to be?

-Both.

-Both.

Give me your thoughts. Where are you going to get to?

OK. I need to be selling to them for £6,

an absolute maximum. I think in terms of costing,

it's possible, if I'm ordering by container-load,

to get that cost down to about £2.20.

What's your background?

After my second year at university,

I did a placement with one of the major supermarkets

in a training scheme, and they sponsored me for my final year

at university. And then after I'd been with this supermarket

for eight years, I moved to a DIY chain

and worked in their head office as an imports analyst.

Since then I've put everything into making this a reality.

Well informed and well organised responses.

Kate is going down well with the Dragons.

But what future for her product?

Hilary Devey wants to know.

Kate, so, we've talked about camping.

What other market could you foresee it going into?

I'm selling quite a few to fishermen,

-people with small boats.

-Yeah.

There's another avenue that I've had interest,

which is the military. I've sold quite a few at Christmas

to people that were staying in people's houses,

and they were slightly elderly and they were staying up high

in the house, so it was a long way down to the toilet,

so they were having one in the bedroom.

Kate, you've gone from a camping site to all the military,

to old people using it as the new commode.

-Um...

-You're over-estimating it.

I think that my sales and the interest that I've had in it

-show that I'm not over-estimating it.

-What sales have you had to date?

I've sold 1,600 BoginaBag stools and over 4,000 packs of bags.

I don't think that represents a fantastic, "let's fly it off the shelf" business.

Yeah.

-I'm out.

-Thank you for your time.

It's a damning conclusion from Duncan Bannatyne.

But there are still four Dragons left.

Will Peter Jones agree with his rival's appraisal?

You're very investable.

And I think... Every time I listen to you, I'm thinking,

I so wish you hadn't just come in with a chair with a hole in it.

I can't see this being huge mass-market enough

to return the level of investment.

I'm going to say I'm out.

OK. Thank you.

-Kate...

-Yes?

I suspect that you can make money out of it,

but I do worry about the scale of it.

And then I think,

the festival market - absolutely. The caravan and camping market,

that in itself can really turn over some pretty chunky numbers.

And you're good.

Thank you.

And those things combined lead me to surprising myself.

Because I'm going to make you an offer.

50,000...

I want 30 percent of the business.

The decline in Kate's fortunes is dramatically halted

as Deborah Meaden makes an offer. But it's for double the equity

the entrepreneur initially wanted to give away.

With two Dragons still left in,

will she now be able to negotiate herself a better deal?

I do see it as a good product, and I do see it as a much larger market.

I've got much larger vision.

Um...

I will offer you the full amount...

..for 25 percent of your business.

Thank you.

-Kate, I love the name. BoginaBag.

-Yeah.

I've already invested in a product that sells brilliantly

in the festival market, WedgeWelly. So I do believe

that that really is your primary market.

But if I was going to invest,

you know, I'd want a material part of the business.

Do I match Deborah's 30 percent...

..or do I just say you've got two Dragons already?

What would you like me to do?

Um, if I'm honest,

I'd really, really like you to make an offer,

because I think you've got the retail experience,

contacts and expertise that I need.

-Oh!

-That's high-rolling...

-That's a very, very high-risk...

But who wouldn't want to consider three offers rather than two?

I think you just told me something.

That you've got a clear, preferred Dragon.

I'm withdrawing my offer.

I'm out.

All of a sudden, a more hesitant Kate

finds her options narrowed considerably,

and Theo Paphitis has yet to table an offer at all.

Kate...

..I'm struggling, really struggling, with that 30 percent,

because...

..you're so early.

I will match Deborah's 30 percent.

OK.

Thank you for your offers, all three of you.

Um...

Deborah's right - Theo is my preferred Dragon.

Kate, congratulations.

DRAGONS APPLAUD Thank you.

It was a nerve-wracking negotiation, but Kate's gamble pays off.

She may have sacrificed equity,

but she gets both the money and the Dragon she wanted all along.

Kate, very well done, and you got Theo, the very one you wanted.

Yeah. Fantastic result. Obviously really pleased.

Well, I admired your chutzpah in saying "I want Theo".

Deborah did say it was a risky strategy,

and when she said that, I thought, "Oh!"

To be honest, it wasn't really a strategy.

She obviously picked up from what I was saying

that my heart really wanted to work with Theo.

-Very well done indeed.

-Thank you.

All entrepreneurs who enter the den believe they'll be the ones

who'll walk away with the Dragons' cash.

But most end up with a dose of business reality.

Sadly, this was true of South Londoner George Allen,

who wanted £50,000 to bring his colourful board game to the masses.

Flaggo! is an exciting international board game

where players fly from country to country

to enable them to collect letters to spell the word "Flaggo" and win.

I sent a letter to the Queen and Prince Philip,

who have written back and said the game looks very good.

Could I have a look at the letters from the Queen and Prince Philip?

Upon closer inspection, Duncan Bannatyne cast doubt

on George's letters.

You might think you've had letters from the Queen and Prince Charles, but you haven't.

These people are thanking you for being generous and sending the game.

There's a huge difference.

I realise they can't really endorse a game,

-given their position.

-Why send the game, if they can't endorse it?

Because I thought it would just be a very nice thing to do.

Less concerned with the royal seal of approval,

Deborah Meaden sought a more conventional proof of interest.

Do you have any toy shops who've shown interest in this?

I haven't had any toy shops that have approached me personally,

but I've written to them, and actually sent them a game

-so they can digest the contents.

-You sent them a game as well?

Yes. They've all been sent a game, because without the contents -

-Which makes it even worse.

-Worse!

The fact they've got your game on their desk,

and they're still not calling you back...

..is a clue, George.

And with the counsel of Theo Paphitis yet to hit home,

Peter Jones dealt a final blow to George's business plan.

I've actually created a board game myself.

-And do you know how much money I made in total?

-I'm not sure.

Nothing. You'll never make a penny from this market.

-Right. Fair enough.

-And I'm out.

-OK.

So far tonight, only one business has been deemed worthy

of the Dragons' cash.

-Theo is my preferred Dragon.

-Kate, congratulations.

If you want to find out why Theo chose to invest in Kate Castle,

press the red button at the end of the programme.

Can you make a good business out of art?

Our next entrepreneur thinks so.

But if Durban-born artist and metalworker Stephen Myburgh

is to get an investment, he'll have to persuade the Dragons.

My name's Steve Myburgh.

I'm here today to attract a £70,000 investment

for a 20 percent equity share in my company.

Myburgh Designs is essentially a design and manufacture company,

and we specialise in a range of swinging chairs.

I'm just going to take you back for a second to South Africa,

apartheid South Africa, when I was much younger.

And the alarm in my father's factory goes off.

And as we enter the building, the scene that I witness

is an SAP dog attacking a young boy

that they found in a cardboard box, OK?

And the boy's splayed out on the floor,

and the product inside that box was spread out in front of me.

And the thing that really struck me

was the lack of value between all the participating ingredients

to that scene. There was no real value in the product.

There was no real value in the relationships between the people,

because the boy didn't value the cop and the cop definitely didn't value the boy.

And so that day a seed was planted in me,

and that seed has grown into a passion,

and that passion is about finding as sweet place

between people, environment and product.

What we do is, we invent beauty,

and the gift that we give to our clients is this creative living.

So today I am here to find that money, to get that cash

that is going to drive my business forward into the next few years.

Really I'm also here to find a dragon-heart,

a dragon-heart to stand next to me and cover my world

with this kind of treasure that I make.

So, if you'd like to try them out, you can,

and I'll answer all your questions afterwards.

I'll try.

A creative approach to pitching from Hampshire-based artist

Steve Myburgh.

-Ooh, it's quite nice.

-You look very regal.

-It's very good. Like it!

-Can I get into that one?

-Yeah!

He may have taken the Dragons back on a journey to his childhood,

but will that be enough to receive a £70,000 investment

in return for 20 percent

of his bespoke-garden-furniture design business?

Hilary Devey needs to go back to basics.

-Where are these manufactured?

-In my factory.

-Where?

-In Hampshire.

-Hampshire. So you actually make these here?

We've just reached a production capability

-of 150 units a year.

-So what's your route to market?

This year I've put all of my efforts into forging relationships

and forging joint ventures,

and I've started to create some really interesting ones.

I've got five hotels on my books, OK? I give the hotel the installation,

and I get to feed off the marketing from that,

so I've had them in the hotels for a month, and I've sold two pieces.

And how much do they sell for?

£5,000,

£3,200,

£18,000,

and £5,000.

To be honest with you, I am only now interested in becoming a businessperson.

It's actually coming to me now. I can feel it.

-SHE LAUGHS

-Tell me how.

-How do you feel that?

-I'm interested in it.

How do you feel? Epitomise your vision of where you want to go.

I want Myburgh to touch everybody in the UK.

My vision of Myburgh Designs is to push it across the world,

to really sell this, to make this the next iconic piece of furniture.

Steve's story may have charmed Hilary Devey,

but in this den, it's all about business.

Theo Paphitis wants more clarity on the numbers.

-Steve, just... You sell that for 5,000 quid.

-Yeah.

Give me the cost in producing that.

£853.

853 quid?

So you're making 150 now, or your capacity's 150?

-My capacity's 150.

-How many are you making?

At the moment I'm only selling 30 a year.

-At an average price of...

-Of about five grand.

I've sold swings to Singapore, the princes of Liechtenstein...

The Mercedes-Benz family bought one from me.

I've got a bit of a career here. I just haven't figured out

how to sell 150 units a year. That's all.

I've got a little bit of magic. Can I show you?

Yeah, show us some magic.

GENTLE CHIMING MUSIC PLAYS Isn't it lovely?

I try to do this. I try to create magic for people, you know?

Give me a chance and I'll make magic products that the world will buy.

You say it's magic, but I had one of those on my ice-cream van.

THEY LAUGH Duncan... Duncan...

wasn't that the magic in your ice-cream van?

Steve... Steve, if I said to you, just concentrate on the business

going forward,

and tell me how you're going to make money out of this,

what's your answer?

I'm going to sell a lot of swings.

It's a good answer. It's not a great answer.

My problem is that, as yet, I don't believe you.

So you need to convince me.

-Can I ask you a question?

-Yeah.

Would you like to buy one of my swings?

-Not at those prices...

-Are you sure?

..and I have hotels where they would sit very nice.

So convince me how we're going to make any money as a business.

I'm looking for some business advice. I don't know.

My prices are created out of my experience,

-not out of my business knowledge.

-So what you're saying is,

you've no idea how it's going to make any money.

You want me to invest £70,000 and then show you how to make money?

Yeah.

I mean, I'm here knocking on your door

because you guys know how to make money.

A frank admission, perhaps, but such business naivety

rarely ends up with a Dragon investment.

Will Deborah Meaden find a reason to part with £70,000?

When you talk, you talk as an artisan.

This is not a criticism. You talk about the imagery.

You spent most of your pitch telling us a historic story

about where all of this came from.

You spent no time at all,

no time at all, telling us where the business was.

It's a brand. It's a global brand that will supply -

But it isn't, is it, because what you've got in front of us

is something that costs £18,000 - trust me, that is not going to have a huge market -

something that's £5,000 - that won't have a huge market -

and you say you have a product. Well, I don't see product.

-I see lovely pieces...

-Thank you.

-..but these are bespoke pieces,

and you're making a mistake if you think what we've got in front of us

is a product you're going to be able to roll out, because it's not.

The thing is that I'm ready grow into the business,

and to take it on, not as an artisan, not as an artist,

but to take it on as a business. Let me spread my wings a little bit,

-and then you'll see -

-Steve, you're not.

-I'm not what?

-Ready to take this as a business.

Oh.

Whilst you in your head think you might be ready

to turn this into a business, you've taken no step at all.

-And this, here, we're investors.

-Yeah, yeah. I see that.

-We want business propositions.

-I see that.

-I'm out.

Thanks.

Steve's lack of business nous

finally results in him losing a Dragon.

And Peter Jones looks ready to show his hand too.

Steve, a lot of artists with your talent,

they do it because they have that passion,

that strength and depth. They see things that people like me don't.

I'm happy looking at a piece of paper with numbers on it. I'm boring.

So I haven't got the talent that you've got,

and I kind of think that talent should stay within you.

I congratulate you on producing what you've produced,

-but it's not something I can invest in, so I'm out.

-Thank you, Peter.

Look, they are great pieces. They're really interesting.

-Thank you.

-But let me just tell you, you will drive people to despair

who go in business with you. You will drive them mad.

For all your talent and your strengths,

if you're really thinking about going into business,

they are also your Achilles heel.

-I'm out.

-Thank you very much.

-Like everyone else, I think it's a fantastic product.

-Thank you.

But I don't think yet it is a business investment.

So giving you advice and giving you money,

and for 20 percent, doesn't stack up.

-I'm out.

-Thank you very much, Duncan.

Three Dragons walk away in quick succession,

and now Steve's hopes of investment rest solely with Hilary Devey.

Hilary, would you like one of my flowers?

OK. Thank you. Thank you. That's very kind of you.

There you go.

-She can't be bought for a copper flower!

-No. Indeed I can't.

-I think they're fabulous.

-Thank you very much.

But I can go to parts of the world and buy that

for 200, 300 euros.

Almost every garden in Morocco will have a chair of some distinction

-like this in it.

-To make -

-If you're saying £800

it's costing you to make 'em here, you wouldn't pay a tenth of that

-in Morocco.

-But it's about making things in the UK.

We don't outsource everything, you know.

-It's about having some authenticity -

-But it's also about making money

-and about profitability.

-You're absolutely right.

-Steve, bottom line!

-You're right.

For me, it's not an investable product,

and I wish you all the very best of British, but I'm sorry - I'm out.

Pleasure.

It was an unusual pitch,

but as usual the Dragons gave short shrift to a business

without a clear path for making money.

Other entrepreneurs who tried and failed in the Den

included Worcestershire-based Phil Hall, who brought along his solution to a common automotive problem.

He just needed £75,000 to bring it to market.

The wingAware is a very simple, flexible plastic wing-mirror protector.

Slots into the car door,

so it will give you that couple of extra inches of protection

to your car.

The Dragons are not short of cars in their collective garages,

so felt well qualified to voice their opinions about Phil's product.

If a car was to come along and hit that,

they're too close to the vehicle in the first place,

and it means the wing mirror will go anyway.

But that still doesn't get away from the fact that it looks ridiculous.

Have you ever lost your wing mirror?

I'd probably prefer it to be smashed than put this on it.

Why don't you just put your mirror in?

It is giving you that extra protection. Even folded in,

a wing mirror does still jut out.

But it was the Dragons' opinion about his financial choices

that put a stop to Phil's hopes of investment.

How much have you spent on a patent to protect this product?

To get it to prototype, £30,000.

You might as well have got £30,000 and flushed it down the toilet.

Before you spend any more money, please get some proof

that somebody is going to buy these. I won't be investing, and I'm out.

Thank you.

Jacky Williams and stepfather Gerry Parker from Shropshire

brightened up the Den with their pitch for £50,000

in an anti-theft device for gardeners.

I was totally astonished to find that there was absolutely nothing at all

on the market that was simple and effective

to prevent hanging baskets being stolen.

It wasn't a problem with which Peter Jones was familiar.

-Imagine a burglar running down the road with two hanging baskets!

-They do.

Really? OK. Well, let's take your word for it.

If you put a phone line into the Den, you would be -

-OK, Jacky. Jacky, hello.

-Sorry.

-Hi.

Jacky and Gerry did find an ally in Deborah Meaden.

-This is neat. It's great.

-Thank you.

-Well done.

The trouble is, you can do the same thing

in a different way. You can do it with cable ties.

They are cheap, and you've probably got them in your house.

In the end, it was just not a big enough proposition

for the multi-millionaires.

What worries me is, you're focussing on the gardening market,

which has got horrendous peaks and troughs.

And I kind of see this more as like a cottage industry,

and I think you will make a good pension fund out of it.

-Uh-huh.

-But to me, it's not an investable business.

-I'm out.

-OK. Thank you very much.

Our next entrepreneurs are from West London.

Former sales executive Henry Buckley and his business partner JJ Harding

think they've come up with a new and efficient way of marketing

that'll appeal to business customers.

Will the Dragons be impressed?

Hello, there. Lovely to see you all. My name's Henry Buckley,

and I'm the managing director of JogPost Limited.

We're here to offer you a ten-percent share of our amazing company

-for a £50,000 investment.

-My name's JJ Harding.

I'm the director of operations and business development.

JogPost is a revolutionary direct-marketing company

that specialises in leaflet distribution.

We currently employ hundreds of fit and healthy individuals

to jog and post our client's marketing materials

door-to-door over London and the surrounding areas.

In the time we've been running, just over a year,

we have seen remarkable month-by-month sales growth.

In the first year we turned over £170,000.

Out of that, 62,000 was gross profit. 32,000 was net profit.

We get new clients every single day, for many different reasons,

but most importantly it's because we consistently get

as much as three times the results as other companies in the industry.

We know we are at the brink of a revolution.

JogPost is about to explode into the market place.

We'd like to invite you guys to ask any questions,

-and we thank you for listening.

-Thank you.

An upbeat and confident pitch from West London business partners

Henry Buckley and JJ Harding. In return for a ten-percent stake,

they need £50,000 to develop their new twist

on leaflet distribution.

But Theo Paphitis looks unimpressed.

JJ, Henry, hello. I'm Theo.

A very positive little speech. Lots of PR.

Is there any substance behind this business,

or is it just you two in trackies, talking?

We deliver approximately 250,000 leaflets a week

-across London.

-Right.

And for us, from when we started until now,

it's been just a massive increase. It's been like a snowball effect.

We have taken the company from just the two of us

pitching the idea to getting clients,

and now we have about 200 joggers who work all over London.

OK. What makes you so unique,

as opposed to anyone else?

When Henry says that we've got over 200 joggers,

they are employed by the company, they work for us,

they all wear these uniforms, and we monitor them,

-measure their speeds and accuracy.

-How do you do that?

We have full-time non-distributing supervisors

on all of our routes, and it's their job to spend the entire day

monitoring the guys, making sure they're doing a good job.

So they can't just dump their leaflets in the bin, go to the pub,

jog back in with a bit of sweat...

That's one of the best things about our system.

It's very easy for us to tell if people are cutting corners,

and that's one reason why we're getting better results than others.

Fluent and assured responses from the two young businessmen.

But what of the future? Deborah Meaden wants to know.

I think you've presented very well here today.

But what I don't have a sense of yet is your plan.

At the moment we've got five teams of people working every day,

and we want to take it to a level

where we have control of the whole of London,

and then open branches in all the other major cities in the UK,

and hopefully even take it international as well.

OK. So, that's your vision. So, if you were going to get to the point

where your business is increased, what is it

that you're physically going to need to do that?

One of our main weaknesses is that our internal systems

hasn't kept up with our rate of growth,

so we would definitely need to invest

in bespoke softwares and business systems

to help us streamline all our communications

-between our departments.

-Where we are now,

we've underpinned the business. We're bursting at the seams.

OK. How do you know that you're more efficient

-than your competitors?

-We've had testimonials

from some of our clients, for example Pizza Hut.

We did a distribution for their Carshalton branch.

That week, we got that branch the very top of the UK league tables

for the first time in history. They'd never even been in the top ten.

They beat the second highest branch, the Edinburgh branch,

by over £1,000 worth of takings.

Impressive statistics delivered in an impressive manner.

Henry and JJ are certainly making a strong case.

But can they maintain their poise

under the scrutiny of Duncan Bannatyne?

-So, you turned over 170,000 last year.

-Mm-hm.

It's hard for me to see, without having three years' accounts,

whether that grew year on year. So can you tell me

-about the four quarters of the first year?

-Sure.

In the first six months we turned over £60,000.

Yeah. In Q3, we turned over £35,000.

In Q4, we turned over £72,000.

Um... So, what's your projected profit this year, then?

Using conservative estimates,

we're using the figure of 20 percent growth per quarter

over the next four quarters.

That'll give us a total of £724,000.

-That's turnover.

-That will give us £136,000 profit,

although we do expect it to be a lot closer to 200.

Right. I want to go back a little bit to where you come from.

I've worked quite a few jobs, mostly in sales.

I was always the top salesman at every company I worked in.

-What kind of companies?

-The Carphone Warehouse -

first month, I was the highest earner in the entire organisation.

I want to make as much money as I can and see what I can do with it.

I'm incredibly good at sales. That's where my experience comes from.

I also worked there for just over a year.

-Henry made as much money as I did in a year in four months.

-Yeah.

Are you as clever with other things?

I think I'm excellent at everything I do.

Guys, I've got to say,

I think your business and what you've done

is very inspirational. Your story is fantastic,

particularly Henry. You get to the top of Carphone Warehouse,

you said, which isn't an easy feat,

and then you just leave after four months. Can you just tell me why?

I've never wanted to work for anyone else. It's been a means to an end -

save up enough money to start my own business.

Well, I am very, very impressed.

I think you're two great, inspiring young people,

and I also love your plan to go national

and potentially go into Europe.

So I'm very excited about the business.

I'm going to make you an offer.

The full amount of money...

but for 33 and a third percent.

So that would make me an equal partner with both of you.

Peter Jones is first to break cover,

but he's demanding more than three times the equity

the duo originally wanted to give away.

Will Hilary Devey now choose to enter the fray?

-You've cornered London.

-Mm-hm.

-Have you studied the demographics of the UK?

-Mm-hm.

So, how many postcodes are there in England?

Well, I actually own, and started from scratch,

the Sameday courier network, that's running about 650 vehicles

across the UK. So I do know the demographics,

and I actually think you've got a fantastic concept here.

I think it will go far.

But I don't think, without the input

of external people, you're going to have the knowledge

to be able to extend it.

So I would like to make you an offer.

I would also like 33 and a third percent of your business.

Mm-hm.

But I will give you £70,000.

In a tactical move, an astute Hilary Devey

offers more money in a bid to secure the deal.

Now will Theo Paphitis make it three in a row?

You're both incredibly good.

You got a business plan. You got a focus,

-and maybe you're after a mentor to help you on your way.

-Mm-hm.

For ten percent, have I got the time to spend with you guys,

mentoring you?

Um, actually...

..no.

OK.

-I'm out.

-Thank you very much.

-Thank you very much.

OK. Just be honest - the reason you're here

is because you want me to invest. Nobody else.

Just be honest. Tell them.

So I'm going to make you an offer.

OK?

All the money, £50,000, for 25 percent of the business.

A third offer for Henry and JJ,

but still for much more of their business than initially intended.

With just one Dragon left, will the duo be able to get closer

to the ten percent they were looking for?

OK, guys.

I think you are very impressive.

I suspect that you're recognising that to actually replicate this,

you're going to have to have something a little bit more solid

in terms of the way you're managing the business,

and that's the moment that I enjoy getting involved with businesses.

And to me, it's very, very exciting.

And I'm going to make you an offer that demonstrates

that I'm excited by that,

because it's going to be better than any offer you've heard as yet.

It's for the full amount of the money, and I want 20 percent.

-Thank you very much.

-Thank you.

Um... I've taken many, many distribution models into Europe

and into Asia. Have you any idea how difficult that is?

-No.

-No.

-It's a long, hard road.

-Mm-hm.

Think about it.

Um... Can we take a minute to have a little discussion?

-I would.

-Thank you. Thank you very much.

Food for thought for the young entrepreneurs.

They now have four deals on the table.

HENRY AND JJ WHISPER

Shall we go... Yeah, I like her.

She's had clients, as well.

But will they choose to hold on to more equity,

or to accept the extra cash that's on offer?

I think we should just go ahead and take it.

HE CLEARS HIS THROAT

Sorry to keep you waiting.

OK. We've made a decision.

-Deborah, we'd like to accept your offer.

-Excellent!

-Well done, guys.

-Good boys! Well done.

-Henry and JJ have done it.

-Really look forward to it! Exciting!

It was a tense exchange, but they have the cash they needed,

and now a very influential business partner.

As impressive as they were, that last part just showed

a real weakness. What they should have done

was come back and try to negotiate. They didn't.

-Oh, I don't know.

-They had a strategy. They stuck to it.

I think they're very good.

Well, JJ, Henry, tell me why you took Deborah's offer.

Was it just the equity?

She was one of the Dragons that we wanted on board.

We were only ever willing to go up to 20 percent.

That was our plan. So it was the only option,

and it was the right option, and we're very happy with it.

It was a battle royal in the Den today, and a battle won

by Deborah Meaden. We know that competition between companies

can give consumers good deals. Well, this particular competition

between the Dragons gave Henry and JJ a deal on their terms.

If you'd like to know more about how Henry and JJ came to their decision,

press the red button now for all the post-Den reaction.

And, if you have a business that could do as well in the Den,

why not apply for the programme? Just go to bbc.co.uk/dragonsden.

Goodbye.

Next time on Dragons' Den...

-Ugh! What?

-That's so ticklish!

-You've got fish on your feet.

-I've got to tell you,

-I think it's great.

-Oh, thank you!

How can you grow your business, if you can't motivate yourself

to do what should have been the biggest pitch of your life?

I'm going to make you an offer, but I want a higher percentage.

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