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'These are the Dragons.
'Five of Britain's wealthiest and most enterprising business leaders.
'Over the coming weeks, they'll make or break the dreams of dozens of budding entrepreneurs.'
-Oh, what? That's weird. It's so ticklish!
-You've got fish on your feet!
I'm going to make you an offer, but I want a higher percentage.
You stand in front of a group of people who could change your life overnight...
How do you hope to grow your business if you can't even motivate yourself
to do what should've been the biggest pitch of your life?
Have you ever heard of the saying, "A mountain to climb"?
You've got several.
'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.
Our five multi-millionaires are ready and waiting
to put that all-important investment into business ideas and inventions
that come before them. But it's their own money at stake,
so only the best entrepreneurs can expect to walk away with any cash.
Hong-Kong born Karen Ho and husband To Chan are first into the den.
The beauty industry is notoriously hard to succeed in,
but can their new concept overcome the challenges?
-Good afternoon, ladies and gentlemen. I'm To.
-And I'm Karen.
And we're representing Aqua Sheko Fish Spa.
We're looking for 150K investment
in return for 30 percent of equity.
In June 2010, we opened our first venue.
It was one of the first fish spas in London
and we soon attracted a lot of customers.
December 2010, we opened our Soho venue.
And this is an illustration of the facilities.
A garden feature fish pedicure hall.
Also a modern Japanese bar with fish manicure areas.
Our first year turnover is a bit over £400,000
and the £150,000 investment will be used to open two more shops.
The further expansion would establish our brand
as well as broaden the customer base that we have.
-Erm, please feel free to try it.
-PETER: I'll try it.
'An orderly pitch from husband and wife team To Chan and Karen Ho.
'To expand their new beauty treatment brand,
'the couple are prepared to give away 30 percent equity
'but need a £150,000 cash injection in return.'
'Peter Jones is keen to put their claims to the test.'
-You put one foot in?
Oh, what? They're all grabbing for me.
-That's weird. And so ticklish!
-You've got fish on your feet.
-After two minutes, you enjoy it.
You must do better than our lady customers who are fine after five seconds.
-HILARY: What does it feel like?
-Like they're sucking on me. It feels weird and it's making me sweat.
-What fish are they?
-They're called garra rufa.
-What are they doing? They're eating part of my skin?
-Yes, your skin is protein to them.
They're gently sucking away on your feet.
I usually describe to customers as a thousand kisses.
-Have you not fed these fish for ages?
-They were fed yesterday by a few customers.
How long does it take for them to clean his feet?
For the optimal effect, it's around 25 minutes per session.
I will say that I do feel very different than when I first went in.
It is quite strangely, weirdly cleansing.
'One successful demonstration and one Dragon convert.'
-Feel your feet. Are they softer?
-I can feel that they're amazingly soft.
'But now spa and health club owner Duncan Bannatyne wants to focus on the business itself.'
-Karen and To.
So, in year one, your turnover was £400,000.
-Right. What was your gross profit?
-What was your net profit?
-Er, about 112.
That sounds a really big profit margin in this industry.
Is that growing on a month-by-month basis?
Or do you have blips when it goes up and when it comes down?
There would be, of course, blips, but what is important is that
we are seeing people saying, "It's great, we'll come back," or "We'll recommend to friends"
-and that people start using our loyalty cards.
-So are you the only people doing this in the UK?
-We are not the only people in the UK, no.
-Other people are doing it?
-How many competitors have you got?
-It's not that important to count the competitors.
It's more important to decide in this new market how we're going to play in three years.
'Assured and reasoned responses from the confident entrepreneurs.
'Theo Paphitis looks intrigued.'
So this is something you just decided to do?
Yes. We went to Macau and there was a hotel in Macau and they had a fish bar there.
We tried it. It was amazing.
We came back and we quit our jobs and we started this.
And we think business is fun. We really like business.
What's your background?
-We studied at the University of Oxford, both in science degrees.
-What degree did you get?
-First class honour, Gibbs prize.
-Merton College Oxford and I did physics.
-And what did you do after that?
-I went to Lehman Brothers to become a quantitative trader.
-You went to Lehman Brothers?
Consultant for one of those consulting firms in London.
'The impressive duo may be garnering praise from the Dragons,
'but it's their £150,000 To and Karen really need.
'Will Hilary Devey find a reason to invest?'
Is your vision to continuing opening shops
or is your vision to sell this product to existing spas?
I mean, I go in nail bars,
and the turnover is phenomenal in such a small place.
I've actually sat there and calculated their profit
whilst I've been having my nails done.
Now, I could imagine that product going into a salon-type operation like that
and that would make that salon more profitable. So is that element part of your business plan?
We cultivate our brand very carefully.
We will not open too many, we will not spread it everywhere,
in one capital, we will only have a few.
But we are prepared to expand overseas if need be.
Explain your logic there.
It is most important for us to make sure our brand is good.
If an independent spa decides to cut on the cost,
then we have further to control, and once damage is done, it's done.
I'm sorry, but I do disagree, cos I'm all about growth and profit.
Yes, I'm very brand conscious, but I think there's ways you can do it without brand denigration.
So I think your whole business strategy, for growth, for profitability, cos let's face it,
that's what we're all in business for, to make money,
and I think you've missed a trick somewhere. And because of that, I think we conflict.
So I'm out.
'A first blow, as strategic differences cause the couple to lose one Dragon.
'And Deborah Meaden looks to have something on her mind, too.'
Can you breed these fish? Have you thought about breeding these fish?
Yes, we have thought about it, but at present, we have not put that into plan.
-So you buy live fish and they're all live.
Do you know, tanks and cages make me feel sad.
I think you guys are very good and you've come up with a very good business model,
but I don't like export trade in live animals at all.
-It's not a type of business that I would operate in.
-Karen and To.
I don't doubt for one minute that you're two great young entrepreneurs.
And what you've done I think is absolutely wonderful. Magnificent. So I think you should continue.
But you don't have something that can't be copied. Everybody can copy it.
So I'm not going to invest.
'Two more Dragons out and the investment tides looks to be turning against To and Karen.
'But can high street expert Theo Paphitis
'see a money-making future in this business?'
I've got to be honest, I find it very difficult to make a decision.
Because you two are good. You qualify. You get a tick in the box.
I worry about the barrier to entry. It's not a lot.
I then worry about how you move the brand across.
Cos I'm pretty certain, within a short period of time,
this market will be congested.
And I'll then be relying on how you separate your business from the crowd.
When I take all those things into account...
..I don't quite get to a yes.
-Right. Thank you.
To, Karen, erm...
You've without question proved your level of aptitude when it comes to looking at a business
and trying to make a business work and I enjoyed it and I'm sitting here thinking, "This is great".
One last question that I've got, though, you're in here wearing dirty trainers.
Is there a reason for dressing in oil-based jeans?
I can explain why. We painted the floor ourselves.
We did the sawing ourselves.
We are very hands-on people.
And if need be, we will get ourselves dirty.
-That's a really good answer, by the way.
In terms of the business opportunity, I am literally, on a balance, that close.
The 112K that you made, how much of that would you normally have taken as salaries?
We take minimum wage.
But how much, realistically, would you like to see yourself taking in the next 12 months?
We are going to put most of our money back into investment, to realise our strategy of opening more shops,
so our current position of taking minimum wage only will hold.
Does your business have any debt in it?
-Mm. That's the loan to support the opening of the Soho venue.
To, Karen, I think it's just tipping the balance the other way, unfortunately.
I don't see how I can make money
at 30 percent of your business.
I'm going to say to you, I'm not going to invest and I'm out.
'The Dragons may have been tempted by the proposal,
'but none could find a reason to invest their £150,000.
'To and Karen leave with nothing.
'This year, the den has played host to a number of products
'aimed at the health and fitness market.
'But so far, we've yet to see the Dragons invest in one.
'Business partners Scott Robert Shaw and Lee Collinson James
'wanted £100,000 to get us all skipping to a different beat.'
We believe that skipping is for everybody.
We wanted to bring a fusion of sport skipping and street dance, which is Skip-Hop.
'It may not have been a scientific assessment,
'but the den demo achieved only a 50 percent success rate.'
-Shall we skip together, Peter?
-Duncan can skip. I've never tried it.
-Hang on, Duncan, hang on!
Give me half an hour, I could have you skipping. THEY LAUGH
'Having tried the skipping, the Dragons got down to numbers.
'Was the duo's success rate any better there?'
Have you ever heard of the saying, "Mountain to climb"?
-You've got several before you can convince me
-to invest £100,000 on a skipping rope.
You've got a business that you're valuing at half a million pounds. How?
-Come on, snap, snap! You should have the answer!
You're coming here asking us for 100 grand.
We've done a lot of study and we believe the turnover is more than achievable.
Do you know what? I don't believe it.
'In the end, it was 100 percent of the Dragons who chose not to invest.
'And that signalled the end for Scott and Lee.'
-Tell me your background.
-I was a self-employed skipping coach.
I was making a very good living until I decided that we ought to start my own business and do it my way.
So you earned really good money, things were great, and then you started this businesses? Yes.
What do you think the conclusion would be if I said that to you?
Yes, I can see where you're leading.
-Don't suggest where I'm leading, what would your advice be?
-Don't do it.
-And that's why I'm out.
The Dragons know nothing about the products or the entrepreneurs they see
until they walk up the stairs into the den.
So don't be surprised if the multi-millionaires ask searching questions
before deciding whether to invest.
Is successful entrepreneur Alan Pearson from Middlesbrough ready for the challenge?
Hello, my name's Alan Pearson. I'm a sign manufacturer from Teesside
and I have two products here that I'm going to pitch to you.
The first, which is street nameplates,
and the second is a new product called Strim Base.
The street nameplates, it's a recycled plastic product,
and a recyclable plastic product.
It, erm... It, er...
We've been selling around £100,000 worth of them a year.
The other product I have is something that I developed off the back of this product.
One of my councils I was selling to
was putting a concrete base round the bottom of the street nameplate.
It's cheaper to do that in the long term than actually strim round them.
So I came up with a product that can be mowed over,
will stop the grass growing round the post, and, er...
-Is that it?
-Sorry. I'm looking for £100,000,
to give a ten percent equity in the company for £100,000.
Erm... Thank you very much.
'An understated pitch from nervy Teessider Alan Pearson.
'He's looking for a cash investment in his new business specialising in street signs
'and a maintenance-friendly accessory. Deborah Meaden is in need of some clarity.'
Erm, what I'd like to understand
is what your business looks like at the moment.
-Because I think you said you sold £100,000 worth of this product.
But that kind of implies there's another business that's sitting behind all of this.
Yeah, this would form a new business. I have an existing business, Ensign, which...
Sorry. So the business that you've currently got, is it profitable?
-How much profit?
-The turnover this year was about £800,000
and we made a good profit.
-A good profit?
-What's a good profit?
Well, yeah, er...
That... I'd rather not... That's...
We're looking at... This year, we made about £60,000.
So £800,000, net profit £60,000. Park that business to one side
and this product here that you've sold £100,000 of, how much profit did that make?
-We'd be looking at about £60,000 gross.
-So presumably you've got accounts.
-So what do those accounts...
-Well, this is part of the Ensign business at the moment.
This has been... This is part of Ensign.
So you've got a product, a new product, sitting inside your existing sign business.
I'm really interested to understand why you've decided to take them out of your existing business.
Because I think that these products would be of interest to you.
The sign business, standing on its own, doesn't need the investment...
Investing in a business that has a proven track record
and is making a profit is always of interest to a Dragon.
'An awkward first exchange from the tongue-tied entrepreneur.
'Will he fare any better under questioning from Peter Jones?'
-I think it's quite appropriate that you've brought in a sign with "Dragons Court" on it.
Because if I was a judge, I'd be sentencing you
to making probably the worst presentation
that I've ever seen in the den.
Is there a reason why your pitch was so...
..slapdash, amazingly average?
I had it all in my head when I came up the stairs, Peter,
and it all fell apart as soon as I got to the top of the stairs.
Could we start again and I just want to see whether you are
at all interested in engaging in a conversation that actually says,
"I'm willing to change my pitch and you can invest in the overall business
-"and have a slice of the overall business, rather than the separation of products."
-Yes, I would.
OK. So let's talk about the future.
If things go according to plan, based around the current business you've got,
what is your current forecast for the next 12 months?
I would expect to turnover £1.1 million, £1.2 million.
And what do you think your gross profit will be?
I'd be looking at 100 to 120 gross.
-Yeah. Oh, sorry, net. Net, sorry.
-What's your gross?
If you take the average of the last three years, in percentage terms,
-what have you made, gross profit, in percentage margin?
-We make round about 100 percent.
-Well, you can't.
-Yeah, with overheads, costs.
-Margin or mark-up?
-So your gross margin is around 50 percent?
-Double what we...
-That's 50 percent gross margin.
'The proposition may have changed, but Alan's nerves have yet to settle.
'Can Theo Paphitis make sense of the Teessider's business?'
So 100,000 of the 800,000
comes from that sign.
-Where does that other 700,000 come from?
No, you said your turnover last year was 800,000.
Yeah, the sign manufacturing as a whole.
-Because... Hold on, let me just speak.
-Selling to people like you.
-At the moment, what you've said to us is you're happy to throw the whole business in.
So now I'm saying, I understand where £100,000
-of the turnover of your business comes from.
The other 700,000, talk me through it.
We, er... We're general sign manufacturers.
-Shop signs, van signs.
-Do you have any big repeat customer base?
-Yeah, we have a number of big customers, blue-chip companies.
-And you made 60,000 profit. Have you always made a profit?
-And what's your wages?
-I take as I need. I don't have a specific amount that I take.
OK, just as an example, you made 60,000 profit after how much drawings?
Erm... I would probably say about 40.
Alan, in your company accounts, every year at the end of the year,
you have to state what salary you've taken. You must know what it is. You can't just say, "I just..."
-What did you take in your last year as a director?
-£4,600? In the full year?
I thought you said to Theo you took 40,000.
Yeah, I have a director's loan account that I draw it out of.
-You've got to clear that.
-That's a little bit misleading,
cos Theo specifically asked you what you were taking from the business.
And what I was taking from the business was £40,000 a year.
-But you just answered Duncan £4,000.
-No, a wage, £4,000.
That's a little disingenuous. The information we glean from that
is you're able to draw £40,000 and it still makes £60,000 profit.
-Now that is a world of difference from a business that can only afford £4,000 of wages
and make £60,000 profit. Cos you turn from a business that might have potential
to a business that's just about paying your wage.
Alan, your job was to take me down a path that led me to a conclusion
-that made me want to invest in your business.
-And you haven't done it.
-Aye, I appreciate that entirely.
-So I'm out.
'Confusion reigns in the den
'and a dazed-looking Alan loses his first Dragon.
'Theo Paphitis is not looking impressed, either.'
Alan, in some ways, I can forgive you
for not knowing all the figures
like the back of your hand.
But I don't think there was any doubt in your mind the difference between salary and drawings.
I wasn't asked that, Theo. I was asked what I took out of the business. But, yeah, misleading.
Misleading. You were misleading in your answers.
And, actually, a bright little product.
Potential. But I'm sorry to say
you have not covered yourself
-with too much credibility here today.
-I appreciate that.
So I cannot invest in you.
-And for that reason, I'm going to say I'm out.
-And I didn't mean to be misleading. That's something I had no intention...
If you can't come here and prepare yourself for the interrogation that you know you would get...
If you're looking at anybody to invest,
they would be asking for this information.
So why wasn't you prepared?
-And secondly, how do you hope to grow your business
if you can't even motivate yourself to do what should've been the biggest pitch of your life?
How on earth do you expect anybody to invest in you,
your product or this company?
You would make my foot itch.
I'm sorry, Alan, it just doesn't go. I'm out.
'Two more Dragons out, and Alan's changes of investment are looking slim.
'Will Duncan Bannatyne throw him the financial lifeline he badly needs?'
I think you would be such hard work, Alan,
I just can't understand how you work.
And so for that reason and that reason only, I've got to say I'm out.
Alan, "Have you got a business that could be invested in?" is the bottom line.
And I think there lies the biggest issue.
It is still a quagmire. And I think the only major mistake that you've made,
and you're going to regret this, is not knowing your core business
as well as perhaps you should.
I can't invest in you. I'm out.
'A devastating end for Alan. It was a shaky start and his pitch never gained momentum.
'He leaves with nothing.'
I walked up the stairs and immediately when I was up there,
all what I had in my head to talk about went.
We barely touched the products that I brought to show them and hoped that they'd invest in.
And I came away feeling a complete idiot.
'The higher the investment an entrepreneur demands,
'the greater the scrutiny they must expect, because it's the Dragons' own money that's being put at risk.
'So when Londoner Jonathan Caplan asked for a £275,000 stake
'in a new poker console, he was on the receiving end of some tough questioning.'
Our flagship product is the wireless poker controller.
It's a handheld joystick that enables you to play the poker game in a faster,
more accurate and more efficient manner. We've currently sold 10,000 to date
and the product is currently being used in over 25 countries worldwide.
'It was an assured pitch from the entrepreneur.'
-Can I use it?
'And enthusiastic poker player Duncan Bannatyne enjoyed the demonstration.'
-Is this a real game?
-It's a real game, real money.
-This is real?
You can do everything from the controller. If I turn my finger, the bet goes up and down.
OK, we want a flush. OK, I've lost. OK.
'But then the business interrogation commenced.'
-Jonathan, what did you do before you did this?
-I decided to go and start my own company.
It was an online gaming company, but it took the aspects of what the poker rooms do and...
-How much money was invested in that company?
You got £4.8 million worth of investment?
-And how much of that company did you own?
-Er, about 14 percent.
-What happened to that company?
-As I started the company, I raised the majority of the first money...
-What happened to it?
-At the point that I took the company to, it was successful.
-What happened to it?
-I left before...
-Where is that 14 percent today?
-They liquidated the company a year ago.
'In the end, it was Theo Paphitis who summed up the mood in the den.'
Jonathan, your previous track record shows that I'm likely to lose my money.
I appreciate I don't have amazing successes to show where I have returns on investment...
-With all due respect, you have no successes to show.
I reckon the odds probably are better just to go to a casino
and put £275,000 on red or black.
-OK. Thank you for your time.
'So far tonight, the entrepreneurs have failed to convince the Dragons to part with their cash.'
You would make my foot itch. I'm out.
'To find out what our newest Dragon, Hilary Devey, makes of her experience so far in the den,
'press the red button at the end of the programme.'
29-year-old London-based twins Polly and Charlotte Vickery
are experienced in the fashion sector and they've recently launched their own range.
But to expand, their company needs investment, and that's where the Dragons come in.
Will they see potential in these two young entrepreneurs?
Hi, Dragons. My name's Polly and this is my sister and business partner Charlotte,
and we're here today to ask you for £65,000 worth of investment
for 20 percent of our company.
Since Brat & Suzie launched, we have established a reputation
for our unique, hand-drawn, illustrated animal T-shirts and tops.
-Our customers are... Sorry.
-15 to 35-year-olds.
We work with different illustrators to create our one-off, quirky prints
and we follow the trends.
We've had great press. We've been in magazines such as Closer,
Look, Company and Cosmopolitan
and we're also loved by girl band The Saturdays.
Since starting trading in 2009,
we are now in 60 stores as well as a major high-street department store.
Thank you for listening. We'd now like to invite any questions.
'A bright pitch from East London twins Polly and Charlotte Vickery.
'In return for a 20 percent stake in their online and high-street fashion label,
'they need a £65,000 cash injection.'
-I notice a few people have got a horse. You've given me a pig.
-We thought it was rock 'n' roll.
'Retail fashion expert Theo Paphitis
'is first to question the young entrepreneurs.'
Guys, hello, I'm Theo.
How many pieces in the range?
-Is that normal?
-No. Our autumn/winter range is a lot bigger.
-Give me numbers.
-And up to this stage,
-you've just been T-shirts?
OK. So what makes you comfortable about moving into other products? I assume it's dresses?
-Well, most of our customers have asked us for different products.
-They want to see a full range.
And also, I think, with our previous experience dealing with factories,
we know all the problems that can go wrong.
-We've dealt with that.
-We're quite comfortable with how to move forward.
What sort of margin are you achieving?
-Gross profit is 41 percent.
And net profit is 15 percent.
A typical order will be how much presold and how much for stock?
Probably 80 percent presold
-and then maybe 10 to 20 percent stock.
-So you're not being that adventurous.
Well, cash flow, isn't it? So we have to be careful.
'Targeted questioning and detailed responses. It's a good start for the duo.
'But what of the brand itself? Duncan Bannatyne wants to know.'
-Erm, Brat & Suzie.
-Where did the name come from?
-We had two cats when we were little and they were called Brat and Suzie.
-And we really loved them.
-And that became the name of your business.
-When was the company formed?
-Two years ago.
-Two years ago?
-And what was the turnover for the first year?
We made 9,000 net profit.
-And the second year?
And we made 15,000.
When you say you're in stores, what kind of stores?
-Independents or chains?
-Independents and then Joy and also House Of Fraser.
-What did you do before?
-I used to work in production at River Island,
-my background is fashion production.
-And I was a designer at Miss Selfridge
and I've worked for high-street suppliers as a designer.
'The confident fashion twins are going down well in the den.
'But Peter Jones thinks he's spotted a flaw in their business model.'
Your gross margin seems to be very low.
-Yeah, we're working on that.
Because we don't have the larger orders,
we're still paying quite a high cost price for our T-shirts.
But once we get larger orders,
we'll be able to negotiate better prices with our factories.
The second issue is the copycats. Cos it means you've got to continue to innovate
-and come up with new designs.
-I think with our design, especially Charlotte's design background,
we're always moving with the trends anyway,
so we won't have things on the rails, hopefully, for too long.
-We'll have new things coming in.
-And we do have loyal customers and we're selling it on our personalities.
And the high street are always going to copy something.
-So, Polly, Charlotte, hi, I'm Deborah.
-What are you paying for your illustrations?
-We pay... It's quite small.
-We pay £20 to each illustrator.
We blog about them and we help them out as much...
-So they see it as a way of getting their illustrations around.
-I think it's great.
-I love the illustrations.
-BOTH: Thank you.
-But I don't see this
as a strongly-branded clothing range. I know you'll say it's your illustrations,
but as Peter said, it's quite easy to find another illustrator and print on a T-shirt.
So to turn this into a real, "That's brand Suzie,"
-you need to come up with something a lot stronger.
You've got a good eye, you've got a good turnover, you're in some good shops,
just keep going at it. But it isn't yet a strong brand. Hone that down so it's got a look.
-For that reason, I won't be investing. I'm out.
-BOTH: Thank you.
'A first blow to the duo's investment hopes.
'But four Dragons still remain.
'Will retail expert Theo Paphitis take a different view?'
I love seeing new designers.
I love people who bring out new ranges.
It's like the life blood of the industry. But I've got to agree with Deborah. I'm looking...
I think, though, with investment and with going forward, with more time to expand on the range...
Look. Your margins are rubbish.
You need to be able to work a lot sharper than that.
You won't be able to do that without substantially bigger volumes. So for a long time,
unless you are actually able to get big orders from the multiples,
you're not going to be able to work those margins down.
That, necessarily, is not the end of the world.
Problem is, the name's great but there's no overriding brand yet.
I think we're close. I think with the magazine coverage, as well, that we've had,
because it's really hard to reflect the brand just on a rail, here, now.
-No, it's not. I'm sorry. Remember, that's what you've got.
-That is you.
-And that rail has to represent you and your brand.
-So I'm out, but real good luck from me.
-BOTH: Thank you.
Charlotte, Polly, you know, the fact is, you're in the industry.
I'm not. So there's not really anything I can add to your company.
-I can't really bring you any expertise to help you sell your product. So I'm out.
-I invested in the den in a business with Victoria McGrane called Neurotica.
We're right in talks at the moment about actually having to go in and invest more money today,
purely on the basis of the fact that as she scaled her business,
-she can't fulfil the orders...
-..without a fair amount of cash.
-It's a capital-intensive business.
-It's not something I can invest in so I'm out.
'Three Dragons walk away from the deal
'and the crest-fallen twins have just one opportunity left.
'Can Hilary Devey find a reason to invest?'
So, it just leaves me. I've had experience in the rag trade.
And I know how difficult a market it is.
-But it's so much fun working in the rag trade.
-I know so many companies that have gone under.
Come back, go under, come back, so many brands that were top of the...
But we are sensible. We're not going to do anything irrational.
I can't think of any other sector that's more high risk
in every possible facet.
Down from production, to the logistics of it,
to the manufacturing, to the sourcing of the garment, to the retailing of the garment,
-to getting it there in time, you know...
-That's all part of the fun.
Well, it's part of the fun if you're doing it with my money.
-But it's not part of the fun if it is my money.
-Agreed. But we...
-I mean, what is your vision?
We want to get into doing denim, accessories and outerwear, maybe have a shop, and then...
Oh, God. I was hoping you wouldn't say that.
I don't think we do want to have a shop. That's her idea.
-Don't listen to her.
-Don't listen to me.
-I don't think we should have a shop.
My heart is saying "I'd really love to work with you, it would be fantastic fun."
I'm really into fashion. I love it. But my head, commercially, is saying "Wow, Hilary. No! No! No!"
-But you're both clearly very, very talented girls.
-BOTH: Thank you.
-So I'm out.
'Polly and Charlotte charmed the Dragons,
'but couldn't convince them there was a big enough financial future for their business.
-'They leave with nothing.'
-Amazing. All of us really liked them. But they didn't get investment.
They're not going to be a success this time round. We all recognise that.
-They only need one bad order and they're finished.
'Other entrepreneurs who tried and failed in the den included Michelle Smith from Dorset.
'She needed £80,000 for her aptly-named motorbike accessory
'that gives pillion passengers a more secure ride.'
StickiButt is a two-part harness system that stops a person from sliding whilst seated.
Part one is the harness, which is worn by the individual.
The second part is a seatbelt that fits on the motorcycle.
'In the absence of a test track...'
-You're welcome to try and destroy it.
-Don't tempt me.
'..the innovative entrepreneur had an unusual method of demonstrating her product.'
-Can you do it with no hands?
'But whereas The Den-Destroyer couldn't fault her invention,
'the remaining Dragons did destroy Michelle's hopes of investment.'
You're dealing with such a niche market that it isn't a business.
You may sell a few, but I don't think
it's going to keep you in luxury or even comfort. So I'm out.
'David Baker from West Sussex wanted £150,000 for just ten percent
'of his modern take on a layout originally patented back in 1878.'
I've been developing a new style of keyboard for these screens.
They use a triangular key. This helps to stop hitting two keys at the same time.
'One multi-millionaire gave a rare glimpse of what he gets up to in his spare time.'
-How many do you think you can sell?
-Well, can you name a popular App? Any one.
-44 million on the iPhone alone.
I don't think you can compare that with Angry Birds.
Not only have we downloaded Angry Birds, we've downloaded Angry Birds Christmas Special, Easter,
-Angry Birds Guy Fawkes Night.
-There's so many.
'But it was an angry Dragon who marked the end of David's time in the den.'
You stand in front of a group of people who could change your life overnight.
You come in here and you say, "I value this at 1.5 million,
"although I've only got £1,200 of turnover."
Well, if you would like to, sort of, put forward what you deem to be a better offer...
Listen, I wouldn't give you £150,000 for 100 percent of it at the moment!
-And therefore, the next two words that come out of my mouth are...
Didn't even need a predictive text.
Entrepreneurs often have ideas for businesses from their own hobbies.
Former fireman Andy Bates from Suffolk turned his passion for motor racing into his own company.
Now he wants a Dragon on board to help bring his latest development to market.
My name is Andy Bates and I'm here today to ask you for an investment of £50,000
for ten percent of the equity in my company, AB Performance Ltd.
I set the company up after a high-speed racing accident effectively ended my racing career,
and my Fire Service career of 24 years.
During some long, enforced days in hospital, I had time to consider the future.
The area that interested me was motorsport.
At the same time, British motor racing circuit owners were throwing their doors open to the public.
Anyone could take to the track in the car of their choice.
It became obvious to me that the bike-powered car had a large part to play in all of this.
Relatively low build costs, and the ability to out-accelerate, out-brake
and out-turn many factory supercars costing ten times the amount.
So, first came my engine business.
Sourcing, supplying, importing, stripping,
rebuilding and tuning superbike engines specifically for use in cars.
The next logical step was Sabre. Take all of the information and produce our own factory supercar.
Sabre, at its first race this year, went from position 26 to position two in 18 laps.
Thank you very much for your time and I'd like to open the floor to questions now.
-Can I have a look?
'An eye-catching pitch from automobile enthusiast Andy Bates.
'He's hoping that by having two sides to his business,
'manufacturing racing cars, as well as servicing the motorbike engines,
'he'll tempt the Dragons to invest £50,000 for a ten percent stake.
'Something seems to have intrigued Duncan Bannatyne.'
Andy, tell me a little bit more about your accident.
Erm, I basically ran out of talent.
I made a mistake one day and hit the wall at Oulton very, very fast. I broke my spine in four place,
-and basically shattered my right knee.
-How long did it take you to recover?
-About two years.
-And when you were racing, was it part-time and you were also a full-time fireman?
When I then went back, I had to prove that I was physically fit enough to do the operational side of the job.
I knew the damage to my right knee was the big problem.
So I basically went out on ill-health in the end.
-This business came as a change I wasn't expecting.
I'd worked for the Fire Service for so long, I think you start thinking,
"Cos I've done this for so long, it's all I can do."
I had to find something and the only thing I knew how to do was motorsport.
'A compelling story from the passionate entrepreneur. But what of his company?
'Theo Paphitis is next to cross-examine the Suffolk-based race engineer.'
-Andy. I'm Theo.
-Pleased to meet you.
Before I get to the serious questions,
what's its 0 to 60, 0 to 100?
-Probably around about 3.6 to 3.8 second mark.
-OK. That's the 60?
-OK. You haven't given me a price.
To give you an example, this car here retailed at £25,000.
-What chassis have you got them on?
-We make our own.
You said the investment is to go into your main holding company.
-How long have you had that, and what's the numbers on that?
If I can give you the background that led to where I am now. Five years trading as a sole trader,
during which time, total turnover
of which I generated £67,000 net profit.
I didn't see the profits I should've because I ploughed it into this project.
This year, I changed the company to a limited company,
I've got fixed assets of about £120,000,
-and I've got work in progress in the unit valued at £15,000 at the moment.
What do you think I, or any of the other Dragons,
can add to your business?
Er, if I'm totally honest with you, I have a very, very high understanding of this,
of this, the mechanics of all of this. The business lessons have come hard and fast,
I was never a businessman. I know I can make money doing it.
What I am looking at now is getting somebody on board who has an interest in the company,
and helping me push it to what I know the next level is.
'Fluent and articulate responses. The Dragons have certainly warmed to Andy.
'Now Peter Jones wants to drill down into the company financials.'
Hi, Andy, I'm Peter. Erm, compelling pitch from a visual perspective.
I love cars. You're taking a passion, a love.
The reality is now you're getting to a stage where,
"How do I turn this into some sort of business that is going to give me a bit of a future?"
You know, where could this go?
-Where is the money?
-My projections are as follows. I've assumed ten percent growth,
I've based it on the sale of two cars in year one,
five cars in year two...
-Give me a profit number.
-The first four months of the year are usually quietest.
-I've had my best four months of trading this year.
So I think we will turnover £200,000 this year
-and I will make £40,000 net profit. Year two...
-Hang on, hang on!
You sell the cars at £25,000 each. You're only going to sell two. That's £50,000.
-Where's the other £150,000 coming from?
-From the rest of the business, it's investment in the whole company.
So where's the rest of the business, in terms of that profit, that 150K?
I've already turned over 60,000 in the first four months of this year.
-And what else do you do?
-Servicing, tuning, rebuilds of cars that have crashed.
Anything to do with racing, driving bike-engine cars, we do at AB Performance.
'A quick-fire exchange
'and Andy seems as knowledgeable about his numbers as he is with his engines.
'But he is yet to receive an offer.
'Has Hilary Devey heard enough to part with £50,000?'
Have you thought of any other markets for this?
Yes. I've got a chap in America
who's been asking questions about, "What are we doing with the car? Could we get one?"
A guy in Switzerland has enquired about it,
but it's not cast in stone, and I wouldn't dare say, "Look, we've got a marketplace."
I'm struggling to find a bigger market than what you're currently looking at.
-I mean, they can't be used as a road car, can they?
-Yes, you could have this car on the road.
As long as we comply with emissions, the position of the lights.
-This one's too low. We'd have to jack this up a bit.
-How safe is it?
We have an issue with the fact that we've got to make the bodywork lighter,
I wouldn't compromise the chassis. It's a fully-triangulated chassis. The side...
You've lost me now. I haven't got the slightest clue what you're talking about.
It's not really my market, and what worries me more is what could I bring to you.
-Thank you very much.
'Andy's impressive run comes to an end, as Hilary Devey fails to spot money-making potential.
'Will Deborah Meaden find a reason to invest?"
How many of this type of car will be in existence right now?
Right now, there's no way of putting a number on the bike-engine cars that are used on the road.
Race series, there are probably
400 or 500 serious race cars
with bike engines that I'm aware of. I think it's a market that will increase.
I've got to say, you come across really well,
but the trouble is, you haven't been able to show a clear way
to make money with this car. So, I'm sorry, for that reason, I'm out.
Thank you for your time, I appreciate it.
You sound great, you're having a ball.
You're looking for a partner, not just a financial partner,
you're looking for a pretty hands-on partner.
I'd have to be spending more time with you and your business than I spend on my own business.
-So I'm going to wish you the best of luck, I'm out.
'Two more Dragons walk away from the deal.
'But has Peter Jones spotted an opportunity where his rivals have not?'
Andy. I love your honesty.
And you've been very straight in terms of how you got to this stage.
But it's a pretty limited market, so you're going to need a lot of time, or at least...
..a lot of effort in turning what you've currently got and making it into a business.
And I think that makes it, unfortunately, a very difficult decision for anybody to invest.
That's where it kind of falls down.
But it also falls up, in terms of...
..I've got some thoughts, of what could be done, and...
..I am annoyingly into cars,
and I'm not being blinded by it,
but I have got some ideas.
So, I've decided to make you an offer...
..for all of the money.
But in return, I want 35 percent of your business.
'A dramatic about-turn and Andy's thrown a financial lifeline.
'But Peter Jones is demanding three-and-a-half times the equity originally on offer.
'With one more Dragon remaining, can the likeable entrepreneur negotiate himself a better deal?'
Andy. I'm really surprised that Peter made you an offer
without getting a second and third years' turnover and profits.
-So what are they?
-Second year was £300,000,
-net profit at £60,000.
And year three, £500,000 turnover, with a net profit of £100,000.
So I am going to make you an offer.
But I want a higher percentage.
I'll offer you £50,000,
but I want 50 percent of the business.
But, you reach those projections over the next three years
and I'll reduce that to 25 percent.
Sorry. I wasn't expecting to have one offer, let alone two on the table.
I think I'd like to take your offer, Peter.
-Thank you very much. Appreciate it.
-Well done. Fantastic!
-'Andy has done it! The investment comes at a price,
'but he walks away with the backing of a passionate and influential Dragon on board.'
Well, Andy, well done! Tell me why you took Peter's offer rather than Duncan's,
cos Duncan's could have been better if you met all your targets.
Well, I did some research going in, knew Peter's interest in motorsport.
I think for what we need, you need passion,
and I wanted Peter on board, really, to drive the project.
So the offer was a bit tighter, but I think he's the man we needed in place.
They say that perseverance pays, and it certainly has for Andy Bates.
Five years of hard graft building up his business,
and he had two multi-millionaire investors vying for a share in his company.
To hear more from the entrepreneurs about their time in the den, press the red button now.
You can also visit our website, bbc.co.uk/dragonsden
'Next time on Dragons' Den.'
-A fatality has happened in the den.
-How much money have you put into this business?
-Oh, my God!
You can see it going, "Tweeky-weeky-weeky-whoo!"
Shouldn't you have investigated why your turnover's growing
-but your profitability's remaining static?
I like the product. I'll make you an offer.
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