The BBC's Dragons' Den has become somewhat of a TV phenomenon in the UK since its inception in 2005. It sees entrepreneurs from across the country seeking investment in new and growing businesses from a panel of expert business minds, leading to a huge number of opportunities for small businesses and big-money deals for those more established. Having originated in Japan, the series' success in the UK has recently led to its arrival on US television, under the name Shark Tank.
The show's global appeal lies in its real-world relevance- businesses live and die by the decisions made by those in charge of them, and Dragons' Den gives its viewers the chance to see real businesspeople making real mistakes. There are many qualities needed by those who hope to avoid such mistakes, survive their trip into the Den, and leave with an investment. Here are ten tips that can lead to another one on the list of entrepreneurial success stories to leave the Den.
Present Businesses, Not Ideas
Don't present the Dragons with an idea and expect them to turn it into a business. They will only invest in businesses with the potential for growth and a return on their investment, and will not appreciate those entrepreneurs who expect the Dragons to do their work for them.
Encourage Investment, Not Gambling
The Dragons only put money into areas where they expect to earn on their investment, not areas where they may earn on their investment if circumstances fall in their favour. Those entrepreneurs presenting them with speculative gambles will not receive an investment, such as poker player JJ Hazan.
Make A Good Sales Pitch
This is a simple one- sales pitches should be confident, well-rehearsed, clear and concise. Nervous or vague pitches never receive an investment.
Do Plenty Of Market Research
Every business or product, by nature, is involved in a market. Whether it is a new market, a growing market or an established market, each entrepreneur entering the Den must understand their market and position their business accordingly. This leads into the next tip...
Focus On Unique Selling Points
Make sure the Dragons are aware of the one quality that separates a business or product from the rest of the market, that one competitive advantage that will ensure success. Market awareness can help a business to develop unique selling points and marketing plans that can contribute greatly to future success.
Demonstrate The Product
Obviously this one only applies to certain businesses, but if possible, demonstrate the product to the Dragons and show them how it works. If they can relate a problem-solving product to their own lives such as Deborah Meaden did with the Anyway Spray, it can be a massive advantage.
Get The Patents
Many entrepreneurs enter the Den with doubts over patents on their products. This is a mistake, and will always lead to hesitation among the Dragons. Patents on new products must be secured, for those who have any hope of gaining an investment.
Develop A Business Plan
The Dragons will always want to know what any entrepreneur is going to do with their money, whether it comes during the televised show or afterward. Many deals fall apart once the show goes off the air because the Dragons are disappointed with the entrepreneur's business plan- get one in place before the investment is obtained, and set the Dragons' minds at ease.
Value The Business Correctly
Don't overvalue a business or product. The Dragons will know if a business is overvalued, and will lose respect for the entrepreneur's business acumen as a result. Equally, don't undervalue- present a realistic valuation of the potential gains from an investment, and the Dragons will listen.
Be Truthful
This is the last and most important piece of advice that can be gleaned from watching the show. Too many entrepreneurs omit facts, lie about their numbers, or otherwise attempt to deceive the Dragons- this will never lead to an investment, and the Dragons will find out sooner or later. Don't do it.
Follow these tips, and use the experiences of past entrants into the Den as a guide- mistakes have been made and businesses have suffered in the Den, but with careful planning and preparation, any strong, profitable business can receive an investment.
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