The Right Time for Dragons’ Den

In a surprising twist on the show, a pair of entrepreneurs presented their business on Dragons’ Den this past week, and shocked all of the dragons with their pitch:

Do you know how many people coming on this show would beg to have your problem?

Jamie Bailey and Trudie Wiseman of C.R. Plastic Products came on the show asking for a million dollar investment, and their valuation was considered to be fair. After all, their business in creating products from recycled plastics was turning $5 million annually in sales, a considerable sum.

The problem, and the reason for their approach to the dragons, was one that could be tracked back to management. As their main line of products are considered to be seasonal – outdoor chairs – their workload as well reflected that. During the summer months, when their product is used, they found themselves unable to keep up with the volume of orders. In the winter months, the lack of orders had their employees voluntarily moving to a four-day work week to keep the company afloat, with portions of the balance coming from personal funds.

This problem is a result of poor management, since a well managed company will use fluctuations in workload and cashflow that are seasonal to the advantage of the company, and build sufficient reserves of either product or cash to cover the slow months.

While some of the money of the investment would go toward retooling their plant to increase their production capabilities, the dragons felt that what was really needed was a better management team that could handle the seasonal flow. As a result, they pushed a harder bargain, askign for 50% of the company for their investment. Trudie and Jamie did not have an issue with the 50% percent, though they did ask for additional funds for that percentage.

While on the show the agreed deal was for 50% for the million dollar investment, once the lawyers and accountants get talking, it’s quite possible the terms will balance out.

However, what this presentation highlights is the entrepreneur who can really benefit from the show. They were prepared, they made a solid presentation of their product and their business, they knew what they needed, and they didn’t set themselves up to be derided. The publicity would help boost sales, which most businesses would consider to be a good thing, and if they get an investment out of the show, then they’ve won yet again.