The Dragons’ Den - script
These are the dragons – five multimillionaire investor on their way to the den. There they will once again make or break the business dreams of dozens of budding entrepreneurs.
‘I think you need to wake up and be a realist and listen to what people are telling you.’
‘It’s just almost impossible to assess whether or not you can make it profitable.’
‘You’ve actually given me nothing to actually hang my financial hat on.’
‘You are saying to me that my brand is twice as good than even IBM.’
‘Just hold on a second so I can say I’m out.’
The dragons know what they’re talking about. Now five of Britain’s most enterprising and wealthy business people, they build up their fortunes from scratch.
James Kahn made his millions creating a global business in the recruitment industry. He now heads a private equity firm.
Glaswegian entrepreneur Duncan Ballentyne’s 310 million pound business empire includes hotels, casinos and health clubs.
Deborah Meaden earned her fortune in the hotel and leisure industry in the West Country.
Theo Pathetis is a retail magnate who has transformed the fortunes of high street brands like Ryman, Lasenza, Partners and Contessa.
Peter Jones has built up a multi-million pound empire with a business portfolio that ranges from telecom and leisure to property and media.
In the den, the dragons are ready to back the right businesses with their own money, but tonight will anyone convince them to invest?
Welcome to the Dragons’ Den, where once again cash hungry entrepreneurs are preparing to face the fearsome dragons, all hoping to convince them that their business ideas are worth millions.They’ll face tough questioning but if our multi-millionaire dragons see a money-making opportunity, any of the entrepreneurs could walk away with the money they need and an investment deal that could change their lives.
2:25
Leslie-Anne Simmons from Dorset is first into the den. She’s already sold over 20 franchises and now hopes the dragons will invest a hundred thousand pounds.
3:02
‘Hi, my name is Leslie-Anne Simmons and my company is called Shoes Galore Limited. I’m here today to ask the Dragons for an investment of a hundred thousand pounds for thirty per cent of my company.
‘Shoes Galore is a mobile shoe company selling shoes, bags, belts and accessories mainly by party plan, inter-corporates and other such events.
‘Our shoe styles come in a minimum of four colours, so unlike the high street, where you will get blacks, browns and a few colours, with Shoes Galore, you get an array of colours. We have pinks, oranges, blues, yellows, purples, and the party plan shopping experience - women with shoes with their girlfriends, a glass of wine – it’s like a feeding frenzy, it’s totally orgasmic, forget Sex in the City, we’ve got shoes in the city.
‘I launched the company in April 2007, and since launching I now have 21 franchisees from Glasgow down to Exeter selling shoes, bags and belts, mainly by party plan. It enables my franchisees to work around their family commitments without expensive childcare costs. I believe that Shoes Galore is a unique investment opportunity and I open the questions from the Dragons.’
‘I’m going to go and have a look.’
‘Yeah, no please do.’
Leslie-Anne Simmons’s colourful shoes display has lured Deborah Meaden into a closer inspection.
‘Quite comfy actually. They\re too big for me but quite comfy.’
But will a 30 per cent stake in her Shoes Galore party plan franchise be enough to tempt one of the dragons to part with 100,000 pounds of their own cash?
‘Leslie, hello. I’m Peter.’
‘Hello, Peter.’
[Laughter] [inaudible]
‘I’m shaking a bit. Hello, Peter.’
‘Are you a bit nervous?’
‘I’m just a little bit nervous.’
‘It looks like, strangely, walking into my partner, Tara’s closet.’
‘Excellent. Because women love shoes.’
‘A lot of shoes.’
‘A lot of shoes. And the one thing that we don’t have in the UK, is that we don’t have a selection of colours.
If you go to Italy or Spain, or Europe, and you go into any of the boutiquesor any of the shoe shops, you get an array of colours.’
‘OK. Let’s talk about the business. You’ve got 21 franchisees and you’ve had that now going for 12 months.
‘Yeah.’
‘How much, to become a franchisee, would you have to pay?’
‘We have three packages. Our start-up package is 3,900 pounds.’
‘So how successful has it been? What’s the numbers?’
‘For the first year, I turned over 196,000. My gross profit was 126,000, and my net profit for that year was 6K.’
‘Can I have a look?’
‘Yes, certainly.’
Leslie-Anne’s bubbly pitch seems to be underpinned by healthy sales. James Kahn is interested in hearing more detail.
‘Leslie-Anne, hi, James.’
‘Hello, James.’
‘Hi. What’s your projections, Leslie-Anne, going forward?’
‘I knew you were going to ask this?’
‘If I were to invest in this, urm, what sort of returns are you forecasting?’
‘In year one, we would be looking at 330,000 in total sales.’
‘And year two?’
‘Year two – 700,000.
‘And the last year, year three?’
‘The big one million.’
‘Ah. Are these the kind of numbers you know, we just take from the sky?’
‘No, not at all…’
‘I’m sure there’s a lot of science to it…’
‘There is…’
‘OK so what sort of profits is the business forecast to make?’
‘Gross profit of 60; net profit of 20.’
‘In year one?’
‘In year one.’
‘If I was to invest a hundred grand, that’s not kind of that exciting, is it?’
‘No, but I think I’m being quite cautious with the number of franchisees that will grow with the business, ‘cause as you know every franchisees, it’s the first couple of years to get it moving. I think I’ve done exceptionally well to get 21 franchisees signed up in the period that I’ve done. It shows that there is a strong market for what Shoes Galore offers. There’s a lot of women out there that would jump at this opportunity.’
Despite projecting low net profits initially, Leslie-Anne is confident in the market potential of her business. Now, retail guru Theo Pathetis wants to know how she plans to use any investment.
‘If I decide to part with 100,000 pounds…’
‘Yes, please…’
‘…of my lovely kiddies’ inheritance…’
‘I’ve heard that one before…’
‘You’ve heard that one…’
‘You’ve used that time and time again…’
‘What is it… what is it that you would do with it?’
‘A hundred thousand pounds would be… sixteen thousand pounds extra would go into finding a full-time wholesale person in our warehouse.’
‘Staff.’
‘Staff. Twenty-four thousand on marketing.’
‘And ten thousand for travel trips because I think that I’m missing out on not going to some of the big shows over in the Far East.’
‘Uh-ha.’
‘And 50,000 to put into stock.’
‘And how much stock are you holding at the moment?’
‘Sixty-five thousand pounds.’
‘Sorry, how much?’
‘Sixty-five thousand pounds.’
‘How much of that stock is…’
‘..current good, and how much is old?’
‘I think about forty thousand is current good, and the rest is…is dead stock.’
‘Twenty-five thousand old stock?’
‘Yes.’
Leslie-Anne’s rainbow range of shoes might make her distinct from her competition, but it’s alerted Theo Pathetis to a potential problem with her holding of stock.
‘Let me just help you, Leslie.’
‘OK.’
‘An old retailer once said to me, old stock doesn’t get more valuable.’
‘No, it gets less valuable.’
‘The longer you keep it…. it doesn’t get more valuable. Your first loss is your best loss. Holding old stock, you’re paying rent, rates, lighting, heating to store it.’
‘I totally agree.’
‘That’s why stores have sales. I’m so desperately trying to find ways of backing you…’
‘Please.’
‘…and I’m failing. And the thing that’s just bought it home to me is…knocking out some of my numbers. One size, one colour is a stock keeping unit.’
‘Yeah.’
‘So, if you’ve got five colours…’
‘Yup.’
‘…and seven sizes, now we’re talking 35 SKUs…on a range. And you’ve got 20 franchisees. That’s seven hundred pairs of shoes. Your stockholding…the more franchisees you get… to be able to service them, is going to go bananas! You’re going to be eating up cash so very quickly, I’d ask you to sit down and do some projections on this, because you could end up thinking you’re doing really well, and without realizing, you end up overtrading, and you won’t be able to carry on.’
‘OK’
‘So I’m afraid for those reasons, I’m out.’
‘OK. Thank you.’
‘It’s a well-meant warning but a stern one. If Leslie carries on expanding as quickly as she hopes, she’ll have to commit more and more money up front, just to maintain the variety of her range. This will be spent before she’s able to recoup any cash from selling shoes. It could easily mean she runs out of money. It’s cost her one dragon, now Duncan Ballantyne is ready to have his say.’