Here Be Dragons!
If you get the opportunity to make a pitch on the TV show Dragons' Den or to any other investor, you certainly have a challenge on your hands.
As you will know if you have watched Dragons' Den, a lot of those business owners making a pitch fail to get the funding they want. This is not surprising given that, time after time, they arrive ill prepared, give an uninspriring presentation and are unable to answer some of the most basic questions put to them.
So where do the hopefuls on Dragons' Den go wrong? Almost everyone, it seems, struggles with one or more of the following:
- Vague about the financials
- Over-valuation of business in the longer term
- Potential market too small or even non-existent (i.e. no customers)
- Weak business plan with unrealistic targets
- Useless or unnecessary products/services
- Having a dream rather than a viable business
- Not having answers at their fingertips or on backup notes
- Insufficent research
- Lack of confidence in delivering the pitch
But it's not that difficult to know what questions you are likely to be asked. Just watch the show a few times, all the most important questions are asked in each episode. The real challenge is to give clear and complete answers. You also need to be honest with yourself as much as the investors. Many pitchers will answer in a way that doesn't quite match reality. Or they'll try to avoid the tough questions altogether by talking about the more positive aspects of the business instead.
Whether you're visiting the Dragons' Den or negotiating with any other investors you need to able to give clear and believable answers to important questions such as:
What is your background and the history of the business?
What are the last 3 years financial results and the current balance sheet figures?
What problem does the product/service solve?
Who has that problem and is also willing to pay for the solution?
How will customers be encouraged to buy product (or even know it exists)?
What does it cost to provide that product?
How will you grow the business over the next 2 or 3 years?
Is it worth the effort and risk?
How will you use the money invested?
How will the Dragons get their money back and what further potential is there?
Taming The Dragons
If youre lucky (or unlucky) enough to get on to Dragons' Den or have other investors lined up you need to create a good impression and provide the information they need. This will give them confidence in your abilities to run and grow your business.
Using my Plan Review service and asking key questions that an investor is likely to ask I can probe more deeply into the details of your proposal. I can help you identify strengths that you can emphasise and highlight any weaknesses you will need to address. I can also help you rehearse and give feedback on your pitch.
For more information please call me, David, on 07726 910542 for a free initial chat about what you are planning to do.
Updated 18/04/2017 DB