Use the links in the panel below to navigate to the last four articles in
the series
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You must conquer your fears, and that means knowing your venture inside out
Theo Paphitis began his career at the age of 16 as a tea boy with Lloyd’s
of London insurance brokers. After gaining experience in retailing and
finance he started his own company at the age of 23 and since then has
specialised in buying up and turning round ailing companies, including the
stationer Ryman and the Contessa and La Senza lingerie chains. He recently
bought 61 Stationery Box stores. Paphitis is one of the dragons in BBC2’s
Dragons’ Den. In the last part of his series, he looks at how to find an
investor
So you agree to go on Dragons’ Den and all you have to do is turn up armed
with bags of confidence and your three-minute pitch, which you have had
weeks to practise.
You know you will have to answer basic questions about your business, which,
of course, you know inside out and from top to bottom because you are living
and breathing it every minute of every day. You then say “thank you” to the
dragons, shake hands with those who agreed to give you the money you wanted
and toddle off with your arms full of cash and bask in the glory of the five
minutes of fame on television that has made you an instant celebrity. How
hard can that be?
Well, actually, it is very hard indeed, because I never cease to be amazed by
the number of people who turn up and fail to deliver the basic requirements.
Viewers are constantly asking me questions like “what was that person doing
on the programme without knowing their numbers?” Or “what the hell was that
person doing without knowing their subject?”
They think it’s ridiculous for someone to turn up in the den appearing badly
prepared and looking like they have so little knowledge. But let me tell you
this doesn’t just happen in the den. It happens in day-to-day business —
every day.
Okay, so standing there with the glare of the lights in your face and with the
cameras rolling can be a bit off-putting. But it’s no more off-putting than
when you go and see your bank manager in his expensive office — and he looks
at you rather disdainfully over his half-rimmed glasses. He is just as
likely to ask the same questions as the dragons.
Except for one thing — it’s not his money that he is putting at risk. It’s the
bank’s cash. Let’s not forget that banks are faceless institutions that run
television ads full of people singing and dancing in an attempt to convince
you that all you have to do is turn up and they will supply you with all the
answers to your financial needs.
These are the people that lend you an umbrella when the sun is shining and
take it away when it starts to rain.
That is not how it is done in the Dragons’ Den. The dragons are looking for
exactly the same as any other investor — a good return on their investment.
They are not looking to run your business for you. Nor are they looking to
enter into a deep, lifelong relationship with you. Though, of course, if
your business does start showing signs of big potential then it is likely
that any dragon or investor will want to continue investing for as long as
it takes to turn that potential into a successful business.
In return they are there to support you and be a sounding board for the
fledgling entrepreneur for as long as it takes — as long as they have faith,
of course.
The truth is that pitching a business idea on television is exactly the same
as pitching to a potential investor — and just as nerve-wracking. If you are
not able to convince them that your idea — and just as importantly, you —
are worth investing in, then you will go away empty-handed.
Whether you are pitching on television or in an anonymous meeting room, every
budding entrepreneur must deal with the other factor that may spell the
difference between success and failure — fear.
As television’s greatest entrepreneur of all time, Del Boy Trotter, says: “He
who dares wins, Rodney.”
In business, if you have no fear, you will come a cropper because only fools
rush in where angels fear to tread. Even top-class sportsmen and women have
a built-in fear of failure — it’s what makes them so damn good. And it’s no
different in business.
So the first lesson you need to learn before appearing on Dragons’ Den — or
standing in front of any potential investor — is how to conquer your fears.
The secret is preparation. If you have done your homework and know your
business, there is nothing that is going to come up that you won’t be able
to deal with.
So should we be throwing up our arms in horror about the state of the business
world as would-be entrepreneurs turn up on Dragons’ Den badly prepared? Or
should we just have a wry smile and be thankful — because it means we all
have a chance in business.
