Foodies in The Den (15:5)

I love Dragons’ Den. There, I said it. I know some business folk are a dismissive of the show because it can glamourise the investment process and potentially mislead around the rigor involved in securing funding – but I just love it! You can also accuse the show of sensationalising some of the issues which could literally make or break a young business but we’re all adults here so surely we know what we’re letting ourselves in for?

There are many reasons to love The Den and if it is used correctly it can be the perfect platform to propel a small business to the next level which is a fantastic gift to the small business world. However, I love it for one reason: the business lessons. It’s a marvellous microcosm for the business world and emphasises some of the amazing abilities and frustrating failings of the entrepreneurial world.

I have watched the show all the way through but this series I decided not to be a passive observer and get stuck in to offer my thoughts on any foodie that makes their way passed Evan’s lair in the basement and through those ominous sliding elevator doors. So this series I’m going to pull out some of the business lessons gleaned from any brave foodie to enter The Den. I’d also like to point out that what follows is not a criticism but a critique; even if it goes badly wrong, anyone that demonstrates the stones to go on TV to bare all has my respect!

northernmunkeebites.dragonsdenbkdSeason 15: episode 5

Entrepreneur(s): Adelle Smith

Company: BKD

Elevator Pitch: children’s baking brand with an ethos of fuelling children’s imagination

Asking For: £80k in exchange for 20% equity

What Went Well?

The Product: it’s on trend. Baking and crafting has grown exponentially over the last few years and any activity that brings the family together is bound to resonate with a large audience.

Branding: the products all look fantastic, polished and very clean. It’s easy to see how the range would stand it out in major retailers. It looks premium and fits the premium price point and will certainly offer a point of disruption on shelf versus the beige competition currently on offer in supermarkets.

What Could Have Gone Better?

Subscription Sales: subscription offerings are another rapidly expanding market and brands like Graze have demonstrated that it’s a fantastically effective way to build a brand. However, this entrepreneur failed to capitalise on a potential USP that could support the brand in commanding a premium price point.

‘Strong’ Interest: unfortunately this is a trap that a lot of entrants to The Den fall into. Entrepreneurs are very keen to tell the Dragons which retailers have shown some interest in placing orders; but this isn’t something you can put in the bank. It’s a great encouragement but it’s worthless until the invoice is paid.

What Other Lessons Can We Learn?

Negotiation is a Game: I appreciate that emotions must run high in The Den but Adele’s poker face slipped when Peter Jones made his offer and weakened her negotiation position with both Dragons. I admit that I’d probably get a bit giddy and it must be really difficult not to react on the spot but it’s not a strong stance unless it’s a professional flinch!

Outcome: Success! 35% given to the serial foodie backer Peter Jones!

Would Munkee invest? I wouldn’t usually want to disagree with Peter Jones but did I mention I’m risk averse? The market for baking kits is evolving with the continued success of GBBO but I’m not convinced that the high volume retailers would back a premium offering in a big way. I’m sure this brand will have a lot of success in premium outlets but I’m not sure we’re going to be overcome by a sea of black and white, so I’m out – however I’d love to be wrong!

Northern Munkee.

 

 

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Foodies in The Den (15:3)

I love Dragons’ Den. There, I said it. I know some business folk are a dismissive of the show because it can glamourise the investment process and potentially mislead around the rigor involved in securing funding – but I just love it! You can also accuse the show of sensationalising some of the issues which could literally make or break a young business but we’re all adults here so surely we know what we’re letting ourselves in for?

There are many reasons to love The Den and if it is used correctly it can be the perfect platform to propel a small business to the next level which is a fantastic gift to the small business world. However, I love it for one reason: the business lessons. It’s a marvellous microcosm for the business world and emphasises some of the amazing abilities and frustrating failings of the entrepreneurial world.

I have watched the show all the way through but this series I decided not to be a passive observer and get stuck in to offer my thoughts on any foodie that makes their way passed Evan’s lair in the basement and through those ominous sliding elevator doors. So this series I’m going to pull out some of the business lessons gleaned from any brave foodie to enter The Den. I’d also like to point out that what follows is not a criticism but a critique; even if it goes badly wrong, anyone that demonstrates the stones to go on TV to bare all has my respect!

northernmunkeebites.dragonsdenspicedbyrayeesaSeason 15: episode 3

Entrepreneur(s): Rayeesa Ashgar-Sandy

Company: Spiced by Rayeesa

Elevator Pitch: fresh-frozen curry sauce with low calorie and gluten free curry bases.

Asking For: £75k in exchange for 12% equity

What Went Well?

Family Business: the positive noise in this pitch was down to the individual who came across very well and the family element of the business added a great slice of personality. Passion, persistence and drive are fundamental to demonstrating entrepreneurial spirit.

Health: this is a fundamental trend in this product area and this focus will drive growth. Assuming the product tastes as good as Deborah Meaden asserted then this USP will help to differentiate the product against some of the more established brands in the category.

What Could Have Gone Better?

The Approach: it may sound impressive and it’s something you should be proud of but being approached by Sainsbury’s and Ocado is not something you can bank. I do appreciate that it will give some confidence but I’m afraid it’s just literature.

Lack of Market Understanding: ‘we don’t have competition’ is a terrible thing to say in the food industry and very unlikely to be true. There are very few brands and products that are inexchangeable. Most products bought are bought in favour of something else because the shopper doesn’t have an endless pit of money. In this example the competition is vast and Rayeesa’s product is easily substitutable for an ambient or chilled option.

Retailer Challenge: for me this single point killed the pitch. If retailers don’t get it, it will never sell. They’re absolutely right in that most shoppers in the frozen aisle are not looking to cook, they’re looking for a convenient, full solution which is why there are so few ingredients in freezers. Unfortunately Rayeesa’s vision that retailers would be willing to put a freezer in the ambient fixture is so far detached from reality. This type of initiative would not be completely impossible to secure but I would wager that it would warrant funding into the £millions plus the cost of hardware. Even in what Jenny coined ‘second tier retailers’ I can’t see it becoming a reality and, although COOK have made some headway, it’s a pipe dream.

What Other Lessons Can We Learn?

Know Your Strengths: for me this pitch is a great example of an entrepreneur that has the right behaviours and drivers to be successful. However, it also highlights Rayeesa’s need to seek market specific support and gain experience and insight externally. This is not a criticism. A lot of entrepreneurs become successful because they surround themselves by the right people.

Outcome: No investment today.

Would Munkee invest? No, I’m afraid I’m too risk averse for this one. The market is challenging and I don’t think the product offering is right. However there are a lot of positive aspects of this pitch so with a few tweaks I’m sure they’ll find success.

Northern Munkee.

 

Foodies in The Den (15:2)

I love Dragons’ Den. There, I said it. I know some business folk are a dismissive of the show because it can glamourise the investment process and potentially mislead around the rigor involved in securing funding – but I just love it! You can also accuse the show of sensationalising some of the issues which could literally make or break a young business but we’re all adults here so surely we know what we’re letting ourselves in for?

There are many reasons to love The Den and if it is used correctly it can be the perfect platform to propel a small business to the next level which is a fantastic gift to the small business world. However, I love it for one reason: the business lessons. It’s a marvellous microcosm for the business world and emphasises some of the amazing abilities and frustrating failings of the entrepreneurial world.

I have watched the show all the way through but this series I decided not to be a passive observer and get stuck in to offer my thoughts on any foodie that makes their way passed Evan’s lair in the basement and through those ominous sliding elevator doors. So this series I’m going to pull out some of the business lessons gleaned from any brave foodie to enter The Den. I’d also like to point out that what follows is not a criticism but a critique; even if it goes badly wrong, anyone that demonstrates the stones to go on TV to bare all has my respect!

northernmunkeebites.dragonsdennaturalnutrientsSeason 15: episode 2

Entrepreneur(s): Liam Sheriff and Craig Newbigin

Company: Natural Nutrients UK

Elevator Pitch: high quality supplement brand that offers 100% transparency and doesn’t contain artificial nasties.

Asking For: £100k in exchange for 10% equity

What Went Well?

The Products: not only are the products on trend and relevant but the duo have proliferated sensibly and developed beyond the functional category. This may present some practical issues when working with retailers whose individual buyers may only look after part of their portfolio. However, having a range that differs in volume and margin is a powerful position when managing margin mix.

Reasons to Believe: having Holland & Barrett on board for a business like Natural Nutrients is a massive coup and absolutely the right retailer at this stage. This will have been a fantastic selling point.

Peter Jones’ Empathy: this isn’t something that you can prepare for but this was fundamental to the success of the pitch. The pair were subjected to harsh loan terms to secure previous investment and not many businesses get offered the opportunity to have a business leader support them in improving that situation. How’s that for belief.

What Could Have Gone Better?

The Numbers: margin is an issue that you can’t escape from and this company was walking a tight rope at a really early stage in the business. The retail price point is high and the margin they make is low; it’s a slippery slope from here but not unmanageable.

What Other Lessons Can We Learn?

Maintain Control: Liam Sheriff did a great job in negotiating a way to secure the investment but have an option to maintain more than a 51% share in the business. This will be important to the business going forward and ensures that there is a clear head driving direction. The inability to make a quick decision can be crippling for some small businesses.

Outcome: Success! 40% equity given to Peter Jones and Tej Lalvani with a 5% optional buy back if the business hits 2018 targets.

Would Munkee invest? No, I’m afraid I’m too risk averse for this one. The market is very clustered and dominated by brands backed by huge companies. I’d also have more concern over the terms of the loan and what was agreed in the past, for me that questioned the credibility of the business. However all Dragon’s made an offer so it looks like Munkee may be wrong!

Northern Munkee.

 

Foodies in The Den (15:1)

I love Dragons’ Den. There, I said it. I know some business folk are a dismissive of the show because it can glamourise the investment process and potentially mislead around the rigor involved in securing funding – but I just love it! You can also accuse the show of sensationalising some of the issues which could literally make or break a young business but we’re all adults here so surely we know what we’re letting ourselves in for?

There are many reasons to love The Den and if it is used correctly it can be the perfect platform to propel a small business to the next level which is a fantastic gift to the small business world. However, I love it for one reason: the business lessons. It’s a marvellous microcosm for the business world and emphasises some of the amazing abilities and frustrating failings of the entrepreneurial world.

I have watched the show all the way through but this series I decided not to be a passive observer and get stuck in to offer my thoughts on any foodie that makes their way passed Evan’s lair in the basement and through those ominous sliding elevator doors. So this series I’m going to pull out some of the business lessons gleaned from any brave foodie to enter The Den. I’d also like to point out that what follows is not a criticism but a critique; even if it goes badly wrong, anyone that demonstrates the stones to go on TV to bare all has my respect!

northernmunkeebites.dragonsdencreativenatureSeason 15: episode 1

Entrepreneur(s): Julianne Ponan and Matthew Ford

Company: Creative Nature Superfoods

Elevator Pitch: ranges of free-from snack bars, innovative baking mixes and creative superfoods designed to cater for top 14 allergies

Asking For: £75k in exchange for 5% equity

What Went Well?

Preparation: fail to prepare and all that is key for any business pitch but it is absolutely fundamental when you’re asking someone to believe in you and to part with their money. The entrepreneurs demonstrated a strong knowledge of their own business and also the marketplace which might sound like a basic requirement but is often found wanting.

The business idea: the product ranges couldn’t be more on trend; it’s on-the-go, it’s home baking and it’s superfoods. Winning. Deborah Meaden identified that the freefrom shopper has developed into a shopper that no longer surfs packaging but wants product confidence and assurance and these guys have got it.

Distribution: there’s nothing better for a potential investor to hear than people are already buying your products and there are lots of retailers supporting it. Creative Nature was able to successfully demonstrate that its turnover is generated from a wide range of distribution with some very credible retailers. Although I’m not too sure how Christine Tacon would feel about the confession that the distribution was bought through ‘listing fees’; nevertheless from the entrepreneurs’ point of view this is a very savvy use of seed money.

What Could Have Gone Better?

Owner’s Relationship: the fact that Matthew holds no shares in the business may have come across as a bit of a tongue-in-cheek comment from Peter Jones but the reality is this information did cast a shadow of doubt in The Den. Family businesses are fantastic and there’s nothing more heart-warming than seeing a family business succeed however it does raise some questions from a business perspective. Who really owns the business? Who really runs the business? How integral is Matthew? What happens if he leaves and what’s his incentive to stay? These queries were well handled but these issues will ultimately need clearing up.

Rose-Tinted Forecasting: the ‘£1M contract’ in Co-Op was a bit of a faux pas that the Dragons were bound to pick apart. I completely understand where the numbers have come from, it’s simple science. However, we’re dealing with an art form and forecasting is not that simple. Assuming that a Co-Op store will achieve the same rate of sale as an ASDA is a little naïve; in some product categories ASDA will dwarf Co-Op and vice-versa in others. I do sympathise but a big bold headline like this will get scrutinised and criticised by any savvy investor.

What Other Lessons Can We Learn?

Profit is KING: there’s a cliché in business that sales in vanity and profit is sanity and everyone in the room recognised that Creative Nature’s margins were too tight for comfort. Every business needs to account for scalability and assume some benefits as you scale up however if margins are tight at the early stage of a business that’s a real concern. It’s not unfixable but if you can’t sustain profitability you’re in for a rough ride!

Outcome: Success! 25% equity given to Deborah Meaden with a 5% optional buy back if the business hits 2018 targets.

Would Munkee invest? Yes! Who am I to argue with the Meaden?! Creative Nature has the makings of a great brand and business. It appears like a sound investment and I’m sure there’ll be more than just Co-Op placing new orders.

Northern Munkee.

 

Secrets of Small Business Start-Up Success

Starting up your own business is bloody scary. It’s a huge leap of faith whether you’re jumping in feet first and leaving the relative comfort of employment or you’re living a double life and trying to cultivate your empire in your ‘spare’ time. I have a great deal of respect for anyone that takes that leap. The reason that it’s so scary is that nothing is guaranteed, despite how many of your friends down the pub think you’ve got a great idea. According to smallbusiness.co.uk 40% of small businesses are opened and closed within 5years; that’s bleak. However there is a wealth of support out there for experienced and budding entrepreneurs in the shape of literature, consultants and free government schemes. But how do you sift through all this information and concentrate it to relevant advice? That’s where I’m hoping to help.

Now the first thing to say is that there aren’t any silver bullets when it comes to business advice. I’m not in a position to say: do this one thing and I can guarantee your success. If I could I’d be a very rich man indeed! This advice is based on sifting through a lot of the available information and my own experience; don’t worry it’s presented minus the BS!

So here are my three secrets to small business start-up success:

1. Do Your Homework

northernmunkeebites.foodstars2If, like me, you have a guilty pleasure for BBC’s Dragons’ Den then you’ll be familiar with this line of advice. An uneasy amount of start-up businesses dive into a market which they know very little about but they are full of passion for. Now don’t get me wrong, passion in business is vital but misguided passion can be dangerous. Holidaying in Spain is not a good enough reason to start a business; that’s merely the seed of a business that will form the passion and resilience through the hard times. It should go without saying, but if you’re about to invest a big chunk of time and money into something you need to understand what you’re getting into. You need to understand if it’s a potential business or just a hobby. So my advice is get online, get out there, get abroad, get amongst your friends and family and get clued up!

2. Start-up for Success

I get it. One of the most exciting things about starting a business is buying lots of shiny new things; however my advice is simple: don’t. You may get guidance from some consultants who suggest that you need to be in control of the supply chain to manage your business effectively; for a start-up this is nonsense! If you can maintain quality and efficiency I would always outsource big sections of your supply chain to keep your business lean and nimble at the start to allow flexibility and ease of change. Companies such as FoodStars can provide that flexibility with a platform for start-up businesses in London by offering commercial kitchens for rent in Bethnall Green, Bermondsey, Vauxhall and Shoreditch – go and seek these guys out and save the capital expenditure for expansion plans.

3. Don’t Sell Your Soul for Sales

This point is key: YOU are the best person to sell your products or your business. I know it’s tempting to answer the calls of heavily experienced sales consultants when they sell you the dream of being able to get your product into mass distribution. Unfortunately you’re more likely to find a pot of gold at the end of a rainbow than a good consultant. Even if you do stumble across the world’s best salesman they still won’t sell your business as well as you do. It’s your baby, no one will love it more than you do.

So there you have it: my three secrets of small business start-up success. No silver bullets just sound advice. Enjoy!

Northern Munkee.