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The Dragons Decide

Dragons’ Den Series 10 on BBC Entertainment – what lessons can entrepreneurs take away from episode three?

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13 Horror Limited

  • The entrepreneur:  Andrew Hannon
  • Investment: £50 000 for a 20% share
  • The idea: Andrew describes himself as being in the business of fear. He presents horror experiences through two self-published books of short stories. The first book is The Magic, according to Andrew it takes between 5 and 10 minutes to complete and is ‘terrifying’. The second book The Dare, is done as a group as ‘it’s too scary to do on your own’. It takes one hour to complete.
  • What the Dragons had to say: The Dragons were confused about how the books actually scared people. Reading one of the short stories ensued in fits of the giggles instead of the promised terror. They were also very confused about what the business actually is. It took them a while to come to grasp with what he’s trying to do. They were also unclear as to how they would get a return on their investment and why Andrew even needed the investment, as he had already successfully sold a large number of books. The Dragons weren’t really clear about why Andrew needed the investment when he could clearly grow the business without it. Because they didn’t properly understand the business model, the Dragons felt they could only give money and not advice or market/industry knowledge. It’s important that investors understand the market that you’re operating in as they traditionally offer some sort of mentorship together with the investment. If they don’t understand what they’re investing in, they don’t feel in control. As a result, the Dragons weren’t willing to invest in the business as they didn’t understand what they would be investing in.
  • What he did right: Andrew had a good grasp of his numbers and showed he’d generated a profit by selling 10 000 of his self-published books. He did have a plan to grow his business and generate returns for his investors. He managed to entertain the Dragons and made them laugh.
  • What he did wrong:  The pitch started out with a slightly disturbing role play with someone hidden under the table, who then turned out to be Andrew. It was an unnecessary gimmick, designed to grab attention, but actually only served to confuse the audience. His presentation was confusing because it started out describing a parcel delivery business, which then evolved into his actual business. He didn’t really explain the business idea properly and how it would generate returns.
  • Verdict:  No
  • The lesson:  Have a clearly defined business model that lays out how the investors will see a return. You also need to easily and simply outline your business, plan, revenue model and industry – you want your investors to quickly grasp what you’re pitching.

Sweet Mandarin Restaurant

  • The entrepreneurs: Lisa and Helen See
  • The investment: £50 000 for a 20% stake
  • The idea: The sisters require investment to grow their sauce business. The product contains no MSG or artificial colouring and is gluten free.
  • What the Dragons had to say: The Dragons liked the sisters’ enthusiasm and polished pitch. It was impressive that they already had one supermarket chain showing interest and that they were supplying Chinese restaurants. The sauces tasted good and were well presented. One Dragon questioned the sisters’ USP, which was perhaps not clearly demonstrated. The Dragons also questioned whether they were running a restaurant or a sauce business and felt that they hadn’t demonstrated sufficient levels of uniqueness, and that because both were selling under the same name, there could be brand confusion. One Dragon demonstrated a concern that the sisters wouldn’t get the margins they were hoping for, because the supermarkets would squeeze them for better prices.
  • What they did right. The sisters knew their market and its value. They demonstrated that they’d already experienced good sales and made a profit, as well as presenting very impressive projections for the business going forward. They knew their cost and profit margin figures inside and out. They had just received accreditation and had firm interest from one retailer as a result. The sauce was already being supplied to Chinese grocers who supplied local restaurants. This contract is worth £250 000. They were already running a successful and profitable restaurant, indicating that they knew how to run a business. By saying that they had invested £10 000 of their own money (one sister’s life savings) in the sauce business, the sisters showed that they had skin in the game and believed in the venture. They clearly demonstrated that they have an investable business.
  • What they did wrong: The sisters didn’t clearly differentiate between the two businesses or outline what sets them apart from the competition.
  • Verdict: Yes
  • The lesson: Prepare a polished presentation and know your numbers to impress investors.

Mamka online retailer

  • The entrepreneur: Matthew Conneridge
  • The investment:  £200 000 for a 10% stake
  • The idea: Online retailer
  • What the Dragons had to say: The Dragons felt that the amount asked for was excessive and based on an unrealistic valuation of the business – in fact, one Dragon remarked that for £200 000 he’d want 110% of the business. The high levels of stock held by the business also worried them – they questioned his control over stock management, and they were unhappy with his unusual stockholder arrangement, in which a partner held 20% equity in exchange for favourable discounts on products – what would happen if Matthew no longer wanted to stock that product? On the whole the Dragons thought that Matthew ran his online business badly. They felt that Matthew didn’t demonstrate that he was investable and they questioned his valuation of his business. They didn’t like the fact that he argued with the Dragons and that he didn’t listen to their advice. They said he hadn’t presented an investable business model and that he was ‘miles off’ in terms of the investment amount sought and percentage offered in exchanged.
  • What he did right. Matthew showed that he’d been in business for five years and achieved £2 million in turnover, as well as a small profit. In that time he’d expanded into a bigger distribution centre. In his presentation he demonstrated growth in his business, had a good grasp of figures and mentioned his large stockholding – which ended up being his undoing with the Dragons.
  • What he did wrong: He mentioned his shareholders almost as an afterthought and was vague about how the 20% stockholding arrangement worked. He failed to demonstrate a USP that would set him apart from the many other online retailers out there. All he could say was that his business was ‘better’. Matthew proved closed-minded to business advice offered by the Dragons. He was vague about how he came to his valuation of the business and was defensive while being questioned by the Dragons.
  • Verdict: No
  • The lesson: Don’t disagree with advice offered by potential investors. As an entrepreneur, you’re likely to pitch to a number of different investors before you find the right person who is interested in your business. View each pitch as an excellent learning opportunity, whether it’s to refine your next pitch, or simply draw from the knowledge of the investors you’re pitching too.

eBag – a desk in a backpack

  • The entrepreneurs: Jill Haywood and Kelly Forbes
  • The investment: £60 000 for a 10% share
  • The idea: Fun pack children’s rucksacks
  • What the Dragons had to say: The Dragons all loved the product and immediately saw the appeal for parents and kids. This enabled them to focus on the numbers and what Jill and Kelly had changed in their business model to drive more profit. They were satisfied with the response of ‘we reduced our margins, shipping and other costs,’ particularly as the entrepreneurs knew exactly what these margins and costs were, down to the cent. The Dragons who had children were enthusiastic about the backpacks, which were fun and practical and designed to appeal to children’s love of pockets and spaces to hide things.
  • What they did right. The ladies innovatively managed to get a TV campaign for their backpacks without spending any money. They gave very clear statistics on their sales and turnover to date and knew their numbers inside and out. Their pitch was very professional. They needed the investment to have enough stock ready to meet orders locally and abroad. They also demonstrated that between them they had the necessary experience to qualify them to make a success of the current venture. They were also clear about the type of help they needed from their investors over and above money.
  • Where they did wrong: Not much. Perhaps by looking to go global before establishing themselves firmly in the UK they were missing a step – but as they explained, that’s what they needed the Dragons for.
  • Verdict:  Yes
  • The lesson: Numbers are crucial – if you know your numbers, you’ll immediately grab – and hold – your investor’s attention. You may also have to choose between enthusiasm, equity or expertise when selecting an investor. If you know what your business needs, the decision will be easier.

Are you an entrepreneur with a viable new idea and an investor-ready business? Could you handle the heat in the Dragons’ Den? Enter BBC Entertainment and Entrepreneur Magazine’s exclusive Dragons’ Den Series 10 competition and you could win a business makeover worth R140 000 with business guru Pavlo Phitidis and Aurik Business Accelerator.

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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Surge In South Africans Swopping Their Cars For Bitcoin

The cryptocurrency Bitcoin has experienced a seemingly interminable rise. Early adopters have experience lottery-sized pay-outs on minor investments as the currency exploded in value in 2017.

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The cryptocurrency Bitcoin has experienced a seemingly interminable rise. Early adopters have experience lottery-sized pay-outs on minor investments as the currency exploded in value in 2017.

As South Africans are itching to get their hands on the digital currency, there’s been an increase in swops and bitcoin-only sales on Gumtree.co.za, says Claire Cobbledick, Head of Core at Gumtree. “This is particularly true for high-value items like cars, bikes and boats. Many sellers are willing to take a gamble with their assets in hopes of a large pay-out.”

This is on trend with other marketplaces. In the United States a McLaren 720S was put up for sale in exchange for 25 bitcoin, a theoretical value of $425,000.

Related: 11 Things You Need To Know About Bitcoin

While Gumtree does not allow for the sale of bitcoin miners or services, Cobbledick says that customers can exchange goods for bitcoin on the site, but should be fully aware of the risks. “Bitcoin is a volatile currency, so while you could easily see a 50% increase in your investment, you could just as easily end up with nothing. It’s up to the seller to decide if they are willing and able to take a gamble.”

Some cars currently up for sale in exchange for bitcoin includes a Land Rover Defender, BMW X5 and a rare 1970 Mercury Cougar V8.

“There are also a few other sellers accepting bitcoin in exchange for Kruger Rands,” says Cobbledick. “Perhaps proving that gold as a store of value is falling out of vogue.”

But the most unusual swop would have to go to an entrepreneurial seller who is offering carnivorous plants in exchange for the cryptocurrency.

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Zando Sold 80 Items A Minute During Black Friday – By Doing This

Black Friday has brought immense success for numerous local online retailers – reflecting the potential of e-commerce in South Africa. Why not learn from Zando’s success in 2017 to ensure your success during the 2018 Black Friday sales season?

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For South African e-retailers, Black Friday is a big sales event. But you need to ensure you’re prepared for the web traffic and that your e-commerce store can handle the logistics of thousands of orders.

zando-sascha-breussAccording to Zando, they experience 100% up-time during Black Friday and less than a week after the season sales event, 95% of customer orders have already been shipped.

To help fellow e-tailers perform better next year, Zando’s CEO, Sascha Breuss answers some key questions about the company’s preparations and learnings around Black Friday:

1. How did you encourage greater sales on Black Friday?

Over the last few years Black Friday has developed a following in South Africa, so we benefitted from the existing hype around it. We didn’t focus too much on upfront marketing, but put our energy into flawless execution and of course great deals for the customers.

Related: The Evolution Of Retail: From Corner Store To Artificial Intelligence

2. How much planning went into ensuring your store platform ran at optimum?

The real ‘hot phase’ started with the first day of November when our IT department went into a ‘feature freeze’ and we focused 100% on site-stability and scalability.

We went through some intense testing of our site with loads up to 15 times the average daily amount of visitors. So, when the actual day came, we were confident in our systems.

3. How were you able to successfully co-ordinate logistics during Black Friday?

Early preparation and experience from past years have been the key to success. We increased our head count in both Warehouse and Customer Service well in advance so that we could rely on well-trained and experienced colleagues come Black Friday.

4. How did you ensure a seamless experience between your website and your app?

We know that our customers are browsing Zando on all platforms, desktop, mobile and app so we implemented some handy features to make the transition between each platform easier. For example, shared baskets and wish lists are now a feature. Some of the deals however have been app-only and sometimes we reward our app users with early access to shop the best deals. So it is definitely worth it to download our app.

Related: How SA’s Online Retailers Can Cash In On Black Friday Fever

5. How did you scale your entire operation for a single event?

This is easy to summarise in one word – TEAMWORK. The Zando staff did an amazing job and were the backbone of our success. Not only did they put the required extra hours in and worked hard until the job was done, but they also showed real team-spirit. When you called our Customer Service during Black Friday it’s very possible that you spoke to someone in our HR, Social Media or Legal team who helped out answering calls.

6. How did your marketing campaign affect traffic on your platforms?

The most surprising element was probably the high volume of traffic that we saw during the night. Visits started to increase every minute before midnight and during the first two hours of the day we saw peaks that were higher than on our strongest week day. This traffic never dropped with a lot of orders being placed between 2am and 3am on Black Friday.

7. How did your technology systems handle the influx of shopper traffic?

In the build up to Black Friday we added additional server capacity and changed the way we handled the flow of traffic. This made us very flexible to switch on additional capacity wherever required. So it was a combination of intensive preparation, close monitoring and ultimately very little sleep for a couple of days to ensure we monitored our system health 24 hours a day.

8. What was your sales strategy?

For us everything that had a discount of 40%-80%, and was still a relevant and recent look, qualified for Black Friday 2017. Once these criteria were fulfilled we made sure that we had sufficient stock available – in some cases the demand was so high that we brought on additional stock from our suppliers during the Black Friday weekend.

Related: 5 Last-Minute Tips For Small Retailers To Boost Black Friday Sales

9. What were your biggest learnings?

We have been very successful in our approach to remain true to the idea of Black Friday – offering great deals on relevant product and not outdated clearance ranges. The customer is very educated and will identify a good deal, and we have seen consumers’ negative comments on stores who used Black Friday solely as a warehouse clearance opportunity.

10. What surprised you about Zando’s success during Black Friday?

Thanks to extensive preparation we have been able to achieve an uptime of 100% for the full month of November. We also kept the deliveries and returns 100% free regardless of discount or basket size. It seems like our customers appreciated this approach and we have actually seen very positive sales numbers after Black Friday while we expected a drop. I believe the full focus and investment on the Customer Experience has worked for us.

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Team Resolutions: 11 Tips To Uncover Passion And Potential In New Hires

If there’s one resolution HR departments should make this new year, it should be to transform the onboarding experience for new hires.

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If there’s one resolution HR departments should make this new year, it should be to transform the onboarding experience for new hires says Michelle Seko, Talent Acquisition Manger at Sage Africa & Middle East.

The importance of a good candidate experience cannot be underestimated. Research has shown that 88% of job applicants are more likely to buy from a company if they’ve had a positive experience when applying for work there. Research has also shown that candidates talk about their experiences with a company, regardless of whether they got the job. Some candidates would even refer a friend to the company and others will re-apply for a future role, if the experience was a good one.

Research also found that:

Related: Why You Should (Seriously) Stop Hiring People

Win-win

Businesses enter into a relationship with a new hire the moment they sign on the dotted line. And, as with any relationship, it will only flourish if built on trust, respect and a commitment to self-improvement.

When you set new hires up for personal success, the outcomes naturally feed into your business’ success, which means you both win.

Here are a few ideas to get the most out of your new hires:

Make them feel welcome

Introduce them to the people they’ll be working with as soon as possible so that they immediately feel part of a team. At Sage, we partner new hires with a buddy, or Sage Ambassador, who helps them settle in and meet new people, contributing to the positive on-boarding experience.

Focus on the benefits

Compelling benefits not only attract the best candidates but also boost loyalty and job satisfaction. People are motivated by different things: one person might value flexi-time while another could place more importance on growth opportunities or bonuses. Focus on the benefits that align with the individual’s values when onboarding.

Set goals early and outline a plan to achieve them

This keeps your team focused, especially if they will be rewarded for achieving their goals.

Assess performance

Monthly, at least. Adjust goals and plans where necessary, reward good performance, introduce new challenges and deal with issues promptly.

Show genuine interest

Regular catch-ups and remembering children’s names, for instance, makes people feel appreciated.

Empower them

Let your new hires apply their knowledge to business challenges and offer training opportunities outside of their comfort zones. Reward ideas that help you do things better and faster.

Related: Hiring The Right Person Is Critical When Growing A Business

Encourage collaboration

People thrive when they can learn from others and when they can share their knowledge. Involve experienced team members in the new hire’s training. This is a great way to recognise and appreciate their loyalty and skills.

Be transparent

Do you have difficult clients? Will the new hire have to work overtime? What are the business’s goals? New hires should know what they’re getting into.

Provide solid training on everything from company culture and benefits, to opportunities for growth

The biggest cost associated with training people is the time it takes for them to become productive. But rushing through on-the-job training could lead to a host of other problems, including repeated mistakes and a lack of confidence.

Openly communicate any changes in the business

Manage your team’s expectations and be clear about yours. Allow new hires to question and understand how you do things and to point out errors – their past experience probably gave them new ideas and ways of working that could boost your team’s efficiency and productivity.

Be upbeat

Your mood sets the tone for everyone else. You can have the best product in the world but unless your team is passionate and enthusiastic about that product, you won’t get the results you’re hoping for.

Keeping people motivated and productive is hard work

But if you provide them with the tools, knowledge and support to do their best work and to contribute their best ideas, motivation and productivity will come naturally.

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