You’re keen to subject yourself to the Dragon’s Den. But will you end up champ or chump?

The Dragon’s Den goes from strength to strength. We can’t get enough of it. You can now even take part in the online version of the show securing up to £50,000 for your enterprise.

Individuals endlessly expose themselves to the Dragon’s Den. Occasionally it pays off but we continue to be stunned by the ill preparation and idiocy of so many.

How we cringe when a Dragon fires a gentle opener “what’s your expected turnover next year?” to which the hapless entrepreneur replies “er, um, er… ten million pounds”. When pressed a little harder, it transpires that they meant to say “ten thousand pounds”. No, wait a minute, that’s not right um, oh, er… I don’t know, quite a lot anyway.

What the hell…who’s going to be interested in a plastic cucumber protector after all?

Anyway, if you really want to succeed in the Dragon’s Den and you’re name isn’t Levi Roots then here’s the first six of a twelve point checklist to see you on your way:

1. Decide why you want to be on the show

i. You like the idea of being on telly

ii. You think that it will give valuable exposure to your business proposition

iii. You want some entrepreneurial input from Theo, Peter, Deborah, Duncan or James

iv. You really do need some seed money to kick start your business idea

If your in for ii. – iv. then ensure that your idea is innovative and investment ready. If your in for i., make sure it’s entertaining.

2. Prepare

The Dragon’s Den expect you to know your business (existing or imaginary) inside out. Business plans are not just for fuddy duddies so get planning now. 70% of businesses don’t bother. But imagine leaving your wedding day to chance and waiting to see who turns up. The Ten Pillars Of Small Business Planning will guide you through the process.

You will confront issues that may be uncomfortable or insurmountable. Listen to what the planning is telling you. If it says that the business model can’t work, don’t ignore it. Either change the plan until it does or accept that your idea is not commercially viable.

3. Know more about your business idea than the Dragon’s do

Don’t be lulled into a false sense of security that because you have designed a toilet seat protector for women you will have the upper hand. The Dragons will piece together your business plan like a jigsaw puzzle and know an awful lot about your business very quickly. That’s because the fundamentals of any business are essentially the same. Concepts such as profit, loss, cash flow, research, planning etc are common across all businesses.  The Dragon’s Den will claim your scalp if you come off second best here.

4. Key personnel

There are two key personnel you must cover in your business model.

1. The ‘intrapreneur‘ is the entrepreneur on the inside of the business. The driving force. The glue that binds the business together. The jack of all trades who understands all facets of the business. Financially astute. Inspirational. A real leader. This is a hell of a brief so it might not be you. Be as objective as you can if you think it is. Check out 30 Ways To Spot An Intrapreneur to help.

2. Industry specific expertise. Again, this could be you but if not, find it quickly.

5. Key financials

You should know every number in your financial planning before getting remotely close to The Dragon’s Den. However, if you’re worried that you’ll go blank in front of the cameras, then keep it simple:

- Cost per unit (how much can you make your widget for)

- Selling price per unit (how much can you sell it for)

- Gross profit per unit (how much profit can you make on each widget)

This is the basis for a commercially viable product. Anything less than 50% gross profit looks shaky, nearer 100% is good.

Know your breakeven point – broadly speaking that number of sales that are needed in order to keep your company afloat. This will contribute to the risk side of the equation. The reward side is covered by understanding profit.  The Dragon’s Den team usually look for the first three years trading:

- Estimated turnover

- Estimated overhead

- Estimated total profit

As a rule, net profit (ie gross profit minus overheads) needs to be heading well north of 20% to begin to look exciting. Now let’s think about cash. You need to know the answer to three questions:

- How much cash do you need?

- When do you need it?

- Why do you need it?

6. Assumptions

All the decisions you take about your business are based on assumptions. This is because you have no reality yet to do otherwise. Be crystal clear about all key assumptions used to put together your viable business model.

OK, we’re half way through our preparation for facing The Dragon’s Den. You’re well on your way to a coherent and well thought out proposal. Let’s move on to Plan To Face The Dragon’s Den Part II.

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• Plan To Face The Dragon’s Den – Part II
• Small Business Myth #4: I Don’t Need A Business Plan
• Why Do Small Businesses Fail – Nearly Always?