Knowing how to negotiate and when to stop! My Dragons’ Den Review of Episode 3 for Enterprise Nation

Here is my review of the third episode in the current series of Dragons’ Den for Enterprise Nation, which highlights some key business lessons.

1. Be a great negotiator, but know when to stop

Negotiation skills are vital in business. However, when pitching for work, you need to be clear about how far you are willing to push the boundaries and avoid the risk losing the deal altogether.

A great tactic is to plan your best, worst and likely scenarios in advance and know how you are prepared to go.

Bucharest born Alex Busianu had a great accent, according to Deborah Meaden, but it would take more than that to win over the Dragons.

His business, Temporary Forevers, a name which didn’t impress Peter Jones, sells luxury leather travel, laptop and camera bags.

It would have been very easy to forget the product entirely after Jenny Campbell and Peter Jones both offered to invest and Alex’s hard negotiation that followed.

It soon became evident that Alex was an aggressive negotiator, knowing exactly what he was prepared to give.

Initially though, Alex lost a Dragon in Jenny Campbell after she withdrew on the basis it was clear that Alex wanted to work with Peter.

Peter could have very easily withdrawn at that point but admired Alex’s negotiation style. A risky tactic which paid off in this instance.

In contrast, Claire Gelder of Wool Couture was offered investment by Touker Suleyman and Tej Lalvani.

She gave 30% equity for £50,000, more than the 10% she was originally wishing to give.

She chose to accept on the basis that the input from two Dragons with experience was more valuable to her than the risk losing that investment via negotiation.

2. Know your route to market

Large brands pay significant sums for product placement on supermarket shelves. This is key to driving customer sales. If a supermarket doesn’t know where to place your product the customer won’t know where to find it either.

Having a clear sales strategy, knowing who your customer is and where they are, are all essential for future sales for your product or service.

Having a great product and being a great person is clearly not enough.

Deborah Meaden loved ex-police woman Rayeesa Asghar-Sandys’ passion for Indian food, coupled with a great tasting natural and healthy frozen product from her business, Rayeesa’s Indian Kitchen.

The other Dragons were equally impressed but sadly her stand alone freezer concept for supermarkets clearly wasn’t viable.

Rayeesa had sold in farmers’ markets and hadn’t really explored fully her next route to market, demonstrating that you need to identify where you are going to sell your product.

Rayeesa received some great advice from Tej Lalvani who suggested that she built her brand and sells online therefore avoiding the refrigeration problem.

3. Ensure that you, and your business, are investor ready

Being ‘investor ready’ means having a realistic valuation and knowing your figures inside out (including the difference between turnover, gross profit and net profit).

You should also have full knowledge of every aspect of your business and have the capacity to do a deal.

You need to back your valuation up with hard figures, have a detailed business plan and three year cash flow forecast.

Getting a Dragon on board is only the first step and a detailed due diligence process will follow any offer of investment.

Although Claire Gelder initially forgot to factor in her labour cost when quoting her profit figures, she soon recovered under gentle prompting from Deborah Meaden and secured an investment offer.

Not so fortunate was ex-Army inventor Michael Gormley of Go Bubble. Whilst he had a credible invention at first sight, to keep champagne fizzy, following further probing it soon became apparent that the invention was a prototype.

Michael was unsure where he was in the patent application process, admitted there had already been a £2m investment and had no sales.

Clever questioning from Peter Jones clarified that Michael only owned 10% equity in the business.

There was clearly no room for movement and his request for investment was destined to fail as he didn’t have the capacity to make decisions on behalf of the company.

Previous reviews:

Enterprise Nation member Sandra Garlick, a former employment and business law solicitor, works with businesses via her consultancy SG Business Consulting and will deliver one-on-one advice in the Adviser Zone at Enterprise Nation’s Festival of Female Entrepreneurs in October.

Copying, Competition or a Compliment?

What do you do when someone blatantly copies what you are doing?

Your initial reaction may be to go in all guns blazing but what are you going to achieve?

Copying your work or plagiarising your content is actually actionable and you are perfectly within your rights to challenge this behaviour, especially if it is leading to confusion within your marketplace and causing you damage as a result.

Copyright  – an automatic right and arises whenever an individual or company creates a work. To qualify, a work should be regarded as original, and exhibit a degree of labour, skill or judgement

Passing Off – The law of passing off prevents one trader from misrepresenting goods or services as being the goods and services of another, and also prevents a trader from holding out his or her goods or services as having some association or connection with another when this is not true

Plagiarism – the practice of taking someone else’s work or ideas and passing them off as one’s own

Someone who is passing off your content, name or brand as their own may cause you damage financially. You often see the big brands challenge the smaller ones if they are alerted to similarities in names, brands or content.

Usually a simple communication, in writing, to the alleged offender is sufficient but sometimes you need to seek legal advice and take a more formal approach if it’s ignored.

Competition is different. It’s healthy to have competition and you would naturally expect it, unless your service or product is totally unique.

It’s always wise to see what your competition is up to. It keeps you on your toes and alerts you to anything where your competition might be crossing the boundaries which impacts on your own business.

Look at your competitors from time to time and carry out a competitor analysis. See what they are doing, how are they promoting themselves. Are they doing it in a good way? Can you learn anything from what they are doing? Do you notice what they are doing, that isn’t so great? Can you spot, bad grammar, loading errors and out of date information on your competitors’ websites and marketing collateral.

Compliment Can you treat it as a compliment? Everyone loves a compliment after all.

Yes, you may have spent hours, days, weeks building up a brand or idea and your competitor simply comes along, copies your ideas, your marketing and it looks so similar that people start commenting that you should do something about it.

However, quite often these cloned businesses fail. They haven’t thought about the detail, the financials, undergone the planning and often haven’t done the background work on the project or idea. At the outset, they think they can do it better. Some might, but the vast majority fail as they haven’t carried out the work required to get to that point.

Here’s where you can simply sit back and watch and take it as a compliment that they think your idea or concept is so great and original, that they want to do it too.

Customer Loyalty: How do you retain your customers?

There are various reasons that a person or business remains loyal to a particular brand, however traditional loyalty is often forgotten, over price.

Many independent retailers have gone out of business when a large retail chain supplies goods at discounted prices, without comprising on quality. Consumers are prepared to settle for a little less convenience and customer service, to get a better deal.

In the professional services sector, customers are now willing to move to another Accountant, Solicitor and Bank for a better deal, or indeed a different type of relationship. Being with a Bank or Solicitor for life is no longer the case.

So how do you create customer loyalty in today’s market?   Furthermore, where does loyalty come from?

If we look at loyalty in other areas of our life….we are loyal to the sporting clubs we support, to family, friends and our pets.  We want to support people we know and love.  We are guided by people in business when they recommend something to us.  Sometimes we are loyal to a particular brand of phone, car or supermarket chain.

Loyalty is generally built around exceptional customer service and great relationships. In considering these loyalties, they are generally built around passion, feeling, relationships and getting that little bit extra…something we weren’t expecting or didn’t even ask for.  In essence, we often buy because of an emotion and remain loyal because of a relationship with someone at the company or where something they do exceeds our expectations.

When something doesn’t go quite right at one High Street Bank, they put it right, apologise and compensate immediately, without question.  When you purchase a new vehicle, one particular brand presents their customers with a box of wine and chocolates and always returns your car after a service or repair, fully valeted.  One local accountant sends birthday cards to all of their clients.  How often do we get an email with discounts to our local restaurants just before our birthday or receive something as part of a loyalty program?  It all makes a difference to how we feel.

These little touches create loyalty and are great ways for people to speak about your company in a positive light to others.  The end result is that these companies, just by a few simple actions, make you feel special and we return to make subsequent purchases or remain loyal to the service or product they provide.

These are just a few tips to create loyalty with your customers:

  • Make your customers feel special;
  • Remember details about your customers.  Perhaps a birthday, a wedding or congratulate them on the birth of a child;
  • If a customer refers you to someone else, remember to say thank you…send a small token or thank you card;
  • Exceed expectations.  Be proactive rather than reactive;
  • Share useful information if it’s relevant to your customer too;
  • Keep in contact, even when they have purchased.  Your existing customers are your most valuable assets.

Sandra Garlick works with businesses from pre-start through to exit.  She is a business mentor and public speaker.  She regularly advises on business growth and strategy.

 

Sandra Garlick appointed to FSB Women In Enterprise Taskforce

LOCAL businesswoman Sandra Garlick has been appointed to a national taskforce which aims to promote women in enterprise.

Sandra Web 1The taskforce has been set up by business organisation Federation of Small Businesses (FSB) to champion the needs of UK’s female SME owners.
Ms Garlick will join 14 other small business leaders from across the UK to set out the recommendations of FSB’s Women in Enterprise report released earlier this year.

Ms Garlick started her own law firm and grew the business to be one of the leading Legal 500 firms in Coventry & Warwickshire for Employment Law until she merged the business in 2014.

She also founded the Woman Who…Awards in early 2016, created to inspire women in business to celebrate their achievements, to gain confidence and to recognise their own abilities.

She said: “I’m absolutely delighted to join FSB’s Women in Enterprise Taskforce as I am keen to continue to influence the women in the business agenda. I am looking forward to representing businesses from Coventry, Warwickshire & Solihull to ensure that local women have a voice. Through my work as a business growth consultant, in delivering the Woman Who….Awards and now in my role on FSB’s Women in Enterprise Taskforce, I am sure I can help women feel confident and to succeed in business.”

Source:  The Business Desk West Midlands