Duncan Bannatyne and his fellow Dragons Den panellists will be crying into their millionaires breakfasts as nearly 65% of small business owners say that they would turn their back on an offer from them as they dont believe it represents good value for money. Duncan, Peter, Deborah, Theo and James are all out!
The Dragon’s Den flames have been put out by nearly 65% of small to medium sized enterprise (SME) owners who say that they would turn down a deal from one of the Dragon’s.
The research, carried out by UK based accounting software company KashFlow revealed that business owners do not believe that the deals put on the table by the quintet represent good value for money and would instead turn to banks or private backers for a more reasonable rate or split of the business.
Just under 750 business owners took part in the research and KashFlow also discovered that when it came to reasons why small business owners would accept an offer from the Dragon’s 36% said it was for the experience they would bring to the company.
A further 27% said they would accept in order to try and grow their company, 24% said they would only accept because of the positive public relations opportunities, 6% said they would only accept if they had no option and a few jokers said they would accept an offer from Duncan Bannatyne just to get a discount off his gym fees.
KashFlow commissioned the research to try and get a better understanding of small companies financial requirements and speaking about the findings Duane Jackson, Managing Director of KashFlow said,
“Many business owners don’t realise that if they just kept a better eye on their business expense and cash-flow they would probably not need to approach television shows for funding and could get a much better offer either from a private financial backer or the banks”.
He continued, “When KashFlow was looking for private financial backing I would have never dreamt of going on television and giving away 50% of my company just for a bit of extra publicity and I think many business owners realise this after they have appeared and this is why so few deals complete following an offer on camera”.
A good example of a business owner who went up against the Dragons and won is Ling Valentine from LINGsCARS.com. She turned down an offer from the dragons and her comment that “Chinese eat dragons for breakfast” became a cult hit with business owners across the UK.
Ling (34) said, “I had two joint offers from dragons Bannatyne and Farleigh. When I refused their first offer demanding a massive 30% of my business, they reconsidered and improved their offer. But they always wanted too much. I flat refused both of their offers. LINGsCARS.com has more than doubled turnover of cars to £28 million in 2007 and I’m really glad I walked away. Businesses who jump at their first offer must be desperate or barmy.”