Talking food entrepreneurship with Dragon Den’s Deborah Meaden
Entrepreneur Deborah Meaden has made 40 investments in start-up businesses during her time in the BBC’s Dragons’ Den, investing nearly £3m in the process. In this interview with IFE, she considers the secrets to attracting investment, and how to take a good food and drink business idea and make it really work.
How do you rate the business climate for new food & drink products right now?
I think it’s a very interesting time – for the right product. Consumers are getting a lot more adventurous, they’re looking for something new and different. The popularity of the Great British Bake Off speaks for itself. You can really see how deeply people are engaged with food, both for dining in as well as dining out.
You’ve invested in food & drink businesses. What’s the secret to attracting investment? What drew you to these businesses in particular?
I have to understand the gap in the market a business will fill. There’s no point churning out the same thing as the person next door. The most important thing for a business seeking investment is to be able to quickly convey to the customer why they should eat their food or dine at their restaurant. What can they talk about that’s different from everybody else?
I’ve also got to have confidence in the people, especially in hospitality which is one of the toughest businesses there is. They have to convince me they have the skills, knowledge, energy and commitment to succeed.
Any particular examples we should take a look at?
Yes, look at Yee Kwan ice-creams and sorbets. Try them, they’re delicious! And what’s the gap in the market? East Asian flavours. We’re talking Chinese and Asian cuisine here, and there’s proven demand from her sales in Harvey Nichols, Wholefoods Market and restaurants around the UK. And then there’s Yee herself, do have a look at Dragon’s Den on iPlayer to see what convinced me to come on board and back her.
Having a good idea is the easy bit in many ways. How do you take a good idea and make it commercially successful?
Imagine your end product and what your business is going to look like, then work backwards. It’s like making a map, and that’s what a business plan is really all about. A lot of people misunderstand business plans; they think they’re documents full of numbers that you hand over to the bank in order to get a loan – that’s not what it’s about.
The plan needs to say what your business is going to look like, what your marketplace is and who your customers are. This isn’t rocket science. The most common mistake people make is to overthink and overcomplicate things; before you know it their idea’s out of date or already being done.
Just map things out and get started. And if you make a few mistakes along the way it doesn’t have to be a catastrophe, you can make sure you’re informed enough to make any mistakes small ones.
How do entrepreneurs get new products chosen by big retailers? How do they know they’re ready to approach them? Is that even the road you’d recommend?
That’s one of the key questions. I think every entrepreneur thinks their product should be in a supermarket – it’s like nirvana, their absolute Holy Grail. To me they’ve got to step back and first ask themselves: ‘Am I ready?’
Few people understand the processes they have to go through to reach the big supermarkets’ shelves: the demands on compliance, on continuity of supply and product quality and uniformity. This is where the entrepreneur really needs expert advice from people who’ve got experience. But before going down that road you should ask yourself: ‘Is the supermarket the right place for me?’
I’ve seen businesses fail due to working capital issues, lower margins and pressures on revenues from supporting promotions. Sometimes a product is always going to be reasonably niche – it’s a lethal combination to do all the above and still end up with a product that doesn’t sell in huge quantities. Fundamentally, don’t try to run too fast too soon.
Do you see businesses that still don’t ‘get’ how to use the Internet?
I think any business not taking their online interface seriously is absolutely mad. We speak in a different language now and behave in a different way. We have to be engaged with social media, we’ve got to be talking to our consumers in many different ways and consumers expect to be able to click a button and find absolutely everything they need to know about us in an instant.
Can you learn to be entrepreneurial? What are the key skills you have to have for success?
The successful entrepreneurs I know have a key set of characteristics. They’re all very different people and they all behave differently, but they’re all brave, they know how to take risks, they’ve all got very good emotional intelligence, they’re always looking for opportunities, scanning the horizon, and they’re interested in how people live and eat and breathe and sleep, and that makes it very easy for them to sort of get into the zeitgeist.
There are also certain things that you can do to succeed quicker, make fewer mistakes and be more disciplined. You have to understand the basics of business, of accounting, how to make the most of the Internet. It’s all basic stuff, but you’ve got to know enough to know what you don’t know. That’s the biggest thing. Know enough to know what you don’t know and when you need to look for help.
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