Neil Westwood, co-founder of the Magic Whiteboard, reveals the benefits of collaboration with an experienced business mentor.
Dragons’ Den has really helped our business and it would have taken much longer to grow Magic Whiteboard without the help of Theo Paphitis, Deborah Meaden, their team of experts and Dragons’ Den. Although not every business has the chance to pitch to the Dragons, seeking help from business angels and mentors is an invaluable stepping stone for every start-up, and here’s why:
1. A financial leg up
If a business angel recognises the potential in your business and chooses to invest in it, you not only get financial assistance that isn’t related to the bank, you get someone with advice to impart, spurring you on. Working with Deborah and Theo accelerated our rate of growth 10 times in less than a year.
In business, you are judged by your track record and the company you keep. Growing businesses that have no track record and no contacts will always struggle to get others to take them seriously.
It usually takes months, sometimes years to get a major retailer to stock a product, but because of our links to Theo, people bought into our business. With his help, our products were stocked in 240 Ryman stores in less than two weeks.
3. Avoiding expensive mistakes
Business angels can point out where the pitfalls are before you fall into them. Theo Paphitis and Deborah Meaden, like many successful entrepreneurs, have years of business experience and advised us on things to do and things to avoid. As a result, we have saved valuable time and money.
When starting a business, finding enough time and money is a real challenge. It can be difficult to know when to take financial risks. Getting buy-in from an experienced business angel can give the banks confidence in you, and you confidence in yourself. Without the investment from the Dragons, we would not have risked getting a loan from the bank and I would still be working at the local hospital in Worcester.
5. Use their strengths
Business angels are not all the same. Most have experience in different areas of business so use their individual strengths to your advantage. Deborah and Theo both had different areas of expertise. The advice we were given on the sales and marketing plan, for example, was key to increasing our sales and profits.
There are plenty of opportunities out there to tell people about your product without having to invest lots of money in advertising. Your business mentor may have contacts within the press that you can take advantage of, if not look to make your own contacts in the press. Being on Dragons’ Den was instrumental in raising awareness of Magic Whiteboard and it is now a household name.
Networking can be a laborious and often unproductive way to build business contacts. Business angels can offer a ready-made little black book for you to take advantage of. Theo and Deborah introduced us to buyers and other key industry leaders, and without them we would have probably not got a foot in the door.
8. Sounding boards
Whilst they’re still on the drawing board, good ideas and bad ideas are difficult to tell apart. Asking someone who has a vested interest in the success of your business what they think about your plans can be a good way to help you decide which direction to go in. The Dragons were there whenever we needed to bounce ideas off and to provide inspiration and mentoring.