The second entrepreneur, Emmanuel Achukwu barely escaped being scorched by the infuriated dragons who felt enormously insulted by his bizarre demand for 5 million naira in exchange for 60% equity in a company that  would specialize in writing business plans for other businesses when the business plan he had presented to the dragons for this business was, as deduced from the dragons, marred by an overwhelming and nauseating dose of mediocrity, incompetence, and severe lack of any fundamental knowledge in the art of business writing.  However, Alexander Amosu prodded on, asking if he’d done his research on who will comprise his clientele, to which this entrepreneur revealed that there were over 1, 500 potential business clients available- Alexander Amosu fired back, wanting to know why Emmanuel felt these businesses would come to him – and Emmanuel remained mute. Femi Tejuoso soon discovered that this young man had committed yet another big blunder in his stillborn project by failing to categorize his own plan appropriately. Chris Parkes soon discovered that the last page of Emmanuel’s business plan was upside down. At this point, Femi Tejuoso could not hide his dismay, “I’m starting a new business, which is a campaign to prevent people from getting into trouble with such ( ill-advised, and badly written) business plans.”

John Momoh attempted a few words of encouragement, “go back home, do more work, and try again…”

But Ibukun Awosika was more forthright with her closing remarks, “please don’t try again. Go back to school. Make yourself more qualified to do this kind of work- but for now, you don’t have a business”

The third entrepreneur, Alao Olatunji was bubbling with the idea of starting what he dreamt was a ‘Modern Day Carwash’, and in order to turn his dream into a burgeoning enterprise  he unwittingly requested for 31 million naira in exchange of 70% equity in his business, without adequate research to support his claims that the business would flourish, coupled with the fact that he was temporarily unable to convince the dragons that investing in the business wasn’t as risky and as foolhardy as drilling for water in the Sahara desert. During his presentation he had revealed his plans to roll out a bouquet of car-washing services under the glam titles ‘Flexi’, ‘Supreme’, ‘Instanta’ etc. He pegged the prices for his services at N1, 000. However, at some point he seemed to be communicating his idea effectively until when he proved unable to respond satisfactorily to Ibukun Awosika’s question, “what seperates you from the others at filling stations?” If this seemed like bad news, it got even worse, when it was discovered that according to his business plan that investors were not to expect returns on their investment for at least 3 years.

“I think you’re going into shark-infested water…I suggest you stick to the manual option” Chris Parkes suggested.

“this is a high risk business” John Momoh revealed.

And it was out! Out!! Out!!! For all the dragons.

Phew!

 The fourth set of entrepreneurs were Titus Emmanuel and Simi Oluwa, they came seeking 10.5 million naira for their food processes and food processing business, in exchange of 25% equity. They were proposing to develop and market of range of products derived from the soya bean – they even proposed the conversion of soya bean to bio-fuel. To demonstrate their meticulous research and preparation, they presented the dragons with a glass of soya milk, which Chris Parkes tasted, and seemed to like the taste.  At this point, Femi Tejuoso noted, “you haven’t told us anything about the processes that lead to the product…” after which these vibrant and brave entrepreneurs who were both undergraduates explained their manufacturing and production process, positing that they’ve only been experimenting in a make-shift lab in their kitchen. Another ambitious idea they presented was to process a food product which was a mixture of soya bean and garri.  A lot of sound ideas flew back and forth from these entrepreneurs, until John Momoh asked if they’ve bothered to conduct a market research, after Ibukun Awosika wondered, “how sure are you that consumers will like the taste derived from the combination of cassava and soya bean?”. At this point, these young entrepreneurs exposed the fact that they’ve based their entire business idea on speculations, and very little research or market survey.

Another loophole presented itself in their presentation when they started brandishing the word “if” in the middle of the cross-questioning…echoing the stance taken by Chris Parkes in his announcement, “I’m out because there are too many ifs…” the other dragons soon opted based on the speculative nature of the business.

Young and ambitious, brave and confident…these are words that best describe these young men…I think we’ve not heard the last of them…with a little business knowledge, these young men would blossom into successful entrepreneurs. Maybe they would know better to research and survey their market rather than base their pitch on speculations.

What do you think?

The second entrepreneur who may be referred to as “Mr. Rebirth” came to the den looking for 24 million naira to develop his idea for what he tagged ‘Centre for the rebirth of African culture and arts’, and in exchange he was offering to give up 30% equity of this business.

Shortly after he introduced his idea, Femi Tejuoso made a remarkable observation, “this business plan you’ve given us looks like one written by a very confused person…you call it the Centre for the Rebirth of African Arts and Culture, yet you’re advertising a breakfast menu that parades Scrambled eggs and bread, German potato salad, Sandwiches, French fries etc…where’s the Akara and Ogi, where’s the moi moi?”

Chris Parkes, as an advertising guru advised the entrepreneur to device means of encouraging Nigerians to tune in and be proud of their culture, while Femi Tejuoso insisted that entrepreneurs like him in the arts and culture business should endeavor not to dilute our culture, while disguising western culture as the prevalent culture of Nigerians. All the dragons opted out. But Ibukun Awosika shared a motherly concern after the entrepreneur had left the den, “I’m tired of our children having the best of education but having no understanding of Nigeria, which is the reason I refused to send my children to British-curriculum schools…I don’t want a British Nigerian, I want a Nigerian that understands who he is first…” Alexander Amosu concurred immediately, humorously indicating that that was the reason why he returned to Nigeria to understand more of his culture. The dragons shared a brief moment of humor.

How many Nigerians have sandwiches for breakfast, not to mention German potato salad?

Well, what’s your opinion?

The last entrepreneur on this episode, Mohamed Umar, the proprietor of Cute Suites in Zamfara state made one of the most exciting presentations in the den. He was asking for N50 million and was ready to part with 33.3% equity in order to bring to fruition his idea of creating a chain of small hotels with a ‘good taste’ in his home state Zamfara. His pitch was picturesque, thought provoking, and promising. “I must commend you for such a cute name you’d found for your hotel” Femi Tejuoso complimented. The entrepreneur continued, saying that he hadn’t approached any banks yet for a loan, but was optimistic that his business would fare better with the collaboration of intelligent business men and women (like the dragons). He boasted of his hotel having a near-monopoly in the hotel business in his operational region, since other popular hoteliers had closed shop. This revelation elicited some trepidation amongst the dragons who wondered why experienced hoteliers would abandon a ‘fertile’ business terrain if not for the obvious reason of low or no viable patronage. “How many planes fly to Zamfara?” Ibukun Awosika asked, and Mohamed Umar responded, “None- we don’t have an air strip”, and Ibukun Awosika, uncomfortable, probed deeper, “so where is our traffic coming from?” and Mohamed answered, “from the contractors who live in Zamfara” – Femi Tejuoso cut in, “so if our target customers currently live in Zamfara, then they don’t need to live in a hotel”. A lot of factors bore to militate against Mohamed Umar’s business idea: there was no clear plan for revenue generation, no accessible patrons for the hotel; the plan was too government dependent in the sense that Umar relied on the income of the local government contractors to keep his hotel afloat. Despite the fact that all the dragons opted out, Mohamed Umar still presented them each with a fez cap and T-shirt branded with the Cute Suits insignia. But he didn’t leave the den until he got the dragons to introduce themselves; after which he reinforced his belief that one day his hotel will play host to one, if not all of the dragons.

“Your T-shirts and hats are nice…the name Cute Suites is nice…but the next thing you need now, which is the most important thing is the actual hotel…”

And like Nwaji Jibunoh put it, “Nothing ventured, nothing gained…”

What’s your opinion?

I need money!

I have a wonderful business idea that is worth more than 40 million naira on paper, but currently worth nothing in reality, and to transform this ingenious business idea into a real business I need 10 million naira. My projected income is approximately 10 million naira monthly, if only I can secure the funding I need. But then an investor is ready to offer me 10 million naira is exchange of 80% equity in this business. Meaning that he will own 80% of my business. He will have 80% control, and he will do 80% of the work! No way, it’s an ugly rip off. I can’t offer anything more than 30%…no way!

I don’t care if he’s bringing his expertise. I don’t care if he’s brought 100% of what we’ll use in starting this business. I don’t care if he’s putting in 80% of the work required to make this business manifest. I don’t care if the business is currently worth NOTHING. I don’t care if he’s taking a 100% RISK with 100% of his money, investing in a yet-to-exist business. I don’t care!

I think the problem is that I think and believe my business is worth the figures I’ve put down on paper. I see the profit, but I don’t see the risk, and I don’t see the obvious: it’s not even a business yet. Yes, right…why should I give an investor 80% of my business, even if he’s taking 100% of the risk? So if I make 10 million naira monthly, automatically, I’ve given him 8 million naira monthly. That’s not fair! I can’t accept that! But what have I forgotten? I don’t even have a business! I need his 10 million naira to make the business happen, or the business will just die like one of my previous business ideas that met with a solid brick wall when it came to the issue of finance. Let’s look at it from a wise man’s angle. First of all, I’ll ask myself the following questions:

1.        How much am I currently making from the 100% ownership I have in the business? And if my answer is NOTHING…not a single farthing! Then, I’ll ask:

2.        How much will I make (independent of the investor’s money) within the next one year? And then again if my answer is between NOTHING and ABSOLUTELY NOTHING, then I’ll ask again:

3.        How much will the business be worth within the next one year with the investor’s money (N10, 000, 000)? And if my answer is that the growth rate of the business is about 100% ROI (Return-on-Investment) on the first month, 200% ROI in the second month, 300% ROI in the third month etc? And if from my calculations, I figure that somehow within the next 4 months, the business may be worth well over N40, 000, 000; then I’ll ask myself:

4.        What is 20% of N40, 000, 000? And if my answer is N8, 000, 000; then I’ll ask myself:

5.        What will the 100% of my business be worth within the next 4 months (or even 1 year) without the investor’s money? And if the figures in my answer say  NOTHING or anything less than N8, 000, 000; then I’ll ask myself:

6.        Is 20% of N40, 000, 000 WORTH more than 100% of NOTHING?

I’ve been thinking about this all day, because I have a business idea to pitch to an investor, and I need to be sure before I decide on how much control of my business is worth giving away for N10, 000, 000. If you’re pondering what I’m pondering, then we both need each other’s comments on this!

P.S: As you know, I’m not a financial expert, I’m just a humble den sweeper, and therefore I make no claims to the soundness of the business logic imbedded in the above reasoning!

–The Den Sweeper 

 **photo courtesy of www.flickr.com

To step foot in the den, you need courage!

You must also have a passion for the idea you wish to present before the dragons, or risk getting burned!

Please never approach the den ill-prepared. If you don’t have your facts right…well, good luck.

And here’s an Idiot’s Guide on How to Walk Out of the Den With No cash…and a Lot of Blisters:

1. Talk about a business idea you have no experience in, or a burning passion for

2. Forget research and base your entire presentation on speculations

3. Stutter, shiver at every question, keep your eyes on your brand new shoes, and remain irritably inaudible

4. Be very greedy, ask for a lot, and offer very little in return

5. Leave your documents at home, and brag about them in the den

6. Ask for the money, and don’t explain in detail how you wish to spend/ invest it

7. Talk about a dozen ideas at the same time, with no plan for executing even one

Well, if you do all these in the den and still walk away with an investment, you may be on your way into the Guinness Book of World Records as the first mumu to kill a dragon!

–The Den Sweeper