I’ve spent some down time over the Christmas holidays recharging my batteries with my head in a couple of books by two of the stars of the BBC’s Dragons’ Den. The books are Deborah Meaden‘s ‘Common Sense Rules’ and James Caan‘s ‘The Real Deal’.
Both books are easy to read and give some insights in to the quite different approaches of two highly successful entrepreneurs. They are both somewhat autobiographical with a healthy smattering of business tips. What is particularly interesting is the contrasting approaches taken by Meaden and Caan. Meaden is a keen advocate of the ‘failure to plan is planning to fail’ school whereas Caan openly, and repeatedly, admits to not being much of a planner.
Meaden’s book includes practical tips on business and marketing planning. She believes that it is essential to write down what you are trying to achieve and to refer to it often to celebrate success and to get back on track when necessary. She appears to be more like her colleague Peter Jones who advocates a 100 day plan to keep focussed and moving forward. Both stress the importance of planning whether or not you need a business plan to secure funding for your business.
Caan, on the other hand, says he is not much of a planner, although interestingly on his first day in the Dragon’s Den he stopped the filming because he hadn’t received any information or business plans from the candidates he was about to assess. This forced Caan to use the tool he has always used to develop his own businesses, questioning.
In his book James Caan shares a tip he learned from his own father which was, ‘observe the masses and do the opposite’. He uses questions to explore why people behave the way they do, what other ways there are to do something, what costs and processes are involved, how much profit could be made etc. These are the sorts of questions a business plan should address.
So is Caan really very different from his colleagues? I suspect not. Deborah Meaden and Peter Jones might write their business plans down but there is no way that James Caan leaps into business without a lot of care and consideration and he certainly recommends detailed analysis of financial and other data to keep a business on track. He even shares some of the lessons he’s learned when he has taken his eye off the data in the past. He came close to losing his first business in the early 1990s because he hadn’t seen just what a devastating effect the recession of that period was having on his recruitment business. Fortunately his accountant drew the figures to his attention and he was able to take steps to ensure survival.
So what can we learn from the Dragons?
- Firstly don’t make the mistake of assuming that your idea is brilliant. Question it. Test it, but nor on friends and family.
- Check out the competition, where can you add value to what they are offering?
- Check out the demand. Don’t be unrealistic in the share of the market you expect to get.
- Use other people’s skills and expertise. Paying for expert help may save you money in the long run or it may allow you to build your business much more quickly.
- Ask questions and check your data. The devil is in the detail.
There are a lot more tips in these highly readable books.