Dragons’ Den: Series 15, Episode 5
After taking a break last weekend, the fifth installment of this series saw a Welsh entrepreneur and her baking company tame the mighty Dragons
Taking a break from our screens last weekend to make way for the PDC Champions League of Darts, excitement for this week's installment of Dragons' Den was even greater.
With four very different businesses stepping up to the oche in the hopes of receiving investment, entrepreneurs were hoping they could follow in the fiery footsteps of dock & bay and Lovebomb Cushions – both of whom left the Den with investment in episode 4.
Perhaps unsurprisingly, it was a Welsh entrepreneur who managed to tame the mighty Dragons this week with her monster cupcakes and baking kit business.
Wondering why the Dragons were so hungry for a slice of the action?
Read on below and find out…
Dragons’ Den success story: BKD
Founder: Adelle Smith
Concept: A children's baking brand that combines baking with a craft activity
Investment sought: £80,000 for a 20% equity share
Investment received: £80,000 for 35% (Peter Jones)
The winning pitch
Entering the Den hoping to keep her nerves and receive a kind hearing, mumtrepreneur Adelle Smith from Newport, but now based in East London, was hoping the Dragons would develop a sweet tooth for her children's baking brand BKD.
Combining confectionery and crafts, and with an “ethos of fueling kids imaginations”, BKDs sells baking kits for kids via premium retailers and its new subscription service.
Having won six awards in both the children's and design industry, stockists include John Lewis, LakeLand, Moonpig and Gousto.
Currently receiving “strong interest” from House of Fraser, Smith was hoping that help from one of more of the Dragons could help her target UK supermarkets – though was warned by Touker Suleyman not to “put all of her hopes into House of Fraser”.
Pitching itself at a “more premium level” than its competitors, BKD cupcake mix sells at a retail price of £5.99 – compared to a standard competitor price of £2.99.
Yet to pay herself a salary, Smith paid £66,000 in staff costs last year and has only just started to break even.
After a nervous opening pitch which saw Smith take a silent moment or two to reassess herself, she invited the Dragons to make their own monster cupcakes with Suleyman and Tej Lalvani accepting – though not without hesitation of their own.
Starting and running the business entirely on her own and alongside her day job, the judges were impressed with Smith's established brand and passion for her product – but were worried at the slow progress of the “game changer” element of the business.
Having “just launched” a subscription service last October with a paltry 75 subscribers, Peter Jones was quick to point out that this wasn't “only just – that's a long time ago.”
Unaware of how many subscribers had renewed their membership, Smith's slow growth within an incredibly fast-paced and competitive market was enough to turn three dragons off her business as Deborah Meaden, Lalvani and Suleyman all pulled out of the investment opportunity.
While remaining Dragons Jones and Jenny Campbell were adamant the 36-year-old mum would struggle to achieve big profits, both were ready to offer a helping hand.
With two offers on the table, Smith accepted Peter Jones's offer of £80,000 for 35% over Jenny Campbell's offer of £80,000 for just 30% equity.
A real moment to savor for the entrepreneur, the “one women force” was “in shock” and “massively chuffed” to walk out of the Den with investment in hand.
- BKD has been trading just over two and a half years
- The business has revenues of £254,000 and is now “heading into profit”
- To date, it has sold just under 30,000 units
- BKD products are stocked in over 160 stores nationwide
- Stockists include John Lewis, LakeLand, Moonpig and Gousto
- The subscription package is £9.99 a month plus £1.99 postage
What the Dragons' said:
Deborah Meaden: “For me its the subscription business piece, that really will be the game changer for it, if its going to work. Because I'm worried about the size of this particular market. The trouble is, you haven't done anything to convince me the subscription market is even a goer.
“The fact you can't answer how many of those 75 customers, which in itself is tiny, how many of those are still on your books, that's all the subscription model is about. It's a pattern of behaviour. I think that's a bit fatal for me. So, I'm really sorry Adelle, I'm out.”
Tej Lalvani: “Congratulations on what you've done so far. It's not easy to create a brand like you have, you've got a really nice package – my daughter would love something like this. She loves to bake, in a fun way, which is what you've done. I'm just concerned about the real size of the market.
“Its going to be slow, long growth and I don't know where it is going to lead to. So unfortunately, I'm not going to be investing, but I wish you all the best. I'm out.”
Touker Suleyman: “What concerns me, is that its very niche. You're not going to get into profitability quick enough for me. So unfortunately, I'm going to say those bad words of ‘I'm out' but I wish you all the best.”
Jenny Campbell: “I like what's on offer but it does need some work. BKD? I'm still wondering what the whole thing stands for.”
Peter Jones: “Considering the partnerships and the size, its still quite small isn't it, the business?
“I think you're going to struggle, I think you're doing an incredible job. The reality is that sometimes incredible things and great businesses don't make any money and for investors that's really tough.
“It's a lonely road. Being an entrepreneur is lonely. It's a really tough business, there's a lot of work to be done here – and I'm going to help you.”