Listen to a real business negotiation and learn loads of English in the process. Vocabulary, scripts and notes available below.
Transcript & Notes
Welcome back to LEP. This is part 2 of this mini series I’m going to do about BBC Dragons’ Den, the TV show about entrepreneurs trying to raise finance for their business startups by going to meet the Dragons – a group of 5 business angels looking to make money by investing in interesting new business propositions.
In part 1 of this I did a long business ramble all about the different factors and considerations involved in an entrepreneur attempting to do an investment deal with a private equity investor. That covered loads of vocabulary relating to loads of different areas of business and laid the ground work for this episode in which we are going to use a real pitch from an episode of Dragons’ Den as a case study from which we can learn loads of English.
Also, the story of this particular investment is particularly interesting and the negotiation takes an unexpected turn which creates more emotional drama than you might expect from a business meeting.
So, at the end of part 1 we listened to Kirsty Henshaw’s original pitch. Let’s listen to that again and break it down for language. After that we’ll listen to the rest of the meeting in bits. We’ll listen and then listen again and break it all down.
This should be a really good one! I hope you’re listening carefully. We might be able to get all of this done in this episode, we will see. There are other Dragons’ Den pitches that I’d like to do too so I might add another episode with some other pitches as well. So perhaps this will be a 3 or 4 part series.
Right, so let’s listen to Kirsty Henshaw again and remember my questions from before.
- How much investment does she need? £65,000
- What equity stake is she offering in return? 15%
- What exactly is the product? A healthy alternative to ice-cream – a frozen dessert (free from dairy, sugar, soya, nuts – everything! But what’s actually in it?)
- Why does she need the investment? To buy stock, raise brand awareness with marketing and PR
Would you like to invest?
What questions would you like to ask next?
Kirsty’s pitch begins at 44:00
It tastes more like frozen yoghurt. Is that fair?
– She wanted a healthy option, similar to ice cream but there’s no dairy that’s why it’s a frozen desert.
How much has it cost so far?
How many have you sold?
– 2,500 units
– Went to a big meeting with a large supermarket – it’s completely unique, some of the staff had heard about it before
Do you have any forecasts in the first year?
– 300,000 units – starting to get into bigger places now
How healthy is it? How much fat is in it?
– Less than 3% fat in all of them, no sugar in any, carbohydrates are from fruit extracts, a good form of sugar
What are the ingredients?
Brown rice milk (because soya isn’t great for children and rice milk is a good digestive enzyme), the fat is organic virgin coconut oil, sweetened with extract of apple, carob and grape.
How far are you down the track with the supermarket?
– Min 400 stores from Sept when they do their refresh
Are they committed?
– At least 350-400 stores to trial it
Which supermarket is it?
They must have asked you whether you could produce in the right volume?
What did you say?
– I said yes because I’ve spoken to the manager of the biggest ice cream manufacturers and they can make it no problem, if we get the order (volume – numbers)
Do you have any idea what Tesco’s potentially could order?
– At least four flavours for each store to start with
How many in a case?
If they sold one case per week per store, that’s 400 cases. How much do you make per unit?
– Just over one pound
So 4,000 per week is what you’d make. That’s 200,000 a year.
– Not including my current suppliers
What did you forecast your profit in year one?
So that forecast is not a million miles out. There’s some substance around it.
What’s your background?
Uni (sports science), but had to leave because mind was on the business
Who is Worhingshaw’s?
– Mix of boyfriend and her name – to make it sound like it had been around for a while
Have you really done all this on your own?
How do you invest the money in this?
– 2 jobs and a bit of a night job, and my little boy
You’re pretty amazing aren’t you?
– No, not really.
[She starts crying]
This has been really tough for you hasn’t it?
– I just do it all for my little boy. I just want him to have a good life.
I’ve got to be honest with you. I’m finding it really really difficult to actually take on board what you’ve achieved. It’s phenomenal. I’m totally blown away by it. I’m going to make you an offer. You’ve come in here asking for 60,000 for 15% but I want 40%.
And I’ll explain to you why. Because I’m not going to give you 60,000, I’m giving you 100,000 because that’s what I believe you need to make this business successful.
Let me tell you where I am. I think you’ve done a great job against all odds, but here’s my blunt and honest truth to you. I’m not going to beat Theo’s offer so I’m not going to waste my time making you one. Thank you very much but I’m out.
Where do you want to take it? You’d love to see this product in every shop. Reggae Reggae Sauce was a big success because of Levi Roots’ whole story. You could be the frozen desert version of Levi Roots.
For that reason I’d like to make you an offer for the full amount but I only want 25% of the company.
Let me wish you every success but you’re not going to need my offer so I’m out (there are already deals on the table).
I’ll match Peter’s offer (£60,000 for 25%)
I don’t want to give 40% away but thank you for your offer Theo.
I’m really confused now because I know you’re both brilliant.
You’re both ideal to help me, so I don’t really know what to do now.
If we raised it to 30% so we got 15% each, I’m more than happy to work with Duncan if that’s something he would accept (yes).
I’d really like to work with both of you. It would be ideal so thank you very much I’d really like to accept your offers.