Innovation

Dragons’ Den: Fly like a dragon

Written by ProfitGuide Staff

JIM TRELIVING
Chairman
Boston Pizza International Inc.
Richmond, B.C.

A former RCMP officer, Treliving partnered with George Melville in 1968 to purchase a Boston Pizza franchise, and soon bought the parent company. Today, BP’s system-wide annual sales exceed $756 million and the pair own numerous other businesses, including Mr. Lube.

Which personal trait or skill is most responsible for your business success?

Understanding and listening. Someone advised me when I was going into business for the first time that if you are going to hire and work with a person, you have to have the ability to listen to them.

How would you go about launching your business again today, if you had no money to do it?

There is always a group of people out there who are looking to get a good return on their money. When we started out, we looked at the bank first and found that didn’t work. So, we said, ‘Let’s go to the people in our business that we think have money and see if this is a good investment for them.’

Which skill is generally undervalued by entrepreneurs?

A better understanding of how deals are done and structured.

What’s the most overlooked source of capital for startup companies?

It takes gumption, but you should make a list of people who have money—private investors—and knock on their doors. It’s the simplest thing in the world, and that’s how I got into Boston Pizza.

Based on your experience, what’s your most important advice for launching a new business?

Have a business plan, have a business plan, have a business plan. Once you have your plan, take it to a banker or an entrepreneur; they’ll poke holes in it, and then you can improve upon it—so that when you take your plan to an investor, he’ll see it and think you know a lot more than you probably do.

ROBERT HERJAVEC
CEO
The Herjavec Group
Toronto

Less than 10 years after starting an Internet security company, Robert Herjavec sold it to AT&T for a reported $100 million. Today, he’s CEO of one of Canada’s Fastest-Growing Companies, The Herjavec Group, a Toronto-based network security firm with revenue of $16 million, up 3,785% from five years earlier.

Which personal trait or skill is most responsible for your business success?

Eternal optimism rooted in healthy skepticism. The ability to stick with it, to be able to get up in the morning and do it again even on the darkest of days.

What qualities in an investment tell you it’s going to be a success?

As the economy gets tougher, I look more for defensible advantages to that business. It can be, for example, intellectual property or exclusive distribution for a product.

What’s the biggest mistake new entrepreneurs make?

Irrational exuberance. The most successful entrepreneurs are very optimistic, but their feet are rooted in the ground.

Which skill is generally undervalued by entrepreneurs?

No. 1 is sales. People never give enough credit to the importance of sales. I don’t mean just salespeople—I mean the focus of the company to sell.

What’s the most overlooked source of capital for startups?

Customers. In my first business, I made a big sale to GE and told them, “I’m a great guy, I’m starting out, we’re going to do a fantastic job for you. But we’d like you to pay in 15 days because we need to pay our supplier in 25 days.” Clients are more open to working with you than you realize.

What’s key to the success of technology startups?

Research in Motion’s Mike Lazaridis recently told me that RIM never invests in new technology until it has a paying customer. The engineers come to management and say, “Here’s what we’d like to develop,” and management says, “Great! Go find somebody who will buy it. Then get a proof of concept and an order, and we’ll put resources behind it.” I’ve adopted that. In technology, it’s important not to make bets that could cost you the company until you have an order.

ARLENE DICKINSON
President
Venture Communications Ltd.
Calgary

After joining Venture Communications as a partner in 1988, Arlene became sole owner 10 years later and rapidly turned the Calgary-based company into one of Canada’s largest independent marketing companies. With offices in Calgary, Edmonton, Toronto and Ottawa, Venture’s 2007 revenue topped $29 million.

Which personal trait or skill is most responsible for your business success?

Trusting my instinct, for sure. That’s been crucial in everything from hiring to the business model that we follow.

Which skill is generally undervalued by entrepreneurs?

Process and organizational skills are generally not a skill set that entrepreneurs have. Entrepreneurs like them, but don’t think they’re as important as sales skills, for instance.

What’s the biggest mistake new entrepreneurs make?

They often go into business with a romantic notion and figure the honeymoon will never end. The reality is that you are running an enterprise that requires a significant personal and financial commitment from you.

What’s the one thing that entrepreneurs can do to make their marketing message memorable?

Simplify. No matter how complex the tactics and execution may get, keeping the central premise of the offering dead simple is critical.

What’s the most overlooked source of capital for startups?

I’d certainly say, ‘angel investors.’ They are a group of people who love startups, who will spend time and energy on your business, and are willing to take a much higher risk.

What’s your most important advice for launching a new business?

There is enough chaos going around already, in terms of energy and enthusiasm. So, you need to be really clear about what you need, and why you need it, so that everybody understands where they’re heading.

W. BRETT WILSON
Chairman
FirstEnergy Capital Corp.
Calgary

He is the newest member of the Den’s investment panel, but Brett Wison is no stranger to bankrolling a good deal. As chairman of Calgary-based investment bank FirstEnergy Capital Corp., Wilson has brokered financing deals worth more than $150 billion. Today, today the firm has major stakes in the energy, agriculture, real estate and sports and entertainment sectors.

How would you go about launching your business again today, if you had no money to do it?

It’s chicken and egg: you’re not going to be able to attract a lot of money until you’ve proven that you can manage and invest a lot of money. So, you have to start small. One thing would be associating with people who share my values and vision for the business. Those would be the angel investors that you’re looking for.

What’s the one quality you wish had more of?

Most people would suggest it’s patience, and I know that. I spend a lot of time gathering information, and then when I’m ready to go, don’t get in the way; let’s get at ’er.

What qualities in an investment tell you it’s going to be a success?

People, people and then people. I’ve often said that smart people can make money in terrible businesses, but unethical people can screw up the best business in the world.

Which skill is generally undervalued by entrepreneurs?

Assessing people and understanding the value of marketing. I don’t think people really understand it, or fully appreciate in order for a marketing piece to be useful, it has to be memorable.

What’s the most overlooked source of capital for startups?

Both clients and suppliers are places I would turn to from time to time. You can delay terms on bills when you are in startup mode.

What’s the biggest mistake new entrepreneurs make?

Market-share guesstimating. They say things like, ‘There are 100 million dog owners who need leashes in the U.S., and if we could just sell 1% of them.’ Well, the gap between you and 1%, given that there are 100,000 people thinking about selling dog leashes, is huge. You might be lucky to get one-tenth of 1%.

Based on your experience, what’s your most important advice for launching a new business?

You have to know it will take longer, cost more and sell for less than you first forecast. Don’t have delusions that your business-plan forecasts are accurate. I can’t tell you how many times people come in and tell me they have a conservative business forecast. No! You have a wrong business forecast.

KEVIN O’LEARY
Managing Partner
North Coast Capital LLC
Boston

O’Leary struck it big when he sold his educational software firm, The Learning Company, to Mattell Inc.for a staggering $3.7 billion. Since then the former TV sports producer has returned to TV, hosting Squeeze Play on Canada’s Business News network.

Which personal trait or skill is most responsible for your business success?

Early on, I realized that I had some fundamental weaknesses. I’m a marketing guy. So many marketing guys blow their brains out because they don’t have the block-and-tackle support underneath them as they push forth new products. An entrepreneur has to be able to look himself in the mirror and say, ‘I know I’m weak in an area, and I’m going to find a partner who does that with me or for me.’

How would you go about launching a business today, if you had no money to do it?

I would go work for a large corporation and pick the brains of the people there to figure out how that big company worked—so that when markets open up a little, I could break out and sell a service back to them.

Which qualities in an investment tell you it’s going to be a success?

The ones where I’ve made the most money have these two ingredients: growing markets and a great leader. Growing markets hide a whole lot of mistakes.

What skill is generally undervalued by entrepreneurs?

The ability to communicate. Can you stand up in a room with 30 people and articulate your idea flawlessly?

What’s the most overlooked source of capital for a startup company?

Right now, the first place you have to go is to friends and family, because no one else is going to give you money. And then you can tap out credit cards.

What’s the biggest mistake new entrepreneurs make?

They’re overoptimistic in their sales forecasts—by 300%, 400%, 500%.

What’s your most important advice for launching a new business?

No. 1 is to be extremely conservative on forecasts. No 2: keep overhead down. I can’t say it enough. If you are burning a hundred grand a month and have no sales, it’s only a matter of time before that first million bucks you raised is gone. Money is blood. If you don’t watch the drops, you’ll die.

Originally appeared on PROFITguide.com
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