Blog Post
Using synergy
- Date: Sunday 27th September 2009
In the On-line Dragons’ Den programme the BBC broadcast this week () I made an investment in a business owned and run by Jill Goodchild. Unusually for me, it is a business that I know the square root of nothing at all about – it’s fashion and costumes. Jill was looking for £35,000 to take her costume design and production company forward and develop it on the internet. She designs and makes costumes and sells them to theatres and dance schools. With the investment money, she was going to get help making the costumes, invest in marketing and develop a web site that would take her into a much larger market – retailing the clothes to, I guess, fancy dress partygoers and so on.
Why I went into a venture that is so out of my normal area of business is a good example, in my opinion, of how an entrepreneur puts a number of things together to make a whole that is much larger than the sum of the parts.
I have a couple of good contacts in the fashion business http://www.checamille.com/
and one of my management team has the skills and knowledge to mentor and encourage Jill to grow her business. Add to this my companies’ experience in working with web sites that sell products and you can see the synergy that made the idea attractive.
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Tip from Shaf – Cross-selling on a web site
Everyone has gone into a shop and bought something that triggered the sales assistant to ‘cross-sell’ another product. A man buys a shirt and the assistant gestures to the tie display to suggest that he buys a new tie to go with that particular shirt: a woman buys a skirt and the salesperson encourages her to buy a matching top.
Simulate this on your web site by suggesting something else that an on-line shopper could buy to go with their original purchase, either on the same site or via a click through.
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So, I bought 40% of Jill’s business for £35,000. I think it’s a good bet and that there will be good growth available to make sure that Jill and I both make money.
Julie Meyer, the other Dragon in the on-line Den, said a couple of interesting things that I quite agree with and that give good clues about how to present to the Dragons:
- She said that she is looking for investments where the entrepreneurs are impatient and ambitious, not just to take their businesses forward but also to really make them take off. Don’t look as though your plans are modest if you want to get a Dragon on board
- After I had invested with Jill, Julie also said something like, “She’s a nice lady; you’ll enjoy working with her.” That’s important too, I’m in business for fun as well as profit and I want to work with people whose company and style I like
You can step outside your normal business ‘comfort zone’ and go into new areas if you are going to work with people who do understand the industry and whom you can trust
- You can see Shaf on programme three of Dragons’ Den Online this Thursday at 10pm, on BBC2
