The common sense angel of the Den with a loathing for business jargon
WHEN Deborah Meaden talks about the “great entrepreneurial spirit in the UK”, people should take note. As a panellist on the BBC’s popular business show Dragon’s Den, she’s part of a team who have become the public faces of anyone-can-do-it enterprise. Meaden turned her family holiday park business into a multi-million pound operation, making her fortune when she sold it. Now concentrating on investing in SMEs – her Dragons Den investments are just one part of her interests – she says that she has invested more in the past 12 months than in the previous three years.
“It’s not that I’ve been finding more opportunities, but better opportunities,” she says. “That entrepreneurial spirit should be the thing that’s going to get us out of this recession, and those enterprises are going to be the engine room of recovery. I want my money out there in these businesses – it’s not as if I’d be getting any interest on it otherwise.”
Meaden reckons that, as mainstream investment avenues have been shut down with the banks “frozen in absolute fear”, the opportunities for angel investors such as herself can be juicy.
Like many business leaders, however, Meaden is unhappy at the 50 per cent tax rate, and the potential for it to restrict growth when it is most needed.
“If it is the entrepreneurs who are going to get us out of this, they need to be encouraged,” she complains. “A blunt instrument like that might be a vote winner, but it’s not very clever for those people who should be aspiring to get things going. I think we can be a bit cleverer with the way we encourage people to invest.”
STRAIGHT TALKING
Meaden is happy taking the government to task , but she’s far from the fearsome, fire-breathing dragoness her TV reputation suggests. A jocular and informal presence, she’s also an intensely private person who recoils from the idea of public speaking, and says – unlike her fellow Dragons – that she’ll never write an autobiography.
What can make her appear bullishly dismissive on television is her commitment to straight talking and an abhorrence of waffle. An episode of Dragon’s Den wouldn’t be complete without Meaden rolling her eyes with boredom as pitchers spew business-speak homilies, but can’t give her figures on turnover and expected profits.
Such situations inspired Meaden’s new book, Common Sense Rules. In it, she wages a war on business cliches and counters them with the simple truths that she says have guided her decisions.
GOOD JUDGMENT
“I get asked all the time by people starting up businesses, what are the keys to success?” she says. “They expect to be able to tick certain boxes and be fine. But it’s good judgment that enables you to be a success, and you’ve got to know the right stuff to develop that judgement.”
Meaden describes the common sense she expounds as “good judgment without specialist knowledge – I’m not a specialist in anything”. But in drawing on experiences from a career that has seen her build an estimated £40m fortune, her aim is to cut through the jargon and distractions that she reckons inhibit people from making strong decisions.
NOT IMMUNE
“I think we have forgotten the common sense stuff, which is the stuff I grew up with,” she says. “I think if these things had been remembered, we wouldn’t be in the economic state we’re in at the moment.”
Not that Meaden’s investments have been immune. JPM Eco Logistics, an eco-friendly haulage company into which she and fellow dragon Theo Paphitis sunk £100,000 in 2007, became the Den’s first recession casualty when it went bust in January. Meaden, however, says that being prepared to take a risk is a key characteristic of the successful entrepreneur – as is knowing when to pull the plug on a failing investment, as she had to in this case. That, she says, is where judgement comes in.
“There are certain characteristics, like competitiveness and being prepared to take risks, that are present in all entrepreneurs I’ve ever known,” she says. “But good judgment is the thing that can be learned – it’s about equipping yourself with simple rules of common sense, and being able to draw on them when you need to. It’s not rocket science.”
Common Sense Rules is out now, priced £18.99
COMMON SENSE RULES MEADEN ON BUSINESS
On being a salesperson: “Far too many people are held back by their fear that they are not a born salesperson. If they are as passionate about what they do as they should be it follows that they can’t help but sell their dream to other people.”
On unrealistic business plans: “The business plan of every investment I have ever made has been far too optimistic. I always knock the timings back a little bit and remind them to make provision for bad debt.”
On hiring: “When people start businesses they tend not to get people in soon enough. If there is a clear picture of where the business is going, there has to be a plan of how to get there. Hire ahead of expansion, because companies without enough people will not reach their goals.”
On small businesses: “The smaller a business, the better chance it has of kicking against the natural economic cycle. It does, after all, only want a small slice of what is usually a big pie. Being unique and personal makes it much easier to buck a trend.”
CV DEBORAH MEADEN
Born: 1959
First business: Aged 19, Meaden launched a business importing Italian glass and ceramics to the UK. It collapsed with Meaden owing £3,000.
Family business: After serving an apprenticeship running Butlins’ bingo business, Meaden joined her parents’ West Country leisure park business, Weststar.
Buyout: After becoming managing director, in 1999 Meaden acquired the major shareholding in Weststar in a management buyout. She sold the company to Phoenix Equity Partners in a deal worth £33m, while retaining a 23 per cent stake. In August 2007 she sold her remaining holding when Westar was bought by Alchemy Partners for £83m.
Dragons Den: Meaden’s investments on the BBC programme include the “make your own” doll, YoudooDoll; Magic Whiteboard, a rolled up, portable whiteboard; and construction waste specialists Prowaste.