Entrepreneurial advice from Wealthy Barber of Dragons' Den
'Infectious enthusiasm' key to business success, David Chilton says
David Chilton is a funny guy. “The part of Dragons’ Den I like least is working with Bruce Croxon,” he jokes, referring to fellow Dragon and the founder of Lavalife. “Make sure you put that in your article.”
But Chilton is very serious about his love of entrepreneurship and business at large.
“You have to constantly be honouring your promises,” he explains. “The consumer is quite demanding and so they should be. I love all of that. I love all the challenges business presents.”
Chilton made his name by writing one of the best-selling books in Canadian history, the personal finance guide The Wealthy Barber.
Two years ago he was recruited to become a Dragon on CBC’s hit reality program Dragons’ Den. During his two seasons on the show he’s closed 14 deals with entrepreneurs who came to pitch their ideas to the panel, investing in a wide range of products and services.
So what is the key entrepreneurial attribute that inspires him to say “yes” to an investment?
“Every pitch is so different, and you have to look for different things,” says Chilton. “I think part of the magic of the show is that there is no checklist.”
But at the same time, he acknowledges there are some basic ingredients to a successful pitch. The most impressive entrepreneurs have a good command of their numbers, and are able to explain their costs and profits. They’re savvy about their prospects and their industry, and have energy. Chilton himself starts to sound energetic when he gets to his next point, speaking faster and faster.
“You want them to have infectious enthusiasm because they have to be able to sell. And they don’t just have to sell to the end customer. They have to be able to get the retailer excited, the suppliers excited, the workers excited. You really have to constantly be in sell mode.”
One of Chilton’s best investments so far is Steeped Tea, a franchised home tea party venture created by Tonia and Hatem Jahshan of Hamilton. The couple’s annual sales were around $1.2 million when they came to the Den, and enticed both Chilton and Boston Pizza owner Jim Treliving to partner with them.
“This year Steeped Tea is trending towards $12 million in sales,” crows Chilton. “We caught them at the inflection point, and I’d like to think we’ve added a lot of value. Jim and I have both been very involved. Those people aren’t just nice, they’re nice squared.”
He counts Awake Chocolate as another wonderful investment, pointing out that like Steeped Tea, this company has expanded into the U.S. Chilton has high hopes for a number of his investments from this current season of Dragons’ Den, but due to the show’s policy of keeping deals a secret until they air, he can’t give any details. Not that he wouldn’t love to - talking up business is one of his favorite things to do.
“I really enjoy the marketing side,” he explains. “Creating the attention, the demand, especially nowadays when there are so many stimulations out there, pulling people’s attention away - social media, the fragmented television marketplace. A lot of people think getting on the shelf is the same as on getting off the shelf. But how do you get the person walking through the store to grab your product and put it in their cart, or go to your website and spend their money? That’s the hardest part of business.”
Marketing may be fun, but Chilton has a suggestion for all entrepreneurs who struggle with the less sexy side of business: the numbers. He recommends a book published in a few years ago called The Accounting Game. It sounds a bit like The Wealthy Barber, since it also uses a story format to impart its lessons, in this case through the story of a lemonade stand.
Watch the books
He also believes that doing your own bookkeeping and writing your own cheques are important, to keep close tabs on what’s going out and what’s coming in. He did his own accounting early on, only passing it off to an accountant when his business became bigger and he was busier.
“Nobody’s asking you to become a CA here,” says Chilton. ”You don’t have to understand stuff like prepaid expenses, but you do need to get the basics down pat.”
From my perspective, modesty is one of Chilton’s most endearing qualities. He often takes a pass on a pitch by saying “I don’t know anything about that industry.” And he maintains a positive attitude even about things that go wrong.
“I’ve really enjoyed a lot of the mistakes I’ve made,” he claims. “And I’ve made a lot of mistakes, including some really dumb ones. I made one that cost me millions and millions of dollars. And I look back on some of those fondly - not the big one of course - because I’m not an idiot! But we all have blind spots, and trying to overcome your own weaknesses and challenges - even becoming aware of them - is part of being an entrepreneur. It’s like a game in so many ways.”
It strikes me that David Chilton could make almost anyone want to become an entrepreneur. I think he’s got infectious enthusiasm nailed.