A question many ask us is, “How did Dragons’ Den go?”
What they mean is … did you get a deal? Yes! We got a great deal! But it’s not what you think.
Of course, prior to the episode being broadcast, we knew the results, but we were under a non-disclosure agreement until the episode aired. So, was there a handshake? No, we didn’t get one, but we still did get a great deal and we are thrilled with the overall results and experience. Our only disappointment is that with 60 minutes of filming, it has been edited down to seven minutes, leaving lots of good stuff on the cutting room floor. If you tune in to the episode and blink, you may miss the video clip of our boats in the water. We were hoping for at least 30 seconds. As for the dragons and their comments, see below for our thoughts.
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Truth be told, we really don’t need any funding and we are debt-free. Adding an investor to our Ottawa location would have complicated our future plans. In due course, we want our children to oversee the Ottawa Palapa business operation unencumbered by outside investors. Gaby and I in turn will focus on expansion with investors/operators in other cities with Palapa Tours International. So how is this still a great deal? Keep reading …
What we enjoyed most about the Dragons’ Den experience is that not only did they validate the business idea, but two of the dragons said that this is the best lifestyle business they have ever seen. That’s powerful!
So, what exactly is a lifestyle business?
A lifestyle business (also referred to as a lifestyle venture) is a business set up and run by its founders primarily with the aim of sustaining a particular level of income (i.e. net $300,000) and no more; or to provide a foundation from which to enjoy a particular lifestyle.
Yes, Ottawa Palapa Tours is exactly that. But is that something the dragons want to invest in? The answer is no … they want to see something bigger and, although we have ambitious plans of 100 boats within the next 10 years, Palapa Tours International has yet to derive revenue from the licence partnerships it is establishing.
The dragons love franchise models because it mitigates risk on their investment. Although we are not a franchise, our business license model will drive a significant revenue source, but not yet and that’s where they got stuck. A lifestyle business in a single location did not “float their boat.”
So, although no handshake, Dragons’ Den exposure is worth well over $125,000 of free advertising across Canada. Entrepreneurs who are interested in doing what we do and being part of “the best lifestyle business” the dragons have ever seen now know about us … tell us that’s not a great deal!
We had the honour and privilege to meet up with Wes Hall from Dragons’ Den prior to our episode airing. Immediately upon seeing us, he said, “Hey, the tiki boat people” and went on to say we had a great pitch. He gave some insight about no deal and it was something we never considered. One of the stumbling blocks for an investor was the “seasonality” of the business. Despite great revenue, he felt that if we were a year-round operation, then it would have been more in line with an investor’s ROI. He did reiterate that our pitch was great and he remembered his FunGlasses!
We chatted about our plans to go south and establish an expansion in Mexico. Wes owns the Harbor Club Resort in St. Lucia and he gave us the name of his managing director. The Harbor Club has a fantastic bay area … so stay tuned.
Looking ahead: once Palapa Tours International has solid revenue numbers from expansion, we do plan on revisiting the den and possibly Shark Tank. Why not! The exposure is amazing, our business model is solid and we love our clients. As we grow, we want to help as many people as we can gain the lifestyle we are building.
We want to thank all the dragons for their enthusiasm and feedback. We want to thank our producers and those who have been with us each step of the way, including our children. Palapa Tours has marked many special occasions, from birthday parties and engagements to bachelorette parties and weddings. We thank you for allowing us to be a part of your lives.
What’s next? As mentioned, Gaby and I are preparing to spend two months in Mexico, relaxing and visiting resorts for expansion. We are also looking for solid investors to partner with us in their respective cities, as well as at the Palapa Tours International level. We can’t wait for next season and hope you enjoyed the episode: https://www.cbc.ca/dragonsden/m_pitches/palapa-tours
Here are some comments on each dragon:
ROBERT HERJAVEC – During our entire presentation, Robert was the most excited. Why? Because he sees tiki boats on the water in front of his house in California all the time. He validated our business and said the boats in front of his home are always full. However, Robert said he saw it as a limited size market. We think he missed the boat in understanding the overall expansion plan vs just a business in Ottawa. Nonetheless, we loved his overall excitement and enthusiasm.
WES HALL – Also validated that this is a great “lifestyle business” but not one for him. We shall see what the future holds with the resort down in St. Lucia. A deal may still be made for a single location vs investing in our corporate expansion plans. Time will tell and we agree with what Wes said when we met him the second time … to keep knocking on doors and never give up.
MANJIT MINHAS – She was excited but said that we should focus on booze sales as she felt they were low. Yet, we don’t want to be focused on only selling more drinks as the experience in our opinion is more important. Manjit went on to say that it is a “fun idea” but that there are no real barriers to entry. We wholeheartedly disagree. The American boats never came to Canada because there is a barrier to craftsmanship and safety as per Transport Canada regulations, which we have met. We are not simply a “raft with a bar.” We are the first of our kind in all of Canada and we built a better boat than what is available in the U.S. We don’t think competition will come easily because there is a huge barrier to entry.
MICHELE ROMANOW – Michele said that she felt the ticket price at $85 was expensive. We are not sure where she grabbed that number from. On average, our tickets are $60 with $45 on Tuesdays and $75 on Saturdays. If you charter the boat, it’s $50 per person. Michele believes we will expand with many boats, it’s a great business but not an investment for her.
VINCENZO GUZZO – Booze cruise? Sees it as a risk. He was comparing us to larger boats of 150 people where safety mosquito nets are in place, so people don’t fall off. Yes, we limit our alcohol sales for the safety of all, yet Manjit felt the sales were too low. Can’t have it both ways. Either we focus on being a cool experience or we focus on being a booze cruise. Risk is part of business but we choose safety first.
ARLENE DICKINSON- Notice no answer from Arlene. Why? Is there something missing? The truth is that our pitch was supposed to be over when all the dragons opt out or we do a deal, but Arlene vanished from any answer. So, we will allow this to remain a mystery.
Our takeaway is that what you see on TV is very far from reality. We are thrilled with the experience, we are thankful to everyone and we already have expansion contracts in place for other cities. Thanks for taking the time to be on this journey with us and our doors are open for any future entrepreneurs seeking to face the dragons. Malaho!
