Rejecting investment from a Dragon is a brave move. In each series of Dragons’ Den, businessmen and women from around the country pluck up the courage to pitch to the panel, in the hope of securing investment, and yet most return home empty handed. Paul Ward falls into the empty handed camp, but unlike most Den participants, this was his choice. Last year he rejected James Caan’s offer of investment in his antibacterial products business, Paragon PE, and has since gone on to exceed his financial targets – something no other Dragons’ Den contender has achieved.
"The contract James Caan offered us involved giving away too much equity, something we just weren’t prepared to do," Paul explains. Instead of £100,000 for 5% equity that he asked for, Caan said he’d give them the full investment, but in return for a 30% stake in the company. It’s a familiar struggle for entrepreneurs. He and his business partner Ken Brownless had spent years formulating their unique antibacterial detergent and when crunch time arrived, they simply didn’t want to relinquish that much control. "We just couldn’t give so much of the company away, it was our baby."
An army medic by trade, Paul worked in the chemicals industry after leaving the armed forces. While developing new products for companies by day, he studied chemistry at night school for the next six years. "I learnt all about the market, what was selling and what wasn’t, and realised I needed to make a product that was non-hazardous and that would kill superbugs," he recalls.
Sheer determination led the pair to launch the business in 2004. Paul re-mortgaged his house and they each put in personal funds totalling £50,000, which helped pay for product development and laboratory testing. "Once we came up with formulations, we had to get each one tested over and over again to prove it worked and to assess its safety, it’s an expensive process," Paul explains. He puts most of the revenue straight back into the business to continue the research and development process, which has amounted to about £250,000 over the years.
Paul says the local Business Link in Lancashire was a valuable source of information and advice that helped with the planning process, however he affirms: "after that you’re on your own" – something he learned the hard way when trying to cope with challenges such as late payments, and securing additional clients. "It’s hard to find new business, especially as a small start-up company, because people trust the brands they know," says Paul. The economic climate has been another strain on the business, as companies have gone bust whilst owing them money.
However, in the midst of the global recession, the business made its first major breakthrough. After months of experimentation, Paul and Ken succeeded in getting their products certified against C. difficile bacteria and the swine flu virus. "During the swine flu pandemic, we were the first port of call for many hospitals because we had one of the only products that could kill the virus." While most Brits responded with panic to the pending epidemic, Paul and Ken saw the silver lining in a very infected cloud.
Aside from medical products, Paragon PE now produces sports detergents, hand sanitisers, odour eliminators and antibacterial beauty products. A recently launched marketing campaign for the company’s sports wash, Halo, will no doubt do wonders for its public image, with a little help from Olympic athletes. Jamie Baulch, the 400 metre hurdler, and the England taekwondo team are just some of those endorsing the products. "Its great having them on board," says Paul, who maintains they were approached by the athletes after they watched the pitch on Dragons’ Den.
While Paul has predominantly aimed marketing campaigns at mothers and sports people, he’s also made the most of his army contacts by approaching the Ministry of Defence. His efforts have not been in vein. He now showcases his products at infection control open days held in barracks around the country. The company also only recently entered the retail market, with products currently being sold in Wilkinson stores nationwide, as well as Filco in Wales, and a number of independent sports stores.
With turnover reaching £1.5m last year, you could argue Paragon PE is the one that got away from the Dragons. But Paul insists his appearance on the show was more of a PR stunt rather than a genuine quest for investment: "To be honest, the company didn’t need investment as it stood on its own two feet already, but we managed to generate some good publicity for the products from it".
Moving the company onwards and upwards, Paul says he’s exploring many different avenues and would like to see it progressing into more specialist sectors, such as the outdoor and pets industries. Even more exciting are various interests that are emerging in Europe, and the Far-East; and a contract with the Chinese army is potentially on the horizon. The world’s largest employer is presently trialling the products and securing the deal would no doubt be colossal for the Skelmersdale-based business. For Paul, "the journey has only just begun".