Subtitles section Play video Print subtitles Hello, Dragons, my name is Claudia and this is my partner Alex. Hiya. We are the founders of Imperial Candles. We are here today asking for £100,000 in exchange for 10% equity in our business. Imperial Candles - we hand-make soy scented candles and other products with a hidden jewel inside as the element of surprise. We started the company five years ago, at the age of 22, from a one-bedroom apartment while studying computer science at university. Since our humble beginnings a lot has changed. We are currently operating from a 6,000 square foot facility. We have a large social media following with almost 400,000 fans on our Facebook page and we have generated £7 million in turnover to date. OK, so how does it work? Simply light up the candle and after a couple of hours of burning you should be able to spot in the wax a little colour package. Simply remove it and discover a new dazzling piece of jewellery. All of our jewellery are made with 95-sterling silver or gold and can be worth anything between £10 and £2,000, so you never know what you'll get inside. Thank you for listening to our pitch. We would love to give you some samples. Scented candles and bath bombs with jewellery concealed inside... TOUKER: What's the value of a ring like this? ..are the offering from Romanian entrepreneurs Claudia Negoescu... It's 45. £45? Yes. ..and Alex Ianas. PETER: What about this? It's about 65. That's the most expensive. DEBORAH: Hold on, hold on, hold on. Oh, that's very pretty. The couple are looking for £100,000 in return for a 10% share of their business... 35. 35? Yaaay! Winner's corner! CLAUDIA LAUGHS ..but will this investment opportunity be another hidden gem for the Dragons to uncover? I'm Sara. Hiya. Wow, impressive - seven million of sales since you started. That's good going, it really is. Thank you very much. How long have you been going and will you just break me that seven million down? We've been running five years now. So, first year we did 750,000, gross profit of 309 and a net of 54. The next year we did 1.9 million... ..with 750 gross and 32 net. And last year we did 1.5 with a gross of 510 and a loss of 34,000. Mm... Why has your gross profit, year by year, been decreasing? Basically, advertising worked quite well when we started. We created a Facebook page and we started doing Facebook advertising... Right. ..but over the next couple of years, let's say, all the social media platforms changed a bit, and we didn't get as much traction. And then our raw materials, we actually buy the majority from America and Europe. Right. So, you can imagine when they're selling... The dollar? Yes. So, that affected our prices by around 20%. Yep. Everything went up. And because we manufacture everything in the UK, the labour got more expensive, so all our overheads went up. So, at the moment, are you losing money, month by month? Yes. This year we're going to make a loss. I think it's going to be around 50,000. 50,000 loss. Yeah. How much money have you got in the bank at the moment? Not too much. Not too much? Yeah. Around £5,000. So, you've come right to the brink. Yeah. Touker Suleyman is concerned that Claudia and Alex could be teetering on the edge of a financial abyss... ..and Peter Jones wants to find out precisely how their precarious situation is affecting the pair. Alex and Claudia, I think what the reality is, you've got a declining business and a declining business model. Are you worried? CLAUDIA: I think I'm putting a lot of pressure on myself because I do all the marketing for the company. How do you live? Er... Basically... We manage! Yeah. What we do, we use the business card, so if we need to pay for something, we pay with that card. We don't even move money to our own personal account. Well, you haven't got it, have you? That's a huge strain on your family life because there's no escape, and at the same time, you're living in the middle of a business that, at the moment, you're running out of money with only £5,000 left. You must be worried that at some point, those candles, the lights are going to go out. To be honest, even though it's silly to say, we're in a better position now than we were two years ago when we had more turnover, because we learned so much more and we're confident that we can turn this around. What are you planning to do? Basically, last year, we outsourced our distribution, so I think that helped a bit with our cash flow. Moving forward we're actually looking at working with someone that can actually make the candles for us so that we can get a fixed cost. One thing is the cost of the product, which you can engineer to make it cheaper, but what I'm concerned with is the cost of acquisition to get the sales. If you spent £1 in marketing, what sales is that currently generating to you on Facebook? Around £5. £5? Yeah. So, that's OK. Things looked bleak for the candle entrepreneurs, but the healthy ratio between their marketing spend and subsequent return has offered a faint glimmer of light. Deborah Meaden, however, is concerned that Claudia and Alex's product could be a flash in the pan. DEBORAH: So, looking at this, my worry is that there could be an underlying issue there and that underlying issue could be, it's lovely, it's a novelty, let's do it, but, actually, that consumer moves on to the next novelty. Can I say something? You have an answer for that? Yes. Because this product is quite unique, I think we can do at least ten million quite, quite easily, because, basically, we based our projection on actually what our competitor does in France and Germany. They're actually doing around ten million in France. And is your product cheaper than theirs? No. They sell for the same price, but the quality of the jewellery is better, and when people start getting more options and seeing our products, they prefer our product. SARA: But the bottom line is you'd be second to market going up against an already established business, trying to knock them out when you don't have something that's more unique. I'm going to tell you something that we shouldn't be telling you, but they've actually made an offer for our business. They've offered to buy your business? BOTH: Yes. For how much? Half a million. Take it. No, honestly, guys, that's great. Well, we don't have that offer any more cos we didn't go for it. I really think if you can go and try and get that half a million offer back on the table, honestly, I... You should have snapped their hand off when you had the chance. It's probably a good time for me to tell you where I am. You've shown that you are successful entrepreneurs and part of being a successful entrepreneur is knowing when this idea's run its course and it's time to run onto the next one. My advice would be, go out and try and find the next jewels in the candles. I'm sorry, guys. It's definitely a no from me. I'm out. A blow for Claudia and Alex as Sara Davies neglects to follow their example,