James Caan of Dragons’ Den: “The bank rejected me”

It was the mid-eighties and Caan was about to launch his executive headhunting firm Alexander Mann. “I didn’t have a lot of money. I didn’t own a house. And I didn’t have any savings,” he says. “So I went to the bank and tried to convince them to give me a loan. They turned me down – they said that I was inexperienced in business and I lacked any capital security. And they were right.”

Unfazed by the knock back, Caan considered his options. Approaching his parents for cash was out of the question. “My father ran a very conventional bricks-and-mortar business in Pakistan; he made something, he sold it, he made a profit. The concept of a service business, such as recruitment, was foreign to him.

“I remember trying to explain the business model to him: ‘Dad, if I can place somebody in a new job, I get 30 per cent of his first year’s salary.’ He couldn’t believe it. He said, ‘Are you seriously telling me that if you find somebody a job worth £75,000 a year, they’re just going to write you a cheque for £25,000? Nah, it’s a fad, it’ll never work.’ He just didn’t get it.”

Caan happened to be flicking through leaflets in Lloyds bank. There, in his hand, was the solution. “I saw the words ‘£10,000 overdraft facility’. So, I filled out a form for a gold credit card, and sent it off. It was so easy. Then I rang Barclays and said, ‘Have you got one of these, too?’ They said yes. So I opened another account. Next, I phoned NatWest. I ended up with £30,000 to fund my start-up.

“Luckily, you don’t need a lot of money to get a recruitment business off the ground. All you need is an office, some furniture and a name over the door. My client list was the Yellow Pages.”

This interview is part of the My First Million series that Real Business is running in association with Orange. Look out for the full article in the March edition of Real Business magazine.

James Caan will also be speaking at our Entrepreneurs’ Summit in April. For more details, click here.

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