Changing The Face Of Construction One Straw House At A Time | Dragons' Den

Summary

Barbara Jones and Eileen Southerland, founders of Straw Works, pitch their eco-friendly business specializing in designing and constructing natural buildings made from straw. They seek a £50,000 investment for 10% equity to expand into prefabricated straw houses and tiny homes. Despite their expertise and passion for sustainable construction, the investors raise concerns about scaling, mortgage, and insurance challenges. The business, still in the design phase, lacks manufacturing capability in the UK, which deters the investors from backing the venture. Ultimately, they leave without investment but remain optimistic about their future.

Takeaways

• 🏡 Barbara and Eileen are entrepreneurs specializing in natural, eco-friendly construction using straw and natural materials.
• 💷 They are asking for £50,000 in exchange for 10% of their business to expand prefabricated straw buildings and tiny homes.
• 🏠 Prefabricated straw houses can be built faster than traditional homes, potentially reducing construction time by a month.
• 💰 Currently, the cost to build their prefabricated homes is around £120,000, but with scale, they believe they could match the industry standard of £113,000.
• 🌾 Their company focuses on creating sustainable, thermally efficient, and airtight homes that are environmentally friendly.
• 📉 The business currently shows a net deficit of £2,000, with sales around £39,600 and several leads for new contracts.
• 🔧 Barbara has a background in carpentry and discovered her passion for straw construction through a two-day course that changed her career path.
• 🏗️ The company outsources prefabrication to a factory in Lithuania, which was a concern for the Dragons who expected UK-based manufacturing.
• 🏦 Challenges such as securing mortgages and insurance for straw-built houses remain barriers in the market, but solutions are available through specialized providers.
• 😔 Despite their passion and expertise, the Dragons felt the business lacked uniqueness and scalability, leading them to reject the investment proposal.

Q & A

What business are Barbara and Eileen pitching in the script?

Barbara and Eileen are pitching their business, Straw Works, a bespoke design company specializing in natural buildings made from straw and other natural materials. They offer prefabricated straw buildings and tiny houses.

What investment are Barbara and Eileen asking for?

They are asking for £50,000 in exchange for 10% equity in their business.

What are the key products offered by Straw Works?

Straw Works offers prefabricated straw buildings and tiny houses. These structures can be used for various purposes, such as offices or artist studios, and are built using eco-friendly materials.

What is the main advantage of using prefabricated straw buildings over traditional construction methods?

Prefabricated straw buildings are more thermally efficient, airtight, and can be built faster than traditional homes. They also use natural, eco-friendly materials.

How much would one of their tiny houses cost?

One of their tiny houses would cost around £14,000.

What are the financial figures for Straw Works in the past 12 months?

In the past 12 months, Straw Works had a gross profit of £39,600 but posted a net deficit of £2,000.

What is a major challenge facing the expansion of Straw Works?

One of the major challenges is convincing construction companies and developers to adopt their prefabricated straw buildings. Additionally, securing widespread mortgage and insurance support for straw houses is a significant hurdle.

Where are the prefabricated straw buildings currently manufactured?

The prefabricated straw buildings are currently manufactured in a factory located in Lithuania.

Why did the dragons ultimately decide not to invest?

The dragons were concerned that Straw Works is still in its design phase and lacks uniqueness as a business. They also felt that the company faced too many barriers, such as difficulties with mortgages and insurance for straw-built houses, and that it would take too long to see a return on investment.

What is Barbara’s background, and how did she get into straw building?

Barbara started her career as a carpenter and joiner, trained in traditional construction methods. However, after attending a two-day course on straw bale building, she decided to focus on building with natural materials, which she felt passionate about.