The Apprentice 2015, Week 8: 3 things to remember in business

As the candidates vye to win £250,000 to go into business with Lord Sugar, we assess the erroneous business decisions from the latest episode

This latest Apprentice episode was all about profit-making as millionaire mogul Lord Sugar set the candidates the challenge of setting and hosting a children’s party for high-spending clients in just two days.

With a budget of £2,000 and the opportunity to up-sell, the teams set to work on hosting an outside adventure party and a ‘mini Olympics’ sports course, with Team Connexus’ Selena and Team Versatile’s Gary assigned project managers based on their backgrounds in events and entertainment.

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Given that customer satisfaction and budgeting were vital to winning the challenge, it was alarming to see the major business errors made by both teams  from moving away from the client brief, “taking punts”, and overspending on items which ultimately resulted in a loss.

So what can you learn from the contestants’ lack of business acumen?

Remember: The customer is always right

From the offset, Team Versatile PM Gary said that the task needed to be about “information gathering”. Prior to meeting the child and the parents paying for the party, he made it clear that the team needed to “listen to the client’s needs”. This initial focus on the client brief won praise from Karren Brady: “Gary and his team have done a great job at listening and building a rapport with the family which is what is required.”

However, cracks begun to show on the day of the child’s birthday party. The team failed to deliver on the goody bags promised; which included personalised t-shirts that “weren’t up to scratch”, provided little entertainment on the party bus, and were asked by the parents to “bring more energy” to the activity day as they weren’t delivering a “fun party”.

Yet, the real issue of managing the customer/client relationship came down to the team’s lack of concern and attention to the mother’s serious nut allergy. When discussing the cake, Gary explained that they had used a hazelnut spread – despite the fact that the mother had clearly told them the day before that she was dangerously allergic to nuts. After confirming with his team, Gary than attempted to reassure the family that they had used milk chocolate spread and not a nut spread but this mistake had already created doubts in the parent’s minds and the father insisted to see the packaging and the nut description.

This lack of attention to the client brief and the customers needs saw the family fail to pay Team Versatile the full amount – a profit loss which meant the team also lost the task.

Business decisions need to be more than just a ‘punt’

Having failed to get the client’s contact details following an initial meeting, Team Connexus’ Selena was unable to upsell other party items such as goodie bags but she decided to take the “gamble” anyway and purchase over £100 worth of party bag items on the hunch that the mother would pay for them on the day of the party.

Claude noted that this was a “very risky strategy” and he was right. At the birthday party, the child’s mother wasn’t happy that she hadn’t been informed about the goody bags and refused to pay for them, leaving the team out of pocket. The resources and money spent compiling the goody bags could, and should, have been invested elsewhere.

Budgeting is everything

Budget planning is integral to the success of any business, even more so for a profit-making challenge. While “annoying” in his approach, Team Connexus’ Richard was keen to keep spending down and reign in Selena’s “creative vision”. In the boardroom Selena noted that it was a benefit to have Richard on the team as it helped her keep track of spending – and consequently saw them bring in more profit and win the task.

On Team Versatile, Gary should have taken on board Richard’s approach to controlling the purse strings as he left David to his own devices to spend £175 on personalised t-shirts. On the day of the party, David “messed up” the t-shirt printing and the parents refused to pay.

View our guides to budgeting here.

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