The Apprentice, Week 7: Lessons to succeed in business
A task which was more "cock-up shop than pop-up shop"; the contestants struggled with pricing and team-building. Find out where they went wrong
23 year-old private tutor Sam Curry was the latest aspiring entrepreneur to exit The Apprentice this week for being “out of his depth” in a challenge which saw the teams tasked with opening a discount store to turn products into profit.
Having sent the contestants to Manchester’s wholesaler district, Lord Sugar said the task was a “simple one” – “buy it, sell it and replenish your stock, simple as that.” But, where Lord Sugar may have had success with selling discount products in his earlier days of business, the candidates did not and the pound store task was labelled more “cock-up shop than pop-up shop”.
From a “dishonest” pricing strategy to poor team-building, here are two essential business lessons to take-away from the episode which will be useful if you’re looking to start out in retail or just want to know how to succeed in business:
Know your figures and set your prices fairly and “honestly”
There were three major errors when it came to numbers and pricing in this week’s Apprentice show. In Team Connexus, Sam was placed in charge of calculating the costs of buying the wholesale items yet it was clear he had got the pricing completely wrong once he got to the till. Brady was aghast and said that it was “shocking that there were only 84 items and he got it wrong; Sam should be so embarrassed about this”. Make sure you get on top of your figures with this free step-by-step eBook guide.
Team Connexus’ Brett and Vana then made a major pricing error when they chose to use the tactic of ‘was and now’ pricing, for instance “was £18.99 now £10”. This “dishonest approach” quickly caught the attention of Brady; “How do you know it was that price? Lord Sugar really values honesty. You need to change your pricing strategy. […] Lord Sugar will be disappointed”. When it came to the boardroom, Brady was right as Lord Sugar insisted that in retail “You can’t make false statements […] it’s a bit dodgy.”
Finally over in Team Versatile, project manager Gary made a poor decision on the pricing strategy of his branded products which could have the cost the team dearly. Claude accurately summed up Gary’s error:
“Branded products should have sacrificial pricing to entice customers in, they’re not doing that, they’re doubling and tripling it. I’m livid. [Poundland] is literally across the way and they’re selling similar products for a fraction of the price”.
Lord Sugar also gave Gary a lesson on clever price positioning: “If you recognise something that you’re used to buying and you see it at a price lower than you are used to paying, it implies that you must have bargains in your shop therefore you’ll come in and explore the rest. The problem is, you were down the road from a famous pound shop and you were more expensive.”
Business lesson: In the words of Lord Sugar himself, constructing a pricing strategy isn’t “rocket science”. Price your product or service too high and you’ll scare away prospective customers. Price it too low and you may struggle to make a profit. You also need to make sure that you are transparent with customers and don’t make claims that can be contested and are “dishonest”. Read our article on 4 tips for pricing your products and service for more advice.
Team management and team-building is at the core of any successful business but, at times, Team Connexus seemed to lack any team structure. From the very start of the task, Scott chose to ignore feedback from his team that they shopped in pound stores for household and cleaning goods, opting for tech goods instead. He then dismissed criticism for Selena who felt stocking electrical appliances would be too male-focused and was a “risky strategy”.
However, Selena’s critical nature continued throughout the task which brought team morale down. As Sam reflected in the boardroom; “She spends a lot of her time retrospectively complaining”. Despite negative attitudes, Scott did manage to keep the team motivated which Brady recognised – “he hasn’t given up, he’s re-stocked the items and he’s going to keep trying”.
Brett’s attitude to the task also came under scrutiny in the boardroom as both project manager Scott and Brady pointed out that Brett could be “I wouldn’t say aggressive, but quite bullish, he can be difficult to work with”. Brett was more focused on his own individual efforts and contribution to the task rather than enabling the team to win and Scott was unable to manage Brett effectively.
Business lesson: Building a cohesive workforce will mark the difference between your start-up’s success and failure. For advice and information on team-building and creating a dream team, check out this guide.