Five Things We Learned From The Apprentice This Week

While The Apprentice is popular entertainment viewing there are also a few simple business lessons we can learn from each episode.  

Last week we saw each team make and sell doughnuts.  There are a number of key business Tasks at play with in this episode.  Pricing, costs, understanding margins and delivering on promises were all important, and lessons we can learn.

Pricing

£5 doughnuts may seem extravagant, but it shows that market rates are not really as fixed as we lead ourselves to believe.  If we can match the right product to the right customer the price becomes a less important part of the decision making process.  Your ideal customers love what you offer and will be prepared to pay a premium for the service you deliver.

Margins

While the teams this week didn't invoke any form of cost plus pricing, it's important to understand what they are.  If we don't know how much it costs to deliver a product or service then we can't know the profitability.

In my years in business I've seen more than a few people chasing revenue without realising that it's actually costing them to deliver the product to its customers.  It seems crazy, but it happens time and time again.

Discounting

Pulling the discounting lever is often the first thing business owners reach for when things get tough.  There is a wide held belief that if something isn't selling its because its too expensive when that isn't always the case.

We saw both teams do just that on this episode.

It's almost impossible to sell a premium product at a rock bottom price in a sustainable way.  Something always has to give.

Instead of discounting, think about how you can add value.  

Delivering on Promises

Under promising and over delivering is a sure way to retain clients.  The smallest of service enhancements can turn customers into advocates when it is unexpected.

Unfortunately, in business, the opposite also holds true.  When we make commitments and then are unable to deliver on those customers switch off and become less loyal.  

Both teams this week made the fatal error of promising something they were unable to deliver upon.

Don't Panic

When the situation becomes difficult or tense it's hard to remain calm.  Often it leads to us retreating to our place of perceived safety. We don't take the actions or decisions that move the task forward, instead choosing to turn to a task that we feel safer with.

When things get difficult in your business, do you Bury yourself in the safety of spreadsheets or are you prepared to take the actions and decisions that will win you the task?

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