Five critical start-up errors, courtesy of The Apprentice

The Apprentice is a wonderful source of advice for people starting businesses and securing investment. The problem is, this advice is mainly delivered in the style of someone playing a game of 'opposites'. 

If you have a spare £250,000 to invest in a business but are not sure where to put it, probably the worst way to find out is to assemble a large group of over-confident 20-somethings and encourage them to ruthlessly stab each other in the back for 12 weeks.

But for Lord Sugar, serial entrepreneur and totally successful business guy, this is exactly how it’s done – every year. 

We’re not going to argue with the sanity of this approach generally, but as the grand finale of series 10 of The Apprentice hots up, it’s only right to highlight some things Baron Alan should consider before he utters that rarest of phrases: “You’re hired”.

1)   Could any of them really, honestly run a business?

Ask people what they think are the main traits of successful entrepreneurs and they’ll say things like ‘a head for figures’, ‘good communication skills’, ‘hard worker’ and ‘being organised’.

The major difference between running a small business and being part of a large one is that you have to wear lots of different hats: HR, marketing, finance and so on, so you must be a good all-rounder.

But week after week the contestants demonstrate an eye-popping deficit in just about all of these areas. Several examples leap out, such as Sanjay getting lost on his own bus tour or Sarah and Lauren’s pointless argument in the fragrance challenge while would-be customers drift past.

Instead of communicating they shout and whine or moan secretly behind other contestants’ backs. They can’t add up, even when the success of a task is contingent on them making the most profit. And as for IT skills, well there always seems to be a hired hand to hold the mouse for them.  

Think you could do better? You need some of these skills


2)   No one knows anything about branding

Okay, that’s a little unfair, but nine times out of 10 Apprentice contestants fall flat on their faces in brand-based challenges. What makes this so painful to watch is their unswerving self-belief, which overrides any remnant of impartial judgement as to what looks good on a shelf.

Contestants spend hours tweaking their designs into a monstrous mess, and when finished they punch the air like they’ve just created the next iPod, high-fiving and admiring the unholy muddle of colour and form in front of them. Remember Aqua Fusion from the advertising challenge? Exactly.

Logos and branding are a big piece of the puzzle when it comes to creating a successful business. Get them right and your product takes a giant leap forward, get them wrong and it could shrivel up and die. 

Things you need to consider include fonts, use of colour, pervading design trends and messaging. Blend them seamlessly for the most desirable outcome.

3)   Some of the business plans are downright weird

If we are to take The Apprentice seriously, then a major inconsistency is staring us right in the face: why don’t the business plans matter more? 

For the first eight or so episodes, Lord Sugar casually ignores the business plans and instead tries to eke out clues as to people’s talents from how well they can make a pudding, or handle tourists on a bus, or buy a skeleton. 

Surely it would be better – admittedly not from a viewer’s point of view – to turn the whole thing on its head: “So your business plan involves creating Britain’s first cat gymnasium and café mash-up? Thank you and goodbye”. 

Lord Sugar could swing his axe through about two-thirds of the contestants before even having to commission any of them for a humorous cookery channel. 

The really strange part, clearly, is that the tasks so rarely match the business plans, so no one is really any wiser whether these blood-hungry wannabes can run anything more than their own baths. 

Good business ideas stem from what people excel at and what they enjoy doing. Plans consider costs, potential customers, routes to market and growth. It’s a shame that so few business plans get an airing on the show, but it’s great when they finally do.


And here’s a guide to doing it properly

4)   The eventual winner will have a very uneven relationship

Okay, so Lord Sugar is prepared to plough £250,000 into a start-up. Fair enough. But he acknowledges himself that this is just about the sum total of his involvement, “I won’t be working, you’ll be working,” he shouts at the start of each episode.

But he still gets half the business. If the start-up succeeds – and who knows it might, stop laughing – then this becomes a pretty sweet deal for the guy who’s already got the best part of a billion pounds in the bank. 

If you’re thinking about setting up a company, it pays to consider the structure it will take; something these candidates haven’t given a lot of thought to. You could be a sole trader, private limited company, partnership or even a publicly limited company with shares traded on the stock market. How you will set it up – and with who – is an important consideration.

5)   Lord Sugar is not the only way to pick up investment

One thing Lord Sugar probably won’t explain on the show is that getting a business angel on board at the start-up stage is a pretty inefficient way to get money. They take a lot of investment (in this case half) for comparatively little cash.

Imagine an alternative in which you start on a tight budget, build the business painstakingly over five years and eventually reach £20 million turnover and £3 million profit. Now imagine Lord Sugar comes a-knocking. How much of your business would his £250,000 buy now?

Not much. And this is why people starting businesses should consider all funding alternatives before picking one. If you’re a ‘selling machine’ like Daniel you might not need any investment at all.

Before you act you need to plan. Calculate how much capital you’ll require (it’s unlikely that all the businesses on The Apprentice need exactly £250,000 – some more, some less) and consider whether you want a loan or to sell equity. Then ace your pitch and punch the air YEAH!