This week sees the return of Lord Sugar and his merry (wo)men. My usual stock response for surviving it is to stop watching it. However, unlike Alan, I’ve woken up in a good mood, and instead I’ve penned three tips for new businesses.
I’ll be the first to admit that The Apprentice isn’t my usual cup of tea. It’s Dragon’s Den, or better still The Fixer which bring much warmth, comfort and hope to my autumnal evenings. However, I did tune in to The Apprentice last night, and successfully resisted the urge to post on every social media outlet “DO NOT JUDGE ALL BUSINESS PEOPLE BY THESE CARICATURES”. I suspended disbelief. I decided that most sensible people also realise this is a charade. Instead, I started thinking what I’d do if I was facing Lord Sugar.
I’ve come up with three business tips for those looking to survive episode 1 of The Apprentice:
Generate and evaluate more ideas
Try and bring some objectivity to your idea generation process, rather than relying on one person’s opinion. Here’s one method:
Decide what’s important in your product (to your customers, and to your business) and write them as column headers on a table. For example: easy to make; long shelf life; healthy; can eat on the go; affordable price; margin. Next, think of ideas and write one on each row. When you’ve run out of ideas think of one more. Then, give each idea a score of 1-5 for each criteria. Add up the scores. Eliminate the lowest scoring. Voila: you have a insightful shortlist.
Test ideas early
Make an early prototype, get it into real customers’ hands, and ask some questions. It doesn’t have to be a big research program – ask 10 people the following four questions:
- What’s your first reaction to this?
- How interested are you in this? Why?
- What do you like most?
- What do you like least?
I challenge anyone not to get useful insight from something so simple.
It’s also a great time to gain feedback on pricing. Pricing is hard, but there are techniques to help. Try asking these four questions:
- What price would this be so expensive that you wouldn’t buy it?
- What price would this be a bargain?
- What price would be so low that you think the quality isn’t very good?
- What price would be starting to get expensive, and you’d have to think before buying it?
The Apprentices should have walked onto the closest high street during the morning (whilst they had the opportunity to adjust their product) and tested their concepts.
Sell below cost
Sometimes business is about damage limitation, especially when you’re dealing with perishable goods. Don’t get hung up on not selling below cost if in an hours time you’re going to be throwing away product. Instead, think of it as damage limitation. At a certain point every pound you sell is a pound more profit, because you’re avoiding a pound of loss.
Not convinced? Take a look at Itsu – the high street food retailer – they automatically reduce their prices for pre-made food by 50% in the last 30 minutes of trading. And who doesn’t love finding a yellow label on a supermarket shelf…