It’s never been more glamorous to succeed in Business than it has been over the past decade, thanks to shows like the Apprentice, Dragons’ Den and Shark Tank hitting our screens. But, is it really as easy to raise funds or succeed in business as it looks on TV? Or is the path to capital and a thriving empire a bit rockier than our TV screens would have us believe?
If you are already in business or if you have followed me for any length of time then I think you will know the answer to that question! But let’s dig down and see what similarities may exist and what lessons you can learn for your own real-world success.
It’s all about the money
The Apprentice, in particular, has a tendency to gloss over financial reality and completely oversimplify things. If you send six people to a prime London retail pitch with £200 worth of goods, and they come back with £300 in their pockets, they haven’t made £100 profit – they’ve probably really lost about £3k when you factor in the cost of the pitch, wages, petrol and insurance – the list goes on! In the real world, a successful business owner knows their figures to the penny, factoring in all costs to calculate what is a viable profit margin, particularly if you’re planning on pitching for investment. A nice gross profit is a start, but the true net profit is what really matters.
Preparation is the key to a successful pitch
Dragons’ Den all too often shows contestants faltering over their pitches, fudging figures and trying to cover up vital information before being inevitably caught out by one of the Dragons. Then one of the other Dragons takes pity on them for having a great personality, offers to take them under their wing and gives them the investment they were looking for! While it may make good TV, try that in real life and you’ll be kicked straight out the door by potential investors. To attract funding, you need to know your business inside out. Profit margins. Wage percentages. Cost of acquisition. Lifetime value. To name but a few! If these terms are alien to you or you don’t know what they are in your business then it’s time to take a crash course! You can’t run your business without this information and your investors will put you to the test – so be prepared to address any discrepancies raised by potential backers. In the real world, there are no TV cameras ready to catch the ‘surprise’ moment when investors decide to back a product, despite gaping holes in the pitch. They would have written you off minutes in, and there are no second chances!
Play the long game
For a real business, long-term reputation is as important as short-term profit. I’ll concede that it’s probably an unfair criticism as far as TV shows go, after all, they have to cram the whole story into half an hour. But the reality is, in shows like The Apprentice, too much emphasis is placed on completing a task at the lowest possible cost, without any real thought about competence and quality.
In one episode I saw, contestants were set a task which involved catering for a prestigious City law firm. Technically, the winning team did have the biggest profit margin, but they had basically passed off cheap tuna on Ritz crackers as canapés and served them amidst a roomful of raised eyebrows! Great tv, but if the cameras weren’t rolling, the caterers would not have been paid, and their reputations would be left in tatters. When you’re actually aiming to build a brand, and not just win a competition, it’s important to exceed, or at the very least match your customer’s expectations. Profit margins are vital, but don’t underestimate the power of customer retention and glowing reviews when it comes to growing a business.
Treat people how you would like to be treated
From Gordon Ramsay shouting abuse at hapless restauranteurs to the Dragons reducing fledgling entrepreneurs to tears – not to mention the bitching and backstabbing of the Apprentice – the reality TV business world is full of tyrannical leaders. Try behaving like that in the real world, though, and rather than riding roughshod over your colleagues to victory, you’re likely to find yourself hauled in front of a tribunal. As the old saying goes, treat people well on the way up, as you never know if you’ll meet them again on the way down! Yes, you need to be assertive and make sure you get what you need – but firm, fair and pleasant is likely to get you further than reality TV-style strops (unless of course you actually are appearing on The Apprentice!).
Not every venture has a happy ending
From the Hotel Inspector to Mary Queen of Shops, there has been a plethora of programmes that focus on turning around a failing business. A quick appraisal from an expert, a few coats of paint and an intense pep talk are almost always enough to turn a failing business into a thriving success on these shows! And sometimes, it really is all that’s needed. But you will find that in most real-world situations, no amount of coats of paint or redesigned menus is going to be enough to counter the changing climate, a failing location and a lack of motivation within the team. This I know, firsthand – trust me!
Reality TV shows never portray the businesses that have to completely diversify, sell up or sometimes shut-up shop altogether. In the real world however that happens all too often – it’s important to be able to recognise when you are in the midst of a serious crisis, one that might involve a complete change of direction or even an insolvency practitioner. No business is immune to changing times or a failing economy and recognising that problems run deeper than a quick makeover, as early as possible is key to turning things around for the long-term.
Drive, determination and resilience,
Unfortunately, many business shows are moving closer to mainstream reality TV with every series, so you could be forgiven for watching them and underestimating the sheer will and effort that it takes to build a successful business. At the end of the day, the amount of money that the mentors and Dragons make from the TV series and their rising profiles will almost always eclipse what they make from any investments in the show – it’s only to be expected that what makes TV good will always come before finding the pick of Britain’s entrepreneurial talent. The most important lesson to be learned from business reality shows is to never take them too seriously!
Do you want to know what really goes on behind the scenes of The Apprentice? I had the pleasure of interviewing season 13 contestants Sabrina Stocker and Camilla Ainsworth who shared the ins and out’s of their experience on the show, what lessons they learned and how it improved their businesses. To find out more, watch the full episodes on my Youtube Channel.