I know the show is very popular so I assume they are using this factor to attract visitors. However, they are right in thinking the show is an ideal opportunity to illustrate how management techniques should be applied to solve problems. This in stark contrast to what happens most of the time on the show. The very first episode The Demise of Anita provided a neat lead-in to the role of budgeting.
I think there were several management related issues covered in last night’s show, but with the demise of Anita revolving around her budgeting problems that seems a sensible topic to focus on for this weeks Apprentice blog.
A budget is a statement of expected expenditure or income that has been allocated under a set of headings, for a set period of time. Budgets = incomings as well as outgoings
Sadly you feel that this was the element of budgeting that was severely lacking in yesterday’s task. Anita was very diligently counting up how much was being spent by the girls, but no mention was given to exactly how much they expected to make. The checklist outlines some steps you should be taking when drawing up your budget (the following is just a sample).
1. Identify the key plans and objectives – In its simplest sense, to make more money than the other team
2. Determine the key or limiting factors – You only have 1 day’s trading so payback period is very important.
3. What is coming in? – What are your revenue forecasts? Indeed were there any revenue forecasts? On this count the boys were much better and factored this into their pitch before heading out to meet the mini cab company.
4. What is going out? – This part Anita seemed to have covered. She knew exactly how much was being spent.
5. Think through the fixed and variable costs – Last night’s task was simplified in this sense as no labour costs or anything were factored in.
6. Collect all the information you need to set this year’s budget – Another failing for the girls (and to be fair the boys too) here, they gathered no information on how much a car wash could fetch, and therefore how many cars they would need to wash to break even when the money was being spent. Only in the car afterwards did they question the budget spend and how many cars they would need to wash to break even.
7. Ask some important questions – Basic risk analysis is required when setting a budget, what factors could throw your predictions? Are your assumptions suitably accurate?
Of course the producers engineer the aprentice activities (usually by allowing insufficient planning time) to ensure things go wrong to provide entertainment for the viewers.
One of the things that really annoys me about the show is the misleading impression it creates of business life. For instance teams really need to work together and support each other when things go wrong. A blame culture is not conducive to business success. Even more misleading is the way ‘Srallen’ is able to fire staff on a whim. Even in these recessionary times HR policies rightly give protection to staff, unless they have received previous warnings, or for gross misconduct. The I am being fired website has more details on what happens in the real world.