A good business plan would certainly have included those details, as one of the key uses of Sugar's cash would be to invest in building start-up stock, so any investor worth their salt would want to know whether she was planning to over-invest in inventory.

However, we do know that Luisa's plan was criticised for being sketchy (I forget the exact words) - certainly Mike Soutar commented that she explained a lot more about her business face-to-face than was laid out in her document. So maybe she hadn't covered it.

Like many things, writing a good business plan gets easier to do with practice. But many entrepreneurs have never actually written a plan before - it appears Luisa hadn't - so it wouldn't be surprising if they missed something obvious out. (Of course, it would help if they asked someone with experience in such things to provide feedback first. I'm available for a very reasonable rate ...)

From what I saw, I couldn't tell one way or the other. You know me - I try not to join the dots too quickly and jump to assumptions based on the very limited information we are given on the show.

There is a world of difference between saying I want to open a clinic or dance floor than a wholesaler. A retail environment like the first two one trusts she knows the figures and its not important for the viewers. They are more interested what this clinic will do and what type of dances they will perform.
When it comes to being a wholesaler of sorts one likes to know, will it be cash and carry or a wholesaler who delivers or something in between and what exactly is she going to sell and who to. Even without the details which are anyway best kept private and secret just the general idea.
This is not a matter of 'writing' a good plan. This is a matter of having a good plan. Unlike the tasks one cant just change it in the middle. I would have thought everything I have mentioned was obvious. She should have studied the competition and seen where they were failing. She did say she could do things better than her boss at one time. Meaning I suppose everyone else as well. I suppose that is how she looks at the world. And if she joins up with LS he will also be included. I have nothing against this attitude perhaps I am also a bit like that, but there are limitations to it.

We deserve a twist. I suggest he doesn't go with either of them. Not sure how the show would get resolved but it could happen y9ou know,

Yes but part of the point of going with Lord Sugar is that he will provide his and the professional expertise to fill in the detail, You couldn't expect anyone to work up the detail too far on their own. The newer and bigger the business the more unanswered questions there will be. You would expect him to have had a good look at the basic thrust of the plan and its credibility, but the detail has to come later, unless he stays at the small shop/service level of offers. There's also questions about Leah's proposal. How saturated is the market, how does she compare to others and how many customers will there be in current economic circumstances, or after an intial burst of interest? Leah seems to be offering him a good return on 250k - her profit margins seemed to be over 50% so he could get a 20+% return on his capital. Luisa may offer smaller margins, but a bigger business that might need more money. Its just not clear whether he wants to maximise returns on the minimum investment for major pocketmoney, or he wants to buy a 50% share of something potentially larger.

There's no sign that Luisa will be a real problem for him. There would have to be something we have not yet seen. Most people have had totally incompetent bosses at some point - ours was only less incompetent than his number two. Anyone competent in the department knew this Luisa can recognise someone useless. That doesn't mean she can't take advice from people who are right, or who have credibility and frighten her as Lord Sugar does. She regularly took good ideas from other candidates on the show, and she never argued with his Lordship. She's actulaly one of the closest candidates seen to him in basic business skills, and even shares his sense of humoour. He said he could employ Neil - who rarely let anyone speak when he had jumped to a decision - and his choice is Leah who completely ignored Zee when she concluded he was useless as her project manager. Basically its an arrgument that doesn't hold up, and in so far as it applies at all applied to all the compettion. It seems to have been invented to give the show an end story, Question is if he believes the show story.

I think it's been made clear now what the biggest issues with each candidate are: Luisa is already running three businesses (question of commitment and focus rather than ability and attitude) while Leah's plan carries the risk of reputation damage if something goes wrong.

As you say, it's all about what Sugar wants. Risk for potentially huge returns? Or lower risk for a 'safer' (quote marks deliberate) return?

I am sure that Leah's proposal was perfect. Mentioning everything you did and plenty more. I would not say there would be just an initial burst of interest. It would be ongoing and unlikely to stop. I think her profit margins are a bit inflated but that is the way of a business plan. One plans for the best scenario not the worst. Her main problem is lack of experience and I think she would need to have a manager of LS's choosing in place at least to start her off. The detail is all already there.
With Louisa its something different altogether. We dont even know the product she is selling although on the final we shall find out. If such a simple thing can be made so difficult what can the rest of the business plan contain.
I have already said that LS gets on best with her and if she just wanted a few extra cup cake shops she would win. But its early days and she hasnt yet found her feet. When she does she will treat him like everyone else. Maybe not publicly but certainly privately.

The trouble with Leah as an investment is that she is a poor advertisement for her own product. Her mouth is an example of cosmetic surgery gone a bit wonky.

1. I think it's been established so far that it is a business-to-business venture, she is looking to create a brand where customers don't have to be frustrated with antiquarian ordering systems and constant out-of-stocks, and she has mentioned sample products such as cake tins and sprinkles. (There will be further explanation in the final.)

2. If she wanted a few extra cupcake shops, I think that would actually make her proposal much worse, not better. Sugar wants to partner in a new business venture, not an extension of an existing one (yes, I know the Tom Pellereau example essentially contradicts that) and opening retail shops is not in any way low risk given the high failure rate of niche retailers and the fact that a fair amount of money would have to go into outfitting the shops (so therefore a sunk cost before you've even started trading). Also - just an observation - I find it odd that the turnover of her businesses was mentioned during interviews but no mention of profitability. It suggests a certain interpretation of what her profitability might be, no?

Since she has experience and a 'good' name I dont think it would be a failure. If a shop opened in your area I think you would buy at least once. Today there are many empty shops in the West End arcades, they would be only too happy to have her. A small unit doesnt need that much outfitting. And like I mentioned it is a tourist article.
About profit and turnover. I havent commented yet on this subject. Many shops start off at a loss, most supermarkets have loss leaders. Its more important to have turnover than profit. If a product cant sell its no use. It can take years to make a profit. Like you say the 'outfitting' has to be paid for and many other start up costs. As long as you buy for less than you sell and your day to day costs dont eat up the profit you should be in the clear. Its hard to increase turnover but one can reduce costs. Unless someone else is 'giving' stuff away there is no reason why one should not be making a profit.

I think most of her target customers would pay big money to look like her.

She looked pretty much the same in her school photos in the Final Five programme.

What is odd about Leah is her walk.

Just my opinion, but I think you seriously underestimate the long-term viability of Luisa's business based on the fact she was on The Apprentice. The 'tourist value' of that wears off pretty quickly. The owner of the Bridge Cafe gets lots of curious visitors as a result of the Apprentice, but he's hardly driving around in a Rolls Royce now. (It's a random cafe on an industrial estate in Acton, and isn't open on weekends ...)

A small unit doesn't need outfitting? Really? List the equipment that goes into making a baking shop ready for operation - refrigeration units, ovens, display counters etc. Now add general decoration etc. It's not cheap - not exorbitant, but you're looking at an investment of closer to £50,000 than £10,000.

There are many empty shops in the West End arcades - yes, absolutely. Do you know how much they charge in rent?

Some of your points about turnover and profit - and the need to control costs - are valid, but a little simplistic. I'm not sure why you mention supermarket loss leaders - those are a few basic products in a store that ranges 15,000-20,000 more SKUs. Overall, having a few loss-leaders is more than outweighed by the rest of the lines on sale. The stores themselves run at a profit. In general, I think it's easy to underestimate how significant a store's non-product running costs are - rent is the biggest, but also staff wages, utilities etc

Finally, a fine point of detail. I know what you're saying about turnover being important, but there's an old saying about "turnover is vanity, profit is sanity" which is very true. Unprofitable turnover is meaningless, no matter how much of it you have. Profit pays the bills.

And, in fact, most small businesses that fail do so not because of poor turnover or low profit, but because they don't generate sufficient cashflow to pay off rent, suppliers etc. The most trusted method used when valuing businesses for acquisitions is to look not at their turnover or their profit but at their free cash flow (which is more closely related to profit than turnover). That tells you something about the relative importance of turnover.

Finally, and most importantly, I should also point out that Luisa's business plan is not to open more shops! It is to create a baking brand which supplies products to the trade (not direct to consumers) - so what she needs is more a warehouse than a shop. In effect, she is looking to set herself up as a wholesale distributor. Whole different ball game (with a much tighter profit margin structure too).

Thanks: I was referring to opening a cupcake shop.

I think you will find that arcade units, there being so many empty, are going cheap. They may even pay her to have one so it will perhaps sell the others nearby.
The truth is they cant fill their units even for nothing.

The equipment which you say costs thousands is usually bought at auction from failed bakers at knockdown prices. The bridge cafe is hardly advertising his business, and the owner is not seen much. This totally different to someone who has been on the apprentice.

Today shops dont like paying for merchandise until they have sold it and no one wants to carry stock they have to pay for. Maybe Louisa will be offering credit where no one else does, but that can also be a recipe for disaster.

People have no morals, and if they make a loss and dont pay a supplier they say its not their fault. Even if its true its really no excuse. If you buy something you have to pay for it. There can never be an excuse not to.

That is categorically not the case. What arcade owners cannot do is to find people to occupy their space at the rents they demand (which HAVE gone down during the recession, but not by that much - calling them "cheap" is stretching things a bit).

There is NO chance of an arcade owner paying Luisa to take a unit, even for the publicity this would create.

It's simply not in the property owner's interest to slash prices to get a couple of units filled, because it would cause uproar when the larger number of existing tenants come to renegotiate their annual rents.

Besides, as I've pointed out, this is a purely academic discussion as Luisa's business plan is NOT about opening a cupcake shop. How about we discuss the actual business plans instead?

Not just "today". In any virtually every business transaction, the supplier will offer the customer credit terms - typically 30 days, maybe 45 or 60. (Cash and carrys are a separate case - their business model demands immediate payment as part of the benefit of selling at lower prices.) So anything Luisa offers in terms of credit terms would likely be little different to whatever the standard terms are in the food service industry. And if she were to offer longer terms, that would hinder her cashflow. If she turns over £100k per month (not unreasonable for a scaled business), offering an extra 30 days' credit would set her cashflow back by £100k - or, to put it another way, 40% of Sugar's investment fund. No small business could afford that.

No offence intended, but can I ask you a question? You profess to have a lot of knowledge about how these business plans might/should work - and many of your points are certainly valid - but do you have much in the way of business experience? As I say, that's not meant to imply anything about your knowledge - just curious.

I wrote that arcade owners cant find people to rent at any price. I think they are now having to pay rates for empty shops so they will let them go just for that. Perhaps you can confirm this about the rates.
I doubt if every unit in an arcade gets let at the same price. And if the existing tenants can find cheaper in the next arcade they would go there. And I would dispute what youre saying about what is in the property owners interest.
Anyway in the case at hand which is of course academic as you point out or maybe not, if having a celebrity next door which boosts their business they wouldnt have what to complain about.
I cant answer personal questions except to say that I work for myself, have never owed anyone money even for a minute, my stock is always paid for immediately even before I am asked to, receive the red carpet treatment at my bank, suppliers always offering me their 'new' goods first, and I have a different attitude on doing business.

Given the botox/filler industry is about to be decimated by probable legal tightening of who can do it, it seems like an excellent opportunity to launch a chain based on medical professionals.

There isn't really a middle ground at the moment - there's the very expensive professional medical dermatologist and plastic surgeon route, or the cheap-as-chips back-of-a-beauty-salon-route.

A mid-priced respectable medically-based chain is clearly a massive untapped market, especially as the cheap option will be gone in a year.

To be honest, I'm not entirely sure why the onus is on me to confirm anything when you yourself only deal in the most vague of facts and statements. So we'll have to agree to disagree on this. You clearly have very strong opinions and your own experiences - fair enough - but you've also demonstrated across many threads that you're not someone who is particularly influenced by or thinks much of what other people think. Each to their own. I tend to prefer having more open discussions because I quite like it when people persuasively make me look at things in a different way. But hey, that's just me.

I agree Luisa's 4 busineses is a killer - unless he goes for the point that 3 would be are mutually supporting.

It is, however, a non argument if the alternative is Leah. Leah seemed to be proposing to set something up, and then continue as a NHS doctor. She would employ other doctors to help provide cover to her cosmetic business. If she's continuing as an NHS doctor, she poses exactly the same problem as Luisa - but in a starker form, as Luisa won't be mid NHS diagnosis, or operation, when the company has an issue. If Leah leaves the NHS, Lord Sugar will get deserved flack for taking a very capable doctor away from the NHS to make him money. He doesn't have a full time partner on offer - unless he takes one from the NHS.

Leah's issue isn't only that things may go wrong. There he has to trust Leah's staff as well s her. Its does he want to be associated with a business that exists on people feeling inadequate about their looks. Can be seen to be encouraging young people to spend money on vanity?

The problem with the risk calculation is its not clear where the big return is, even if both projects are viable. Leah offers a big return on 250k. Luisa may offer a bigger business with more return overall - or not. Leah could open more clinics, but not if he wants to take the early return, or if that needs more money, or if that means she can't be in as much control of her risks? Luisa may or may not need more money at the start?

Most of your questions about Leah - all valid - are covered in the final to some degree.

Luisa's operation may not be that cheap to set up, depending on to what extent she requires warehousing etc. It's not 100% clear. Even after the final itself, it's not 100% clear!

https://www.taxpayersalliance.com/ho...bombshell.html

As you can see they rather demolish shops than keep them empty.