But I really don't see (yet) how the two business plans, based solely on business plans, could fail.

I love baking but don't really think Luisa could divide her attention to all her business ventures to really make her partnership work with Lord Sugar.

I intensely dislike the idea of people spending money based on precedures that feed on their insecurities, no matter how 'legal' or 'ethical' you are about it, it's a vanity industry and for it to work (make profit) you have to exploit peoples' weakness/vanity/insecurities and potential for dire consequences to the society at large is huge.

I think Lord Sugar really wanted Neil to win, but now has no choice but to take a humongous gamble with EITHER of these two finalists!

It did seem as though Sugar wanted Neil to win, or at least to be in the final two, but I suspect he may already have felt that his plan wasn't viable before the interview process.
Last week I had a really strong feeling that Leah was going to win, but having watched The Final Five the other night, and seeing how some of Luisa's past behaviour was toned down in that, coupled with the fact that I think Karren in particular, really likes Luisa, I feel certain now that Luisa will win.
I don't think either plan sets the world alight personally, but I feel like Luisa's is probably the safest bet; I just don't see LAS investing in the botox/ filler plan, that could potentially be a legal minefield without having to make the additional outlay on his own team of lawyers to oversee things. I think Luusa's plan is one that he could take much more of a backseat on.

Not a fan of either proposal - but if I was being asked to invest with one of them - it would be Leah.

She seems committed to her profession, has done her homework with her numbers, and wouldnt be dividing her time between this business and all her other interests. Because she is a relative newcomer to business - she would be an ideal protege for His Lordship - willing to listen to his advice and be moulded by him.

The interviewers told Shuggs in no uncertain terms that Luisa was after his contacts and cheque book, and I'm sure she wont like having to listen to advice and/ or instructions from a business partner.....

And you need to sell a LOT of cupcakes to make that £150 gross profit per treatment Leah is offering - and you can treat a LOT of people in 1 day, a friend of mine went to one of those lunchtime Botox clinins and said it was heaving with customers all of whom were paying a lot more than £300 a time!

Leah has no business experience whatsoever that may be her downfal and it showed on many of the tasks that she had none

Leah doesn't have Luisa's experience but she is super intelligent and tends to remain calm and professional under pressure.
Luisa has fantastic experience and is very bright and street wise but is unpredictable, difficult to get along with and quite arrogant.
Pluses and minuses to both of them.

I thought it was a bit off of LAS to accuse Luisa of maybe not being able to give all her time to the new venture, because of the fact she already owns 3 businesses, but seems to have forgotten to ask Leah the same question. In fact Leah will find it harder, it's not as if half way through a shift she can stop to run off to her shop.

I still think Leah has a problem with regards to ethics. She said herself she was surprised it was even brought up as an issue because it should be taken as read that it would be an ethical business.

I'm not sure ethics and non-essential cosmetic work have ever walked hand in hand. It would be tricky to grow a business whilst keeping it as ethical as Leah insists.

The ethics thing is overplayed. This is not very different from tanning or tooth whitening; and at a lower level from children wearing braces, and adults having tattoos, both of which are more permanent but do not pose great moral issues.

There might be a greater physical risk from botched treatments but that is not quite the same thing.

I have worked in the baking industry for over 30 years.

Luisa's business is just another fashion trend - here today gone tomorrow - as will be Sugar's money. Cupcake businesses are folding all over the country at the moment.

Only in VERY trendy city centre locations can they do business.

Selling accessories to the retail market is a good idea - but selling to bakery businesses is a dead loss. the wholesalers have merged into bigger companies and have the market carved up.

Interesting post Steve.

Good to get the facts from someone who knows the baking market, as frankly was having a hard time visualising what was different in Luisa's proposal compared to the suppliers currently available to bakers/baking enthusiasts....

What the interviewers said though did peak my interest when they said that there was a "gap" in the market. What do you think is different Steve to justify their enthusiasm for Luisa's plan?.....

Also, I cant think of her cake shop as particularly successful as surely £100.000 turnover is pretty small if factors such as business rates and staff wages are taken into account. And as for her turnover for her online business, what didn't come out was profitability, as "turnover" is all very well and good, but bears no relation to profit margins.....

And at £2 per cupcake, she isn't selling enough to justify a full time shop - that's fewer than 1000 cakes per week!

There is only a gap in the market - if you do not know the market in depth.
Luisa's main reasoning for this was the "low stock" levels of website based companies dealing with retail businesses.
This is rubbish - written by someone who is too small to have dealt with the main bakery wholesale suppliers. There is no supply or stock issues at all in the UK bakery ingredients supply sector - if anything there is over-capacity so there are going to be takeovers and mergers in the future.

If you have a retail bakery business you deal with one of 2 or 3 companies who deliver weekly and have depots all over the country. BAKO, BFP or Klumans.

Anyone too small to deal with one of these suppliers is too small to bother with anyway.
Sugar decorations and accessories come from only 2 or 3 suppliers, Culpitts, Fiddes Payne and (Gem cutters from South Africa).

Glitter and shimmers are very dodgy as most contain artificial colours which although is fine for very small startup type businesses - is not acceptable to any major retailer.
Natural colours and flavours only are allowed by the supermarkets.
Getting good natural glitter and shimmers for cake decoration is a nightmare as most natural colours fade or colours run.

The home baking (mixes and accessories) market is dominated by Dr Oetker - who took over the UK Supercook brands.
Dr Oetker are a German multinational, the biggest in Europe in home baking, with deep pockets.

This would be like someone starting up car company to compete with BMW

http://www.fiddespayne.co.uk/
http://www.oetker.co.uk/oetker_uk/html/default/home
http://www.culpitt.com/

Luisa is not in the "Bakery business" she is in the home baking business - and her cupcake business is like any other "fashion" business cashing in on a trend.
She should be commended for spotting a trend, but most fashion business is "get-in, cash-in, get out".

Great post Steve. Always best to hear from someone who knows the relevant industry.

Would £250k be enough to effect what Luisa's proposing or will it need to be a much bigger operation than that?

Also what sort of margins would she be looking at?

Thanks.

No idea - but the Peter Jones meets programme abot the bath bomb people was interesting.
They lost all the £8 million they got from selling their old company to the Body shop.

The stuff would be pretty good margin, however, it would be low volume - so unless she was careful she would lose on delivery costs.

http://metro.co.uk/2012/03/19/lord-s...-range-357128/

LAS is in business with Susan Ma with her beauty products line. Wondering if he sees an opportunity to connect both Susan's and Leah's businesses. Cosmetic treatments, and then you will need cosmetics and skin care which is Susan's field. Susan prides herself on being ethical and selling natural products etc and Leah stressed this isn't a vanity project and will be selective who gets treatment. LAS stressed it was risky but he says he;s a gambler, he may fancy a punt on Leah, because there are decent profit margins to be had.

Good info Steve, I'm too at a loss to see what Luisa's business actually is, my company deasl with one of the largest independent bakers in South Wales (28 Shops last count) and they don't seem to have supply issues!

If it's the home market, then surely companies like Lakeland have that quite well sewn up?

A bakery wholesaler is a boring business with a big warehouse full of pallets of fat and sacks of flour and big boxes of packaging and foils.
It is all about relationships and the baker must trust the supplier 100% to deliver what they order, when they want it.

You need massive stocks, staff to pick orders from the ingredient pallets and set them onto the customers pallet. This means you need fork trucks, loading trucks, and experienced warehouse staff.

Hillary Devey from Dragons Den made her millions through distribution and it is big volume for small margins.

However, we will see lots of shots of Luisa smiling sweetly and making pretty cupcakes, all of which will have nothing whatsoever to do with the business she is proposing.