by Abe Sherman
I’m not a big fan of reality television, but there is one show that every business owner should be watching. The Profit, which debuted last fall, stars Marcus Lemonis, a billionaire investor who is called in to save ailing companies. Regardless of the products the company sells, his approach is to make sure the three P’s are all healthy; People, Process & Products. Capitalization, a common theme for why he is called in, is fixed on the spot with a check that Marcus writes to the owners, not as a loan, but as a capital investment to insure that he becomes a partner and is fully invested in the continued success of the business. As he says, he’s not a consultant; he invests in and fixes companies.
The range of subjects is remarkable to me because we deal with all of the same issues in our consulting business; from family dynamics in the very first episodes, Car Cash, where two brothers had taken over their father’s business but weren’t getting along, to Maarse Florists where another second generation family business owner had no idea how to measure costs and even though they were doing over $3.5 million in revenue, were losing money. Business owners must know their numbers, but as you will see, most don’t. Knowing your Cost of Goods Sold, Gross Profit, Inventory Management, (including moving out dead inventory), Marketing, Merchandising, and of course my favorite subject, building a great team; these are the subjects that get covered episode after episode.
LA Dogworks was an episode about a dog grooming and boarding business there the owner was, well, a bit maniacal and out of control – completely undermining and abusing his staff. Yes, these shows are often not pretty to watch. There is a good deal of bleeping as tempers flare.
How much debt should a company have? When to expand or not? How to redesign the showroom to create better traffic flow and to be more efficient with merchandising? How much inventory to carry? When to get rid of dead inventory? How to empower the staff? How to reinvigorate a marketing campaign? How much money should the owners take out of the company? What are the margins? Knowing the financials? How to treat the team? Where are the growth opportunities? How do deal with dysfunctional family dynamics? Do any of these sound familiar?
It isn’t a coincidence that we deal with each of issues every day in our own industry. And here at BIG, we are especially engaged through our Plexus Performance groups, where these subjects are addressed during our three-day onsite meetings. While most of our clients are not in as bad of a shape as the subjects that appear on The Profit, every single episode has similarities to issues we deal with throughout the year.
The reason to watch The Profit is to understand that regardless of the business, the issues we deal with in running our businesses are the same; People, Process and Products. There are solutions to the problems and watching how Marcus cuts through the clutter, gets to the heart of the issues and takes immediate steps to improve these companies (which doesn’t always work out, as I hope you will see) is remarkable. In fact, last week, on the last night of one of our Plexus meetings, we showed an episode of The Profit, brought in popcorn and all enjoyed watching Marcus transform a business before our eyes. I believe we’ll be making The Profit a part of every Plexus meeting – I hope you enjoy it.
The Profit airs Tuesday nights on CNBC at 10 pm EST. Previous episodes can be found online and are also aired on CNBC.