If you haven’t yet, head over to Hulu and watch all available episodes of Marcus Lemonis’ The Profit. The Profit, an American reality TV show that premiered in 2013 on CNBC, follows prominent businessman Marcus Lemonis as he saves failing small businesses. In each episode, Lemonis identifies a struggling small business that he believes has potential and invests his own money to save the business, save jobs, and make money. This show offers some of the best examples of retail strategy, small business challenges, change management, and turnaround. After 2 seasons of The Profit, here are 6 lessons we learned from Lemonis:
*This article talks generally about lessons learned without many specific examples to avoid spoilers!
1. The 3 Ps: People, Process, and Product.
In every episode, Lemonis refers to his 3 Ps: People, Process, and Product. Lemonis believes that in order for a business to have a chance at success, it must have two of the three Ps. The most important P is People. Having the right people in the right roles is crucial. Lemonis’ take on People goes beyond just finding the right employees. Lemonis emphasizes providing a nurturing environment for People to develop and thrive. They must also fill the right roles and be treated well. A business must also have an excellent product. A lot of entrepreneurs and small business owners assume that customers view and appreciate their products the same way they do. Lemonis evaluates a product by considering its market opportunity, its price (margin), its packaging, its uniqueness, and more. A business must also have the best possible process for creating, delivering, and selling the product. In each episode, you will see Lemonis and small business owners solve challenges related to each of these Ps.
2. Maximize your profit per square foot
Lemonis is a retail genius. You will often see him walk into a retail location and immediately analyze its use of space. The goal here is to make as much money as possible per square foot. This includes removing unnecessary inventory, closing non-profitable retail locations, expanding product or service areas that bring in the highest margins, positioning products in optimal locations, and much more. Sometimes entrepreneurs will become fixed on a certain layout because that's either what they know, what they are used to, or what they think works well. The Key Lime Pie Co. episode is a good example of this.
3. Don’t Become Too Attached
Entrepreneurs often become way too attached to their way of doing things, and their way of doing things doesn't always work. Especially in the context of the show, if everything they were doing was working, they wouldn't be in the financial situation they were finding themselves in at the time. Be willing to accept advice and feedback from business partners, employees, friends, family, acquaintances, and most importantly, customers. Furthermore, be willing to adapt and to change. Competition gets increasingly challenging, markets fluctuate, trends happen, and customer preferences change, be willing to adjust and get used to it! A good example of this can be found in the Tina & Michael's PRO-FIT episode.
4. First Impressions are Lasting Impressions
This isn't a huge takeaway from the actual series, but it stuck with us and we think it's often overlooked. The first interaction your business makes with a customer, even if it is just the front of your shop or the landing page for your online business, leaves a lasting impression. If you own a brick-and-mortar shop, make sure the front of your store is clean and inviting. Be sure to keep inventory organized. The same goes for the digital space. User experience is important. Keep your site maintained, organized, and very user-friendly. You will see this little piece of Lemonis wisdom in play at the beginning of the Amazing Grapes Wine Store episode. When Lemonis first walks up to the business he encounters a pile of empty boxes right at the entrance.
A lot of the struggling small businesses you will see on the show accumulate massive amounts of SKUs that dilute their business, lower their margins, and result in a loss of focus on the core product. This also leads to large amounts of unsold inventory and clutter and a lack of organization in the stores and in the warehouses. The best example of this in action is, again, the Key Lime Pie Co. episode.
6. Be Present
Business owners and partners of ventures around the world, make time for face time! If you are part of a business, you should act like it. If you can't dedicate as much time as your fellow partners, manage expectations and make your intentions known. Be transparent and be willing give more responsibility and decision-making power to those consistently present. The best examples of this are the Sweet Pete's episode and the Amazing Grapes Wine Store episode.
Look out for The Profit returning October 14 to CNBC! In the meantime, check out some more Lemonis wisdom. When life gives you Lemonis.
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