Billionaire Growth Strategies
Marcus Lemonis’ Growth Strategy for Mr. Green Tea
This was a another good educational episode for aspiring Marcus Lemonis types. Rather than being distracted by the issues of highly dysfunctional owners, Marcus was able to immediately get down to business with Mr. Green Tea’s management. In the Planet Popcorn and LA Dogworks episodes the audience was tipped off early through editing that the owners were going to be difficult to work with if not downright impossible. With Jacob Maarse Florists, the owner’s last minute on camera reneging on the deal and outrageous denial that Marcus had sunk well over $150,000 into his business came as a shock. We all knew that Hank had an immature streak in him early on but no one was expecting such a shocker of an ending. Thankfully with Mr. Green Tea we could get back to more interesting business lessons.
So let’s apply Marcus’ three-part system for analyzing a business: People, Product, and Process.
Marcus Walks Away Again
Well, this was another episode where our hero Marcus couldn’t get past the People component of his three-step fix-her-up methodology to work on Products and Process. However, it still offers up a valuable business and life lesson which I will get to shortly. But first I want to say that the episode brought back some memories for me. Back in the 1980s, right after completing my degree I moved into a third-floor apartment in an old four-story mansion that had been built in the Roaring 20s for railroad executives. The mansion was situated in the most exclusive neighborhood in the city so that in addition to being a fabulous place to live, it also offered tenants a prestige address.
Finally some good news on the economic front.
U.S. Poised to Become the Low-Cost Manufacturer of the Developed World
Our analysis suggests that the U.S. is steadily becoming one of the lowest-cost countries for manufacturing in the developed world. We estimate that by 2015, average manufacturing costs in the five major advanced export economies that we studied—Germany, Japan, France, Italy, and the U.K.—will be 8 to 18 percent higher than in the U.S. Among the biggest drivers of this advantage will be the costs of labor (adjusted for productivity), natural gas, and electricity. As a result, we estimate that the U.S. could capture up to 5 percent of total exports from these developed countries by the end of the decade. The shift will be supported by a significant U.S. advantage in shipping costs in important trade routes compared with other major manufacturing economies.
These shifting cost dynamics are likely to have a significant impact on world trade. China and the major developed economies account for around 75 percent of global exports. And the U.S. export surge will be felt across a wide range of U.S. industries.
Growing Eco-Me From $500K to $10 Million
After the last two train wrecks, Hank Maarse and Planet Popcorn, I had a good vibe about Eco-Me just five minutes into the episode. It was also obviously time for a business that could actually be saved by our hero. (It’s pretty safe to assume that Marcus and CNBC pick a few bad apples for purely entertainment reasons in the same way that Lord Sugar and The Donald include a few bunglers and villains among their apprentice candidates. After all, if there isn’t some drama no one will watch.
It’s Not Rocket Surgery
Planet Popcorn and the Case of the Missing $400,000
The Profit episode about the popcorn business brought back memories from my years in selling businesses. Let’s just say that some business sellers are less than forthcoming with the facts.
Planet Popcorn sells a variety of popcorns at fairs and farmer’s markets across southern California. However, its main cash cows are two stands at Downtown Disney. As you may have already guessed, this is a cash business and that means a challenge for anyone interested in getting a clear picture of just how well it’s doing, as we will see.
Things get off to a shaky start for Marcus and the owner. Initially she wants to use Marcus’s money to open a creperie. Marcus wants nothing to do with a new venture. When they later go to scout potential locations for a permanent popcorn store, she reveals that she is still fixated on opening a creperie. I don’t know how Marcus could have made his feelings any clearer on the subject: No freaking creperie!
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