small business growth strategies
Marcus Lemonis Develops a Business Growth Strategy for Coopersburg Sports
This is another drama-mama free episode which offers a good look at a stalled out small business. Unfortunately it felt rushed and would have benefited from a delay in airing so that we could see the actual results of Marcus’s growth strategy. However, with the season coming to an end shortly it had to be aired this week. (Was this the season finale?)
The company is a manufacturer of wooden sports novelty products. It’s located in Coopersburg, PA which is Amish country. Scott the owner inherited the company in 1991 from his father and shortly after secured the rights to produce mini-baseball bats for MLB teams. Before that the company had been in a sunset industry manufacturing wooden handles for tools. The bats have been the bread and butter line for the company ever since. Revenues peaked at $4.38 million in 2008 when a major player, Louiseville Slugger, stepped into the market and cut Coopersburg’s sales in half.
Marcus Explores Growing West End Coffee Company
Despite the fact that this was another walk out by Marcus it offers some valuable business lessons, including one big one.
West End Coffee Company is roasting operation located in Greenville SC, serving local restaurants and specialty shops. The company was purchased by the two owners, John Brown and Becky Schramm in 2012 for $499K. We are not told how long it had been in existence prior to the purchase.
Marcus Lemonis and Unique Salon & Spa
This was a surprisingly drama-free episode. It’s also the stuff of a typical Harvard Business School case study. In other words, it’s not a particularly interesting business but some good lessons do await us.
Marcus Lemonis and the Fishy Seafood Store
Okay, let’s take a look at this one. We finally got the train wreck we have all been waiting for. I know you guys and gals love them.
Swanson’s Fish Market is a 41 year old family business located in Fairfield, CT. It’s currently run by the founder’s son Gary Jr. His wife Sue is also involved to some debatable degree. Their daughter Larissa recently quit her job to come work as the book-keeper for business.
On July the 4th, 2009 the building that housed the original store burned down and all was lost including a full year of operations and income. Today the business is $900K in debt and struggling to become profitable.
Despite the huge debt Gary Jr. initially paints a bright picture when asked about the store’s financial performance. Monthly sales are over $150K. The fresh seafood has a decent gross margin of 30% while the soups and other prepared meals have a strong margin of 60%. Marcus immediately starts seeing $ signs as he thinks about expanding the latter. On top of that the new building makes additional money by renting out two storefronts to a cafe and burger joint. This income more than covers the mortgage payment.
Sweet! Sure it’s a dull business but Marcus has the Midas Touch and can turn it into another money maker.
How Marcus Plans to Grow Queens Vibe (formerly “Artistic Stitch Sports Complex”)
Well this episode was a bit of a roller coaster ride with some serious plummets that could have killed the deal. It also has some interesting deal-making aspects.
The Artistic Stitch Sports Complex is an odd collection of businesses all operating under one roof in Queens. The two owners, Sal and Nic, are friends who have been in business 18 years to date. Their bread and butter businesses are embroidery, silk screening, (and sign making*). However, they were able to get a deal on an old 28K sq. ft. warehouse a while back which had far more room than they actually needed. So to justify taking over the entire building they came up with some pretty weak secondary businesses. These include a restaurant and a sports complex where people can play basketball or get in some batting practice. These add-on businesses appear to take up 80%, if not 90%, of the floor space, with the profitable ones “shoved into a corner,” as Marcus put it. Walking around the place, he described it as the “world’s weirdest mini-mall.”