small business growth strategies
Yesterday morning I noticed that people were doing searches on “Marcus Lemonis skullduggery” but had no idea that the latter was actually a business appearing in The Profit. So I jumped to the conclusion that a few paranoid types were associating skullduggery with Marcus’s deal-making style. Oftentimes people who don’t understand the rules of business will suspect the worst when they don’t get what they want. Instead of accepting that they are bad negotiators they will attempt to paint the other party as being somehow unscrupulous. It’s rarely the case and certainly doesn’t apply to Marcus.
Then by late afternoon I discovered that these searches were for the latest episode of The Profit.
Skullduggery
After the farce of Worldwide Trailer Sales, I was ready for an episode about a serious business with real potential that Marcus could fix up and make money with. I really do try to start each week with an open mind, folks. Alas, it was not to be. We got Skullduggery instead. Over the years I have met a few toy company owners and/or CEOs and all of them were playful creative types. They have to be in order to understand what their customers will like.
In contrast, the Skullduggery office and owners had more of a Speedy Muffler outlet look and vibe than that of a creative business. Indeed many of the toys were really quite lame as Marcus pointed out early on. And what’s worse, the president really couldn’t relate to kids as demonstrated by his ugly reaction to the young girl at the focus group.
To recap, Skullduggery has been a small family-owned business since 1987 which designs and sells games and toys. It’s currently run by the founder’s two middle-aged sons. Despite being in business almost 30 years it only has $1.6 million in sales and a $50k loss in the most recent fiscal year. On top of all that it is $1.3 million in debt. At the rate it’s going this debt will never be paid off.
Something is clearly very wrong here and it will be interesting to discover why.
Marcus Lemonis Finds Himself in Crazyland: WorldWide Trailer Sales
This one could have been an interesting case study when you recall that our hero is a self-proclaimed “car guy.” Sadly, it falls strictly into the entertainment category. You can rest assured that Marcus’s screening process intentionally selects a few guaranteed train wrecks just to keep the audience happy. The popcorn lady episode was another one of these as well as Maarse florists. I know from my own traffic logs that the train wrecks are the most popular searches even though they tend to offer the least in terms of business lessons.
Marcus must have known going in that WorldWide Trailer Sales was a hopeless situation because of the people involved. You don’t just talk to people once before committing to bring over with a full production unit to tape a one hour show.
We’re definitely starting to see Marcus’s growth strategy evolve this second season. I refer to Marcus carving out a part of the original concept for an escape pod in event the main project fails or is simply a pass. This time around the escape pod is Tina’s protein treats.
Lets take a look at Sena’s Pro-fit gym. The owner, Michael, is a perfect example of someone who thinks that he has a business when in reality he only has a job. This truth usually sinks in when someone tries sell their business and discovers that no one wants to buy it. One of the primary tests to distinguish between a real business and a job is to ask the question: Does the owner have to be there all the time? 24/7? If he or she has to play a role in producing and delivering the service or product then it’s a job. With a real business the owner can be on the beach because trained staff and management are able to run the thing for extended periods.
Think of it this way, it doesn’t make economic sense to accept both a low income and the responsibility for fixed overhead. If you are willing to accept low income then get a job and let your employer fret over covering the overhead.
Warning: Spoilers ahead. Watch first.
A. Stein Meat Products
Most tycoons develop a business growth strategy for a particular industry and then stick to it. Not our hero Marcus Lemonis. Cars, cleaning products, popcorn, flowers, dog kennels, etc. he’s open to them all. The reason for this is that Marcus has developed expertise that’s transferable across industries. Specifically, he has a solid grasp of both finance and marketing. He knows enough about finance to be able to figure out the appropriate financial fix for a business. (If he needs to, he brings in a specialist as we have seen at least a couple of times now.) He also understand the basics of developing national brands. (Once again, he brings in specialists to design the logos and other details that constitute a brand.) If you watch a similar show called Hotel Impossible you will see the expert also relying on specialists to handle the details. No one needs to be an expert at everything. You just need to be able to pull together the right team in most cases. In some ways these guys are like a really good concierge in that they put you in touch with the right specialists.
Marcus Lemonis talks openly about he makes his money with Michael Burt. Marcus’s goals are to make money and save jobs.
This is very good!
Please start at min 16 when the fashionably late Marcus finally arrives.
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