5 Business Lessons Everyone Can Learn From CNBC's 'The Profit'
Marcus Lemonis is the GOAT
If you want to learn how to succeed in business, watching CNBC's The Profit is a great place to start.
The reality series stars self-made millionaire Marcus Lemonis, who knows a thing or two about running a successful business as chairman and CEO of multi-billion dollar company Camping World. Lemonis travels the country in search of struggling businesses that he can turn around with cash, expertise and partnership. The show is packed with tough love, but also practical advice for entrepreneurs and owners looking to better manage their businesses.
Here are five business lessons from The Profit that will bring purpose and perspective to your daily grind.
1. It’s All About People, Process and Product
The first step to owning or investing in a successful business are the oft-repeated three P's: People, process and product. According to Lemonis, people are the cornerstone of this formula. You should have the right people working for you in the right roles, and you should be motivating and managing them the right way. Often when giving business advice, Lemonis reminds his audience that the employee is #1. Give your employees a positive working environment that plays to their strengths, and your company is well on its way to success.
When it comes to operations, find ways to create a more efficient and streamlined process. Cutting costs and upgrading systems used to create the product could increase sales and profitability. This will ultimately improve outcomes for your business.
Finally, make you sure you have a valuable product that stands out. If you're an entrepreneur thinking of entering a saturated market, your product has to be unique since it will be a commodity. If your market isn't saturated, ask yourself, "is there a reason why nobody else in this?" It might mean that there isn't a market there.
2. Know Your Numbers
One of the first things Lemonis goes over with business owners are finances, which they usually have the least knowledge of. In one episode, Lemonis found that by lowering food costs by at least three percent and allowing customers to pay with a credit card, a South Carolina barbecue restaurant could seriously grow profitability.
For Lemonis, knowing basic accounting is crucial to having a successful business, even saying, “to not have a solid understanding of how much you make and how much you sell is a crime.” Rather than making decisions based on your gut, you should be making decisions based on your numbers.
In order to run a successful business, Lemonis says that you need to know three things inside and out: Your annual sales revenue, gross profit margin and expenses as a percentage of your gross profit. Before investing in a business, Lemonis will go over each of these numbers with owners to understand its health and potential.
3. Put Your Ego Aside
Self-interest and pride won't move your business forward, a lesson that some business owners learned the hard way on The Profit. In a 2015 episode, the founder of a Chicago seafood restaurant, Da Lobsta, refused to relinquish control of half his company to Lemonis, who offered $210,000 to relieve his debt. Lemonis said the decision to reject the deal revealed "where pride turns to ego." Those willing to accept help and critical feedback increase their chances for success, while those who retreat to their usual modus operandi miss an opportunity for self-growth. As Lemonis often comments during the show, "no one is above the business."
4. Constantly Reinvent Yourself
Even if your product is selling today, you don’t want to find out that it’s obsolete tomorrow. That means studying the competition and always staying one step ahead on pricing, packaging and target audience. It also means being honest about your strengths and weaknesses, and being open to trying new things. As Lemonis puts it, “every single company in this country today, if they’re not evolving, they’re dying.” How can you make your process and product more sustainable? How can you become a better listener?
For example, the founder of the fly fishing company Smithfly often became defensive when receiving feedback on his products. When Lemonis commented that a jacket fit a little big, the owner pushed back. When potential buyers called his water boat a "tough sell," the owner said Henry Ford received similar criticism when he created his first automobile. The owner had to learn to accept new ideas and change his way of thinking in order to grow his business.
5. Listen to Your People
Whether it’s from your staff or your business partner, it’s crucial to heed the advice and opinions of those you work with. If you have the first P down, it’s likely that you’ve surrounded yourself with very smart, like-minded people who want to see your company succeed as much as you do. They compensate for your weaknesses and help cover your blind spots so your business is constantly improving.
Lemonis often tells aspiring entrepreneurs to work for someone else before starting their own business. Not only will you learn first-hand about the industry you want to enter, but you'll also learn what it's like to be fired or mismanaged. When you're on the other side, you're more likely to listen to those you manage, thus becoming a better leader.
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