One of my favorite TV shows is CNBC’s “The Profit,” featuring Marcus Lemonis, a successful millionaire entrepreneur. On each episode, Mr. Lemonis offers to help a troubled company in exchange for a certain percentage of ownership and complete control over decision-making.
Having financed and worked through numerous similar business situations in my 26 years as a banker, I can attest that Mr. Lemonis is spot-on. If you are trying to advance your business, consider his crucial three Ps.
People
The current bookkeeper you hired (or inherited) when annual business revenues were $1 million may not have the skill set to manage the books for a $12 million company. That hardworking machinist you promoted to production manager did a fine job when there were 12 employees on the floor. As production expands, however, does he have the capabilities to hire the talent you need or get the plant ISO certified? While well-meaning, those employees who grew up with the business may not have the acumen needed to follow where you’re leading your company.
Process
I recently met a second-generation retailer who was able to drastically reduce expenses by eliminating a warehouse purchased years ago by her father. He would purchase and store product to take advantage of wholesale deals he would receive. Unfortunately, much of the product didn’t sell. After converting to a new inventory system, she now receives instant reports of product that is selling or not in stores. She has disposed of the stale inventory and warehouse space and profits have increased. Take a good look at your business process if you haven’t done so recently. What efficiencies can your business gain by refining it?
Product
Mr. Lemonis seems to choose companies that share a common trait: the business offers a solid product or service. Your business may have a strong product or service, but have you considered new ways to leverage or expand it? Is there another use for the product that you haven’t considered? Are there international markets you should enter? Should you consider supplementing your premium-priced product with a lower-cost, imported version? One of my manufacturing clients is considering all of these options to grow revenues that have flattened in this slow-growth economy. Spend time evaluating your options to find new avenues for growth.
You don’t need to bring in Mr. Lemonis to make 100 percent of the decisions for your business in order to grow. However, an objective review of your own three Ps – using your banker and accountant as an objective sounding board – can help you make critical changes that keep your business on the path to success.
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