Marcus Lemonis’ Tips for Running a Small BusinessHost of CNBC's 'The Profit' says focusing on people is key to succeeding as an entrepreneur.
On his CNBC show “The Profit,” multimillionaire entrepreneur Marcus Lemonis puts his money – more than $35 million so far – to work, investing in struggling small businesses and helping to turn them into profitable, thriving companies.
Lemonis doesn’t have a business degree, and didn’t study psychology, but he has learned a lot by experience.
“I was a poli sci major and a C-minus student, but I had a great mother who raised me with the mentality that I had to pay attention to people first and everything else second,” he says. “I feel like I’m really good at understanding people, how they tick and what makes them work, and how to get the best out of them.”
While he doesn’t always succeed, Lemonis has learned from his failures, too, and he shared his from-the-trenches advice for running a small business.
- Understand your numbers so you know what decisions you’re making. “It’s like taking a trip without a road map – you wouldn’t do it.”
- Your product or service must be relevant. “If I were to open an eight-track cassette company, you’d laugh, wouldn’t you?”
- Put aside your ego. “Entrepreneurs and business owners mistakenly think they’re the most important variable in the equation, and have all the answers.”
- Pay attention. “Not listening to your customers as you get feedback and thinking ‘This is fantastic, everyone else is wrong’ is a mistake. So is believing your good press.”
- Know your business and everyone else’s. “Take your time to study your business. A lot of people don’t, and they don’t study the competition – and the competition beats them.”
- Focus. “If you’re an ice cream manufacturer with 20 flavors, that’s OK as long as the 20 are doing well. It’s about finding what your strike zone is and staying inside of it, not being all over the place and throwing things against the wall.”
- Set guidelines. “A family business can work if the owner – the family patriarch or matriarch – establishes a law and order about how it will exist. Will the family be held to the same standard as other employees? Will they show up earlier than everybody else, stay later than everybody else? Perform at a higher rate? Any variance in that and it’s a total collapse.”
- Have a succession strategy. “If you have kids who are not interested in the business, what’s the succession plan? And if you do have kids that are interested, are they the right person? Or is it the manager that has worked for the company for 25 years? If somebody dies unexpectedly, who’s running the business? Nobody wants to deal with those issues, and then all of a sudden things implode.”
- Understand that people drive everything in business. “Owners sometimes think that they’re the star of the show, and they forget that [other people come first].”