The Profit’s Three Ps
The Profit, a new TV show designed to appeal to the watchers of business shows like Shark Tank and Kitchen Nightmares, centers around three Ps:
The TV show features a billionaire who rescues failing businesses with a healthy infusion of cash and advice. Marcus Lemois puts his own money into each business he works with, takes over the operations for a week, builds factories and revitalizes retail spaces, and generally behaves like a fairy godfather for struggling companies.
In typical reality show style, the cameras catch the negotiations, the big changes Lemonis makes, and the reactions of the business owners when he tells them they’re going to have to change, too, interspersing the human dramas with cartoons to make the math more palatable.
In a recent episode, Lemonis worked with a small but successful CPG company, Mr. Green Tea, to expand from the Asian restaurant market into mass market retail. By cutting out co-packers and building their own ice cream making facility, the company expects to be able to quadruple their production and double profits. Lemonis and the family who own Mr. Green Tea — now Keyport Creamery — look forward to a profitable future.
You might not be able to get Marcus Lemonis to visit your business (and write you a check for half a million dollars), but you can use his three Ps to help pinpoint the things about your business that are working — and the things that need work.
Lemonis has worked with — or tried to work with — some difficult people on the show, providing us all with reminders that shouting at workers or dissing clients isn’t a good idea, but even happy companies can benefit from a look at the human assets at their company.
Here are some questions to ask:
- Do you have enough people to complete the work?
- Do you have the right people in the right places? Working to the strengths of team members can make a big difference — and start ups often need to reevaluate at some point. If you began as chief cook and bottle washer (and accountant, janitor, day care manager, and VP of marketing), it can be hard to identify the things you should give up.
- Are you able to separate the personal from the business? Lemonis worked with a company that made cleaning products. They named their products things like “Emma” and “Phil” rather than “Toilet Cleaner” and “Dog Shampoo.” Instead of testing this idea or even accepting that it was a bad idea after testing, they held onto it for sentimental reasons.
- Is your product good? Nothing can make up for a poor product. This is an area where testing and tweaking makes a lot of sense.
- Does your product meet a felt need among your target consumers? Can you help develop a need if they don’t currently feel it?
- Do you have the right mix of products? If your customers like your product, can they try another flavor? Are the sizes, the packaging, and the name suited to your target customer?
- Do you have clear, consistent processes all along your supply chain? A lack of systems in the office can affect the company as a whole, and start-ups often let their processes grow organically. Maybe this is a good time to examine your processes and make sure they’re scalable.
- Are you missing any chances to reduce costs and increase profits? For both the cleaning product company and the ice cream company, Lemonis was able to streamline their production process to make their operations far more profitable. You might not have an angel in the wings with a checkbook, but running the numbers could show practical investments you might need to make.
- Do your processes take into account security, financial fitness, and overall strategy? Sometimes a start-up can be so focused on getting the product out the door and increasing revenue that business basics get overlooked.
Giving your company a check up can be eye opening. The Three Ps are a good framework . . . and a good way to increase that other P: profit.