The Profit's Marcus Lemonis Is A People Person

The bankroll of CNBC's business-turnaround show spoke to Previously.TV about what sets it apart from 'fluff-and-buff' shows.

Screen: CNBC

Screen: CNBC

I spoke with The Profit guru Marcus Lemonis prior to the second episode of CNBC's business-turnaround show, and asked him a few of my tinder questions. Is he content with what's shown of the process? Why can't family businesses thrive with the second generation? And is Mr. Green Tea going to show up on every CNBC show, or just this one and Crowd Rules?

He offered to let me call him again with more nerdy micro questions later in the season, a gesture he'll come to regret. ("Vehicle wraps?!" "...Buntsy, it's three in the damn morning.") In the meantime, here's what Lemonis had to say about the show, his People Process Product "platform," and what might happen in a second season.

On whether an unfamiliar business sector makes Lemonis uncomfortable

On the first day of any of 'em, there's obviously some level of uncomfortableness, because you're trying to understand the landscape, and the product's not that complicated but it's still foreign. So the first day there's a high level of uncomfortableness, maybe for three hours, and that subsides pretty rapidly.

On whether he's happy with what's accomplished as of an episode's final cut

Well, last week's episode, I'm really really pleased with; obviously what matters more is what happens after, not what happens during the show, and I know people like to watch the show; it's the execution and follow-through after that's probably way more relevant than the stuff that we show you, which is a microcosm of that piece.

This week's episode, I would say that I'm just flat-out pissed. I mean, I lost a hundred and fifty thousand dollars [on Jacob Maarse, the Pasadena florist], that's real money, that's not like … none of the money is any money but mine, the network's not pitching in in terms of the danger involved, and this is not a fluff-and-buff show. This isn't like putting tablecloths and putting some curtains up. I put a lot of money in that deal, and I think what's more upsetting than that is, we have some footage that we were not able to incorporate into the show, that happened after the last argument, that the owner, he tells me that business is better than ever and morale is the best it's ever been, and I said, "Well, okay, so that's -- you need to follow through on your handshake," and he says, "Why would I -- you fixed my business, I don't need you." [NB: I believe we did actually see florist scion Hank Maarse showing his ass in those exact words. -- ed.]

On why a second-generation business is so likely to fail

I've seen this for years, kids inheriting, an unexpected death happening, or some reason that these second generations [are] in the position they're in. They have no passion for it, and you know, typically when a business gets started, it started out as some desire, some passion, some inspiration, and if you are thrown into a job where you just don't want to be there, you just have no excitement -- what do you think the results are gonna be? They're not going to be as good as if you were the original founder of the business, okay.

There are cases where the second generation brings new ideas and innovation and technology to the existing business. There's one episode [of The Profit] that will be a second-generation business, but that father and son are working together now so that it'll be more of a baton-handing.

On how that business, Crowd Rules vet Mr. Green Tea, got another swing at the CNBC piñata

I was getting intimately involved with the casting, because I'm not gonna put my own money into something I don't like. And I watched the [Crowd Rules] episode. We were literally in the middle of production; we had all the companies chosen; and I watched the episode and fell in love with the family dynamic -- and I love ice cream, I'm a big candy guy. And I called the network and said, "Look, these people" -- they should have won, first of all, in that episode, but that's neither here nor there, and they hit the jackpot anyway -- and I called the network and said "Look, I want an audible here, I love these people. Would you consider allowing them to be one of the companies that I take a look at." A lot of hemming and hawing, they had been on the show previously, but we ended up having them.

An unbelievable family -- I mean, family businesses rarely work; there's obviously the same drama dynamics you'd find in any wonderful loving Italian Jersey family. But they're awesome, and I can tell you that it ends up being one of my favorite experiences -- I don't mean about the episode; one of my favorite business experiences in recent memory.

On whether the, um, "casual" business practices we see are the rule of these businesses, or the exception

You know, I'm very careful not to call it incompetence in all cases. Some cases it's just lack of knowledge, or lack of resources, or lack of experience that result in … you'll find that across all of these, the simplicity at which they operate their business. ... "Let's have half a million dollars of inventory on a scratch pad." "Let's have nine hundred thousand and put a hundred thousand in an inventory system." But you're gonna find that over and over again, and in some cases, in Episode 3 which is the popcorn episode, it's even more pronounced.

One of the things I talked to the network about doing is, this is really gonna be a very different show than anything I can think of, this isn't Gordon Ramsay, this isn't Shark Tank, this isn't any of those shows -- if you like those shows, you're gonna like ours more, because it's just different. … I can tell you that everything that you see happens, and sometimes it kind of zig-zags a little bit or confuses people, because that's kind of how it really happened, and I didn't want to follow what they call story beats or story themes the whole time. I followed the business story, and if it led to a good episode, great, if it didn't lead to a good episode, that's not -- my job is to make good business decisions, not make good TV, if that makes any sense.

On whether the aired version is "realistic" -- i.e., does the audience see the micro decisions that make the difference

Obviously, there's 42-odd, 43 minutes in an episode and I shot, in some cases, hundreds of hours. And it's always tough because I watch the episode when you watch the episode, and you want to make sure that the point gets across, and of course, in every episode I'm like, "Aw, I can't believe they didn't show that thing where I was talking about the balance sheets," and I'll ask about it and they'll be like, "It was really boring." Well, it wasn't boring to me but we only have 42 minutes and we gotta shrink it down to these stories.

The one thing that [the network] did tell me from the beginning, and this is absolutely true, make sure that you know your audience, and be very deliberate when you explain things, to not only be, to the viewer, trying to teach them something, but to the business owner themselves. … Be literally like a professor in a classroom, where you have to talk a little slower, and simplify the concepts. And it was a great lesson … when I get emotional or get frustrated, I launch into my normal jargon, and they would look at me like I was from Mars. It was still my show to do, but they just cautioned me to try to know my audience regardless, and that was good advice.

On People, Process, and Product

You take a look at a business, and there's three components. You know, process is important, how you buy things, how you sell them, how you inventory them, what processes, literally think of like an assembly line from start to finish. The product is the product or service that you're selling, whatever that may be … but the people side is always the wild card. You can always improve the process; you can determine if the product is obsolete or not, but you can't fix the people.

If I go into a business and I love the people -- they work hard, they're ethical, they have all these things -- I'll spend way more money and time trying to fix something. If I love the process and I love the product, but I hate the people? It doesn't matter how cheap the deal is, it doesn't matter how much money I'll make; I won't do the deal.

… And I ran into a couple, there's one in L.A., the dog episode, where it's unbelievable process, spectacular business, needed tweaking in that it wasn't as profitable as it could be, but I was -- it was just unbearable, I left, I couldn't take it.

On revisiting the businesses he invests in during a possible second season

We are in the middle of casting Season 2, and we will start filming in October for an airdate in January, at this point that's what's on the docket … what happens in Season 2, it's more important for people to get a summary of Season 1 in Season 2, than it is for them to see Season 2, from a content standpoint, because, to gain credibility over time, people have to see what worked and what didn't work. And it's not all gonna work, it's not a perfect science, and I think as long as we're honest and nothing feels manufactured, if it works, great, if it doesn't work, let's tell people why. It could be that the business owner, when we left, veered off course and crashed the car.

On why he changed Car Cash's color scheme

Number one, I like the colors, and in my current businesses, Camping World and Good Sam, those happen to be the colors, so I was very comfortable with them…

I'm also rolling Car Cash out in my hundred stores around the country, and I wanted it to be an easy integration; I didn't want to bring orange into my store. It's gonna look like a Starbucks inside of a Barnes & Noble, and I wanted it to look more seamless. In fact, if you look closely at the logo, in Car Cash, there's a halo over the word "Cash," and the business that I own is called Good Sam, and there's a halo in Good Sam's, so it wasn't totally by accident. … I tried not to make it too pronounced, but that was the reason I chose that color scheme and -- it allows me to interchange things, and interchange artwork. I do a lot of stuff with NASCAR today, and when I do signage or things of that nature, it allows me to pop in and out logos pretty easily and not have to change the whole thing.

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  • D J

    I don't think so Good Sam and car cash business blend well, who wants to go to a campground to sell a car?

  • soontoleave

    Let me ask a dumb question: Did that really happen? Did that guy Hank Maarse actually cheat this guy Marcus ?? Surely Marcus has a no-lose lawsuit here. He has paper work to prove he spent his money. He has the video of the handshake. And certainly he must have something in writing between himself and that idiot.

    One thing is for sure. I won't ever do business with a thief like that Maarse guy.

  • Yael Mammon

    Marcus is obviously brilliant in business, but why didn't you get a signed agreement? Unfortunately, a handshake does not always suffice, especially when dealing with a lazy and dishonest person such as Hank. I hate to say it, but it's a good idea Jacob isn't here to see the mess his son has made out of the business he worked so hard to build. I look forward to seeing more episodes in the future.

  • Runs with paint in her hair

    I moved from Southern California, but used to spend $$$ at Jacob Maarse really often. I loved (notice the past tense) that store. I went in for old time's sake in 2012, I think. As I walked through I remember wondering what the hell had happened. It was dirty. I couldn't find things. Cards were jumbled like they are at the drug store on the weekend. Nobody gave notice that I was there. I was heart broken. So when I saw The Profit was doing Jacob Maarse, I couldn't poke buttons fast enough to watch it.

    Once again, heart sick. Hank Maarse took out all his daddy rage on Marcus Limonis. It's hard to watch a 49-year-old man with behavior matching that of street gangs. The guy says whatever he wants to say in the moment, and none of it is real to him because it has obviously never been required.

    There are good people there... people who were proud to be working for such a prestigious business. They deserve better. I hope business people saw the real worth of those employees and contact them with job offers. I'd love to watch Hank Maarse take a hearty fall. Of course, it will be someone else's fault.

    Last comment? Marcus? You knew damned well Hank Maarse was a spoiled rotten brat. It shows on his face and in his tone of voice. Why'd you do it? YOU deserve better!

    Patti

  • musings2

    I've been using Jacob Maarse florists since I was 18, and now that I live on the East Coast I still have them send things to my mom in L.A. This show does not demonstrate that Hank is a thief. It demonstrates that Lemonis never was able to communicate with the guy, always treated him like he was backing him into a corner. In the end, Lemonis failed to understand that generic flowers are for sale for cheap at Trader Joe's, and that unique home-grown roses are NOT available everywhere, but they are at Maarse's. If he had understood what it is to support the art of the place rather than imposing his generic business advice, communication might have allowed partnership. It was Lemonis who had the most at stake, and he failed to execute. The quick profits he promised never materialized, and it was going to have to take sensitivity.

    By the way, the business my father started has only grown under my brother's control. The doom Lemonis thinks is in second generation business is not necessarily true. Ask Medtronic for an opinon about a certain father and son they have worked with. They seemed to know how to deal in ways that Lemonis didn't. A rude man who goes around calling someone a thief and trying to trash his business does not have my support.

  • Jeffy25

    It's funny how you start your post disguised as some random customer, and then wrap back around and admit that you have a personal bias and are a member of the family.....

    And I'm guessing you didn't notice your transparency.

  • Stan Lawler

    Patti. You are absolutely correct. I just watched the episode with Jacob Maarse and couldn't believe how spoiled Hank is. It was evident in the first meeting. I loved it at the end when Marcus said that he would put a lien on the building and get his money back. Too bad he didn't benefit from any profit though. He put a lot of time and energy into that business and basically got nothing for it.

  • Billy Bob

    I made an account here just to comment on this imbecile. Not only is Hank from Maarse flowers a thief, he is worse in my opinion. Hank not only tried to get away with taking Mr. Lemonis' investment, Hank went out of his way to falsely accuse. Hank showed he is not only unthankful but a slanderer, imputing that Lemonis didn't make a contribution while it is not only documented, but also recorded by filming. Hank, you are scum. You need to apologize and repay the investment. Hank brought shame on the Maarse name.

  • Richard Firth

    Hank has dishonored his family name. I can see why Marcus didn't expect Hank to commit reputation suicide on national TV.

  • Fat Chad

    Interesting perspective. First, in the "boutique" industry (such as 'unique, home grown' roses), pricing is significantly higher. The fact that Hank didn't know what his margins were was crazy.

    Second, Lemonis promised to go from red to black in 1 MONTH, not 1 week...Hank bailed within the 1st 2 weeks. Also, supporting the art of a place doesn't make that place become profitable.

    Next, you may know someone in the 30% of successful second generation businesses, but that does NOT deny the fact that 70% (actual 68.7%) of second generation businesses fail.

    I love that Marcus Lemonis doesn't take crap from business owners. He has helped too many companies to take crap from someone who doesn't have the answers. I feel sorry for Marina and the other employees of that company that will eventually lose their jobs because of Hank's pride and impatience...

  • Andrew Rukavina

    That Maarse was bad blood, I could tell from the inception. He copuld never really loook Marcus in the face (bad sign) and I think the reason the girl was ok with the demotion is that after Marcus left the room he told her he was going to snkae Marcus out of his money and give her the job back anyway. Plus I think that playing a pansy boy to his mommy was one way for that maarse to keep moving the ball under a different shell. In my opinion, Maarse was a scumbag out of the gate.

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