OK, I admit it: Before my call with Marcus Lemonis, I was nervous, and despite having interviewed the likes of Mark Cuban and Dez Bryant in the past, I was star-struck. Luckily, that lasted less than a minute into our conversation. My first impression of Marcus was, “Here’s a guy I can relate to!”
You see, as we spoke, Marcus was on the way to Home Depot to complete several honey-do list items for his wife. As a guy who regularly does these types of tasks for my wife, speaking with someone with the profile Marcus has happily going about completing his honey-do list put me at ease and made for an instant connection.
Marcus is as real as he appears to be on his show The Profit. His desire to help people become better entrepreneurs and business owners is genuine. Unfortunately, many of the strategies shared by celebrity entrepreneurs are too superficial and self-serving. To learn more about how Marcus helps entrepreneurs, I quickly pivoted the conversation from honey do’s to business.
Marcus Lemonis (Full Interview)
Ever done an interview from a @HomeDepot parking lot… #theprofit https://t.co/Q8bM8zZ3O9
— Marcus Lemonis (@marcuslemonis) March 4, 2021
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WHITE: I really want to know how you got started as an entrepreneur. What made you want to become an entrepreneur?
LEMONIS: It really largely circled around my quite awkward childhood. I always found that business was a way for me to neutralize my awkwardness and to create something that would allow me to connect to other people in a way where I felt like I could at least be on an equal footing. So as a child, I started getting into business, and I had a little lawn business, where I made about $3000-$4000 a month as a 12-year-old, which is a lot of money for a 12-year-old.
WHITE: It sure is.
LEMONIS: And really, that’s as simple of an answer as it is. I needed business to sort of save me from the awkwardness of my childhood, and it was a great neutralizer.
WHITE: Obviously, you started making money at a very young age, and now you help entrepreneurs increase their profits. So what are the best ways entrepreneurs can accelerate their profitability?
LEMONIS: I think they have to first understand what the metrics are that make up profitability. I think too often people think it’s one plus one equals two, but profitability is more of an art and a science than it is anything else. If you don’t understand your numbers and you don’t understand the genesis of how they come to be, how they’re mapped out on a financial statement, or how they’re mapped out on your balance sheet, and what the different levers are that push and pull those numbers up and down, then there’s no chance of you improving profitability.
The way that I’ve seen most people sell at profitability is to understand that the numbers need finessing. The second thing is to accept the fact that you can’t cut your way to a profit. This idea that expenses are to be managed is true, but they have to be managed in concert with the idea about growing the business, and too often, people think they can cut their way to a profit, particularly when they’re falling short. So knowing your numbers and understanding them is key.
WHITE: So, understanding what your key metrics are and how they relate to your particular business, is that right?
LEMONIS: Yeah, it doesn’t really matter what business you’re in from my perspective. I always tell people that whether it’s their business or their home, there’s money coming in, and there’s money going out. And understanding the pieces and parts that make up the money coming in and how they can be improved, and the parts and pieces that make up the money going out and how it can be mitigated is important. And whether you are running a plumbing shop or you are running a Fortune 100 company, the fundamentals behind those two things aren’t different. The numbers may be different, because there are more commas or more zeros, but the principles aren’t any different, regardless of the industry or the size of the business.
WHITE: That makes a lot of sense. Let’s talk a little bit about philanthropy. Why is philanthropy important to you, and why should it be important to other entrepreneurs?
LEMONIS: I’ve never been a fan of weaving philanthropy into your business pitch. What I mean by that is the “sell this and we’re going to give a percentage away.” I think that’s a gimmicky marketing campaign, and quite frankly, the modern-day consumer can see right through it. People want to get the best service or product for the best value. And if you run a business and you do a really good job with it, and you recognize your role in the community, your role in your town, your role in your neighborhood and your civic responsibility to be a good member of it, that’s really where philanthropy comes back.
And so the way I look at philanthropy on a personal level is that I never inject it into my companies. I inject it into my own ethos as a result of the profits that I make from my businesses. It’s not a mandate to give away money, from my perspective, but it is a mandate to give back. And what I tell people is, even if they’re running an unsuccessful or an unprofitable business, they can give back by giving their time.
I look at my 12,000 employees in my primary business at Camping World, and it is a requirement, a condition of employment that they volunteer 32 hours a year. That’s philanthropy. Philanthropy doesn’t always have to come with the check. But I’ve always believed that a perfect associate or a perfect partner understands that balance between their contribution to society, particularly the one where they use up space and the environment, and they use up the resources that society provides them.
Then if you receive fruits of that labor, you should give them back in one form or another, and I think that balance is a necessity.
I really became more focused on that through a spectacular author and professor at the University of Pennsylvania named Adam Grant, who has become a friend. He had a book out called Give and Take that really impacted the way I thought. It’s about people who always give or people who always take and defining which one of those people you want to be and how that intersects with business.
WHITE: Wow, amazing. So my next question is about your motivators and what drives you personally. What gets you up in the morning?
LEMONIS: Well, I have this great sense of responsibility for other people. I would say that is my biggest motivator. I’m not a parent; I don’t have children, but I know now what it feels like at least remotely to have children, where you have this unconditional love for the people that you work with, but more important is this heavyweight of responsibility. I would say that when I’m feeling sluggish or feeling anxious or feeling frustrated or angry or disappointed or whatever emotion I’m feeling about my business life, I remind myself of my responsibility because I chose to be a leader. I chose to own my own business. I chose to employ people. And that choice is a responsibility, not a right; it’s a privilege and a responsibility.
I think that is daunting to me, when I think about the responsibilities that those people have for their own families like tuition and rent and mortgages and all the things that go on with it. That is my single greatest motivator and my desire to never let them down. And I tend to be a person who struggles on this front of my character. I tend to want to be a people pleaser, and part of being a people pleaser is allowing other people to get what they need out of me. So that to me, out of — I’ll use the right word – out of responsibility or obligation more than anything else.
WHITE: Coming out of a rough year in 2020, is there anything about the business landscape in 2021 that excites you?
LEMONIS: I think sunshine and rainbows, and I say that jokingly, but not really. I think we’ve all been put into a very odd place, and unfortunately, we’ve lost a lot of people, a lot of lives in the process. What it did for me and what I hope it did for other business people is to change our balance, our scale of what really matters in the world, really reengineering our thought process around how a business can contribute to society in a positive way. How it could save people in a positive way.
And we also saw how people will rally around the support of other businesses. We get so caught up in our day-to-day lives that 2020, I think, gave us a strong dose of reality. I worry that in 2021, as the vaccine gets disseminated, as people get back to their own lives, will they forget what it felt like to rely on other people to support them? So I’m excited about the hope and the possibility that people have changed their perspective about other people, both in business and in life, and I’m fearful that they may have amnesia.
WHITE: Got it.
LEMONIS: I know that’s a bit of a dark answer, but that’s my honest answer.
WHITE: Yeah, it makes a lot of sense. So, my next question is about your show on CNBC The Profit. This is one that I’ve got a lot of people wondering about, and that’s; how do you determine which businesses to invest in?
LEMONIS: There are only two things, and they’re going to seem overly simplified. When I have the ability to learn and when I have the ability to teach. When those two things exist simultaneously, that’s a business that I want to spend time on. I love learning, and while I love teaching and I love sharing, I love learning. I wish more people acknowledged the necessity and requirement to learn and the benefit of learning. I don’t think we learn enough, and I think we think we have all the answers. The best business people in my mind are the ones who don’t have all the answers.
WHITE: I couldn’t agree more. Being a lifetime learner is something that’s important to me, and the minute you think you know everything is the minute you really start to go in the wrong direction and stop evolving.
WHITE: So my next question is the opposite of that. What types of businesses make you want to run in the opposite direction?
LEMONIS: Businesses that exist with owners who exist for the wrong motivations. I don’t like businesses that purely and simply are in it just for the economics. I don’t like entrepreneurs who just do what they do just for the money. I think there’s got to be more to life than that, and when I meet people like that, I don’t judge them; I don’t criticize them; I just don’t do business with them.
WHITE: Makes sense. So continuing on with The Profit, what’s been your single biggest success story from that show of the business you’ve helped? Is there one that stands out?
LEMONIS: I’ll answer this the way you would if you have kids – do you have children?
WHITE: I do, two daughters, 8 and 12.
LEMONIS: Yeah, I’ll answer this the way that your daughters would want to hear their dad answer this. I don’t have a favorite business. I do have favorite experiences; I have favorite lessons. Things that have actually given me the most return on my investment aren’t limited to money. It’s where did I learn the most, who grew the most and by the way, what’s odd about it? I think that the successes necessarily are the ones where I got the best return on investment. Sometimes the failures or the deceit or the lies or the financial losses are where I learned the most and got the most out of it, because they gave me a roadmap on what to avoid.
Are there a few businesses that have been my favorites? Yes, but they aren’t necessarily the businesses that were my favorites. It may have been the people who worked on the businesses because my relationship blossomed, and I built friendships out of it. So I won’t pick a specific business or specific company, but I will tell you that the experience for me has been life-changing, and it has made me a better person. It has taught me more about myself. It has helped me deal with my insecurities, and it has helped me build my confidence in other areas. That has been my return.
WHITE: Wow, amazing. What’s been your single biggest challenge as an entrepreneur and how did you overcome that?
LEMONIS: Knowing when to walk away and when my idea was a bad one, a mistake, and being bold enough to recognize it publicly, not just privately.
WHITE: Yeah, a lot of entrepreneurs struggle with that. How did you learn to jump off before the Titanic went down?
LEMONIS: In some cases, embarrassment and being forced to. Other cases, friends and family pulling the plug for me and trying to grow as an individual. You know, since I give people advice about being direct and transparent, I have to make sure that I swallow that same advice.
WHITE: Ok, last couple of questions here. I don’t fully buy that when you’re not at work, you’re only doing honey-dos. Do you have any hobbies?
LEMONIS: You know, making television and teaching are my passions outside of work. And I think some people view that as work, but I enjoy it because I’m able to use a platform to inform and inspire. I spend the bulk of my time running my camping office. There’s no doubt about that. And I spend the next lion’s share of time running the businesses that I invest in, but the balance of time that’s left, I spend making television. And that’s my equivalent of going to a soccer game. I don’t have kids, I don’t play golf, I don’t play tennis, and I don’t have a lot of hobbies. I don’t own a boat, and I don’t do things like that, so making television is not only a hobby; it’s my life passion. I recently bought a big film and television production company in New York, actually one of the foremost, last week.
WHITE: Is there anything else you’d like to leave us with?
LEMONIS: Not everybody is meant to be an entrepreneur. Not everybody is meant to own a business, and trying it is one thing, but not everybody is built for it. It requires a certain amount of humility and patience. It requires the acceptance that you may fail and not get paid, or you may not make any money, and not everybody can afford to or has the stomach for that. I think accepting that is important.
I meet young people all the time who say to me, “What should I do to start my first business?” And my response is, “Go work for somebody else and know what it feels like to deal with a good boss or a bad boss. Know what it feels like to be accountable, know what it feels like to be fired and catalog all those emotions that you have. Then, if you ever are that person, you know how to behave or how not to behave.”
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*Thank you to Transcription Outsourcing for transcribing this interview*
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