Marcus Lemonis gets real about the book that changed his life -- and the woman that did, too
Getting a small business off the ground is hard work, period.
From finding financial backing, to making a profit, to — dare we say — enjoying yourself along the way, the life of an entrepreneur can be a stressful and confusing path to navigate.
Luckily for you, we called in the big guns to get the expert low-down on the best way to go about the road to being a successful business owner.
We sat down with Marcus Lemonis, serial entrepreneur and host of CNBC's 'The Profit' to talk small business tips, growth, common pitfalls and a new competition he's sponsoring with the UPS store through May 20 that will give entrepreneurs the chance to win $10,000 — yes, really!
AOL Finance: What is something small business can do right at this moment to advance their businesses?
Marcus Lemonis: "Really understand their numbers...People think 'Okay, I need a new marketing campaign, I need new packaging, I need a new logo, I need a new idea.' What I want you to do today is really dig into your financial statement, and understand exactly what it is that's driving your numbers. What's driving your sales up or down, what's affecting your margins and more importantly, what's affecting your bottom line? If you don't know those numbers everything else you do is really going to be a waste of time."
AOL Finance: What would be a characteristic of that someone who shouldn't start a business?
ML: "Lazy people would be a good start! If you're living in your parents' basement and you have no money that also wouldn't be a great idea...owning a business isn't for everybody. That doesn't mean that you're not an entrepreneur, but owning a business is a privilege in my mind, not a right. Usually, the owner of a small business is the last person to get a check, the last person to get credit, maxing out their credit cards and really putting everything they have into the business.
If you don't like failing, then you should not open your own business. I've failed plenty of times, and you may, too."
Watch our live interview with Marcus on the AOL Finance FB Page:
AOL Finance: What's one must-know tip that you would give to small business owners starting today?
ML: "If you're going to open a business today, I want to make sure that you have enough working capital to actually open your business...every business, no matter how good it is, is going to lose money upfront. You have to have enough working capital in your bank account to sustain that."
AOL Finance: What are some unique ways that entrepreneurs can find funding for their businesses?
ML: "The UPS store and myself had this idea to come up with a chance for people to pitch their ideas. If you log on to The UPS Store's Pitch Off, you can upload up to a 90-second video (by the way, don't send in 30 seconds, use every bit of the 90 seconds) and you can win up to $10,000 in prizes and even a $10,000 check, which they're probably going to make me write— Which I'm fine with, if your video is good!
Small business owners have until Saturday, May 20 to submit their 90-second video.
There are a lot of contests that you can find online (like the UPS Store's Pitch Off contest) and then there's typical ways to raise money online, but I would caution people against basically putting their house up for collateral.
I've met a lot of small business owners who have maxed out credit cards, put their house up as collateral, and I admire the courage they have, but it's a little more risky than I think people realize because the banks will take your house if it doesn't work out. It's very scary.
But most people, typically (though they don't want to admit it) are still raising money from family and friends. And while most people like to hide the fact, I think it's actually a nice fact to admit because it's showing that people believe in you...don't be shy to talk about it!
AOL Finance: Do you have any standout small business success stories that you're particularly proud of?
ML: "I focus on something a little different [when it comes to judging success] — I like to see the maturation or the progress of the people in the business. How have they changed their perspective? How are they running the business differently? How have they matured and changed their mindset about the importance of the other people in the business, the importance of having a process or really improving their product?
I have one really cool business that I think has really changed a lot, and that's SJC Drums out of Boston. It's two young guys that own a drum company that make drums for bands like Green Day and Imagine Dragons...but they've now progressed for making drum sets for people that are just starting out, and not just being so boutique -- And how they've had to change their mindset, and how they've had to manufacture differently...even though they're Patriots fans, I still like them! They've done very well.
As you judge people on the success of their business, don't always look at the financials. Look at how the business has matured and how the people have as well.
AOL Finance: What do you think about the notion of "shopping local" to support small businesses?
ML: "I don't want to give small businesses this crutch that they should appeal to people to shop at their business because they want them to just buy local.
I want small businesses to be the winner, to be the reason people shop because they have a competitive product, at a competitive price with above average service.
Do not appeal to people by telling them 'we're small, give us a chance.' How about, 'We're the best, here's how we're different from our big-box competitors or different from other small business owners, and this is why you should shop with us.' Give people a value proposition, not a pity story."
AOL Finance: Do you have any business books or courses that you recommend?
ML: "If you're going to read books about getting into business, i would strongly advocate that you start with a math book...I really want people to understand the basics of math. And once they really get a handle on that, then get some basic books on accounting — debits, credits, how to balance a checkbook, what a balance sheet looks like, what debt looks like — and then you can progress.
[But] get into the trenches and work...there's no better education than the education of real life. working for somebody else and understanding how a business should run or how a business should not run is the best thing.
AOL Finance: Is there a particular book that's changed your life?
ML: "Besides The Bible? I'm not trying to be super religious but thats a book that changed my life!
Other books that have changed my life are the books that I studied in elementary school...a good geography book, a good history book...in order to be in business, you have to understand some basics.
If i was going to get into one business book, i have a favorite of all time it's Adam Grant's 'Give and Take'. It really teaches people the importance of understanding that in business, it's not all about you.
AOL Finance: Who's inspired you the most in business?
ML: "My mother...she ruled with an iron fist, but she believed in being aggressive in going out and getting things on your own, and not having people do things for you.
We all know the difference between right and wrong — it's okay to be competitive, its okay to be aggressive — but you should do it with the mindset of 'What's your mother really going to say?'"
AOL Finance: What's the most common mistake you see small businesses make?
ML: "They take their people for granted — sometimes I'm guilty of it as well, I get caught up in the hustle and bustle of things, and i forget that nothing really happens unless the people on the frontlines are actually executing the plan."
AOL Finance: What's the best industry to invest in right now?
ML: "Invest in things that aren't going to go away — the auto business, the hair business...things that Amazon can't kill — you can't get a haircut on Amazon.
People always ask me, 'If i lost everything, what would i go do?'
I would go sell cars. It's what I used to do and I would do it again — Everybody needs to get around!"
The new season of 'The Profit' airs June 6 on CNBC.
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