We don’t usually watch reality shows but Tyler Cowen mentioned this in his blog and I was curious enough to give it a try. The series follows a businessman Marcus Lemonis as he meets with owners of various businesses which under some form of distress or another. He then makes an offer of money in exchange for a stake in the company or a share of the profits. The series appears to be very successful as it now has six seasons but watching just this first season is enough to satisfy my curiosity.

The central conceit here is that Lemonis uses his own money and really is out to make a profit. He also demands that he has full control of the business for a week so that he has a free hand to make whatever changes he feels are necessary to turn the company around. It’s worth noting that out of the six businesses he deals with in the six episodes of this first season, three are failures and it’s clear that he must have lost some money there so the stakes at least seem real enough. I really liked how the episodes amount to a behind the scenes look into various small and medium sized businesses in the US, ranging from a used car business, to a florist and a popcorn maker. It’s not often that business owners can be convinced to open up the nuts and bolts of their operation to the public but that’s exactly what happens here. It’s educational for example to see how small the kitchen used to make popcorn worth more than a million US dollars of sales needs to be, or break down exactly how much profit a dealer makes when buying a used car and reselling it.

Tyler Cowen mentioned this show to highlight the simplicity and yet undoubtedly effective advice Lemonis dispenses. It doesn’t take a genius for example to realize that if your business involves sending out drivers to deliver goods, you need to provide them with GPS devices, or that if you’re not making money because most of your sales are to middlemen, you should try cutting out the middlemen. Lemonis cites a simple mantra of Product, Process, People to figure businesses out but basically the problem is almost always People. Often improvements are obvious to outsiders but the business owners balk at making changes because they’re used to doing things a certain way, or that they’re reluctant to upset partners and employees they have a long-term relationship with or that the business is jointly run by more than one person and they can’t see eye to eye. When you think about consultants coming in to fix failing businesses, what comes to mind is smart guys with MBAs and spreadsheets and simulated models. Instead the changes Lemonis makes are straightforward, elementary even on a nuts and bolts level, which makes them easy to understand and appreciate.

Unfortunately the show still suffers from the usual foibles of the reality show format. There is tiresome repetition of lines of dialogue. The show sticks to rote routines of Lemonis writing and offering a physical cheque and asking for a week of full control which are obviously pure showmanship. Many participants have confessed that the cheque is only a prop and the real money, if it is given at all, is actually placed into escrow with a lawyer. It takes way longer than a week for Lemonis to turn a company around and it seems that sometimes filming takes place over a matter of months. Lemonis likes to give the impression that all the deals are made over a handshake but it’s obvious that plenty of paperwork and lawyers are involved. All this is designed to make it more palatable to television audiences with short attention spans I suppose but they really hurt its believability and credibility.

I’m not really interested in watching more because I know that a lot of the human conflict and drama is exaggerated and the show likes to highlight these aspects more than anything else. Still watching this first season has been illuminating and I see that Lemonis often repeats the same basic moves that he makes for each business: make sure the accounts are in order, put in a proper inventory system, have attractive packaging and makes it clear to customers what it is that you’re selling, break down the profit margin of your different products and focus on what makes the most money etc. It’s the same advice over and over again, but they are the basic building blocks of every successful business and they work, which is why Lemonis has been as successful as he has been at what he does.