The Definitive Guide to Business with Marcus Lemonis

Cautionary tale shows why you need a clear chain of command at your workplace

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Marcus Lemonis: Here's why the chain of command is important at small businesses
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Marcus Lemonis: Here's why the chain of command is important at small businesses

On this week's episode of CNBC's "The Profit," well-meaning siblings who own a chocolate shop find themselves melting under the scrutiny of CEO, small business investor and turnaround king Marcus Lemonis.

Lemonis visit Zoe's Chocolate Co., a family-owned shop in Pennsylvania run by Zoe, her two brothers and their father, who makes hand crafted chocolates inspired by the family's Greek heritage.

The company had once been successful, but in recent years profits had diminished and the siblings were forced to take out multiple lines of credit to remain afloat. Part of the problem, it turns out, is their lack of structure and hierarchy.

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In the ten years in which the store had been open, the team had created just 18 chocolate-based offerings. When Lemonis asks who handles research and development, the siblings mumble, and no one gives a clear response.

"I kind of knew that answer already," Lemonis says. "That's why there's no products."

But the real issue is that the siblings don't seem to have clearly defined roles of any kind within the company.

"Can you help me understand everybody's role?" Lemonis asks. "Who's in charge of the business?"

The brothers agree that Zoe is the de facto leader, but beyond that, it's unclear who is responsible for the different areas of the company.

To illustrate his point, Lemonis posts a Facebook Live video asking his followers to order products online from Zoe's. In just 15 minutes the video receives 8,000 views, resulting in 150 orders. On a normal day, the company receives one or two online orders.

The siblings scramble to fill the orders, with no clear process or chain-of-command in place. At one point a customer calls asking to modify their order, something the company isn't equipped to do.

"No systems, no process — they look like chickens with their heads cut off," says Lemonis.

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Even in the all-hands-on-deck environment of a small, family-run business, it's essential that each employee have clearly defined, regular responsibilities, Lemonis makes clear. That will ensure that day-to-day tasks are monitored and completed, and also that the responsibility for growing the company and developing new strategies and lines of business doesn't fall entirely to one overwhelmed person.

And in the case of an unforeseen crisis — or even a positive development, like a surprise flood of orders — established roles ensure that the company continues to function while challenges are being met.

"I would expect that whoever was working in the internet shipping department and a small staff would be able to fulfill those orders without disrupting the kitchen and disrupting the retail store," says Lemonis. If the family behind Zoe's Chocolate can figure that out, their future might well be sweet.

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CNBC's "The Profit" airs Tuesdays at 10 p.m. ET

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