The Definitive Guide to Business with Marcus Lemonis

Marcus Lemonis: This one trait in a boss can destroy a business

In order to run a successful small business, chances are you'll need to open yourself up to outside opinions and resist the urge to micromanage every last detail.

That's one of the lessons that self-made millionaire and entrepreneur Marcus Lemonis has to impart on one small business owner on Tuesday's season 5 premiere of CNBC's "The Profit."

Tankfarm & Co. is a men's clothing company in Southern California run by two brothers: John and Mike Anderson, who also run a successful — and profitable — apparel design and supply company that produces clothing sold by retail giants like Nordstrom and Urban Outfitters.

But when the brothers opened Tankfarm's brick-and-mortar locations, their management styles clashed — and their business suffered. Tankfarm's two retail locations made only $29,000 total in profit in 2017.

"Something's off; Tankfarm should be a bigger brand," John tells Lemonis on "The Profit."

Mike and John Anderson, the founders of Tankfarm
CNBC
Mike and John Anderson, the founders of Tankfarm

And what's at stake is more than just business — it's about family too. John and Mike run the retail and supply businesses, while their father, Rick, operates the family's clothing screen printing shop, which was founded by his father.

A third brother, Ricky, previously worked there, until he passed away from cancer in 2016. Now, John and Mike want to keep their family business intact so they can eventually pass on equity in the company to their own kids (John has two daughters and Mike has three sons), as well as Ricky's children.

"We're gonna build this thing and they're gonna work for us. That's our dream," John tells Lemonis.

"Any time you meet people that are rich in family tradition ... those are the underpinnings of good business partners," says Lemonis.

Still, "I always anticipate that there's going to be some level of tension and some level of arguments and a difference in philosophy," with family-run businesses, Lemonis tells CNBC Make It.

And that's what he found.

To make sure there's a business for future generations, Lemonis tells the brothers that they need to close one of the retail locations (the lease is up anyway) and redesign the layout of the remaining store that will become their focus.

During the process, it becomes clear that John's management style is part of the problem, when his inner control freak comes out amid the changes.

Lemonis describes their process as "broken" after watching John cut off brother Mike mid-sentence, when talking to a client about a complaint.

"Certain things come down to respect," Mike tells John later in the episode. "It's like you want to be my boss sometimes, where I'm like, 'Dude, we're partners.'"

"Both of you, get your s--- together, and figure out how to coexist and have mutual respect," Lemonis tells the brothers.

But after Lemonis invites Mike's wife — who runs her own successful apparel store that pulled in $1.3 million in revenue in 2017, more than Tankfarm's two stores combined — to take charge of the redesign at the Anderson brothers' store, John refuses to go along with most of the changes.

"I don't like having outsiders come in and be like, 'No, do this, do this, do this,'" John tells Lemonis about why he couldn't handle watching someone else take control of the store's redesign.

"I think you really need to work on letting things roll off your back a little bit more," Lemonis tells him.

Mike and John Anderson with Marcus Lemonis
CNBC
Mike and John Anderson with Marcus Lemonis

Tankfarm employees also tell Lemonis that John's inability to cede control has led him to ramp up his micromanaging behind the scenes, leading to a noticeable drop in morale at the company.

"If I had another job opportunity, I would take it," one employee tells Lemonis.

Bosses who micromanage can create a toxic work environment where workers can feel undervalued and disrespected. And when employees don't feel valued or respected, their productivity can suffer, which ultimately hurts the company.

So Lemonis hosts an intervention, encouraging the employees to confront John about his behavior. John's problem is not that he's a "bad person," Lemonis says, but he "doesn't know how to have awareness about how his actions or his words are affecting other people."

"The only way this is going to work for me to be involved — honestly, because I'll walk away — is if there's a mutual respect amongst everybody, [and] treating people with sincerity and respect," Lemonis tells the brothers and their employees.

John agrees and apologizes, allowing the company's overhaul to continue on a smoother path.

Lemonis tells CNBC Make It that he "felt like the two brothers really understood the men's fashion market," he just needed to "refine their process and get the two of them to work more closely together," he says of the brothers. "Because there's not a lot of companies like theirs that that have the creative skills that they do."

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

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