BY MARCUS LEMONIS

Growing Your Assets

Assets aren’t limited to what’s in the bank. In fact, they range from your staff, customers and inventory to contracts, trademarks
and accounts receivables. In this informative course, Marcus shows you how to identify then expertly manage your assets to
maximize growth.

What You’ll Learn

 What is a Business Asset?

 Strategies to Use Assets to Grow Your Business
 How People, Products, & Process are Your Most Important Business Assets
 Assets for Retail Companies 101
 The Importance of Repeat Customers and Strategies to Make it Happen

1. How to Identify Assets in Business

What You Will Learn

 Defining Assets
 Various Types of Assets
 How to Identify Assets
 Why it’s Important

by Marcus Business Team

As a small business owner, there are many responsibilities that come with the title. You must be involved in—or at least fully
aware of—everything from planning, human resources, customer service processes, marketing strategy, and much more.

One of the most critical aspects of small business ownership is accurate documentation of your finances. And when it comes
to finances, keeping track of your assets in business is crucial. After all, you may be losing both time and money if you are
not managing your assets correctly. “Know your numbers” is something Marcus always says, and it relates to your assets in
business as much as anything else. This is because without knowing what these are and how they affect your business, you
will never be able to get precise data to be able to make critical business decisions.

At this point, you may be thinking that you already do this. And many small business owners do keep impeccable records
when it comes to their cash flow and inventory. But assets in business are much more than just the money in your cash
register and the products on your shelf.

For example, did you know that if you deliver a package, but aren’t paid immediately for the delivery, the amount owed to
you counts as an asset under accounts receivable? Many might count this as a debit until the money is secure in your account.
But then that means that you are falsely doubling your company’s debt if you’re also tallying the merchandise that was
delivered as a debit to your inventory. If this sounds a little complicated, do not worry. Before we go further into all the
different types of assets and how to identify them, we will first tackle the basics.

I. What is an Asset?

According to Investopedia, assets in business are items of value owned by a company (Liberto, 2020.) They can be tangible
items such as company vehicles, real estate, computers and equipment, office furniture, gondola shelving units, and other
fixtures, or intangible things like intellectual property such as patents and registered processes. There are three fundamental
properties that assets possess:

 Proprietorship: all assets in business are owned property that can be eventually turned into cash or cash
equivalents, such as inventory or patents.
 Monetary value: all assets must have an economic value that can be monetized or sold. Assets must be
appraisable and quantifiable.
 Resource: assets can also be used to generate financial benefits by selling them or converting them into
something that can be sold – For example, raw materials (CFI, 2019).

II. Types of Assets

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Assets in business are separated on the balance sheet as current assets and noncurrent assets. Current assets in business are
those that can be turned into cash within a year. Some examples of current assets are actual cash, inventory and, as mentioned
previously, accounts receivables—debts owed to your company for goods or services that have been delivered or used but not
yet paid for by customers.

Noncurrent assets in business are your long-term assets. These are assets that are harder to turn into cash and are expected to
provide value for more than a year. Noncurrent assets in business include items such as real estate, infrastructure, and
equipment. This type of asset is usually referred to as “capitalized assets” since their cost is capitalized and expensed over the
life of the asset in a process called depreciation (Liberto, 2020.) Depreciation is how your small business can account for the
value of an asset over time, considering the life expectancy of the item.

Let’s take one of Marcus’ investments in South Florida that manufactures high-end furniture, as an example.

This family business makes quality custom pieces for interior designers and various lines of ready-to-ship pieces available for
direct purchase. Its state-of-the-art manufacturing facility and all the industrial equipment and tools would be noncurrent
assets. If you wanted to turn them into cash, it would require a lengthy process; and when the family invested in these things,
they expected them to last for much more than a year. Current assets would be the raw materials—such as wood and fabrics
—that will be turned into furniture, the finished pieces in the warehouse, and the invoices pending payment for furniture that
has already been delivered to customers.

III. Identifying Your Assets

What are your business’s assets? To answer this question, you must determine your actual asset accounts. First, list
everything your company owns; then separate the items on your list into current and noncurrent assets.

There are three categories to help you classify assets in business:

1. Convertibility: you can classify your assets based on how easy it is to convert them into cash.
2. Physical existence: classifying assets based on their physical existence as tangible or intangible assets.
3. Usage: this category allows you to classify assets based on how they are utilized in your operation.

Classifying assets is vital to a business. These are some of the essential components in constructing financial statements,
which you can use to evaluate your company’s performance. For example, understanding which assets are current assets and
which are fixed assets is important in knowing the company’s net worth of working capital. In the scenario of a company in a
high-risk industry, understanding which assets are tangible and intangible helps to assess its ability to quickly liquidate assets
in case of necessity.

For example, in an industry like farming—which is extensively dependent on climatic conditions—knowing which assets
could be converted to cash helps mitigate the risk of going under should an unexpected drought happen. Determining which
assets are operating assets and which assets are non-operating assets will allow you to see how each asset affects your
revenue and helps paint a detailed picture of where your company’s revenue is coming from.

In addition, the value placed on intangible assets, such as processes, knowledge, relationships, and intellectual property,
should not be ignored.

Currently, intangible assets can be even more important than tangible property, especially when pricing your business for
sale. An intangible asset that many tend to overlook when appraising their business’s assets is the value of their brand. A
strong brand and a loyal customer base can be considered intangible assets in business as part of a company’s goodwill.
Which, by definition, “is the value of the business in excess of its owner’s equity” (Entrepreneur, 2002.) Examples of this
include a prime real estate location or your brand’s reputation. These are abstract things that bring value to your business—
value that would still exist even if you were to sell the company to someone else.

If this all sounds a little overwhelming, don’t worry. Remember what Marcus always says, “you don’t have to be a genius to
run a successful small business, but you better be smart enough to be willing to learn.” There is a wide variety of tools,
dedicated computer software, and apps that can help you manage your assets. Keep in mind that investing the necessary time
and money to research and implement an asset management tool—that makes sense for your type of operation—will pay off
in the long run. It will also be helpful to get your accountant involved to assist you in determining which tools may be best for
your business’s bookkeeping and report-building.

Ultimately, the reason for implementing new tools and technologies should always be to create efficiencies that will save you
time and money—not make things more difficult for you and/or your accountant. Also, it is crucial to think about the future

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and how you envision your business growing in both the short run and your long-term goals. You should contemplate an asset
management tool that is modular, or that allows for potential expansions, in order to keep up with your company’s demands
to manage your assets as the operation grows.

So, what types of assets does your business have? If you have not yet done this exercise, it is imperative that you do it as soon
as possible.

The longer you go without accurate data, the harder it will be to make the most informed decisions to benefit your business.
Also, you could be missing out on potential growth opportunities through inefficiencies. And Marcus himself would tell you
that, “more efficiency leads to more money, and more money leads to larger margins.”

MARCUS’ CLOSING QUESTIONS

1) What types of assets does your business have?

2) What assets does your business have?

2. 10 Tips for Retaining Customers

What You Will Learn

 Why Retaining Customers is Important

 How Your Business Can Retain Customers
 Discounting Strategies
 The Importance of Loyalty Programs
 Managing Reviews & Ratings
 Making Customers Feel Special

by Marcus Business Team

As Marcus Lemonis says, “The key to business isn’t being smarter or wealthier. It’s being able to connect to people and relate
to them.” That insight is particularly true when it comes to building a solid base of loyal customers. In fact, It’s almost
impossible to be successful in business without an effective process for retaining customers. By making repeat purchases and
telling friends about your products and services, loyal customers keep your business moving forward.

Studies have found that the top 10% of your loyal customers spend about three times more per order than the 90% below
them.

Retaining customers is also important for profitability. That’s because acquiring a new customer can be five times more
expensive than retaining a current customer. Establishing a solid customer retention process allows you to spend your
marketing dollars wisely. Fortunately, most techniques for retaining customers are significantly less expensive than marketing
to new prospects.

I. If you would like to improve your customer retention process, here are 10 strategies to consider.

a) Offer a discount. One of the best ways for retaining customers is offering a discount on the next purchase. It’s a
strategy used by countless online and brick-and-mortar retailers, as well as other types of businesses. The nature of
the discount can vary from business to business, based on your products and services, as well as the nature of your
customer base. For instance, a “buy one, get one free” strategy can be very effective for selling groceries, shoes,
books or other relatively inexpensive goods. But if you are selling luxury watches or motor vehicles, your offer
might focus on a “lifetime service warranty.” Whatever your business, you can use your CRM (customer
relationship management) database to identify your best customers. Then you can call them directly or send an
inviting email with a subject line like, “25% Off Your Next Purchase” or “A Special Offer for Our Valued
Customers.”

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b) Create a loyalty program. Leading brands like Starbucks, Staples and Best Buy offer rewards programs because
they work! You can adopt a similar customer retention strategy for your business, such as “every fifth purchase is
free.” It’s an excellent approach for retaining customers because it gets them in the habit of buying from you, rather
than the competition. Like other types of offers, loyalty programs can be adapted to the nature of your business. A
home repair or service company, for instance, could offer a free annual checkup to prior customers. A clothing
retailer could offer $1 in credit for every dollar spent on merchandise, while a music store might allocate a portion of
payments for lessons toward the purchase of an instrument.

c) Connect with a cause. Your customers may have an affinity for a certain cause, such as children’s education,
financial literacy or medical research. Linking your business to that cause can do good things for retaining
customers.

For a New York family, success in business grew out of a personal tragedy. After the death of a wife and mother in
the 9/11 terrorist attack on the World Trade Center in New York, her husband and son used proceeds from her life
insurance policy to partially finance an Italian restaurant in New Jersey. When Marcus stepped in to help them
straighten out some of the business’s issues, he recognized their commitment to building ties with the community.
Along with donating $25,000 to Stars of Hope in their wife and mother’s honor, Marcus purchased 5,000 individual
stars for the restaurant. Now, patrons and employees can get a deeper sense of the restaurant’s story.

d) Stay in touch. A regular newsletter, social media posts, texts, postcards or personal notes are great ways to stay in
touch with your customers. A phone or video call is another great way to say hello with a personal touch. A strong
communications plan can provide the foundation for retaining customers by keeping you focused on this vital task.
With today’s online tools, many of these communication functions can be automated, making it easier to remind
customers about your products, your services and your mission. Just be sure that your message sounds like it’s
coming from a human – not a robot!

e) Ask for reviews or ratings. If your customers feel good about your business, ask them to send in a testimonial or
post a positive review or a high rating at an online site. If you have a home-related service business, for example,
you might encourage your customers to post a testimonial on Yelp. For travel-related businesses, TripAdvisor is a
high-traffic site for customer reviews. These types of posts are great for validating your business and capturing the
attention of new prospects. In addition, they also give your current customers an opportunity to express their feelings
and make them feel good about doing business with your company. Just be sure to follow up with these loyal
customers who serve as your advocates in the market, and keep them engaged with your business in the future.

f) Personalize the experience. You don’t have to be a Fortune 500 company like Amazon or General Motors to
personalize your customers’ experiences. Just take a look at your sales records or CRM database in order to pull out
a nugget or two that will allow you to personalize your next offer or message and help you in retaining customers.
For example, many financial service and real estate businesses keep track of their customers’ birthdays and send an
email or postal greeting. On the retail side, fashion boutiques can keep track of a customer’s styles, colors and sizes
and reach out on the phone or text when a matching item arrives at the store. This customer retention strategy lets
you connect on a deeper, emotional level, strengthening the long-term relationship. After all, everyone likes to feel
special, and a personalized offer is more likely to elicit positive feelings than a generic message.

g) Educate your customers. Not every repeat customer will understand the features and benefits of your product or
service. After all, how many people actually use all the tools and applications on their smartphones? As part of your
customer retention process, consider a follow-up educational message after you make a sale if that’s appropriate for
your business. For instance, you could send a link to your website for written, graphic or video directions about your
product. You could also put your customer’s purchase into an appropriate context, such as showing how to assemble
a child’s bicycle at home or set up a camping tent in the outdoors. Your customers will appreciate your going the
extra mile to help them save time and understand how this purchase can help them achieve their goals. You should
also send a follow-up message in case they have any further questions.

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h) Expand your offerings. Some types of businesses have a “one-and-done” sales cycle. In other words, customers who
have made a purchase are unlikely to return again. One way to change this process and retain those customers is to
expand your offerings and give them something new to buy. This is an excellent approach for building customer
loyalty as well as generating repeat sales. For instance, Marcus met with the two owners of a California business that
was initially an overnight online success by selling colorful pairs of socks. However, the owners were struggling to
find their way, as they started looking at several unrelated lines of business and lost their original focus. Today, the
company is back on the growth path with an expanded product line that includes swimwear, t-shirts and hoodies.

i) Provide great customer support. Your customer retention program should include a commitment to providing
support, whether online, in person or through voice or digital media. Even your most loyal customers may run into
an issue from time to time, such as a question about a product, an invoice or a shipping issue. You need to be able to
handle these inquiries smoothly, efficiently and carefully. Don’t make the mistake of ignoring these issues, as that
can lose a customer and damage your business’s reputation. Remember that delivering warm, personalized support
will go a long way toward building relationships that help you in retaining customers.

Here’s a tip for small businesses

Your business would not be a success without your current customer base. Take advantage of every opportunity to
thank them.

j) Say “thank you.” Your business would not be a success without your current customer base. Take advantage of
every opportunity to thank them and let them know how much you appreciate their loyalty. You could set up an
automated “thank you” message to consumers after every purchase, or email a personal note to your best customers.
After all, a customer who feels appreciated is more likely to make another purchase than someone who sees no
difference between your business and the competition.

II. Make them feel special

As Marcus has learned through the years, making each customer feel special is the secret to a successful retention strategy. “If
you have a good relationship with clients, people for the most part will stop shopping on pennies,” he says. You can build
those relationships whether your business serves a local community, a business sector or an online market. Just pay close
attention to your customers’ needs and desires, stay in contact, and be sure your products, processes and people are aligned
with your customer retention program.

MARCUS’ CLOSING QUESTIONS

1) What are things that you’re currently doing to retain customers?

2) Which strategies from above will your business implement to retain more customers?

3. Income Producing Assets

What You'll Learn

 How to Turn Your Cash Into Assets

 Assets That You Should Consider Using Your Cash On
 Assets That Produce Income

by Marcus Business Team

If you’re sitting on a pile of cash in your business, congratulations! It’s great to have a cushion on hand to cover a slowdown
in your monthly cash flow and it’s highly recommended to always keep a certain amount of money on hand for emergencies.

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But rather than collect a few pennies in interest each month, you could turn that extra cash into income-producing assets. This
strategy can create new revenue streams or open the door to greater market opportunities. As Marcus Lemonis says, “You’ll
have skin in the game.”

Here’s a tip for small businesses:

Before investing your cash, think about how much you need to keep in reserve for unexpected operating expenses.

Before investing your cash, though, take a close look at your business’ overall financial position. Think about how much you
need to keep in reserve for unexpected operating expenses. Also look at your current loans, mortgages or other liabilities. If
your bank loan has a 5 percent interest rate, then an additional payment would, in effect, be generating a 5 percent return. So
any income-producing assets you would acquire should deliver a higher potential return.

Otherwise, you would be better advised to pay down the loan. And if you have a business credit card with a double-digit
interest rate, you should use cash to pay off that balance each month!

Nevertheless, there are many ways to boost your business’ revenue stream and profitability by acquiring income-producing
assets. For instance, when a family-owned candy business launched their store in North Florida, the company found a “sweet
spot” in the local market, but ran into financial difficulties and called on Marcus for help. Under Marcus’s guidance, the shop
improved its candy-making kitchen operations, and moved to a prominent high-traffic location, leading to a significant
increase in revenue. This allowed the business to build up its cash reserves and purchase an adjacent building to expand its
production capabilities.

I. What are Some Income-Producing Assets?

Your business is one example of an income-producing asset. If it didn’t provide you with revenue, you would probably have
to close the door and look for a job. However, there are a few types of businesses, such as pharmaceutical or medical research
companies, that can succeed in the future, even if they are not producing income right now.

In any case, your business requires an active commitment of your time and energy, so you may want to look for income-
producing assets that require a lower level of involvement.

Here are several examples:

 Rental real estate. Commercial and residential properties are available at a wide range of prices in virtually every
market.
 Investing in other businesses. This might involve acquiring another company or taking a minority share and
letting someone else handle the operations.
 Savings accounts, money market accounts and certificates of deposit. These offer the advantages of immediate
liquidity, but typically have low rates of return.
 Peer-to-peer lending. Basically, you provide a business loan to a borrower.
One of the most famous income-oriented investors is Warren Buffett, chairman and CEO of Berkshire Hathaway. Known for
his long-term approach to stocks, bonds and other assets, Buffet reported more than $3.8 billion in dividends in a 2019 annual
letter to shareholders.

II. Turning Cash Into Income-Producing Assets

There are many strategies for turning your extra cash into income-producing assets, including the following.

 Buy real estate. Real estate can be an important addition to your portfolio of business assets. Purchasing a
commercial property and leasing it out can generate a steady flow of income, while increasing the book value of
your business. Other benefits of owning real estate include potential appreciation and tax advantages such as
depreciation.

Another great thing about real estate is that you could use a mortgage loan as leverage, multiplying the impact of
your cash investment. However, those loan payments would need to be subtracted from the monthly rent
payments. Be sure to compare the projected rates of return with and without a loan to see which works best for
your business.

There are other ways to benefit from buying commercial real estate. For instance, if you are considering an
expansion, you could acquire a suitable property in the target market. You could lease that property to produce

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income until it’s time to make the move. If your business is leasing space now, you should consider purchasing
the property. You would no longer have to pay rent to a landlord, improving your monthly cash flow. Ownership
also offers the potential for appreciation.

If your business has extra space available, you could generate extra income and increase your cash reserves by
finding a suitable tenant. For instance, if you have a vacant suite in your office, you could turn those wasted
square feet into an income-producing asset. But don’t lease that space to a competitor or a business that would
interfere with your operations!

 Make an acquisition. One of the time-tested ways to grow your business is to acquire a competitor. This is
another great strategy for using your cash to generate income-producing assets. If all goes well with the
acquisition, your business will gain access to your competitor’s customers, creating a robust new stream of
revenue. But you don’t have to limit your acquisition targets only to your competitors. Look for opportunities to
use your cash to buy a business with related products or services. This strategy can allow you to enter a new
market more rapidly and efficiently than starting from scratch. And if you play your cards right, you can also
capitalize on cross-selling and upselling opportunities.

 Offer peer-to-peer lending. Do you know another business in your market that could benefit from extra cash? If
so, you could create a new revenue stream through peer-to-peer lending. This strategy can create a new income-
producing asset for your business with a significant upfront investment.

You don’t have to lay out cash to buy real estate or another business – you simply make a loan at a competitive interest rate
and enjoy the incoming flow of dollars. With peer-to-peer lending, you need to conduct a due diligence analysis to make sure
the borrower has the financial ability to make those payments on your loan. You may also want to secure the loan with a lien
on the business’ assets, as insurance in case the borrower defaults before the final payment. If you want to pursue this
strategy, be sure to have a business lawyer draw up the documents needed for a mutually beneficial agreement.

III. A Step-By-Step Approach

If you are considering ways to put your cash into income-producing assets, this step-by-step approach can help you make a
good decision. As Marcus says, “You have to know your numbers.”

1. Determine your current cash on hand. This typically includes funds in a business checking, savings or money
market account, as well as any petty cash in your establishment.

2. Increase your available cash. If you are thinking about buying a property or making an acquisition, you might
want to look for ways to redeploy your current assets. For instance, if you have a large fleet of service vehicles, you
could sell several trucks to raise cash. If you have a satellite facility that is losing money, look for a potential buyer
or shut it down, reducing your outgoing expenditures.

On a national level, Wells Fargo sold dozens of its bank branches in 2020 to reduce annual expenses, and improve
its financial position. In the small business sector, Marcus helped the owner of a northeastern-based lighting
company understand how the money that was tied up in his extensive inventory was severely affecting the company.
By selling off the excess products, the owner was able to increase the business’ cash reserves and redeploy the
money for other purposes. The result was a stronger company that the owner was later able to sell to a much larger
business for a profit.

3. Analyze both the risks and potential returns. Some types of income-producing assets can generate greater returns
than others. Of course, they often carry higher risks as well. If your main goal is a steady and secure stream of
income, you may not want to acquire another company or offer peer-to-peer loans.

4. Consider your own resources. If you have a stable business with good managers in place, you may be able to
devote more of your time and attention to a new income-producing asset. But if you are focusing your energy on
your current business, then you should look for a more passive investment – an asset that provides income without
requiring your personal resources.

IV. Make a smart decision

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It takes knowledge of your options and the willingness to do your homework in order to make a smart decision about turning
your cash into income-producing assets. If all signals are “go,” then you can move forward with confidence to add a new
stream of revenue to your current operations. As Marcus says, “In any business, you can’t be complacent. If you do, you’re
going to go backwards.”

MARCUS’ CLOSING QUESTIONS

1) What assets do you currently have?

2) Which types of income-producing assets are right for your business?

4. Registering Trademarks & Licensing Agreements 101

What You'll Learn

 What is a Trademark
 Why You Would Want to Register a Trademark
 How to Register a Trademark
 What is a Licensing Agreement
 Why You Would Want to Set Up a Licensing Agreement
 How to Set Up a Licensing Agreement

by Marcus Business Team

Marcus Lemonis knows that “Ideas, information and inspiration” are driving forces for well-known brands like Zappos, Sony
and Chevrolet. By trademarking the names, logos and other properties of their brands, these businesses have successfully
penetrated the global marketplace. Today, your own brand may be one of your most valuable assets, building customer
awareness, as well as generating sales and revenue. That’s why you need to be sure to protect your rights by registering
trademarks.

Marcus’ three I’s: Ideas, information, inspiration

In addition, your trademarks and other intellectual property (IP) assets can also generate revenue for your business through a
licensing agreement. With this approach, another business would pay you a steady stream of cash for the right to use your
logo on their products or services, enhancing profitability without having to invest in more people, products or processes.

You could also sign a licensing agreement with a well-known company to add its brand to your product or service. In that
case, a licensing agreement can allow you to increase your pricing, boost your sales and give you a competitive advantage in
your market.

I. What is a Trademark?

Let’s start with the basics. A trademark can be a word like Cheerios, a symbol like the Nike “swoosh” or a slogan like
“What’s in Your Wallet?” It can also be a certain color, sound, taste or smell, or any other “mark” that identifies a product or
service as something distinctive in the marketplace. In registering trademarks, you should include the name of your business,
as well as your online domain names, in order to protect these vital assets.

Several years ago, Marcus met with an Australian fashion designer who had developed a line of organic cleaning products
with an unusual and difficult to pronounce company name. Marcus felt the brand name was a liability in the U.S. market,
rather than an asset, and suggested it be renamed. Marcus agreed to an investment in the company that included his ownership
of a new “Best in Show” trademark for the company’s line of pet cleaning products. Although the owner didn’t follow
through with the deal, Marcus understood that the “Best in Show” trademark had significant value as a potential future
investment in the pet products marketplace.

II. Why is it Important to Register a Trademark?

Registering trademarks is an important step for many reasons. It can be a protective action against the competition or a way to
generate revenue through a licensing agreement or similar business arrangement. Whether your company is a small start-up, a
growing mid-size business or a large enterprise, you should secure the rights that you might need in the future. Otherwise,

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another business might infringe on your trademarks or ask you to pay a steep price to secure the rights that should have
belonged to you.

An example of a successful entrepreneur who could have been locked out of one of her most valuable assets was the owner of
a kettle corn business who Marcus once worked with. The owner launched her business in 1999, and a few years later opened
the first of several kiosks in high-traffic tourist attractions under her chosen brand name. But when Marcus met with the
owner about taking her business to the next level, he realized she had made a big mistake. She had been using her brand name
but had neglected to purchase the domain names that she was using. Marcus quickly helped her secure these names and
trademarks, helping her protect her online sales potential.

III. Steps to Register a Trademark

There are several steps involved in creating and registering trademarks. It’s a process that takes time and may involve
engaging an attorney with experience in the many nuances of intellectual property law.

1. Creation. Before you can register a trademark, you need to come up with a distinctive brand name, logo, design or
other mark. This is not as easy as it might seem, since only a handful of the possible choices may work, for either
legal or marketing reasons. Your trademark must be distinctive and not already in use by another business.
Therefore, you might need to set up a series of brainstorming sessions or hire an expert in creating new brands to
find a handful of potential trademarks. One effective approach is to invent a new word for your brand, as a certain
online search company did years ago with “Google.” You should also think about the meaning of the word in other
languages to avoid negative connotations. A classic example often referred to in marketing classes is the Chevy
Nova, as “no va” means “doesn’t go” in Spanish.

2. Search. Next, you need to search the U.S. Patent and Trademark Office (USPTO) to be sure no one else has
registered the same trademark. But that’s just the start. You should also search your state’s corporate database to
avoid duplicating an existing name, and do an internet search as well to see if anyone in the world is using the same
name, logo or other branding device. After all, the USPTO won’t allow you to register a trademark that is
“confusingly similar” to someone else’s mark. Even if a business has not registered a certain trademark, it may be
able to protect its mark, since it was using it first. In addition, you should do another online search to be sure the
appropriate domain name or names are available to your business. Fortunately, there are automated search tools that
can help with the search process; and you might want to engage a specialist in registering trademarks.

3. Registration. After completing the first two steps, you are ready to file your application with the U.S. Patent and
Trademark Office (and with similar offices in other countries if you do international business.) Although you can file
the application yourself, the USPTO recommends that you hire an attorney who can guide you through all the legal
requirements. There are very specific types of information you need to provide and legal deadlines that must be met.
Be aware that the USPTO will conduct a thorough review that includes time for someone to challenge your
application. If there are no objections to your filing or if there is a ruling in your favor, the USPTO will go ahead and
register your trademark.

4. Protection. After registering your trademark, you need to protect it. That means ongoing monitoring in the U.S.
and other markets to be sure no one is using a similar mark or otherwise infringing on your rights. You can set up an
automated tracking tool to send you an alert if another business starts using your trademark without permission. If
so, you should send the business a cease-and-desist letter and file a complaint as soon as possible. Unless you take
action to protect your trademark, you may lose the valuable protection it provides.

IV. Benefiting from a Licensing Agreement

While registering trademarks is important for protecting your brand, a licensing agreement can generate income for your
business. Marcus worked with a Pennsylvania-based sporting goods manufacturer who had ongoing licensing agreements
with several Major League Baseball teams. The company made mini-bats with licensed team logos and sold them at stadiums
around the country. However, competitors soon jumped into the market, and the owner asked Marcus for advice to grow the
company’s sales.

Marcus suggested adding a new line of custom stools made from baseball bats carrying licensed team logos. The owner and
his family liked the idea and expanded the product line but didn’t stop there. They used their creativity, as well as the power
of their sport licenses, to offer wooden bedroom sets for children, baseball bat toothbrushes and tailgate party accessories.
The company also obtained licenses from NASCAR, the National Football League (NFL), and other sports organizations,
leading to strong growth for the family-owned business.

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Depending on your business, you may own brand names, logos or other types of intellectual property that could generate
revenue through a licensing agreement. Many of the largest franchises had their start when the owner of an individual store or
restaurant had the bright idea to offer a valuable intangible asset to other businesses through a licensing agreement.

V. Do it Right!

Here’s a tip for small businesses:

Whether registering trademarks or preparing a licensing agreement, it's essential to do it correctly. Don't try to shortcut this
process.

Whether registering trademarks or preparing a licensing agreement, it’s essential to do it correctly. As Marcus says, “People,
process and products” need to be in alignment for success. So don’t try to shortcut this process. That means hiring an
experienced lawyer who can draw up the necessary documents to file and protect your trademark application or execute a
licensing agreement.

But you can consider that money as an investment in your business, just like buying new equipment or hiring more people.
Remember that trademarks and licenses can bring substantial value to your business, and don’t neglect these intangible assets.

MARCUS’ CLOSING QUESTIONS

1) What trademarks does your business currently have?

2) Should your business trademark anything it hasn’t already?
3) Would a licensing agreement be beneficial for your business?

5. What is Proprietary Business Information?

What You Will Learn

 Defining Proprietary Business Information

 Why Proprietary Business Information is Important
 How to Protect Proprietary Business Information

by Marcus Business Team

What would you say if a competitor came up to you in a coffee shop and asked for the names of your three biggest
customers? You could say “Get lost,” “Take a hike,” or “Sorry, that’s proprietary information.” After all, there’s no reason to
divulge that kind of hard-earned information about your business.

Here’s a tip for small businesses

So, take a moment to think about the most important information in your business – the "crown jewels" of your operations
that you need to keep out of the hands of your competitors.

Today, almost every business relies on proprietary information to some degree, from Coca-Cola’s legendary secret beverage
formula to your monthly sales reports or the wealth of data stored in your customer relationship management (CRM) system.
So, take a moment to think about the most important information in your business – the “crown jewels” of your operations
that you need to keep out of the hands of your competitors.

Your proprietary information could include trade secrets, production methods, marketing strategies, software applications and
financial data. After all, you don’t want everyone knowing how your sales, profits or customer base change from year to year.
Perhaps you’ve developed a proprietary machine tool, sealant or coating for a manufacturing operation, or a new algorithm
for delivering targeted ads to your customers on social media. These are products and processes that belong to your business
and need to be protected to maintain a competitive advantage.

Other types of proprietary information include product specifications, chemical formulas and cooking recipes. In many cases,
these trade secrets provide the foundation for a startup business or an extension of a current product line. For example, the

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owners of a key lime pie company started as a roadside stand selling the tangy desserts made from local Florida limes. They
opened a brick-and-mortar store but were unable to turn a profit.

When the owners turned to Marcus Lemonis for help, he realized that one of the factors holding the business back was using
generic, pre-made ingredients to produce a larger volume of pies, rather than the original homemade process that attracted
customers when they started out. Marcus helped the owners refine their processes for mass producing handmade crusts with
fresh key lime filling, and they began selling their signature pies using a new proprietary recipe. Since then, the company’s
sales have taken off, and the pies have won numerous culinary awards, including “Best Pie in Florida” from USA Today.

I. Why is Proprietary Information Important?

Proprietary information is a legal concept that refers to the rights you hold as a business owner or “proprietor.” It typically
refers to confidential information that gives you a competitive advantage in regard to your people, processes and products.

As a general rule, proprietary information refers to material held within your organization that would not be readily available
to the public.

For instance, if you used an online search engine to find 25 potential customers for your products or services, the resulting list
would probably not be considered confidential. After all, anyone else could do the same thing, including your competitors.
On the other hand, if you have taken the time to compile detailed notes about your 25 top customers and keep the data in your
CRM, that material would almost certainly be considered proprietary.

There are many ways you can use proprietary information to attract new customers, increase revenue or grow your market
share.

For instance, you could draw on your customer database to launch an advertising program targeted at similar prospects. You
could adjust your product price points up or down depending on confidential information from your suppliers, or capitalize on
social media feedback to improve your services.

Of course, if you have developed a secret sauce, a unique blend of beverage flavors or a new food preparation method, you
could build an entire business around your trade secrets. For the co-owners of a BBQ restaurant in Kentucky, the creative use
of proprietary information led to a wildly successful new product line. Several years ago, Marcus met with the owners to see
how they could grow their small family business. He looked at the restaurant’s proprietary recipes for barbecue sauce and
suggested selling bottled sauces online as well as in their store. The result was a new revenue stream from a relatively small
investment.

There are plenty of other creative strategies you could consider to help grow your business. For example, you could offer a
one-time use of your proprietary customer list to a charitable organization in your community in order to attract a larger
audience to a local fundraising event. This can be a true win-win relationship that allows you to maintain control of
information, while building a new partnership, meeting other business and civic leaders, and generating favorable publicity as
a sponsor of a worthy cause.

II. Protecting Proprietary Information

Because your proprietary information has value, it needs to be protected from a variety of internal and external threats. That
typically requires a multi-layered defense strategy tailored to your business’s specific operations. Today, threats can come
from almost anywhere, so you need to pay attention to your people and processes and shore up any vulnerable areas.

The first step is to identify your trade secrets, as well as any other information you need to keep confidential. That will help
you determine your security priorities. Depending on the nature of that proprietary information, you can then take appropriate
measures, such as the following.

 Cybersecurity. You should invest in a strong cybersecurity program to protect the most valuable proprietary
information from hackers. That might mean installing strong firewalls and authentication procedures, or relying on a
cloud-services provider who can guard against the ever-changing cybersecurity threats. You should also be sure your
employees understand and follow your security protocols. Few things are more damaging to a business than a
criminal breaking into your system and stealing trade secrets, personal customer data or other proprietary
information.
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 Access control. Depending on your business, you may be able to limit physical access to your facility to employees
and approved visitors. A data center or executive office suite may have even stricter access controls. Software
applications, such as CRM programs, can also be adjusted to prevent employee access to confidential data. A
salesperson, for example, might have full access to information about her own customers, but not to customers of
other representatives.
 Internal security. Your laboratories, production areas, conference rooms and executive offices should be kept secure
to guard against leaks of confidential information. That might mean automatic door locks when someone exits the
area, putting tinted glass on windows, or adding security features to communications devices in these locations to
prevent unauthorized recordings.
 Non-disclosure agreements. Many businesses use written non-disclosure agreements (NDAs) to keep employees
from revealing proprietary information while working for the organization. Suppliers, outside sales representatives
and other business partners can also be required to sign NDAs before accessing your business’s data.
 Non-compete clauses. An employment agreement can also contain a non-compete clause that prevents a former
employee from using proprietary information in a competitive role. For instance, you wouldn’t want a sales manager
to leave your company on a Friday, join your top competitor over the weekend, and start calling your best accounts
on Monday.

You should be aware that many of these protective steps require specialized knowledge, such as expertise in network security
tools or access control protocols. An experienced attorney should be engaged to help you draft NDAs and non-compete
documents that comply with applicable state and federal regulations. After all, you don’t want to go into court expecting to be
compensated for the loss of proprietary information only to find that your NDA or non-compete was invalid right from the
start.

III. Don't Let Your Guard Down

It’s not enough to put a series of safeguards in place and get back to your daily business activities. That’s because your
proprietary information is not a one-and-done bundle of secrets tucked away in a safe deposit box.

That confidential data is constantly changing with the acquisition of new customers, the launch of a new product or service
line or an entry into new markets. Cybercriminals are constantly looking for new ways to attack your confidential database
and extract your secrets. Meanwhile, the laws regarding NDAs and other confidential disclosures continue to evolve, and
documents prepared in the past might need to be updated.

Therefore, you need to stay focused on securing your proprietary information and monitor potential threats to reduce the risk
of a costly unexpected surprise.

MARCUS’ CLOSING QUESTIONS

1) What proprietary information does your business currently have?

2) How do you plan on protecting your proprietary information?

6. 6 Reasons Employees are the Most Important Asset of a Business

What You Will Learn

 Why Employees Should be #1 in Your Business

 Why Employees Are Assets
 The 3 P's
 How to Show Employees You Value Them

by Marcus Business Team

Here’s a tip for small businesses:

“The customer is not No. 1 to me,” Marcus says. “They’re No. 2 – right behind the employee.”

How often have you heard a company say, “Employees are our greatest asset”? It is a favorite saying in the business world
and one that Marcus Lemonis emphasizes at every opportunity. “The customer is not No. 1 to me,” he said. “They’re No. 2 –
right behind the employee.”

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But all too often the actions of a business fail to match those fine words. Rather than look at themselves, owners blame their
employees for the problems they encounter in business or fail to invest in their human assets. When Marcus met the owner of
a California dog grooming and boarding business several years ago, he found several competent employees were on the verge
of quitting. They told Marcus they were tired of being criticized for their actions, while their suggestions for improvement
were ignored. Later, the owner of the pet business agreed, saying he most enjoyed being with the dogs.

But whether or not you are a “people person,” you can take steps to improve your relationship with your employees. It
doesn’t require a big financial investment or time commitment. Instead, it’s a matter of maintaining a positive attitude in the
face of the challenges facing every business. As Mary Kay Ash, founder of Mary Kay Cosmetics, once said, “People are
definitely a company’s greatest asset. It doesn’t make any difference whether the product is cars or cosmetics. A company is
only as good as the people it keeps.”

I. Employees are Assets

Successful businesses rely on several different types of assets, such as financial capital, real estate, production equipment and
powerful technology. But in today’s knowledge-based economy, there is no question that employees are the most important
asset of an organization.

Fortunately, many business owners, as well as leaders of Fortune 500 companies, understand that their people are their
greatest asset. In 2019, Hilton ranked #1 on Fortune magazine’s ‘100 Best Companies to Work For®’ list. “Hilton truly has
hospitality at its core, resulting in a unique team member and guest focus that is unlike any other company I have seen,” said
one employee. “The company invests in me and my team, and encourages an entrepreneurial approach to our work.”

Employees at Forbes’s #2 ranked company, Salesforce, had similar things to say. “They truly care about empowering
employees and improving the entire community in which we are involved,” said one. “Many places talk, but Salesforce backs
up that talk with even more action. I am proud to tell people where I work and how much they give back.”

But not everyone understands that employees are the most important asset of an organization. There are plenty of smaller
businesses with a different perspective, such as an Illinois-based sports apparel company that specializes in fishing apparel.
Not long ago, Marcus met with the co-owners who combined their first names and built a multi-million dollar company with
more than 20 employees. While Marcus was hoping to turn the company into a major player in the sports apparel market, he
quickly changed his outlook after talking with several employees. They told him they were tired of working in a warehouse
without air-conditioning – especially when the two owners left every Friday to go fishing. Even worse, they knew the
company was in trouble and cashed their paychecks as quickly as possible, fearing they would bounce. Although the owners
would say people are our greatest asset, the reality was very different.

II. 6 Ways Employees are your Greatest Asset

Just in case you may not be clear that employees are assets, rather than liabilities, here are six ways they contribute to the
success of your business.

1. Employees are essential to providing your goods or services. Step back for a moment and consider how long you
could keep your business running if you had to make sales calls, produce your goods or services, support your
customers and collect the payments all by yourself. Unless you are a sole practitioner, you need to hire good
employees, train them, and motivate them to keep your business running

At a specialty cheese shop in New York, Marcus recognized the talent and dedication of a particular long-time
employee to the family business. Marcus put the employee in charge of developing a complementary product line,
including cheese knives and boards, and wound up making him a partner in the business.

2. Employees will help you recruit new talent. When someone is looking for work, they often check online reviews
and ratings of their target companies. If your employees are satisfied with how you treat them, they will typically
give you good grades in these online sites. In addition, they may know good people in your community who are
looking for a better position in sales, operations, accounting or some other field. This kind of word-of-mouth
recruiting from employees who know that you believe “people are our most important asset” can be a very cost-
effective way for you to recruit new talent.

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3. Employees are your first customers. If you want to treat your customers well, you need to believe that your
employees are assets. In many ways, they are the first customers for your business – and if you can’t provide them
with a satisfying employee experience, your customers will know right away. Take the case of a full-service salon
company in New York. The owner started the business in 1998 and grew it to a $4.1 million operation with more
than 120 employees in four locations. Marcus felt the family-owned company could benefit from his expertise as
well as his investment dollars.

When he toured the first salon, Marcus found it looked dated and run-down.

In fact, the owner told him she was having trouble finding new hairdressers because the premises were in poor
condition. Another issue related to management: several employees felt their duties were unclear and the products
they needed were always in short supply. After implementing Marcus’s recommendations – including a change in
management and physical renovations– employee morale improved and the salon’s revenue and profitability
increased significantly.

4. Employees can give their 100% to your business. Well-trained, experienced and motivated employees can deliver
an exceptional customer experience that makes your business stand out from the competition. They can also help
you develop new product and service lines, reach your sales targets and contribute to your community service
initiatives.To take just one example, Trader Joe’s clearly understands that highly engaged employees are the most
important asset of the organization. As a recent Forbes article noted, “Trader Joe’s excels at quick response times
and employees who will do anything – even opening products to give samples – to make customers happy.”

5. Employees are the face of a business. Who provides the day-to-day customer experience for your business? It is
your employees on the front lines who serve as the face of your business. If they come to work feeling great, they
will perform their jobs well and convey their positive feelings to your customers – a win-win outcome for all aspects
of your business.

6. Retaining great employees strengthens your long-term prospects. Turnover is the bane of many small businesses. It
takes time and money to replace workers who leave your organization. But if you believe that “people are our
greatest asset,” then you have laid the foundation for a talent retention strategy to support your operations in the
years ahead. After all, experienced employees who know your customers understand your culture and appreciate
their careers will keep you on the right track for the years ahead.

III. Let Employees Know Their Value

Here are four tips for treating your employees well, improving their performance and demonstrating that you know that
people are your greatest asset.

 Empower your employees. Most people resent being micromanaged. Rather than spelling out each task in detail,
allow your employees to find their own solutions to the issues they face on the job. Let them make decisions, and
help them learn from the results, even if they make mistakes.
 Show them respect. Don’t talk down to your employees, belittle their skills or insist they put in extra hours without
compensation. Instead, treat every individual with respect, regardless of personality, education, gender, age or
cultural background.
 Recognize and reward their achievements. When employees do a great job, make sure to let them know you
appreciate their contributions. People who feel valued will tell family, friends and customers about how much they
like working for you – and that spirit can spread quickly throughout your organization.
 Give them opportunities to grow. Don’t be afraid to challenge your employees by giving them assignments that
stretch their capabilities and add to their skills. This is an excellent way to keep them engaged in the business and to
increase the value of your people assets.

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As Marcus says, the three keys to business success in today’s world are people, process and product. All three aspects of your
operations need to be in alignment to maximize your long-term profitability. But it’s clear that people come first, because
employees are the most important asset of an organization.

MARCUS’ CLOSING QUESTIONS

1) How are you treating your most important asset, your employees?
2) What ways can you improve this treatment?

7. Inventory Planning for Your Retail Business

What You'll Learn

 Inventory Perishability
 What a SKU is
 Best Methods for Inventory Planning
 Setting up an effective floor plan
 Managing inventory levels

by Marcus Business Team

When new entrepreneurs venture into the retail world, most tend to focus on sales as the main benefit to the business. Out of
fear of not being able to meet product demands, they may fall into the trap of overcompensating by investing in too much
inventory. Now, depending on your type of merchandise, this could be a small problem or a big problem, but it is a problem
nonetheless. Marcus alway says, “you don’t have to be a genius to run a successful small business, but you better be smart
enough to be willing to learn.” If you’re not sure why investing in too much inventory could be a problem, then keep reading
because we’re about to do a brief deep dive into advice for small businesses that manage retail inventory.

First things first: when it comes to inventory planning for small businesses, there is one common mistake made by many
entrepreneurs that can be easily avoided. So, let’s get this one out of the way: not keeping track of the little things. Attention
to detail is imperative when it comes to inventory planning for retail businesses. You must keep everything organized and up
to date- from your books and numbers to the physical merchandise. Many store owners like to play Wizard of Oz with their
shops. This is when all the merchandise is beautifully displayed in public spaces and managers know, down to the most
minimal item, how many units are available on every single shelf. But when you go behind the curtain, the magic is gone.

Warehouses are in disarray and there is plenty of merchandise unaccounted for. To optimize the management of your
inventory, you must keep order and account for everything you own, regardless of where you hide it.

I. Why Is All Inventory Perishable?

To manage your inventory efficiently, it is important to understand that all of your merchandise is perishable. From items
with expiration dates, food items that may rot, to objects that you might not think could be perishable, everything has a
lifespan; and you must constantly be aware of what your inventory’s lifespan is. For example, while articles of clothing might
not rot as unsold food items do, they still have a shelf life. Think about seasonality; if you have bathing suits left after the
summer is over, they might not be sellable anymore. Now you are stuck with those bathing suits in inventory that will take up
precious space, or you are going to have to liquidate at a lower price to at least get some return on your investment. Another
reason why non-perishable items become perishable is that unsold merchandise depreciates once new models or new trends
become available. A common example of this can be found in car dealerships. Who would pay full retail price for a car after
the new-year model releases? Once your inventory is past its prime selling date, you must make the difficult decision to
either:

1. Discard it as a full loss—as you would with spoiled food items;

2. Lower the price to at least try to minimize the damage—like an "end of season" or a "making room for new
models" sale; or
3. Store it until you can try to sell it again—like the case of the bathing suits during winter.

This last one is a gamble that will still cost you. If you are maximizing your storage space properly, you might not have room
to store much merchandise until you can sell it again the following year. Also, you run the risk that once summer comes back
around, fashion trends no longer favor your old merchandise, meaning that you just spent a whole year storing something that
you might not be able to make a profit on regardless.
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Here’s a tip for small businesses:

"So, a tip for small businesses is to “know your numbers” so that you can make savvy decisions that will strike a financially
healthy balance between sales and inventory. "

It is imperative to keep in mind that while sales and discounts could increase foot traffic to the store and help you raise your
sales numbers, discounted merchandise will negatively affect your bottom line. So, a tip for small businesses is to “know your
numbers” so that you can make savvy decisions that will strike a financially healthy balance between sales and inventory.
This is Marcus’ number rule in business, you don’t have to know them by heart (although technically you could and Marcus
will even tell you that you should), but you should have all your numbers up to date, well organized, and accessible at all
times.

II. What Is An SKU?

If your business offers different types of items—like for example, a convenience store or neighborhood bodega—you need to
be aware of the individual lifespan for each of the SKUs that you have in inventory. SKU (pronounced “skew”), is an
acronym short for Stock Keeping Unit. It is a unique code used by retailers to identify and track their inventory. This code
identifies the product’s characteristics, such as the manufacturer, brand, style, color, and size. For example, one particular pet
food store has over 295 unique SKUs for dog food alone. There are 36 different dog food brands; but each brand will have
different flavors, and each flavor comes in different presentations (bag, can, pouch, etc.,) and then each presentation might
come in different sizes. To continue with this example, not every SKU has the same lifespan. Unopened dry pet foods have a
shelf life of approximately a year, meaty dog treats might only have six months of shelf life, and accessories such as leashes
and food bowls can technically be on a shelf forever. Once you have determined how many SKUs your small business will
handle and what the shelf life is for each, you are ready to begin inventory planning.

III. Which Is The Most Important Aspect Of A Retail Business?

Advice for small businesses: keep a close eye on your inventory system and supply chain planning. Maintaining the delicate
balance between having enough inventory to meet demand and not having too much that goes to waste is critical. If the stock
isn’t managed correctly, it could trick you into believing that your assets are higher than what they are. A tip for small
businesses is to develop a sales forecast. In your business plan, you need to determine how much you estimate you will be
selling daily, weekly, monthly, or quarterly. Then plan your sourcing lead times to have enough inventory at the right time in
the right place to meet demands without going over. Remember that you must try to buy the right amount of stock, for the
right time, for the right customer, and have it at the right place and at the right time.

 Too much inventory is going to lead to reduced margins.

 Too little inventory is going to lead to lost sales.
 The wrong inventory is going to lead to both.

IV. Best Methods For Inventory Planning

The sales forecast is a living document that you will be adjusting with real numbers once you start selling. At first, it will be
challenging to create a reliable sales forecast because you won’t have any historical data. To get you started, you could begin
hypothesizing numbers based on how you see other businesses in your area perform, or by estimating based on competitive
research. The most important thing is to have a forecast to plan your inventory accordingly.

Two important things to keep in mind when it comes to business planning: first, “forecasting is mainly educated guessing”
(Berry, 2005); what you need is common sense, research of the factors, and motivation to make an educated guess; and
second, forecasts are always wrong. Yes, your sales forecasts will never be perfect. But you can minimize the margin of error
by incorporating ranges into your forecasts instead of using exact numbers (Caplice, 2020). Here’s a tip for small businesses:
keep track of the forecast errors so that you can measure any drift in the tendencies. So, “have no fear and be willing to fail,”
says Marcus Lemonis; because even when it comes to sales forecasting, you will be able to acquire valuable information from
your mistakes. Once you have a few weeks’ worth of real sales data, you will be able to guesstimate better forecasts. Once
you have a full year of records, it will be much easier to establish your forecast since you will be able to directly compare to
the same seasons, holidays, and other important milestones that could affect your business’s sales.

V. Setting Up The Most Effective Floor Plan For Your Inventory

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When talking about inventory planning, it is essential to also talk about product placement. The old adage “location, location,
location” is not limited to just real estate. When planning your orders, it is vital to keep in mind how you’re going to
showcase your merchandise in your space – not only to account for how much room you’ll need, which is obviously
important, but also to know how much inventory you can display for your clients at any given time. Here is some advice for
small businesses: once you have developed your sales forecast, give your prime real estate to the SKUs that will be your best-
sellers, providing you with the most significant profit margins. For example, in 2014, when a key lime pie company reached
out to Marcus for business guidance, he noted that the store had over 60% of their retail space dedicated to selling low price,
low margin items that represented only 20% of their overall income. Basically, they were hiding their top sellers! Here’s a tip
for small business owners: maximize your retail floor plan by showcasing your best sellers and giving them the most
considerable floor space. And as a bonus: when it comes to planning your floor space to drive sales, organize your store
clustering items that belong together and label the areas clearly. This will not only help you minimize consumer confusion,
but you will also benefit from well-thought-out product placement.

Recent marketing research has recommended that in-store incentives, such as product displays and cross-selling
opportunities, significantly influence sales (Chen et al., 2006.) Examples of this can be found throughout pet food stores. For
instance, while you can find food bowls for dogs and cats in the bowls section, having some of the dishes by the pet food can
motivate shoppers, who might only be in the store for pet food, to also invest in a new bowl. This practice is called cross-
selling and, if used wisely, can help you move inventory that is harder to sell, by pairing it up with your best sellers.

VI. Properly Managing Your Inventory Levels

Inventory management is an ongoing process that never ends. It is the lifeblood of a retail business. Here’s a tip for small
businesses: keep a close eye on your inventory’s flow, especially at the beginning when you are still trying to figure out your
sales forecast. Running out of merchandise to satisfy your consumers’ needs could cost you a consumer for good. “Customers
rarely look back after they find a company that can promptly fulfill their orders at a competitive price” (Microchannel, 2015.)
If these customers had to go somewhere else because you were out of stock, you might lose their repeat business. Most of
those lost clients are a lost source of revenue for your store. Therefore, it is imperative to know each SKU’s lead time to react
in time to avoid possible stock-out problems.

Lead times are critical when it comes to planning your sourcing. If, for example, your vendor manufactures in China, you
must consider how long it will take for that merchandise to reach your store. Once you place the order, how long is it going to
take to fulfill it? Is it being shipped by air or sea? How long does it take to clear customs? After customs, how long is it going
to take from the port to your door? Let’s say that the whole process from order placement to delivery takes two months; then
you need to consider that and place an order two months before you estimate that you could run out of that product. Lead time
becomes another critical number in your SKU’s equation.

Now you know how long it takes to get the product on the shelf and for how long you can keep it there before it becomes
waste, how many you expect to sell in a set period of time, and how much space you have available to store that SKU. All
these numbers should help you visualize how each SKU should be managed to strike that perfect balance to keep you
generating sales while minimizing waste in inventory.

VII. Who Should Oversee Inventory Planning?

Advice for small business owners: you need to be 100% in charge. As mentioned before, inventory planning is what makes or
breaks a retail business. You need to know your numbers to make the essential decisions in your company. As your business
grows and expands with time, you can look to delegate these responsibilities to a supply chain manager. But even then,
Marcus will still tell you that you must “stay focused, work hard, know your numbers, and be disciplined.”

MARCUS’ CLOSING QUESTIONS

1) What strategy do you use to plan your inventory?

2) Is your inventory storage space set up efficiently?
3) What areas of inventory management can you improve on to improve your business?

8. Respecting and Valuing Your Business Assets

What You Will Learn

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 What a Business Asset is

 The Importance of Respecting and Valuing Assets
 How to Respect and Value Your Asset

by Marcus Business Team

Here’s a tip for small businesses

The lasting value of your business assets depends on three things: people, process and products.

Take a moment to think about the value of your business assets. Is it the price you could get if you sold all your products
tomorrow? Is it the balance that remains after subtracting your liabilities? Or is it a broader concept that reflects your ability
to continue serving customers in the future? For Marcus Lemonis, the lasting value of your business assets depends on three
things: people, process and products.

A successful business has many assets, from money in the bank to the people who produce goods and services to the
customers who provide revenue. From an accountant’s point of view, assets go on the positive side of the balance sheet, while
liabilities – your debts, tax obligations and payables, for instance – go on the negative side. But this basic equation may not
reflect the actual value of your business or the assets that make it possible to keep growing your company.

I. What are Business Assets?

Business assets come in many different forms, including the following:

 Money – your cash on hand for immediate use

 Bank accounts – your checking, savings and investment balances
 Leases – on your facility or busienss equipment
 Products – your work in process and inventory
 Equity – the funds you and your partners have invested
 Property – including the buildings and facilities
 Equipment – such as the computer network, business vehicles and machinery

It is fairly easy to determine the value of these financial and physical business assets. For instance, you could simply look at
the balance in your checking account or determine the market value of your property if you were to sell it tomorrow.

Accountants know there are other important ways to look at these types of tangible business assets. For instance, there may be
tax considerations that affect their value. If you purchased new equipment this year, that asset could be subtracted from
business revenue on your next income tax return. Many assets can be depreciated over time, such as your building and
equipment. The depreciated value of these business assets is considered their book value – the amount entered in your
accounting books. That number may or may not reflect the actual market value of those assets.

Liquidity is another consideration that is particularly important for an owner. Some business assets, like savings and
investments, are highly liquid and can be sold immediately if extra funds are needed. On the other hand, real estate assets are
not liquid and it could take weeks, months or even years before they could be sold to raise money.

Many Fortune 500 companies list the properties that house both their national and international operations as some of their
largest assets. During downturns in the market, these are often areas they turn to in order to offset losses. AmerisourceBergen
Corp. announced in 2020 it was selling its 122,000-square-foot facility in Memphis for $5 million. Another example is
Pearson, a global education company that was forced to sell some of its business assets in 2017 after posting a $3.3 billion
pretax loss.

II. Your Intangible Assets

But those physical and financial assets are far from the only valuable aspects of your business. There are also many intangible
assets that can be equally or more important to your company. These types of assets include:

These types of assets include:

 Your brand, which can be among the most valuable assets in your business
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 Your intellectual property, such as trademarks, patents and licensing rights

 Your customers, who provide the revenue to keep your business moving forward
 Your goodwill in community – the trust and positive expectations people have about your business

While it’s difficult to pin a solid number on the value of these business assets, always be sure to include them when thinking
about the current status of your company.

III. Respect Your Business Assets

But there’s another aspect to consider when thinking about your business assets. Do you treat your assets with respect? For
instance, do you deplete your savings and investment accounts at the first opportunity, or do you keep those balances as high
as possible? What steps are you taking to monitor and protect your brand or enforce your licensing rights? Are you treating
your customers well or taking them for granted?

Marcus’ foundation for business success – people, processes, and products – provides a great framework for learning just how
much you respect your tangible and intangible business assets.

Let’s start with products. Do you focus on quality and make sure everything is up to your standards before it heads out the
door? Or do you try to cut corners with less expensive ingredients or components, and try to gain market share by
undercutting the competition?

Not long ago, Marcus was impressed by a Denver entrepreneur who was committed to selling high quality skateboards. He
made sure every aspect of his products was top-of-the-line from the ball bearings and wheels to the composite, non-skid
surface. Each board was handmade and meticulously inspected to maintain a high level of quality and craftsmanship.
Although the business ultimately ran into financial trouble, there was no question about the owner’s commitment to his
business assets.

You also need to respect your business processes. Do you park your inventory in an aging warehouse where your products
slowly deteriorate, or do you pay a little more for a nice facility with heat and air conditioning? Your production equipment,
forklifts and company vehicles need regular maintenance to avoid breakdowns. If you skimp on those expenses, you are
asking for financial trouble in the future.

The same approach holds true for your business’ computer network. You need to keep the operating system up to date to
avoid potential security risks, and invest in upgrades to handle the latest applications and support more devices.

When considering an investment, Marcus looks closely at how companies treat inventory and equipment. For instance, he
found that the owners of a Tampa truck assembly business had placed a high value on their spare parts and assemblies. But
when he visited the facility, he found old rusty parts and a warehouse in complete disarray. He discovered that the company
has never taken an actual inventory and the true value of items on hand was much less than the number shown on the books.
It was clear the owners did not respect their physical business assets and their business was suffering because of it.

IV. How Do You Treat Your People?

How you treat your employees, managers and partners may be the most important factor in determining whether your
business succeeds or closes its doors. “Your job as the CEO of the business is to be the coach,” says Marcus. “Rather than
running people under the bus, you’ve got to get them on the bus with you.”

Unfortunately, many business owners look at their people as liabilities, rather than assets. They complain about the high cost
of salaries, ignore their personal requests and fail to provide the respect every person deserves. That was certainly the case
when Marcus visited a Los Angeles pet grooming business. He quickly saw that the owner blamed everything that went
wrong on his employees and would throw temper tantrums on a regular basis. It was no surprise to Marcus that the business
was going to the dogs because the owner focused on the customers’ pets rather than grooming his hard-working employees
for the future.

There are many ways you can show respect to the people who make your business a success. It begins with a merit-based
hiring process based on knowledge, skills and experience, as well as the candidate’s ability to fit into your culture.

Once new people are onboard, you should allow them to do their tasks with accountability but without micromanaging. Listen
to their comments, rather than ignoring what they say. Find ways to engage them in the organization, such as offering a bonus

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for completing an important task. Recognition is another great way to show respect for your people. Find ways to highlight
individual and team accomplishments, and use these occasions to emphasize their importance to your organization.

Recognition is another great way to show respect for your people. Find ways to highlight individual and team
accomplishments, and use these occasions to emphasize their importance to your organization.

Along with offering competitive salaries and benefits, you should provide training and career development opportunities for
your people, encouraging them to stay with your organization. While a high turnover is ideal for assets like your products and
inventory, it becomes a negative when applied to your people assets. And when your people feel undervalued or disrespected,
they are likely to leave as soon as they can find another position.

V. Value and Respect Your Business Assets

To be successful, you need to value, manage and respect your assets. A good accountant can help you keep track of the
financial values – which is always important in tracking your profitability, preparing your tax returns, and determining the
sales value of your business. Just be sure to treat those assets – particularly your people, processes and products with respect.
As Marcus says, “The customer is not No. 1 to me. They’re No. 2, right behind the employee.”

This article is informational only and subject to errors or omissions. As with any legal or regulatory advice, please consult
your legal counsel or tax advisor to make sure you are in compliance with all and any federal, state, city or county rules
and regulations. More

MARCUS’ CLOSING QUESTIONS

1) Do you currently respect and value your assets appropriately?

2) What can you do to improve the way you respect and value your assets?

9. How To Attract Investors To Your Business

What You’ll Learn

 Tips For Businesses Trying To Attract Investors

 Numbers that Matter the Most When Investing
 Why You Shouldn’t Get Offended By Investors
 Things that Attract Me to Investing in a Business
 What To Look Out For When Looking For Investors

by Marcus Business Team

For many startups looking to grow their business, attracting potential investors is crucial. Early in my professional career, I
realized there was no proven route to securing investors. Just like every other aspect of running a business, it requires a bit of
patience and a lot of hard work. Networking absolutely helps when attempting to secure an early investment, but you can’t
meet everybody in one day. That’s where the patience comes in. In most cases with investors, they want to see a proof of
concept before diving in.

Building up a core customer base and establishing a solid foundation is vital. Think of it like a garden. You need to plant the
seed in the soil and get the plant to start sprouting a bit before an investor joins, that’s where the hard work comes in.

I. Tips For Businesses Trying To Attract Investors

Throughout my professional career, I’ve been able to hone in on five key tips for attracting investors that I love sharing with
other entrepreneurs. The first and arguably most important tip is focusing on the customer. Make an effort to speak with every
customer in the store and ask them about their experience. Make sure they walk-out believing that every effort was made to
provide them with a pleasant and memorable experience. Customers are often fantastic early investors as they’ve already had
a chance to build a level of trust and belief in not only your products and process – but also in the people who make up your
organization – you, your partners and staff members.

The second tip is thinking like an investor. Take the time to consider what questions you would ask a potential business
owner if the roles were reversed. When I was getting ready to meet with investors, I stood in front of the mirror and asked
myself a ton of questions about my business. I tried to think of different questions about my business plan, products, shipping
operations, and anything else I could come up with. I wanted to be sure I could answer any question that may come my way.
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Number three, be prepared to eloquently explain your story. What drove you to start your company? What motivates you to
put in the hard work necessary to grow a business? What problem are you attempting to solve? Every organization has an
origin story so be prepared to tell yours.

The fourth tip is understanding why you need the investment and a detailed plan outlining what you’ll do with it. Every
potential investor will want to know exactly where their money is going and how it will help your company. Investors want to
feel secure that you have a clear vision for the growth of your company. The final tip is being a reliable partner. Like every
relationship in life, trust is key. Investors want to know that you are someone that follows through with their promises. Stick
to your word and prove that no matter what, you’re a trustworthy and honorable person.

5 Tips For Attracting Investors

 Focus On The Customer

 Think Like An Investor
 Be Able To Tell Your Story
 Have A Detailed Plan For Investors
 Be Reliable

II. Numbers that Matter Most To Early Investors

One of the most important aspects of running a business is knowing your numbers! The numbers that matter most to an
investor who is looking at your business will vary based on whether you’re a startup or an existing business. Early investors
are not as focused on how much revenue is being generated at the start. More importantly, they want to see that you
understand how those numbers correlate to your business. What’s your presentation of the numbers? Why are your numbers
the way they are? How can those numbers change over time? How can their investment enhance those numbers and the
profitability of your business? These are the numbers that early investors will focus on. So, be prepared to provide a detailed
analysis, showcasing your knowledge on all phases of your organization.

III. Do Not Get Offended By Investors

Most investors will want to take a look at your books before investing. Frankly, who can blame them? Before I write a check,
I want to be sure that the information I’m getting is accurate. Try not to take it personally when investors start doing their
own research. They may ask to see financial statements, speak with employees, speak with your accountant or financial
advisor to review tax and bank statements, etc. It’s a natural feeling to slightly pause when asked by investors for this
information, but remember it’s not for a lack of trust. Investors have every right to do their due-diligence and analyze the
numbers before committing their money.

There’s a very good chance that investors will take a look at your numbers and come back with more questions. In some
cases, a question may be posed simply to gauge your passion and conviction toward the business. A good old-fashioned
debate can lead to healthy discussions about operations and further highlight your confidence in the future of your
organization. Investors love confidence – but they hate arrogance. So keep that in mind when answering questions about your
business. As an investor, I would want to know that the person I was investing in was willing to take feedback, constructive
criticism, and be open to new ideas. Even if you don’t entirely agree with an investor’s suggestion, they want to know that
you’ll be open and willing to listen.

IV. Things That Attract Me To Investing In A Business

One of the biggest things that attracts me to a business is the people – the owners and managers as well as the staff members.
I like to get to know them, find out what makes them tick and why they started the business in the first place. Sometimes, I’ll
ask questions that are more clinical and academic in nature to check certain boxes. Other times, I like to ask more personal
questions about their upbringing or home life. Sometimes I’ll ask a question that probably shouldn’t be asked. But I want to
understand philosophically how they look at things and the reasons why. Understanding their philosophical approach gives
me a better idea of how someone processes information and what drives their decision-making. Every business has some
down days. Understanding how they approach people on those down days will give me a clearer picture of how they will
handle a bigger crisis, if and when it arises. I want to know exactly what kind of leader I have philosophically and not just
financially.

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V. What To Look Out For When Looking For Investors

There are a few things I look at when I’m considering investing in a business. Is this person passionate about their business?
What’s the quality of their character? Do they have a thorough understanding of the numbers? All of these things matter.
Right off the bat, I want to see if we share an alignment of goals, strategies, and incentives. I need to be sure that the
partnership isn’t lopsided because that can lead to mistrust on both sides down the road. Finding a business partner is a lot
like dating. It can’t be a one-way street. This means that when I invest, I want to know that I’m truly bringing something to
the table and I’m being valued. Do you have a plan for what you will do with my investment? Nobody wants to sign a check
and walk away and forget about it. I want to invest because the other person is looking for a mentor, uses me as a resource for
problem solving or connecting with others, and has a clear path for how my investment will further grow their company.
These are just a few examples of the things that excite me as an investor, aside from generating a profit. It also makes an
investor feel like a bigger part of the company, resulting in a greater sense of pride in the organization and partnership.

All investors want to feel like they’re really a part of the team. This doesn’t mean that you need to walk them through every
single daily decision, just remember to keep the lines of communication open. Be honest about your goals and open to
feedback at all times. Open communication is the key to building a harmonious partnership, leading to greater success for all.
The right investor will elevate your organization and support your vision for the future. These tips should help guide you
toward the perfect partnership for your business.

MARCUS’ CLOSING QUESTIONS

1) How will you attract potential investors?

2) What do you look for in potential investors?

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