By Anita Campbell

A hot genre within reality TV these days is the “business turnaround” show. One of the better known examples is celebrity chef Robert Irvine’s popular Restaurant Impossible® on the Food TV network. In it he and a team go into a failing restaurant and in 48 hours turn it around: new menu, new décor, new management practices, sometimes even new management. Then there’s Hotel Impossible®, airing on the Travel Channel®, in which hotel consultant Anthony Melchiorri turns around a failing hotel in each episode using blunt language and tough love.

Jump over to Spike TV® and you’ll find Bar Rescue®, a louder, edgier version of a turnaround show featuring Jon Taffer, who’s billed as “one of the country’s top restaurant and bar consultants” turning around – what else? – a bar, with a lot of in-your-face shouting in the process. In case hospitality businesses aren’t your thing, head over to the Bravo Network® for Tabatha’s Salon Takeover, in which hair salon owner Tabatha Coffey helps failing salons turn around in a week.

What all four shows have in common is that they take on existing small businesses that are failing and try to show them how to succeed. Unlike other shows such as Shark Tank®, they are not about startup entrepreneurs with slick pitches looking for investors. Nor are they about wildly successful entrepreneurs telling how they did it.

No, turnaround TV gets into the nitty-gritty of small business. It’s about small businesses you see across America that for whatever reason have lost their way. They are mostly family-run businesses, sometimes beset by divorce, health problems and personality clashes. Many were phenomenally successful in the beginning, but have fallen on hard times. They employ a handful to perhaps a dozen or more employees. Key criteria: They are on the verge of closing for good due to crushing problems the owners seem incapable of solving.

The shows are entertainment. But you’ll also find powerful business lessons including these seven:

Quality matters above all – Hotel Impossible points out that customers’expectations are pretty straightforward. In the hotel business, cleanliness and friendly staff are two key issues. And in today’s world of online reviews, past customers can be brutal. Failure to execute on fundamental issues like those can sink a business. Fixing the quality, on the other hand, can lead to a swift turn-around.

Use industry data to run the business smarter – Bar Rescue will point out a hard-hitting statistic to explain the “why” behind something – what it calls the science behind a successful bar. For instance, one episode explains why it’s crucial to crush fresh citrus fruit and not use pre-made drink mixes – because when patrons can smell an item at the bar, their chances of ordering it increase 79%. It’s hard to argue when data backs up a recommendation.

Just because you’ve always done it that way is no reason to continue – It’s amazing how often the only excuse for poor quality, poor marketing, poor service or poor execution is, “We’ve always done it that way.”

Poor management is usually at the heart of failing businesses – Whether it’s an owner who’s mentally checked out, given up hope, dallied with the staff, refused to delegate, or failed to lead – management issues abound. Fixing the business requires fixing the management issues. Two common issues are: (1) the owner who micromanages and then feels under stress, taking it out on everyone around him or her; and (2) no one being in charge, resulting in staffing and operational problems never getting addressed, and leading to frustrated employees and bad attitudes. The net result? Customer attrition.

Understand your financials, especially pricing and costs – Often prices are too low, sometimes not even covering costs. The reason may be ignorance – the owner isn’t aware of what the market will bear. Other times the too-low prices are due to fear – fear of losing regular customers. Either way, it puts the business in a slow death spiral where there isn’t enough money coming in to profitably run it. The solution: raise prices.

The owner may be the biggest obstacle – In one episode of Restaurant Impossible, the owner Sandi (a self-confessed control freak) is argumentative, aggressive and rude. She had never run a restaurant before, and is now losing $20,000 a month. To turn around the restaurant means getting her to listen and be receptive to new ideas. Irvine tells her, “If you listen, I can fix it. You’ve got to let me do my job.”

Not every turnaround works – Now that some of the shows have a few seasons under their belts, they are looking back at earlier cases. There are some heartening success stories. But the turnaround doesn’t always last. Tabatha Coffey wrote in a blog post that “… my biggest surprise at Refuge Salon was that it wasn’t there anymore. The doors were closed.” The New York Times did a story about Restaurant Impossible pointing out that sometimes the turnaround works, but that some restaurant owners reverted to former practices, and some were already too far gone to make it.

These and many more lessons abound. Turnaround TV is cheaper and more entertaining than attending a business class. And in the process you just may have a revelation about something in your own business.

Anita Campbell is CEO of Small Business Trends, an independently-owned small business website, and BizSugar.com, a social media site. A former General Counsel, she held a variety of senior executive positions in the corporate world. Prior to that, she was an executive and associate counsel for a regional bank.

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.  Any views expressed in this article may not necessarily be those of Nevada State Bank.