On the heels of our recently tanked economy, owning a small business has got to be one of the toughest jobs in the world. Compounding this is the fact that many small businesses are family-run, uncomfortably combining sibling, marital, or parental politics into the family’s actual livelihood. The Profit is a new CNBC reality show starring Marcus Lemonis, the CEO of the Camping World empire (who knew?), now billed as a “serial entrepreneur” who has turned around hundreds of small businesses. Apparently he gets about 150 emails an hour and answers them all. Personally.
Previews for The Profit, because it’s a reality show focused on drama, have zeroed right in on the most painful confrontations as this stranger comes in to tell these people what’s wrong with their businesses. Ladies crying, guys getting in each other’s faces, flying furniture. Lots of bleeping. Lemonis is spouting platitudes like, “If they get with the program, I’ll teach them how to succeed,” “If you want people to listen, put money on the table,” “I’ll write the check, even if you won’t,” and my favorite, “Get back in here and show these people how to be a leader!” Even The Profit’s promo pic has Lemonis in a dark suit, crossed arms and scowling, standing on a literal pile of money. Since he’s a fairly young, pleasant-looking entrepreneur, on the promo pic he kind of resembles an angry hamster.
But promos can be misleading (what? shock), because on the actual program, it turns out Marcus Lemonis is a pretty nice guy. He also does indeed seem to have an innate ability to immediately find out what’s wrong with these businesses and turn them around. It’s like watching Donald Trump without the obnoxiousness and the bad hair and the bankruptcies.
On The Profit, Lemonis will tackle six businesses to get them on the profitable path. We see him washing windows and scrubbing toilets. To read: hands-on. He reports that he judges business on three things: people, process, and product, and “most often businesses fail because of people.” First up: 1-800 Car Cash, an auto-buying business owned by two brothers in New York City. Their dad opened the business in the ‘70s, making $50,000 a week at its height, then brought in his sons.
The business started tanking with the recession in 2007, then their father passed away last year. Now sales are down 70%, the business is $200,000 in debt, they’ve laid off employees, and they have no income. The unlucky brothers are Jon, the elder and manager, and Andrew the younger, head of marketing. Jon tells Lemonis the company’s biggest problems are getting customers and being low on capital, which means they can’t buy cars, which, correct me if I’m wrong, seems like the point of the whole business. Because they’re renting in New York, they have ridiculously high overhead, and because they use wholesalers to sell the cars they purchase, they’re only clearing about $500 a car.
Lemonis takes the brothers in for a sit-down. Soon it’s clear that Andrew is chock-full of ideas for the business: rehabbing the gross office space and disgusting customer bathroom, getting fleets of cars to do mobile cash appraisals, expanding the advertising. Older brother Jon rolls his eyes the entire time. Lemonis points out these are good ideas, but Jon is too stressed about the business to take the time to listen. But not too busy to do the advertising for the business, which doesn’t leave Andrew the marketing manager a whole lot left to do.
Lemonis immediately has some ideas for improving the business, especially getting rid of the wholesalers to eliminate the middleman. But he likes the idea of the business, and wants to franchise it out, which will hopefully lead to more profit-making at various locations.
The first Profit tears (but far from the last) come from Andrew, who despairs about not only the business, but the problematic relationship with his brother. Andrew says he’ll do anything to save the business, and is committed to change. Jon seems the opposite of “committed to change.” Lemonis offers them $200,000 and the chance to collect an annuity for a licensing partnership going forward. If they market the Car Cash brand, they will eventually receive what Marcus calls “mailbox money,” so they get money whenever anyone opens up a new Car Cash, without doing any work. Man, I want some mailbox money.
In return, they have to let Lemonis be in charge for a whole week. Seems like a small price to pay, but guess who’s resistant? In a surprise to no one, Jon says he’s a control freak. He thinks they need more capital than $200K, so he asks for a line of credit for $300,000 more. Lemonis kicks back in his chair with this kind of “Here we go” smirk, and demands interest rates. Jon offers 5%, which Lemonis says is not fair. He offers 10%, since the loan is unsecured. (I didn’t do great in high school Econ, but it’s all coming back to me now.) Jon counters that they’re offering him the chance to make millions. Or, from Lemonis’ side of the table, he’s offering them the chance not to go under in a week. It’s all in how you look at things. They split the difference at 7.5%, because Lemonis likes Jon’s moxie.
Which again, is pretty generous of him, because Jon can be kind of a tool. He dismisses his brother’s attempt to take back the advertising in the same way he probably gave the kid wedgies back in grade school. Lemonis tells him he’s one of the “best car guys, but worst managers of people I’ve ever seen. You shouldn’t be talking to people that way.”
On Lemonis’ week in charge, he pushes Jon to kick out the wholesalers (note: Car wholesalers look really menacing when they’re cut off). He also hires about ten million contractors to paint, redo the storefront, and remodel the offices, sales area, and bathroom, to the tune of over $300K. He books Andrew some studio time to make 15- and 30-second media spots. He’s hoping this will give Jon a chance to see what Andrew’s made of: “Nothing shuts people up like performance and success.” Lemonis sounds like he could easily have his own line of inspirational posters.
Car Cash is transformed with the new logo and paint job; it’s clean, bright, professional-looking. Andrew enthuses, “I wish my father was alive to see this. He would love this. I wish he was here.” Cue tears and then the plinky music as Jon is impressed with Andrew’s ad work and “feels humbled” by what he now sees as his foolish resistance to change.
Three months later: Car Cash is flourishing, transactions are up 30%, and new licensees are popping up. Lemonis adds, “Most importantly, the relationship between these brothers is on the mend” and that their father would be proud of them. So nice! Honestly, I was ready to write him off because of his douchey orange Jaguar convertible, but turns out it’s a total product placement. That guy does not miss a trick to make money.
The only downside is a paradox at the heart of The Profit: At the end of the episode, Lemonis might have shown these people how to fix their businesses, but he now has a financial stake in them, so is it really their business any more? On the upside, their doors are staying open.
- While Lemonis and Jon are duking it out over the wholesalers, they are standing in front of a dry erase board that lists things like “Car Cash Tip Of The Week.” There’s also a “Rachel’s Wall Of Awesomeness.” Sadly, it is empty, but I am dying to know who Rachel is and how she accomplished future awesome things.
- In the episodes coming up: Next week, Lemonis invades a floral shop, which looks like a must-see, as the guy seems extremely cranky for a florist. He’s the guy Lemonis yells at to be a leader; he also calls him “a thief and a liar and a cheat.” I definitely want to find out how you can accomplish all that in a floral shop. But on a future episode the LA Dogworks people seem to have the most contentious relationship of all; bet they’re married.