RV industry executive Marcus Lemonis Tuesday night (July 30) offered a primer on how to run a business in CNBC’s new business-based reality show “The Profit.”
Lemonis, the engaging 39-year-old chairman and CEO of Camping World Inc. and sister division Good Sam Enterprises LLC, wasted little time in the show’s season premier in throwing his weight – and money – around in helping to fix a struggling Manhattan used car buyer called Car Cash.
Run by brothers Jon and Andrew Baron, whose father, Bruce, founded the business in 1977, Car Cash was near bankruptcy when Lemonis entered the picture with bold new ideas for how to turn it around. The brothers grossed $13 million in sales in 2012 but posted a loss of $200,000 and are $200,000 in debt.
“I’m here to fix this business,” says Lemonis, who’s shown driving his red Jaguar at one point in the episode along a picturesque stretch of oceanfront. “If you want people to listen, you put money on the table.”
And that he did, writing a check for $200,000 and providing a line of credit for up to $300,000 at 7.5% interest – a rate that represents a compromise between the 5% offer from overbearing brother Jon Baron and the 10% Lemonis initially requested.
Lemonis, a well known personality in the recreational vehicle business, noted early on in “The Profit” that he was selling cars by the time he was a teenager, and he takes an instant liking to the concept of buying used cars at the West 55th Street location and then turning around and selling them to car dealers. But the brothers’ policy of selling them through car wholesalers doesn’t sit well with Lemonis who wants to eliminate the middleman and improve on the average margin of $500 per sale.
When Jon Baron ignores Lemonis’ directive to change the company’s traditional way of doing business and get rid of the wholesalers, Lemonis, who has now taken over the company, declares, “You’ve got to the end of the day: they go or I go!”
Much to Jon’s chagrin, Jon reluctantly ends his relationship with the wholesalers. Lemonis also coaches Jon on his people skills. Lemonis, who oversees the $2.5 billion CW/GS operations from his Lincolnshire, Ill., headquarters, then instructs him on how to make the customer feel satisfied with his offer for their car by remaining with the customer and talking him through the deal during the appraisal process.
Lemonis spends another $350,000 for 40 contractors to gut and refurbish the tired old building and bring it up to modern-day standards. To underscore his determination to clean house, Lemonis in one scene throws a chair Bobby-Knight-style across the showroom floor. He’s also seen cleaning a toilet.
Viewers do see a warmer side of Lemonis, who takes an instant liking to brother Andrew Baron. Andrew has allowed his controlling older brother to walk over him on numerous day-to-day decisions and is brought to tears when explaining to Lemonis the brothers’ less-than-ideal relationship. As part of the turnaround, Lemonis urges Andrew to write his own TV commercials, and he arranges with a recording studio to tape them. Andrew surprises Jon with a slick 15-second spot that depicts a bolder version of Andrew trumpeting the merits of Car Cash.
Lemonis’ intervention seems to spark a genuine turnaround in the brothers’ relationship with each other.
Viewers soon see Lemonis coaching Jon on negotiating the sale of their newly purchased cars to car dealers and stands by, beaming, when Jon successfully flips a BMW he bought from a couple for $14,000 to a dealer for $17,200. The profit of $3,200 far exceeds the $500 average that Jon had been accustomed to.
In the show’s finale, filmed three months after Lemonis entered the fray, the brothers’ reconciliation is complete with sales up 30% and the business profitable – complete with a new mobile site and a fledgling nationwide franchise operation based out of the same West 55th Street location.
The franchise was Lemonis’ idea, and while the brothers realize a return on each new franchise sold, the inference is there that Lemonis’ upfront investment will be recouped several times over through the franchise initiative.
So, while there’s a happy ending for this — the first of the season’s six episodes – various promotional trailers for subsequent episodes suggest their endings may be less copacetic.
Next week, Lemonis, who offers business advice in a staged studio setting throughout the segments and invites businesses that are in over their heads to visit www.theprofitcasting.com, enters the flower shop business.
“I hope anyone who has a small business will learn things from this show,” says Lemonis. “So many small businesses fail when they don’t have to.”