Lemonis okay. In the last seven years of doing the profit, ive visited nearly 100 businesses. Lets go make some money [ horn honking ] and ive traveled the country trying to fix the people. And you do 1 million a year . You should be proud of that. Man but we dont know how to keep any of it. Lemonis . Fix the process. You see . It flimsy. Dont ever make these again. You dont sell them. And create a few products. Juli it reduces anxiety and depression. Lemonis i kind of like it. I spent countless days working on these companies. How much money did you burn through . Parker 650,000. Lemonis but we cant always fit everything im thinking into the show. So tonight were gonna give you an inside look at an episode from season one called car cash. You probably are one of the better car guys ive ever seen, but you are one of the worst managers of people that ive ever seen. Jay you know hes not one of the better car people youve ever seen, which is the right thing to say, which is what i would say, too. You know, youre one of the funniest guys ive ever seen, its just you dont get any laughs, you know . You know what im saying . Lemonis over the next hour, im gonna take you behind the scenes to share with you what i was actually thinking during filming. One of the contractors actually came over and put jon up against the wall. Jay oh, is that right . Lemonis he said, you cant talk to your brother that way. Jon thats a terrible idea. Are you out of your mind . Its a [bleep] waste of time. Youre totally out of line. [bleep] your decor, man lemonis . Share some secrets. These people that are really in trouble cant get out of their own way. Jon this isnt chicago. This is new york city. This is my [bleep] town. Dont tell me about my guys. Lemonis you dont know anything, but you got till the end of the day. And give you an honest assessment of my decisions. If you cant tell him whats wrong, then you shouldnt be in business together. My name is marcus lemonis, and this is an inside look at the profit. Jay that is a doble steam car. That is the greatest steam car ever invented. That one over there belonged to howard hughes. Lemonis everything in here is pretty old, huh . Jay including us, yeah. Lemonis no, not me. What do you mean, us . Not me. Jay okay, me. Lemonis its beautiful, jay, in the automotive world. So, im a big fan of jay lenos garage, and thats part of the reason why i wanted you here today, is to join us. Amber and, before we start, jay, how did your love of cars start . Jay well, i mean, i grew up in new england, where your dad would teach you to fix things, youd watch your dad, and then you get your first tool set when youre, you know, 6, 7, 8, something, whatever it might be. Plus, we went places in reality. I mean, now kids have a cellphone. So you dont have to go places. Lemonis to go anywhere, right. Jay yeah, literally, kids sit in their room, hey, susan, send me a naked picture. Okay, great. And a naked picture. In my day, we had to go to their house, somehow convince the girl to take her clothes off, take the picture, go two towns over to a drugstore where they didnt know your parents, get the picture developed, so its just different. Amber [ laughing ] so thats where your love of cars started . Jay thats where my love of cars came from. Lemonis were gonna go ahead and start the episode on that note. Amber why dont we roll . Lemonis 35 years ago, bruce barron dreamt up car cash, a business that allows you to sell a used car for cash without all the hassle, and bruce brought his sons, jonathan and andrew, into the company. Andrew pleased to meet you. Lemonis ive been buying and selling cars since i was a teenager, and i know this business. And with over 50 million new and used cars sold in this country last year, well, i see big opportunity with the car cash brand and i want a piece of it. Its funny to watch that for me. I think about this particular show and how scary it was for me to do this for the first time. And the episode tonight is the first episode. Jay well, i love the suit you have on. I havent seen that. It looks like one of those 69 with two pairs of pants . Okay, thats great. Lemonis ive dropped the suit. [ dog barking ] hello . Andrew oh, hi. Lemonis hey how are you . Andrew hi, marcus. Lemonis im marcus. Andrew hi, im andrew. Lemonis andrew. Both nice to meet you. Andrew this is murphy. Lemonis wheres your brother at . Andrew hes right in here. Lemonis good morning. Jon marcus. Lemonis im marcus. Jon its a real pleasure. Thank you so much. Lemonis nice to meet you. So, i want to get a little, quick tour. Jon right here, were in the buying office. When we buy the vehicles, we sit the customers here. This is where we negotiate all the deals. Lemonis jay, i want to make sure that you and everybody else understands the basic premise behind the business. So, essentially, this business operated like a pawn shop. They did not sell cars. You would only be able to seyour car. The goal for this business was, how cheap can we buy somebodys car, and how much can we resell it to the wholesale market . How many square feet do you have in total . Jon i think 4,500. Lemonis which is this garage and this . And thats it. Jon yeah, thats it. And we do have a small office upstairs, also. Lemonis whats the rent here a month . 10 grand . Jon oh, well over 20,000. Almost 30,000 a month. Lemonis almost 30,000 . Jon yeah. Lemonis space is very expensive in manhattan. Having a large overhead, well, that puts a lot of pressure on a business. Amber marcus, how important is the visual appearance of a business like this . Lemonis i think, ultimately, what the customer wants is some level of confidence that where theyre going into and theyre dropping their car off is professional. And thats the biggest fear that people have when they sell their car. Whats interesting is, is i look around your garage and i look at the cleanliness of the floors or the cleanliness of the walls. Essentially, what i was looking for the inside of that place to be, was that an indoor showroom. Whats your biggest challenge today . Jon getting customers to come in. I also need working capital. Im dangerously low on cash right now, which means i cant buy cars. Lemonis how much do you spend on advertising . Jon between 5,000 and 10,000 a week. Lemonis a week . And how many people actually come here a day . Jon you know, some days we get five, maybe 10 a day. Lemonis and whats your buying rate . How many are you buying . Jon were probably closing like 80 . Lemonis whats typical margin on a car . Jon anything under 10,000. We have to make 500 on the car. Lemonis thats a slim margin. Jon its a very slim margin. Lemonis the overhead at car cash is close to 100,000 a month. A month. And they buy about 80 cars with an average profit of 50,000 to 100,000, which means theyre losing money every single month. My First Impression is that the place looks tired and worn down. Andrew i would love to, you know, spruce up the place. Lemonis how about clean it with a mop . Andrew the orange is a little dated. You know, i want bold, vivid colors. Its got to pop. Jay the orange, its just too bulabula. Lemonis too aggressive. Jay yeah, too aggressive. Aggressive is the word. Jon i dont think so. I dont agree. The orange and black works because its striking and it stands out, and the office is very inviting. Lemonis what office is inviting . Jon the buying office. No . Lemonis no. Jay well, right away, i can see the dynamic. I mean, the younger brother i guess hes younger. The one dressed as fredo. Amber [ laughs ] jay i mean, hes got the hat on. I mean, i see where this episode is going. Lemonis you do . Jay and whats gonna happen. Well, yeah, i assume that the younger brother is somewhat the creative artist, just doesnt want conflict. And the other brother seems to sell everything through conflict, you force that. Lemonis hes definitely the creative guy. Lemonis so, guys, i wanted to spend a little time, kind of, understanding the traffic that comes through here. I mean, obviously west 55th gets a ton of traffic. Jon its a fantastic location. Were basically the only outlet to the west side highway. So there are literally thousands of cars every day driving down 55th street. Lemonis so, what kind of advertising do you do . Do you do radio advertising . Jon radio and web. Lemonis so youre in charge of marketing . Andrew for the most part. Lemonis you can already tell. And much to what you were saying is that the younger brother doesnt even feel comfortable voicing his opinion, he doesnt feel comfortable answering me. Any question that i had, jon, whos the older brother, always took the lead. What do you mean, for the most part . Andrew well, with the radio, jon handles that. And lemonis isnt that marketing . Jon this is yes. Its, sort of, a disconnect that jon and i have. Lemonis 50 of the business belongs to him, so my guess is that either youre not fighting for it or hes just not listening to you. One of the twos happening. Jay i just love the fact that the older brother is just i mean, i feel like im watching death of a salesman with willy loman here, you know . Lemonis pretty close. You have experience in advertising . Andrew yeah. Lemonis and what kind of things have you pitched to jon that hes just kiboshed, said no to . Andrew i would have a fleet of cars that would drive around to do mobile appraisals that would be wrapped up in a car cash advertisement. It would be bright jay but look at him look, look. Lemonis hes like, no. Jay hilarious. Jon we never did that before. It just seems so silly. Lemonis these are some good ideas. Why arent you fighting for it . Andrew you know, to be candid, theres only so many times you get kicked in the balls until you stop trying. Lemonis [ laughs ] lemonis hey, how are you . Steven hey, how you doing . Lemonis marcus. Steven steven. Both nice to meet you. Lemonis is this your car . Steven no, no. Were wholesaling them. Lemonis wholesaling them . You buy cars from them . Steven yes. Lemonis how many do you buy a month . Steven 40 to 50, something around that number. Lemonis thats what youre buying . Steven yeah. Lemonis so, this guy would basically determine what the number was gonna be. And then tell him how much money they could make. And they couldnt figure out why they werent making money. How often is he here . Jon my friend steven . All the time. Hes actually a wholesaler. I sell most of my cars to him. Lemonis of course you do. The question that i have is that youre giving up the spread. What did you put on the car . Jon 8,000. Lemonis what did steven pay for it . Jon 8,500. Lemonis this car will retail for what . 12,900 . Jon i was gonna say 12,900. Lemonis theyre gonna go somewhere else and make, between the time you buy to the time the final customer gets it, 4,000 to 5,000 on a car like that. Whereas, you only make 500. Thats too much money. Thats the difference between making money and losing money. Jon i dont think so. I dont agree. Because he puts very aggressive numbers on cars. Lemonis hes in it to make money. Jon hes in it to make money. But he was very close with my dad, also. Hes like family. Lemonis hes like family. Jay oh, yeah. Lemonis wholesalers like steven and sold directly to dealers, i think theres an extra 1,000 to 2,000 a car. And when you buy 80 cars a month, thats 80,000. Thats 960,000 a year without buying one more car. So, walk me through the process. Jon i scan the car into my software. It brings up numerical values on the car. And then, from there, i take a look around the car. Yeah, Something Like this i can probably get 8,500 for. So im going from 8,000. Lemonis okay. Now the next step is to actually speak with the customer. Lemonis jon needs to definitely make more than 500 on average per car. Jon the book value is 8,200 on the car. Id feel comfortable paying 8,000 for it. Lemonis you and i have a difference in philosophy on appraisal. I like the customer with me during the appraisal. I want the customer to know that what im doing is fair. If i take them around the car and i point out the defects with the car, the imperfections with the car. When these lights turn yellow, you can get this replaced. It costs 300400 bucks. And when i give them a number thats lower than what they originally thought it was gonna be, their expectations are probably more in line. Theyre less surprised, and they feel like youre hiding less. I would rather ask these questions with them. When you leave somebody in the office, then you come back with the number, it seems like you set me up. Jon i dont agree. Lemonis jon and andrew are great guys. Jay its your first line. Jon and andrew are great guys, but. Lemonis theyre nice guys jay you dont like the older guy. I can tell that. Lemonis i actually dont like him. I like him as a person, but not as a business person. Jay they invite you in, and theyre disappointed when you dont agree with them. Why dont you agree with me . My business is failing. Its not doing well. Why dont you agree . You know. Amber its always ridiculous to us, though, when someone reaches out to marcus and then fights him. Jay but thats probably more the norm, isnt it . Lemonis less now than it used to be. This is very simple for me. I came here to make money, and i like the concept, but the concept has to grow. For me, this is about opening more locations and signing up licensees around the country. Entrepreneurs can come here and see a prototype. Any licensing deal that we do, you guys will share in a percentage of those profits without having to put up a dime or do a days worth of work. That sound okay . Jon sounds great. Im, like, blown away. Lemonis does he seem blown away to you . Jay yeah, blown away. Lemonis . Is that i have to be convinced that the prototype works. Like andrew mentioned earlier, the place needs to be jazzed up. The other thing that needs to change is the relationship between the two of you. Do you feel underappreciated here . Andrew sometimes. Because theres times where we dont talk, we dont communicate. Lemonis why is that . Andrew you know, i have a lot of ideas. Im full of ideas. Lemonis and good ones, too. Jon i dont have time to discuss things for an hour. Lemonis if you guys cant communicate as business partners, you cant be in business together. If you cant tell him whats wrong, then you shouldnt be in business together. I asked him several times, do you not want your brother in the business . , no, i definitely want him in the business. He didnt. Jay i think he wants the brother indebted to him. I mean, this is shakespeare, isnt it . Lemonis it is. Jay its the oldest story. The sibling rivalry, whatever it might be. The older brother, the younger brother. Its the oldest story in the world. Andrew he and i really dont, you know, hang out and. [ sniffles ] [ sniffles ] [ sighs ] i just want us to click. Right now, its not clicking. [ sighs ] lemonis andrew is far more concerned about his relationship with his older brother and in getting accepted, and his brother knew it. And he just wanted acceptance. He just wanted to be in the family business. Jay i think he genuinely loves his brother and looks up to him and wonders why he doesnt get anything back in return. Lemonis coming up. Jon i would also like to ask for a line of credit. Lemonis whats the Interest Rate . Jon is 5 fair . Lemonis no. Jay suddenly, he went all michael corleone on him. No, son. And i want you to pay. That Liberty Mutual customizes your insurance, i just love hitting the open road and telling people so you only pay for what you need [squawks] only pay for what you need. Liberty. Liberty. Liberty. Liberty. The curb. Its probably not something youve thought about. Unless you were parking. Or skating. Or trying to save the oceans. But now . Curbs are having a moment. From restaurants, to your veterinarian, to carmax. With contactless curbside pickup, you can shop online, then complete the purchase from the safety of your new car. Because thats the way it should be. Carmax. 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Jon yeah, and were not clicking because when i come in here, im just so focused on trying to make money. Lemonis andrew, what are you thinking . Andrew ill do anything to fix this business. Im 100 committed to change. Lemonis is your brother committed to that . Andrew i cant answer that. Only he can. Jay yes, he can. Lemonis he knows the answer is no. If he doesnt change, his business is gonna fail. So, the deal that i have has me writing you a check. So im willing to give you guys 200,000. It allows you to solve the debt that you have, it allows you to put some cash in the business and bring things current, and it allows you a chance, in addition to that, to collect an annuity on the brand name and the website forever. Pause. I want to explain the deal. I wanted to own the concept, and so when i looked at their business, i saw that they were short about 200,000 to clean up their debt, put a little cash in their jeans, and i was essentially buying the rights to the business. Jay but they didnt invent this concept. Lemonis the didnt invent it, but they were the closest to a wellpackaged concept of it. And the fact that they had the 1800carcash you literally dial the phone number, the fact that they had the website, the fact that they were in new york city and were buying a lot of cars. It was proof to me that the concept worked, and youll find out later on that i dont know that they necessarily understood that. Im gonna be very clear. Im in charge for the next week. So what i say goes, which means youre not in control. At all. Jon im a control freak. Its hard to let go of that. Lemonis we didnt notice. Your Business Needs cash like jon like, yesterday. Lemonis like, yesterday. Jon but we also need capital to buy cars. I dont know if 200,000 is gonna be enough. So i would also like to ask for a line of credit. Lemonis so how much is the line of credit you want . Jon okay. Lets say, can we start with 300,000 . Lemonis whats the Interest Rate youre gonna pay me . Jon is 5 fair . Lemonis no. You know what, jay, i was just thinking about what you had said about jon, and i think he was so offputting to his brother, and my flexibility to make the deal work for him really was pretty watered down. You wonder how much the deal could have been better for him had he not been a bit of an ass abo