Clean. But im not just giving them advice. Im putting up millions of dollars of my own money. If you dont know your numbers, you just dont know your business. Ill work by their side. Ill put in the hours. cause i have the same risk that they do. Wheres accounting . Shes counting. No, wheres accounting . Um. Oh, my god. This business is a total mess. I judge businesses based on three things its pretty damn good. Most often, businesses fail because of people. I trusted people to manage. Thats not fair what are you talking about . Dont you even go there. Im not going anywhere. Youre strangling things. Back up. Im there to lead, but if they dont follow, this business doesnt make it. Youre a thief and a liar and a cheater. You didnt do what you promised. Get out of my face. All i hear is a bunch of noise. [crying] i dont want to lose my company. Ill make the tough decisions they wont. Youre being demoted. Anything to turn these unsuccessful businesses around. What the [bleep] is your problem . That people dont [bleep] want to do it anymore. Are you challenging me . Youre making me look like a stupid liar, and im not. How am i supposed to trust you . And if they cant cut it. I gave you very simple instructions, and you failed. The deals off. This is my [bleep] town. You wanna lose the deal with me . They need to go, today. If they get with the program. Give me a hug. Ill teach them how to succeed. I think him coming in here has been absolutely fantastic. I think its a dream come true. I mean the morale is better than its been in a long time. Any time you want to say thank you, ill be fine with that. Thank you. Im rescuing the American Dream one business at a time. It just changed our look. Congratulations. You earned it. It may take 30 years, but you know im gonna make money. Did you actually just tell me that its gonna take 30 years . Oh, my god. Tonight on the profit. Im marcus. Its a real pleasurethank you so much. Nice to meet you. I go inside car cash, an autobuying business run by two brothers in new york city, which is on the brink of failure. Were dangerously low on cash right now, which means i cant buy cars. If i cant fix the business. If you dont like money, dont follow my process. And the brothers relationship. Are you out of your mind . Theres no [bleep] way car cash will be closed for good. 35 years ago, bruce baron dreamt up car cash, a business that allows you to sell a used car for cash without all the hassle. The business thrived, making upwards of 50,000 a week, and bruce brought his sons jonathan and andrew into the company. Nice to meet you. In 2007, the recession hit. The business tanked, and the family struggled to keep it profitable. My job is on the line. Bruce passed away last year, making the situation even worse as the brothers mourn their father, struggle with business, and each other. Im about to blow my top here. Never tell somebody again to do that. Last year, the Company Generated 13 million in sales, but posted a 200,000 loss. Now sales are down 70 from their peak, and the brothers find themselves 200,000 in debt and counting. Theyve had to lay off many employees, and neither of them have taken home a paycheck in months. Im in the heat of battle. Im busy downstairs generating income mounting debt, combined with lagging sales, means that they could be mere weeks away from shutting the doors on this manhattan institution. Im sick of this bull[bleep]. Ill do anything to fix this business. 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. If jonathan and andrew follow my lead, i will turn this place around and make it profitable again. Good, right there is good. Thank you. Hello, good morning, warren. Hi, this is malissa from 1800carcash, carcash. Com. [dog yipping] hello . Oh, hi hey how are you . Hi, marcus. Im marcus. Hi, im andrew. Andrew, nice to meet you. Nice to meet you. This is murphy. Wheres your brother at . Hes right in here. Oh. Good morning. Marcus. Im marcus. Its a real pleasure. Thank you so much. Nice to meet you. So, i want to get a little quick tour. Right here, were in the buying office. Okay. When we buy the vehicles, we sit the customers here. This is where we negotiate all the deals. Where do you sit, then . Right there . Yeah, they sit here, we sit behind the desk. Wow, okay. I like the mascot. Yeah. Hes awesome. How many square feet do you have in total . Uh, i think 4,500. Which is this garage. Yeah. And this . Yeah, thats it. And thats it. And we do have a small office upstairs also. Whats the rent here a month, 10 grand . [scoffs] ovwell over 20,000. Almost 30,000 a month. Almost 30,000 . Yeah. Yep. Space is very expensive in manhattan. Having a large overhead, well, that puts a lot of pressure on a business. Are both of you here every day . Six days a week, yeah. Youre the general manager . Yeah, thats right. And your role is . Marketing, internet, social media. Whats your biggest challenge today . Getting customers to come in. I also need working capital. Were dangerously low on cash right now, which means i cant buy cars. How much do you spend on advertising . Um, between 5,000 and 10,000 a week. A week . And how many people actually come here a day . You know, some days we get five. Yeah. Maybe ten a day. And whats your buying rate . Whahow many are you buying . Im in the ratiowere probably closing, like, 80 of whats typical margin on a car . Anything under 10,000, you have to make 500 on the car. Thats a slim margin. Its a very slim margin. The overhead at car cash is close to 100,000 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. I would love to, you know, spruce up the place. The orange is a little dated. You know, i wanted bold, vivid colors with white. Its got to pop. I dont think so. I dont agree. The orange and black works because its striking, it stands out, and the office is very inviting. What office is inviting . The buying office. No . No. 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. This is 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. So what kind of advertising do you do . You do radio advertising . Radio and web. So, youre in charge of marketing . For the most part. Whatwhat do you mean, for the most part . Well, with the radio, jon handles that, and internet isnt that marketing . Ithis isyes. Itsits sort of a disconnect that wethat jon and i have. 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 two is happening. Do you have experience in advertising . Yeah, yeah. And what kind of things have you pitched to jon that hes just kyboshed, said no to . 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. It would be vibrantthe color. It would catch peoples eyes. We never did that before. It just seems so silly. These are some good ideas. Why arent you fighting for them . You know, to be candid, theres only so manyso many times you get kicked in the balls until you stop trying. The baron brothers are waging their own little war, and thats bad for business. Andrew needs to find his place and stake his claim. Was this a fourcylinder or a sixcylinder . Hey, how are you . Hey, how you doing . Im marcus. Steven. Both nice to meet you. Is this your car . No, no, were wholesaling them. Wholesaling them . You buy cars from them . Yes. How many do you buy a month . 40 to 50. Something around that number. Thats what youre buying . Yeah. Wholesalers are a broker who stand in the middle of a transaction. They buy cars from jon, they mark up the price, and they sell it to a dealer. Why do we need middlemen around here . How often is he here . My friend steven . Mmhmm. All the time. Hes actually a wholesaler. I sell most of my cars to him. Why . Um, because i trust him very much. Hes a good friend of mine. But the issue that i have is that youre giving up the spread. What did you put on the car . Uh, 8,000. What did steven pay you for it . 8,500. This car will retail for what . Id say 12,900 . 12i was gonna say, 12,999, yeah. How much margin is that, in between you and the final customer . 8,500 to 12,999, yeah. Its almost 5,000, right . 4,500 . Theyre gonna go somewhere else and makebetween the time you buy it to the time the final customer gets it 4,000 to 5,000 on a car like that, whereas you only make 500. Thats a lot of money. Thats too much money. Thats the difference between making money and losing money. I dont think soi dont agree, because he puts very aggressive numbers on cars. Hes in it to make money. Hes in it to make money, but hehe was very close to my dad also. Hes like family. If jon eliminated 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. When a customer came in, i wanted to stand back and watch jon appraise the car. Okay, come inside the office. Car cashs profit is determined by two factorshow much they buy the car for, and how much they sell it for. So walk me through the process. I scan the car into my software. Right. It brings up numerical values on the car. Then from there, i takei take a look around the car. And then i have to figure how nice the car is, how close to the book value. Is it worth in excess of the book value. Um, yeah, Something Like this, i can probably get, like, 8,500 for it. So, ill go up from 8,000. Okay. Now, the next step is to actually speak with thethe customer. Jon needs to definitely make more than 500 on average per car. The book value is 8,200 on the car. Id feel comfortable paying 8,000 for it. Um. Right now, car cash is in real trouble. Theyre out of money, and if they dont change their process, this business isnt gonna make it. 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, or the imperfections with the car. When these lights turn yellow, you can get this replaced. It costs 300 or 400 bucks. Then 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. Make sense . I like that. I like that approach. You too . Last year, car cash generated over 13 million in revenue. Thats 13,500 per car, since they bought 960 cars. If jon followed my process and took the customer through the appraisal process, he would be able to buy cars for 5 or 10 lower than hes paying today. Thats about 1,000 a car. 960,000 a year, without buying one more car. When you leave somebody in the office, the level of anxiety thats happening, as you sit there, as the minutes tickoh, god. Then you come back with the number . It seems like you set me up. I dont agree. Look, jon and andrew are great guys, and this is a great concept, but theyre hurting. And i know that if i make the changes that i want to make, this business will be profitable, but they have to listen. Ththis 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 could come here and see a prototype, and then in perpetuity, forever, 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. Does that sound okay . It soundit sounds great. Yes. Imim, like, blown away. Im. With this plan, my expectations are really simple. I look at one location. If i can buy an average of 50 cars per location, and just average 1,000 per car, i can generate 50,000 a month. After i pay my expenses, i expect to clear, after all the bills, 20,000 to 25,000 a month just with one location. You do the math, if you open 100. So the catch to this whole deal, uh, is that i have to be convinced that the prototype works. Like andrew mentioned earlier, the place needs to be jazzed up. Its a little crusty and rusty. Would you agree with that . The other thing that needs to change is the relationship between the two of you. Do you feel underappreciated here . Sometimes. cause theres times where we dont talk, we dont communicate. Why is that . [sighs] you know, i have a lot of ideas. Im full of ideas. Mm. And good ones, too. I dont have time to discuss things for 45 minutes to an hour. Its just, im wired differently. Like, i cant sit and talk about stuff like that. 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. [sighs] he and i really dont, you know, hang out, and. [sniffles] [sighs] i just want us to click. Right now, its not clicking. Coming up. The catch to this deal is that im in charge for the next week, which means youre not in control. And later. The furniture that we have now, it does not match thethe decor of [bleep] your decor, man looks like they picked the wrong getaway driver. Theyre going to be paying for this for a long time. They will, but with accident forgiveness allstate wont raise your rates just because of an accident, even if its your fault. Cut sonny. Was that good . Line the desert never lies. Isnt that what i said . No you were talking about allstate and insurance. I just. When i. Lets try again. Everybody back to one. Accident forgiveness from allstate. Click or call for a quote today. only tylenol® rapid release gels have laser drilled holes. They release medicine fast, for fast pain relief. Tylenol®. For fast pain relief. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. I just want us to click. Right now, its not clicking. Yeah, were not clicking because when i come in here, im just focso focused on trying to make money. Andrew, what are you thinking . Ill do anything to fix this business. Im 100 committed to change. Is your brother committed to that . I cant answer that. Only he can. Jon doesnt seem willing to change. But what he doesnt realize is that if he doesnt change, his business is going to fail. So the deal that i have, uh, 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. 200,000 up front and a Licensing PartnershipGoing Forward is a great deal for them. I mean, theyre really gonna benefit. Im gonna sign up licensees around the country, and theyre gonna get mailbox money, which means every time a new car cash opens, well all get a check without having to put up any money or do any work. So the catch to this whole deal, uhi want to be very clearim in charge for the next week, so what i say, goes. Which means youre not in control. At all. I dont know if giving controlyou know, 100 control, basicallyto somebody that, you know, we just met and, um [sighs] how do i put it . Im a control freak. Its hard to let go of that. The Business Needs cash like. Both like yesterday. Obviously, its gonna take capital to change the complexion of the business. But we also need capital to buy cars. I dont know if 200,000 is going to be enough, so i would also like to ask for a line of credit. So how much is the line of credit you want . Okay, uh, lets say, can we start with 300,000 . Whats the Interest Rate youre gonna pay me . Um, is 5 fair . No. Oh. Really . Really. Its 10 . I need 10 , because its unsecured. Well, its unsecured, but you have to understand something. Were giving you an opportunity to make millions and millions of dollars. But imbut i am putting up all the money. Youre putting up all the money, but youre putting up the money based on the idea that our dad created. And its his vision, and his blood, sweat, and tears that got us to this point and built the name brand that youre gonna make millions of dollars on. For the sake of both of us, we need to do Good Business here. We need to make a lot of money here. Were your flagship. You need usyou need us to be the most successful franchise that you have. If were not your most successful one, then nobody is gonna buy in. One of the things i like about jon is that hes willing to push back. Right after i give him 200,000, he then comes back and asks for another 300,000 for working capital. I mean, i thought it was bold, but i like that about him. It shows me he has some fire in his belly. Ill split the baby with you at 8 . How about 7. 5 . Okay, we got a deal. Yep. So when you take my check, for the next week, im 100 in charge. Which means, what i say, goes. Do you understand that . Yep. You better buckle up. Yeah. Because change is coming. Once i make a deal, i dont waste any time. Im gonna turn this place upside down. Do we have a deal . All right. Do we have a deal . Sounds good. Thank you so much. Lets get to work, right away, okay . Hey, everybody i wanted to tell you what has happened. Very exciting news. Jon and andrew and i have cut a deal where im now going to be part of car cash. Im a big believer in three thingspeople, process, and product. I think we have the right people, but we need to make some improvements. Look, i didnt come here today to do one single business deal on west 55th street. I came here because i think 1800carcash should be a national brand. Were gonna add licensees around the country who are going to pay us a fee to license 1800carcash in an area thats relevant to them. In order for this Business Model to attract licensees, were gonna have to show them its profitable. Theyre not just gonna buy off on an idea. So one of the first things we need to do is make more money. We need to fix the appraisal process by bringing the customer into it so we can buy our cars for less. Jon, the wholesalers have to go. More importantly, we need to get rid of these wholesalers, because we need to make that extra money that theyre making between here and there. That extra money could be 1,000 a car. If we can fix this business, then licensees are gonna love it, and theyll sign up like its going out of style. If were goi