small business growth strategies
Warning: Spoilers ahead.
Watch it online first.
Well, this was an episode with surprising results, to put it mildly, and one which provides the second season with a strong start.
In a nutshell, successful residential real estate investor and car buff Pete Athans has sunk his entire life’s savings into a new used car concept. The problems with this move are two-fold. One, Pete doesn’t really understand the car business. Two, he has this very odd idea that a dealership should also be a neighborhood hangout where people will come to watch television and play video games instead of just buying cars.
The result is that he has sunk $4 million of personal funds into a money-losing concept that wastes about 95% of its retail footage. The interior of the building is a huge empty cavern with just three cars in a space that should hold twenty. There’s also a wing that serves as a lounge outfitted with leather furniture and wall-mounted flat screens TVs. This space could easily hold another ten vehicles.
Marcus Lemonis
I just watched the first episode of the second season of Marcus Lemonis’ The Profit about the Athans Motors dealership located outside Chicago. Judging by the episode and trailer it looks like it’s going to be a strong season.
Someone emailed me yesterday about the progress that Marcus has been making with the business from his very first episode. In it he acquired Car Cash an NYC based company that buys your used car for cash. So what has Marcus done with that single location business since becoming a partner with the two brothers?
The answer is that he’s taken the winning formula and duplicated it a few times.
Go ahead, and take a guess as to how many locations there are as of this writing.
No peeking.
Take a guess before clicking for more.
The Profit Returns for a Second Season
I have some really great news.
Season 2 of The Profit with Marcus Lemonis starts on Tuesday Feb 25th, 2014.
Marcus has become a sort of unofficial poster boy for The Tycoon Playbook in that he is an exemplary practitioner of one of the three main ways that tycoons create value in acquisitions. While I enjoy most shows about experts who go into ailing or failing businesses to fix or save them, Marcus’s is the best of the lot in my book.
Hedge Funder vs. Tycoon
It often seems as if everybody wants to be a hedge fund guy these days. If you then ask the wannabes what hedge funders do, you invariably get a vague answer along the lines of “they invest in stuff” or worse, a simple blank stare. Now to be honest, it took me a while to get a handle on what they do. (Note that I didn’t use the word “understand.”) As far as I can make out a hedge fund is basically an unregulated mutual fund for sophisticated high net worth individuals and institutions. This is another way of saying that a hedge fund can invest in almost anything that its management believes it can earn a high “alpha” in. (The alpha is a rate of return above and beyond what one might expect from trading in stocks and bonds the way mere mortals do.)
So basically almost anything goes so long as there is potential for the high returns necessary to attract and keep sophisticated investor capital.
Job Opportunities
Marcus Lemonis
Marcus Lemonis is hiring people to help him expand his empire.
To quote Marcus:
With the growth of my portfolio of companies I’m always looking for great people. Please send resumes to jobs@marcuslemonis.com
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