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Family Business Case Study: Two Brothers On The Brink

Written by John Kuder

Table Of Contents

This case study has a happy ending! The Barons brothers sought expert help and they got it. The result was steady growth and they are still in business 9 years later.

Their story was made public on the popular CNBC show, The Profit.

The very first episode of The Profit featured Marcus Lemonis hoping to franchise a used car buying concept. The business was based in New York City.

Bruce Barons founded 1-800-Car-Cash in Manhattan in 1977. The episode aired in 2013. They said that Bruce had passed about a year before they called Marcus Lemonis for help.

We discuss their story in this YouTube video:

The Situation

Bruce’s two sons took over the business sometime before, but what year. It is clear that they were still grieving his loss. Grief was affecting their behavior in the business and towards each other. This was a family in pain, and the family pain infected the business.

This company made $13 million in revenues in the previous year. The problem was that they spent $200,000 more than that, which they had to borrow.

This shows that gross revenues aren’t the most important number to watch.

People Problems

The two brothers were not communicating well. The older brother, Johnathan, seemed to be trying to keep things exactly as they were when their father was alive. The younger brother, Andrew, had many ideas to try to improve things. Johnathan wouldn’t hear them. He abruptly interrupted, “Absolutely not!” when Andrew was sharing one suggestion.

In another instance, he yelled at Andrew in front of employees and contractors. “Don’t spend money on pretty things to make the office look nice!”

The whole place was in the middle of a facelift that Marcus insisted on and paid for. The office was uninviting and outdated.

It was clear that Andrew was stuck in the past in some way. I suspect that he thought not changing anything was showing loyalty to his father. He was also worried about the financial problems of the business.

People Problems

The two brothers were not communicating well. The older brother, Johnathan, seemed to be trying to keep things exactly as they were when their father was alive. The younger brother, Andrew, had many ideas to try to improve things. Johnathan wouldn’t hear them. He abruptly interrupted, “Absolutely not!” when Andrew was sharing one suggestion.

In another instance, he yelled at Andrew in front of employees and contractors. “Don’t spend money on pretty things to make the office look nice!”

The whole place was in the middle of a facelift that Marcus insisted on and paid for. The office was uninviting and outdated.

It was clear that Andrew was stuck in the past in some way. I suspect that he thought not changing anything was showing loyalty to his father. He was also worried about the financial problems of the business.

It was clear that Andrew was stuck in the past in some way. I suspect that he thought not changing anything was showing loyalty to his father. He was also worried about the financial problems of the business.

Process Problems

The primary business process of buying cars and reselling them was also ineffective. They parked customers alone in the office while they inspected the car. Then they delivered their offer. Once they bought the car, they immediately sold it to a wholesaler who was standing by on the property.

Marcus insisted that both parts of the process change. Include the customers in the inspection and show them exactly what lowers the value of the car. The wholesalers had to go. That convenience was costing the business most of their possible profits.

Our Business Coach Perspective

What Marcus brought was a fresh perspective. Yes, he also invested his own money. However, money alone was not the solution. They needed to change their behavior. That was invisible to them. Marcus held up a mirror and pointed out what he saw, so they could see it too.

It’s not magic nor rocket science. We can’t change what we can’t see. Getting a fresh perspective is a big part of what coaching offers.

Accountability is another big part of the value received. Marcus held Johnathan accountable to maximizing his margins and it required him to get out of his comfort zone. He guided Andrew through a similar change process. In both cases, he supported them by seeing them as fully capable.

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