Marriage and business conflicts are never pretty. When the two are combined, it can get even more complicated.
In the latest episode of CNBC’s new “Money Court” series, O’Shares ETF chairman Kevin O’Leary is tasked with finding a solution for a couple fighting for the leadership of their growing grooming empire for pets.
Chris and Emily Elias run The Ruff Life, a popular mobile pet grooming service in Long Island, New York, which has seen its business explode during the pandemic. With their fleet of vans busier than ever, the couple think it’s time to expand. Chris wants to buy three new pickup trucks and expand the business nationwide, while Emily wants to stay home and open a pet spa.
Business partners have turned to O’Leary for advice, and because they signed a contract agreeing to follow his recommendation, his decision will be binding.
The couple’s business reported $ 800,000 in revenue, including $ 240,000 in profits, in 2020. While both wish to capitalize on their current popularity by continuing to grow, they have different ideas for the future. future of the company.
For Chris, The Ruff Life’s next step is nationwide expansion. He wants to spend the $ 100,000 the couple saved to rent three new vans and put them in cities across the country.
“We own Long Island,” Chris says. “I want to spend that $ 100,000 on a nationwide rollout because I think we can go further and really make this brand national.”
Emily, meanwhile, believes they should build on their local success by opening a pet spa, which will allow them to create new sources of income, including daycare and dog training. She thinks expanding their operations to other cities will stretch them too much and thinks they should continue to make money near their homes.
Kevin O’Leary’s reaction
When weighing the couple’s options, O’Leary says there’s one main factor the Eliases need to consider.
“The decision is: what risk do you want to take? ” he says. “What is the path of least resistance to a higher return on capital?” “
He criticizes their two plans. For Emily, he’s baffled when he learns that she doesn’t have a business plan for the pet spa and tells her that the business can’t move forward until she gets to work. .
And although O’Leary calls the business “amazing” and says that most entrepreneurs “would die from having the problems you have,” he tells Chris that his expansion plans are the result of ” get drunk some success “.
“Do you want to become national? What are you, fools? The path of least resistance is right at your feet,” he said.