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tv   The Profit  CNBC  November 2, 2017 1:00am-2:00am EDT

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my expectations is that we pick up at a minimum, 20 points of margin. 20 points of margin across $2,800,000 a year in business is $560,000 in gross profit. that's one heck of a return on $150,000. steve: hi, ana. ana: hi, steve. lemonis: also, in order to cut down travel and enhance communication, i linked up pacific hospitality and grafton furniture with at&t collaborate. ana: did you get the files i sent you about the simple greek project? steve: yes, i did. lemonis: ana and steve will be able to make calls, hold conferences, and even share designs with one easy-to-use platform. and with simple greek franchises set to open all across the country, it's imperative that pacific and grafton stay connected and communicate. ana, i mean, the reason that this business is successful and will be successful is because you're a big driver.
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ana: you kind of brought this out of me, which i knew was there, but i never really applied it. you like, kicked my butt and woke me up and in a way. lemonis: you should be very proud because she is who she is because of her, but also because of you. gilbert: i don't think that i can live without this. lemonis: yeah, i know. we can't be without you. ana: he's like a different man. he's not as stressed anymore. and, i mean, he went on a vacation for a whole week. lemonis: i'm very proud. ana: aw. thank you so much. lemonis: very proud of you. ana: you have no idea how -- what this means. lemonis: pacific hospitality has been around for 40 years, but with ana and her new structure and assistance from steve, well, i can see pacific growing nicely over the next 40 years. ana: i love you, papa.
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holy [bleep] there's a lot of cash in here. ...the owner of a specialty coffee business has thrived against all odds... i think you should be very proud of what you've accomplished. ...only to become the victim of his own success. steve: now this business is kind of growing beyond my experience. lemonis: as the company has grown, he's lost his grip... jeff: we don't have meetings. lemonis: none? ...leaving his process unrefined... i don't think you guys have any idea what's in your inventory. ...and his staff in constant conflict. steve: so, you know a lot more than you're telling me, and i've called you out on this. it [bleep] pisses me off. this whole thing pisses me off. lemonis: if i can't help him regain his confidence and be a leader... kevin: you come in to pitch the stories, the passion -- i didn't get that.
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lemonis: ...this business will come to a bitter end. you should pack your [bleep] and you should go. my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not gonna wake up every morning wondering if we have a job. we're gonna wake up every morning wondering how many jobs we have to do. it's not always pretty. everything's gonna change -- everything. but i do it to save jobs, and i do it to make money. this is "the profit." let's go to work. ♪ in 2009, steve sims started bodhi leaf coffee traders, a purveyor of the finest coffee beans grown in unique microclimates across the globe. steve: we go to the farms, we source all the coffees, import them, handcraft each batch. so, we're looking for the best of the best out there. lemonis: previously, steve was in real estate. and he didn't know much about coffee before he got into the game,
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but he proved to be a quick study, buying only the best beans and reselling them here in the united states. steve: we import for guys that want specialty boutique coffee. they have nice shops, and they want good coffee. lemonis: today, he sells raw beans to other businesses. he has a retail line of roasted beans, and he operates two coffee shops. bita: 12-ounce white mocha? lemonis: and his sales exceed $6 million a year, but the bigger bodhi gets, the more difficult it is for steve to keep up. steve: i'm sick of keeping the train on the tracks here. i feel like i can't grow anymore. lemonis: the company is chronically short on working capital. the inventory system is nonexistent, and now his employees are frazzled and frustrated. steve: this is -- this is [bleep] up. lemonis: still, specialty coffee is one of the fastest growing industries, and steve knows the market inside and out.
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together, i'm confident we could make a real splash. bita: hi, marcus. lemonis: hey, how are you? this place is huge. bita: i know. lemonis: what is your name? bita: hi. bita. lemonis: bita? parker: parker. lemonis: parker? nice to meet you. what's special about the coffee? bita: it's roasted in-house. we have our roaster over there. lemonis: that's what that smell is. it's so strong. bita: we do also import as well. so, we have a whole warehouse that we can walk you through. lemonis: okay. great. i've been to a number of coffee "shops", but i didn't expect to see a giant window and 10,000 square feet of coffee beans piled to the ceiling. i didn't expect to see a roaster in the middle of the room. it was a mecca epicenter of coffee. steve: marcus. steve sims. lemonis: steve, how you doing? steve: great to meet you. lemonis: nice to meet you. lemonis: dude, i love your beard, bro. your beard is awesome. steve: thank you. lemonis: if you ever shave it off, you're gonna go out of business. steve: yeah, exactly. lemonis: what makes you different from the other big coffee people?
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steve: number one, we only source high-end, specialty coffee. so, we don't mess around with commodity coffee. we don't mess around with gas-station coffee. lemonis: super premium. steve: we look for the best of the best. number two, we do source the coffee, so we kind of take the middleman out of it. lemonis: so, there's some extra margin. steve: little extra margin in there. lemonis: what is amazing about the business model that steve has built, is he has vertically integrated his entire process. usually, a coffee shop like bodhi would buy its beans from a middleman who will have already marked up the product to make some money. but by bypassing that system and buying directly from the farm, he allows himself to make all of the margin, from the farm to the cup. on top of that, he has his hands on the process from start to finish, and that's what guarantees him quality control. brando: how are you doing? lemonis: good. what is your name? brando: i am brando, like marlon brando. lemonis: that's kind of cool. i'm marcus. nice to meet you. brando: nice to meet you. lemonis: so, how does that work? brando: so, these are the two pour-overs that i'm gonna do.
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so, what i'm doing right now is i'm preheating the filter and i'm preheating the beaker. lemonis: okay. brando: if you don't preheat the filter, you're gonna get a papery taste in your coffee. lemonis: okay. brando: i'm gonna grind them right here. we're gonna do 20 grams of each. lemonis: okay. brando's very technical. you would think he was getting ready to launch the space shuttle. like, it's an art for him. brando: okay. okay, add it. lemonis: i just wanted coffee. i didn't want to go into the meth lab. brando: and there's your pour-over. ♪ lemonis: this is a lot fruitier and sweeter-smelling. it tastes good. it was very smooth, but it had a nice flavor to it. it was the best cup of coffee that i've ever had. so, who trains the different people that come to work here? steve: brando, head of the cafes. brando: director of cafes, sure. lemonis: okay. so, you run the whole store? steve: both of them. two open, one in anaheim hills, which is about seven miles from here. lemonis: it looks like this? steve: very similar, no warehouse. i'm also in whole foods, and i have all my bagged coffee in whole foods. lemonis: okay. steve: all right.
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lemonis: can i get a tour? steve: let's do it. lemonis: awesome. steve: so, this is our roastery. this is where we roast it all. we're roasting fresh every day. and this is jared. jared: hey, i'm jared. lemonis: jared, i'm marcus. nice to meet you. steve: he's our head roastmaster. lemonis: so, can you walk me through the whole process, how it works? jared: absolutely. lemonis: okay. jared: so, this is green coffee. we start with the green, raw coffee. each batch is weighed precisely for consistency, and then you throw it into the hopper of the roaster. it roasts for about 13 minutes. lemonis: so, do you do all the roasting for the entire company here, or is it just for this shop? jared: everything for the entire company is on this roaster. lemonis: so, if you grew your wholesale accounts, how would you fulfill that demand? ronnie: we're almost maxing this thing out. so, we're like -- we're like right at the breaking point. lemonis: oftentimes, i go into businesses, and they have capacity, but they don't have the product. that is not their problem here. they have a great product, and i want to figure out how to deliver more of it. ♪ how much of the company do you own? steve: 51%. lemonis: who owns the other 49%?
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steve: i had two investors come in. i needed to buy more coffee. i was selling out of it, and i didn't have any more money. each one of those green containers back there costs me 90 to 150 grand, and i had to paid for that up front. that's why i needed investors. lemonis: what prompted you to get into the coffee business? steve: uh, i was flipping real estate from 2005 to 2009. doing well for a while, then the bottom fell out from under me. i lost everything, except for the house i live in. and i have a family. so, i was looking for a way to support them, to be honest. it was a scary time in my life, and it was the last 60 grand i had to my name. so, my back was kind of against the wall. so, i had a friend that had a connection in sumatra for green coffee. flew to sumatra, bought my first container. didn't know if i was overpaying for it. didn't know if it was good. and i came here and started cold-calling roasters in the area, and i got lucky. it was a great container. people were saying, "this is the best sumatran coffee i've tasted." it was $63,000 for that container. that same container, today, costs about $120,000. lemonis: i wish you'd have bought more. steve: i wish so, too. so, this is the warehouse.
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♪ lemonis: holy [bleep] there's a lot of cash in here. steve: yes, there is. lemonis: there's a lot of green in here. steve: we import it for guys that want specialty coffee. say you own four restaurants and you want good coffee in your restaurants. you come to a guy like me. or i'll do private label. we do that for a lot of guys right now. lemonis: it's becoming even more clear to me that you're running two distinct businesses here. wholesale -- selling green roasted bags -- then the other business is opening up these cafes. steve: yep. lemonis: this business can be best described by looking at a coffee plant. on the wholesale side, there are three branches. he sells raw beans to other roasters. he sells finished beans to restaurants and other roasters. and he sells finished, roasted bags of beans to retailers who want to capitalize on the specialty retail market. then there's the retail side, the locations that he operates as coffee shops
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along with the beans that he sells direct to consumer. look, there's a lot to understand here, but what i want to understand first is how the overall sales process works and how the team interacts together. jeff: marcus, i'm jeff. lemonis: how you doing, my man? jeff: hey. lemonis: nice meeting you. jeff: yeah, you too. lemonis: what do you here? jeff: been here from the beginning, and i handle the commercial accounts. lemonis: wholesaling? jeff: wholesale, yeah. this is my list of the accounts that i handle. lemonis: how many are there now? jeff: i think i have about 160. lemonis: what is your title today? jeff: green coffee sales manager. lemonis: so, you run all of the green coffee sales? jeff: i'm kind of the go-to. i mean, obviously i'm handling the bulk, but, um, we have a bit of a team, but i'm the head. lemonis: and do you have a staff that works for you? jeff: per se. it's not very -- lemonis: what's "per se" mean? jeff: you know, there have been squabbles. there have been personality conflicts. people are, you know, bickering. lemonis: when you guys have staff meetings, who holds the staff meetings? jeff: we don't have meetings.
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lemonis: none? jeff: no. lemonis: but if you and jared have a disagreement about something, who resolves it? jeff: uh, we tend to talk them out, and after a couple days, uh, maybe things cool off a little bit. lemonis: a lack of formal staff meetings may seem like a small thing to some people, but for any organization to be healthy, communication is at the forefront, especially with as much as bodhi has going on. and if people are arguing and fighting as much as jeff says they are, well, that's something really need to get to the bottom of. ♪ how often do you guys get together as a staff for, like, team meetings, like, you, jeff? brando: very rarely with jeff. yeah, i mean, he just does green sell, and i just do cafe. lemonis: yeah. so, who do you report to -- steve? brando: yes. lemonis: who reports to jeff? brando: no one that i know of. lemonis: okay. jared, so, i'm trying to understand, how do you guys communicate with each other? jared: we don't really have very many formal meetings, but me, brando, steve, we're all here almost every morning.
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lemonis: okay. and jeff mentioned that nobody's having any meetings with the team. jared: jeff, you know, works from home some days. he's not here all day. that's frustrating. ronnie: i personally feel like there's tension there. but i -- lemonis: tension around what? jared: i've had someone come up to me and ask for the vice president and then ask for jeff. lemonis: does that annoy other people here as well? jared: yes. lemonis: does it annoy you? ronnie: yeah. lemonis: clearly jeff is frustrating people at work with his behavior, and that's something that needs to be discussed and dealt with. hey. steve: hey. lemonis: but, ultimately, it's up to the leader to make sure that his people are communicating with each other and that people are -- are working together well. the guys were telling me that there's not a lot of staff meetings? steve: no. we don't have weekly staff meetings. i've never been good at that. i got a good team around me, good people. now this business is kind of getting big, and that's part of the reason why i'm talking to you. lemonis: that's the reason you called me? steve: oh, yeah.
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now is a pretty scary time in my life. lemonis: is it that bad? steve: yeah. the company is growing beyond my experience of running a company like this. i just -- i learn as i go. i always have. and i almost lost everything. it happened before, you know? can it happen again? and now i got kind of some good people here that i want to take care of. they're like family to me. i feel like i need to be their leader. i need to -- i need to show them the way, and, uh, it gets scary sometimes. i want to do it right. [ voice breaking ] i didn't want to do this. i don't want to do this. i want them to know i'm strong. [ clears throat ] lemonis: you have to have some confidence in yourself. just 'cause you have tattoos and zz top gave you their beard does not mean that you can't be a good leader. steve: i appreciate that. lemonis: i'm telling you that. your people will respect you more, okay? they'll respect you more. steve: all right. lemonis: can you grab all your financials? steve: yeah. ♪ lemonis: hi, there. tracey: hi.
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lemonis: i'm marcus. tracey: tracey. nice to meet you officially. lemonis: nice to you meet you. steve: i printed out -- or tracey printed out -- the key things i think you might need or if you need anything else. lemonis: what do you do in total revenue? steve: last year, we did $6.6 million. lemonis: of the $6.6 million, how much of it comes from the wholesale division of green beans? tracey: about $5.2 million. lemonis: geez. big number, brother. steve: thanks. lemonis: okay. the business made 77,000 bucks. $77,000 is not awesome, but it's -- it's a profit. there's $3.5 million worth of assets, but there's no working capital. steve: right. lemonis: do you feel like you have some big needs coming in a short period of time for cash? steve: yes. central american harvest is coming again, and we have to buy all these containers, and that's a tough time. lemonis: how much do you think that is? steve: somewhere between $800,000 and $1.2 million. lemonis: but you realize, and i'm not trying to... steve: i know. there's nothing. lemonis: ...there is no money here to buy anything. steve: oh, i get it. lemonis: but i think you should be very proud, very proud of what you've accomplished.
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i mean that. steve: okay. lemonis: you know, look, let me study the financials, and then we'll get back together. steve: okay. i appreciate you coming in. it's an honor. lemonis: thank you, brother. steve: yep. ♪ lemonis: ooh! we're in the middle of bean factory. steve: right in the -- right in the heart of it. lemonis: how you feeling? steve: nervous. i just feel like i'm a normal dude. so, i don't know. it's a lot of mixed feelings. lemonis: humility is a requirement for me to be in business with somebody, but there's a certain amount of confidence that i would like you to have to be partners with you. and i'm telling you now that i am gonna make you have confidence, and you got to be able to communicate. if you can't, it's, like, people don't know what to do. steve: i agree. lemonis: steve, i wanted to go over the financials one more time again, if that's okay. steve: yep. okay. lemonis: business is gonna do
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$6.4 million in revenue this year and is gonna make approximately $100,000 in profit. steve: yes. lemonis: there's roughly $3.5 million worth of assets. steve: okay. lemonis: but it's short on cash. my offer is $1,750,000, and i would like 50% of the business. with this investment, the other investors are gonna get diluted by 25%. so, i would have 50%, you would have 26%, the investors would have 24%. ♪ steve: it's not that i don't want to give. it's just -- it sucks. i feel like... i work all this time to get to here. okay. at the start, i had to give up, whatever, 49% for 200 grand. now here -- now here i am again. i have to do it to grow. and here i am, gonna dilute myself again. at what point, you know, is the, like, the reward there? it's just -- it sucks.
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brando: people have asked me, "do i have to listen to jeff? 'cause he told me to do something." and i said, "no, you don't. he's not your boss." lemonis: why do you need to be telling anybody anything? you are not in charge! you should have kept your [bleep] mouth shut. steve: it's not that i don't want to give. throughout my career, i've been fortunate enough to travel to many interesting places. i've always wanted to create those experiences for others.
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at optum, we're partnering across the health system it's just, here i am, gonna dilute myself again. and now i'm only gonna be, whatever, a 30% owner of my own company.
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it's just -- it sucks. ♪ lemonis: steve, i don't want you to feel like you got minimized too much, but everybody has to give a little. steve: okay. lemonis: my offer is $1,750,000. $1,750,000. i would like 40% for that, i would like you to have 40% for that, and i would like them to have 20% for that. steve: so, i'm diluting 10%. they're diluting... lemonis: but i'm also taking 10% less than i want. steve: okay. lemonis: i would like that $1,750,000 to stay in the bank for working capital so that you could buy inventory without having to think about it. steve: yeah. okay. lemonis: and i'm not getting any tattoos. i'm just telling you that right now. steve: [ laughs ] lemonis: i'm not doing that. ♪ steve: okay. lemonis: we have a deal? steve: yeah. ♪
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lemonis: so, steve and i made a deal for me to invest $1,750,000 into the business. i invested the money not to just fill it and move it in this warehouse. i'd rather be a national business, with one in texas and one in florida and one in chicago, where people can come there and be, like, "this is amazing," and the line's out the door. where steve has really excelled so far is building his wholesale business. his retail business is just starting out, but with his expertise and his ability to buy the beans, this would be a waste as a regional business. this needs to be a national brand. i'm also not convinced that the branding is right. jeff: i'm surprised you don't like the leaf. i mean -- lemonis: i don't like the leaf because i don't think it's memorable. when you go to disney world, what -- what's the branding? jeff: the mouse, the princess. lemonis: here's my mouse. jeff: right. lemonis: i -- this is the brand. okay? like, this is what starbucks looks like, and this is what specialty coffee looks like. steve: all right. lemonis: i want to sell that. steve: all right.
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lemonis: and i want to embrace it. and then we do have to have weekly and monthly reviews as a team. it's about communication. all right, let's go to work. thanks, guys. steve: yeah. yeah. ♪ all right. what's our plan here? lemonis: to see where we sit and where the opportunity is. steve: okay. lemonis: okay? there are companies around the country that fight to get on the shelf at whole foods. and the fact that steve was able to get his product into a national retailer told me a lot about the quality of his product and the passion that he has in selling it. but what i want to think about today is how it compares to other retail brands and how we can best position it for future success. steve: so, this is us, right here. this is our presence. in most of the stores, we have pretty good presence as far as, you know, we're not down at the bottom or top. lemonis: i have to be honest with you, i-i-i don't like the packaging. i can't read the name. steve: 'cause of the style of the font, i get it.
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lemonis: i have -- i have rarely seen a coffee package that i like. like, this, to me, it's, like, couldn't be more boring. you disagree? steve: no, i agree. we also sell them the coffee. lemonis: you sell them their coffee? steve: we roast it for them. lemonis: so, do you think that a lot of these people on this shelf bought some green beans from you? steve: and still do. lemonis: as a wholesale customer, if i saw that all the sudden you were selling me coffee, but now you were selling against me as well, it would make me uncomfortable. steve: mm-hmm. lemonis: it's going to start to poke and prick at some of your buyers. steve: it's already happening. lemonis: i don't think you want that. $5 million of business cannot be compromised. steve: i agree. lemonis: is there a world where bodhi leaf gets out of the business of competing with the people that it's roasting for and that that brand only lives as a wholesale brand? steve: of course. lemonis: that, to me, would be the goal. in order to protect our current wholesale business and ensure those wholesale customers that we're not competing with them
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by retailing the same beans we sell them, we need to come up with a different brand with a slightly different product offering, something just shy of ultra-premium but still top-shelf quality. and what this strategy allows us to do is also sell to more people. i really believe that there's a way to have it feel crafty and specialty and be super-premium as opposed to ultra-premium. steve: i agree. lemonis: and i want to build the new brand around you. steve: um, i don't want to come across that way to the public and people as arrogant. like, look at this guy, trying to put his face out there everywhere... lemonis: uh-huh. steve: ...things like that. i just don't -- i ha-- i have to do it in a passive way, yeah. like, i don't want to be known for the brand like that. lemonis: you don't want to be known to be the best coffee guy in the world? steve: well... i got to think about that one. lemonis: i'm not trying to embarrass him. i'm trying to sell more coffee, and i want to make sure
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that the customer sees that beard and says, "that's the seal of approval. that's the validation." i'd like you to be thinking about that retail brand. steve: okay. lemonis: all right. i'll see you back at the office. steve: all right. ♪ lemonis: hey, steve? steve: yeah. lemonis: do you have a printout of inventory? in a business like this, it's all about inventory, the raw goods. and i wanted to ensure that there was a system in place that controlled the asset. okay, we're gonna try to figure out how to count this inventory. so, if we started walking around right now, take me to el salvador bodhi leaf finca vista hermosa. jeff: we -- we do have kind of little -- little bays laid out here. lemonis: so, what is this? jeff: and -- and these are numbers that kind of identify the bays. lemonis: okay, so where do i see the bays on here? jeff: so, obviously they're not on here right now because we haven't had the system in place. ronnie: there's nothing on paper
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that will tell you where the coffee is. lemonis: and who is in charge of the inventory? jeff: i am directly in charge of the inventory. tracey: you know, you oversee what your sales of going out, but there's a lot of other little facets that you, you know, aren't overseeing. he's not, you know, in this warehouse every day, touching all these bags. jeff: uh... i'm actually back here quite a bit. i'm double-checking inventory to make sure we have the product to sell. ronnie: no. like, i don't think so. jared: it's mostly myself who would count these. lemonis: i would think that the guy that buys them and the guy that sells them would know. he should know what he has in available inventory at all times. is that how it works? jared: no. that's how it should work, though. ronnie: yeah. jeff: i-i feel like i have been pretty responsible with the inventory. lemonis: so, how much inventory do you think is in here? jeff: 1,160. lemonis: 100,000 and 60? jeff: 600. lemonis: $1,168,000 is what's on the balance sheet as of today.
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jeff: right. lemonis: is there $1,168,000 of beans in this warehouse? ♪ why don't you know this number? jeff: i know the numbers. lemonis: i'm starting to candidly get annoyed with this guy because you can see the disconnect between him and the rest of the organization. you don't know that number, but you're representing to people that you're the vice president? jeff: never. never said that. lemonis: employees have heard you tell people that. jeff: well, they're lying because i've never, ever said that. brando: he tells people that he's a vice president. jeff: i've never said that. i... steve: he -- he's a -- my wife's cousin, so he's family, and through the family, i have heard that. jeff: but being -- being here from the beginning, being steve's senior employee -- ronnie: right there, though. it's, like, i almost don't want to listen after you say, "i'm the senior employee here" and stuff. brando: people have asked me, "do i have to listen to jeff? 'cause he told me to do something." and i said, "no, you don't. he's not your boss." lemonis: so, are you giving people direction
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that work for him? jeff: no. brando: i can have evidence of that in two minutes if you want me to. lemonis: i'd like to see it. we have to put this to bed. so, please get the evidence. brando: okay. lemonis: he's either a liar, or he's very forgetful. and the only way to get to the root of it is to pick a topic and run it to ground and actually find out what happened. ♪ brando: this is dana. lemonis: hi, dana! brando: she's one of my shift supervisors. lemonis: how are you? by the way, thank you. dana: i was just doing my normal job, and jeff asked me if i would just clean behind the grinders. if it needed to be done, i don't mind doing it. except, like, who is my boss? jeff: yeah. i-i-i'm guilty. i-i-i should have told you, brando. lemonis: no, but you shouldn't have even told him. he doesn't -- you don't -- he doesn't work for you. it doesn't concern you. like, buy beans and sell beans. and this is why people have a beef with you. why do you need to be telling anybody anything? you are not in charge!
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jeff: so, i should have told steve? lemonis: you should have kept your [bleep] mouth shut. ♪ jeff: we're kind of, uh, joining forces with marcus, and, uh... kevin: you know, we work with companies 'cause of the quality of the product first. jeff: yeah. uh-huh. so, um, uh...
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lemi would like threein charge! it two is i'm not standard. three weeks. ok.
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that's your job, by the way. steve: i agree. lemonis: you have to be the leader. you didn't say much. i can't be the mouthpiece here. steve: i got you. lemonis: all right? steve: yep. jeff: all right. lemonis: okay. let's go. ♪ how you guys doing? jeff: all right. doing well. lemonis: welcome to chicago. in order for bodhi to have a national presence, it has to have a distribution center in the midwest. so, today we're going to a roaster production facility and warehouse in chicago that's available. david: hello. good morning. jeff: how are you doing? lemonis: how are you doing? david? david: i'm david. lemonis: i'm marcus. david: nice to meet you. lemonis: nice to meet you. steve: david, i'm steve. david: hi, steve. nice to meet you. we'll do a whole walk-through. ♪ back here, i roast coffee. this is the coffee roaster itself. lemonis: holy [bleep] that's big. how many pounds does your facility
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have the capability of producing on an annual basis? david: we can produce about a million pounds a year. lemonis: okay. how many pounds do -- do you guys make a year? jared: we did about 120,000. lemonis: so, this is basically our process on steroids? david: exactly. lemonis: this feels legit. steve: this -- this is set up to do volume, for sure. lemonis: goal number one is to get steve a distribution center in chicago. one of the byproducts of it is that he'll have roasting capacity which will allow him to also grow his retail business. so, i really feel like this gives us the ability to grow. it could be really awesome. david: sure. i think we have a pretty good deal going. lemonis: i'm glad that we were able to make a deal because this is the kind of thing that ultimately changes the path of the business. david: right on, guys. steve: all right. ♪ lemonis: now that we know we're gonna have a hub in chicago, it's time to start knocking on doors and drumming up some business.
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so, the first place that i'm taking the team is to a restaurant group called rockit ranch. they own a number of restaurants all across chicago. we now know we have a foot in the market, with doing business with the espresso shop. and so i thought we could sit down with these guys. jeff: let's -- let's do this. lemonis: you ready to go? jeff: let's sell some coffee. lemonis: okay. great. regardless of all the issues that people have with jeff, what i ultimately want to understand is if he could be a good salesperson. that's ultimately what matters. jeff: all right. kevin, where -- where do you feel your coffee has been lying in the past, as far as, like, what caliber of coffee you guys serve here? kevin: well, we have six venues, soon to have seven, and each one uses coffee in a very different way. okay. jeff: um, what is, uh... you know, uh, we're kind of, uh, joining forces with marcus and, uh, trying to work into the chicago market. kevin: well, you know, we work with companies 'cause of the quality of the product first. jeff: yeah. uh-huh. so, um, uh...
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lemonis: i would have expected jeff to tell the story of the brand, the fact that they source the coffee from different farms around the world, the fact that they're a behemoth in the wholesale industry, but instead he's just fumbling. jeff: um, um... lemonis: if your business is in trouble and you need my help, log on to... kevin: well, you know, we work with companies so we know how to cover almost almoanything.hing even a swing set standoff. and we covered it, july first, twenty-fifteen. talk to farmers. we know a thing or two because we've seen a thing or two. ♪ we are farmers. bum-pa-dum, bum-bum-bum-bum ♪
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'cause of the quality of the product first. jeff: yeah. uh, um... um... steve: it -- it's always fresh, always the highest specialty coffee we can find, for sure. kevin: yeah. well, i'd love to taste it. jeff: great. lemonis: can you pull some out? jeff couldn't even create a connection with the buyer. it was awful. ♪ steve: so, kevin, this first coffee is the guatemala los santos. i like to call it more of a crowd-pleaser. it's just a mild coffee. it'll appeal to the masses. lemonis: how do you like the flavor? kevin: it's great. i can -- definitely got the nice chocolate notes and the well-rounded acidity. um, you come in to pitch the stories, the passion -- i didn't get that. so, i can't make a decision. ♪ lemonis: thank you so much. kevin: my pleasure. lemonis: great feedback, and -- and we'll learn from it. we'll get better. kevin: great to meet you.
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jeff: great to meet you. steve: thanks a lot for having us. lemonis: embarrassed -- that's where i'm at right now. by the way, he is a terrible, terrible salesperson. steve: he's the reason our green coffee sales are so low. i've been kind of noticing that over the last few months. lemonis: well, what do you think? is he qualified to even do what he's doing now? steve: i think this is something we need to feel out and see where the business goes going forward and then decide. lemonis: okay. steve: okay? lemonis: i'm gonna plant the seed in his head that he needs to start thinking about how he's gonna deal with jeff, but in the meantime, we have to get to work. ♪ steve: we'll be making all our blends in the hoppers up here, grinding right here. so, this space is kind of utilized. lemonis: before we start production in the warehouse, i asked steve to re-layout the whole flow so that it's consistent with what we're doing in california. steve: right there, where you can see the window through the warehouse, i think this area right here should be the cupping room. lemonis: i also wanted him to brush up the place. in case any wholesale customers come there, i want to put our best foot forward.
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once this place is done, it'll have the capacity to fulfill wholesale orders throughout the entire midwest. also, the new roaster will give us the ability to produce a heck of a lot more retail orders. so, let's fire this bad boy up. first, we need to create a new retail offering. so, the boys have been hard at work coming up with new blends. steve: careful, might be a little hot. lemonis: strong, but it's good. ronnie: our aim with it is the broadest market of coffee drinker. lemonis: from what i've tasted, they're knocking it out of the park. steve: whoo! whoo. lemonis: steve has gained a lot of confidence through this process. steve: if we are using any sort of bearded logo or image, i just don't want it to come across as arrogant, mainly. lemonis: well, we have a lot of work left to do for him actually to accept being the face of the brand. [ machinery whirring ] meanwhile, construction's moving forward, and the entire place is being cleaned out for a fresh start.
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♪ i thought it would be a good idea for the three of us to chat after chicago and hear from you on what you thought happened there and have open dialogue about it. jeff: i think i did okay. we -- we went in there, and we explained what we do. i think i'm good with people. steve: i think we [bleep] the bed. i think it was horrible. it was just a [bleep] pitch, all the way around, is how i feel. i really do. lemonis: and i felt like you really struggle to build rapport with people. jeff: i don't think so. i mean, my numbers have been good. dude, look at my numbers. i-i'm -- steve: i've looked at your numbers. i don't like them. honestly, for selling for five years, you should be doing three to five containers of coffee a month, easy. jeff: are you doing three to five containers a month? steve: no, but i don't sell anymore. now i'm doing a lot of other stuff. lemonis: i think it's interesting that, rather than addressing your own issue, you started to deflect to steve and challenge him, like, "what, are you selling three to five containers a month?" jeff: i didn't say that.
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i didn't say that. steve: you just said that. lemonis: do you guys know why you're here today? steve: no, no idea. jared: no, we have no idea. lemonis: how you feeling about the brand? steve: feeling good with bodhi. lemonis: are you? oh, what do we think? ♪
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jeff: i didn't say that. i didn't say that. steve: you just said that. lemonis: why don't we pick this up later? 'cause you're sort of checked out. jeff: yeah. yeah. let's break, and i'll talk to you in a little bit. ♪ lemonis: if this was business, by myself, i know what i would do with him. steve: if it's not gonna change, then it's not gonna work. like, in the last couple weeks, i came really close to firing him, really close. lemonis: is he disrespectful to you? steve: no. he went to purchase coffee in el salvador, and, you know, that's his girlfriend. lemonis: she's the salesperson? steve: she's the owner of the farm. lemonis: whoa, whoa, whoa. wait a minute. he was buying from his girlfriend? steve: yeah. we've been buying from her for the last three years, but now she's your girlfriend and i just got the worst pricing i've ever had. lemonis: and have you confronted him on it? steve: oh, yeah. we got in a pretty heated battle about it. lemonis: and what did he say? steve: "well, what do you want me to do?" i go, "what do you mean, what do you want me to do? you're the buyer for the green coffee. you should be handling this. this isn't right." he's watching out for her more than he's watching out for bodhi, and that's exactly what i said to him, and i got pissed.
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lemonis: and what do you want to do? steve: let's go in the back and talk to jeff. lemonis: he has demonstrated a lack of consideration for his co-workers. he has represented himself as somebody he is not. and now the company has been buying beans from this farm for three years. he starts dating her a year ago, and the price magically goes up around the same time that he's dating her. so, there's one farm that you guys have historically bought from, that you're actually dating the person that is selling it to you. jeff: yeah. lemonis: and the price went up by a significant amount. he was telling me that it's somewhat unheard of, that it would jump that much that fast. jeff: um, i've been noticing some increased pricing, i mean, looking at pricing from other suppliers. lemonis: you didn't see an increase from other el salvador people? steve: nowhere near hers, not even near. lemonis: okay. steve: and jeff knows that. so, i feel like we're being taken advantage of a little bit. do you not? jeff: no. she e-mailed you three weeks ago. steve: aren't we the company that kind of made her who she is in the u.s.? now it's just like, "[bleep] those guys?" this is [bleep] up. jeff: it's [bleep] up.
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steve: yeah, but that's what you say. step in and make it right. and if you're just gonna stand behind her, that's [bleep] up. jeff: she had to sell it somehow, so... lemonis: has she sold it already? steve: oh, so she already sold it? jeff: she had to sell it. steve: so, you didn't even tell me this. jeff: she hasn't sold it, but she's making -- steve: you just said she sold it. see, you know a lot more than you're telling me, and i've called you out on this. you just now told me something i didn't know. like, she already might have sold the coffee? were you gonna tell me this? what if we don't have any el salvador coffee now in the next couple months? i need to be to be booking coffees. jeff: well, that's what she needs -- that's what she says she needs. she's over it. we should be willing to pay it because those are her costs. lemonis: that is [bleep] up. steve: where do your loyalties lie? jeff: with my employer. steve: i don't feel that at all. i don't think you need to do anything further for bodhi leaf. [bleep] pisses me off. this whole thing pisses me off. jeff: it's [bleep] up. lemonis: i am watching steve's backbone be built one block at a time. he started soft, but as jeff got more aggressive,
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steve became very clear. this is the way things are gonna be. i started to see some real leadership. you should pack your [bleep] and you should go. jeff: all right. lemonis: you should do it today. jeff: all right. i will. ♪ lemonis: it's been a few weeks, and we've made a ton of progress. our new chicago roasting and shipping facility is done, and it's ready for action. holy mackerel! steve: a little different than last time? lemonis: it looks like a different place! steve: remember all the -- lemonis: where's all the crap? steve: literally like 40 pallets of stuff was taken out of here. lemonis: before, bodhi couldn't even keep up with demand. now, not only can it keep up with demand, but it can grow and grow fast. but before one bean moves, i want to make sure there's a solid inventory system. steve: easy to do. we sticker everything as it comes in. so, you scan it in, so -- and as you can see, that goes up on this spreadsheet. lemonis: this system will allow us to know where every bag is and where it needs to go, increasing efficiency and protecting our assets.
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now that all our systems are in place, i'm going to allow them to start buying beans to grow business again. so, steve has hired a new salesperson. steve: rick. marcus. rick: marcus, nice to meet you. lemonis: how are you? nice to meet you. rick: really nice to meet you. steve: rick's ran some big companies. rick: we're gonna move into other parts of the country, and we can do exactly what we did here with green coffee, and i picture that all the way across the united states. lemonis: most importantly, i'm seeing the progress in steve. he's become a better leader. he's more confident. he's holding weekly staff meetings. steve: all right, guys. weekly meeting. everybody, sign in. lemonis: he's got a real handle on his business. steve: mike, everything all right in the warehouse? any problems? mike: nothing. steve: brando, cafe-wise, you have any issues with? brando: we're crushing it, so... [ laughter ] lemonis: but there's still one more hurdle for him to cross. ♪ look, i've mentioned several times that i want to turn steve into a brand. and he's pushed back. well, today, i have a surprise for him. do you guys know why you're here today? steve: no, no idea. jared: no, we have no idea.
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lemonis: what about the brand? how you feeling about the brand? steve: feeling good with bodhi. lemonis: are you? steve: yeah. lemonis: okay. for me, this is a big moment for steve. it was either gonna go really well or really bad. should we take a look? steve: we're gonna find out. lemonis: what do we think? ♪ (honking) (beeping) we're on to you, diabetes. time's up, insufficient prenatal care. and administrative paperwork,
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if you'd have told me three years ago... that we'd be downloading in seconds, what used to take... minutes. that guests would compliment our wifi. that we could video conference... and do it like that. (snaps) if you'd have told me that i could afford... a gig-speed. a gig-speed network. it's like 20 times faster than what most people have. i'd of said... i'd of said you're dreaming. dreaming! definitely dreaming. then again, dreaming is how i got this far. now more businesses in more places can afford to dream gig. comcast, building america's largest gig-speed network. now more businesses in more places can afford to dream gig. lemonis: what do we think?
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♪ steve: i actually like it. oh, that's pretty awesome. jared: wow. does not look arrogant at all. steve: i like that. lemonis: i wanted to buy the biggest wallscape billboard i could find to announce the new brand that's being launched. and i actually saw a sense of pride. let's say we go look at something else. steve: yeah, let's go. lemonis: what do you say? ronnie: all right. let's do it. ♪ ronnie: oh, dang. jared: oh, wow. steve: [ laughing ] are you serious? ronnie: i like it. it's a cool-looking building. wow. lemonis: establishing a wholesale distribution model in the midwest, i wanted to complement it with a retail shop. steve: wow. that's pretty cool. lemonis: as you're growing a brand in a market, you want to be able to display that brand in multiple ways. and with the fact that steve has grown as a leader, i'm confident that they can handle this.
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ronnie: wow. jared: i like the brick. ronnie: yeah. it has a good feel, a lot of character. [ laughter ] lemonis: you guys excited about this? brando: totally. ronnie: definitely. this is really cool. steve: dude, look at the ceiling. i love it. brando: i do love that ceiling. that's cool. steve: this is gonna have a total specialty feel. lemonis: my expectation is that the chicago retail shop, combined with the wholesale warehouse, could become a $3-million-plus business in the next 12 months. you combine that with the $6 million that bodhi is already doing in california, we're scratching $10 million really quickly. steve: this is gonna be our best shop yet, for sure. lemonis: you think so? steve: yeah. lemonis: back in orange county, i still have one more surprise for our team. i wanted to thank you guys for what i would consider an interesting process, but i really don't believe that steve could have done this without you guys. steve: no way. i couldn't have. no way. lemonis: so, what i wanted to do is i wanted to give back


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