tv The Profit CNBC September 5, 2021 1:00pm-2:00pm EDT
then you can take a knee and we can just call it a day. thomas: no, it would simplify my life. lemonis: alright, brother. ♪♪ man: ♪ we're gonna live forever ♪ ♪ gonna live forever ♪ lemonis: so, we're here in los angeles, california, in the furniture design district, and over the last several years, i've invested in a ton of furniture businesses, and i've really fallen in love with design. so, i had a family reach out to me looking to take their business to the next level. now, this particular business, mod barn, has a lot of potential, and it's run by a brother and sister. let's take a look, see what it looks like. this is the showroom? wendy: yes, this is our showroom. ryan: we do custom furniture. we specialize in murphy beds. lemonis: in the three-year period, the business made almost $700,000.
how much money is in the bank today? wendy: we have about $5,000. wendy: we need to get customers furniture. i've made so many excuses. lemonis: how late is this job? nathan: three months. lemonis: that's a real problem. that would piss me off if i was the customer. are you all by yourself? ryan: yeah, my son's with me. lemonis: i do worry that you're by yourself here a lot. and it feels like all the burden falls on you all the time. wendy, you have to step up, or you're going to burn them out and the company's gonna close. i'm marcus lemonis, and i risk my own money to help businesses. i love investing in american businesses. woman: i just don't want anything to really change. it's not always easy, but i do it to create jobs, and i do it to make money. do we have a deal? let's rock and roll. man: yeah! this is "the profit." ♪♪ wendy: my name is wendy jestin, and this is my furniture store. lemonis: for siblings wendy and ryan, the furniture business is in their blood.
wendy: ryan and i both started out in the furniture business with my dad working in his store. my name is ryan jestin, and i am a woodworker. i am very passionate about what i do. i have a little boy that's everything to me. lemonis: despite growing up in the industry, their lack of process has crippled their business. wendy: our issues with our business is organization, not following through on a delivery for one reason or another. ryan: being a single dad, i have a lot on my plate. details sometimes get lost because i'm going so many different directions. lemonis: they're at a bit of a standstill right now, and i'm here to see if i can help them carry on their family legacy. hi there. ryan: hi. lemonis: i'm marcus. ryan: i'm ryan. lemonis: ryan, nice to meet you. ryan: nice to meet you, marcus. wendy: hi, marcus. i'm wendy. lemonis: wendy, nice to meet you. you have a big smile. wendy: you know, it's an exciting moment. ryan: that's my son. lemonis: hi there. nice to meet you. alphus: i'm alphus. lemonis: alphus? alphus: yes, sir.
lemonis: that's an awesome name. where are you from? alphus: kenya. but i'm american now, so a little bit of both. lemonis: is this the showroom? wendy: yes, this is our showroom. or a little hole in the wall nook. lemonis: so is this an example of a piece? ryan: yeah, yeah, this is. we do custom furniture -- residential, commercial, and we specialize in murphy beds and barn doors. lemonis: what is this piece? ryan: a murphy bed that folds open. let's leave that one. don't pull it, don't pull it! lemonis: hold on, guys. [ laughter ] relax a little bit. what is this? ryan: it's another wall bed. lemonis: does this come down? ryan: oh, no. we just don't have a mechanism in some of these. the ones that we do have a mechanism is the back one. lemonis: and just, all kidding aside, the reason is because you're saying to people the mechanism is the same inside. alphus: it also costs money, and that's probably why wendy: pull-out mechanisms, yeah, they're $500 a pop. lemonis: is capital part of the reason why things aren't the way they should be? alphus: 100%. lemonis: i'm a little frustrated with the fact that the murphy beds aren't working and they're using capital as an excuse.
that doesn't really make any sense to me when it's a simple part that you can repair. and if somebody's coming to your business to invest, you'd think you want it all to be done right. it doesn't sound like a capital issue to me. it sounds more like a bad first impression, lack of preparation issue. so in this particular one... ryan: [ whispering ] yes. alphus: finally. lemonis: well, finally, 'cause you only gave me one. ryan, where did you learn this? ryan: years of practice. just growing up in my family business. lemonis: what's a medium-range murphy bed cost like this? ryan: $3,200. lemonis: i'm kind of fascinated by the concept of a wall bed. as people live in smaller spaces... ryan: right. lemonis: for them to be able to be on a tight budget and to be able to have a comfortable bed, that they can put it up and turn it into a desk and have that be their backdrop with a beautiful design element 'cause they don't want to have a zoom call from the bed. alphus: correct. lemonis: what's everybody's role? ryan: i basically do everything. no, i'm just kidding. lemonis: you're kidding, but you're not. ryan: i do a lot. i handle the production. i talk to my builders. i make sure the installs go out.
i go on my house appointments, deliveries, i mean, start to finish. lemonis: it can't all fall on your shoulders. you can't be everything to everybody. it's impossible. wendy: i'm the one that oversees the sales. what i'll usually do is get the quote, pretty much put everything together, and then hand it over to ryan to do a house appointment. lemonis: okay. alphus: i'm the finance guy. i handle most of our bookkeeping accounts. lemonis: why is capital the reason things are this way? in the meantime, there was a new order that came in for another client. we are using the funds from the second customer to complete the first order. lemonis: you're basically robbing peter to pay paul. currently, when mod barn completes the sale with a customer, the customer puts up a deposit. the problem is is that the money that the new customer puts up as the deposit ends up getting used to finish off previous jobs from previous customers, ultimately robbing peter to pay paul along the way. the bigger issue here is that it's causing delays
and creating additional costs. what needs to happen is that they need a streamlined process and enough working capital to assure this doesn't happen again. this business has been here how long? wendy: five years. ryan: five years. lemonis: i thought that your father started the business. wendy: he did, but that was another business. it was furniture. but we both branched out and did our own thing. ryan: i started my own furniture company, and then wendy ended up starting the mod barn, and i came and worked with her, and then we became partners. wendy: he closed his business. lemonis: and you wanted to close it? ryan: [ sighs ] not necessarily. i didn't want to close it, but i-i spread too thin. lemonis: is your dad still around? ryan: no, he passed away two years ago. lemonis: i'm sorry. wendy: it was sudden, so it's still raw. lemonis: did he teach you this business? ryan: he taught me a lot about the business. he was my best friend. i remember watching him do his sketches. he'd show it to me and i'd be like, "whoa, that has a lot on it, dad," and just knowing i'm maybe carrying on a family tradition --
he was so proud to see my designs. lemonis: who owns the business? wendy: officially, i do. lemonis: is there an unofficial answer? wendy: unofficially, we both do. lemonis: you're super uncomfortable right now. ryan: i'm sorry. lemonis: can you and i take a walk outside? ryan: yeah. lemonis: okay. i could tell that that was bothering you inside. that's why i wanted to give you an escape hatch. ryan: thanks. i mean, i have just financial issues from several years back now. i guess i'm afraid to take that step and bring my trash into the business that i had from my previous business. it's like i just have been stuck for so long financially and i don't want to be stuck anymore. i want to stick in my lane of what i'm good at and not have to take care of everything. lemonis: do you feel like you're carrying the full bucket of water? ryan: yeah, every day. lemonis: you're raising your son by yourself? ryan: yeah. lemonis: and you don't own any of the business? ryan: right. lemonis: when you think about all the pressures that ryan is dealing with, not only is he having to manage
every single step of the manufacturing process, but when he closed down his previous business, a number of financial liabilities followed him. and when they set up this new company, wendy ended up taking 100% of the equity so the previous creditors couldn't attack the business. once all those things get cleaned up and we can figure out the manufacturing process, i think a lot of the pressure that ryan is feeling today that's suppressing his creativity could be unpacked and unlocked. is there any other part of the business, or this is it? is there anything in the back? alphus: yeah. wendy: we actually have three woodworking shops. they're all contractors that we use on a regular basis. lemonis: they're not your labor? wendy: they're not our labor. lemonis: they're subbed out. wendy: exactly. lemonis: is that how your whole model works? wendy: yes. lemonis: i'd love to see a job that you guys have in progress. do you have one that's out there right now? wendy: yes. ♪♪
ryan: watch your step. wendy: there you go. ryan: this is a work in progress. this is a murphy bed lemonis: who does the designs? ryan: i spend the time and i draw it out by hand. lemonis: i'm super impressed that you did that. ryan: i just need to make the template and then i give it to our builder. so we have eight-inch solid wood on the sides, and we're going up with the pattern and then we're going back down. lemonis: it's clear to me that ryan really does understand his craft. he understands how to design things in his mind and on a piece of paper. the problem is you can't get to scale off a hand-drawn piece of paper. and so ryan's going to have to adopt the cad system, which is going to make things precise down to the millimeter, which will ultimately improve production and profitability. the first missing element in the business is you need to take your ideas and bring them to life in a technical way on the computer. it just automates everything. ryan: i like it. wendy: i do, too. man: ♪ are you ready ♪
♪ you know i've got to see you show your hand ♪ ♪ are you ready ♪ lemonis: any financials to look at? alphus: yeah, this would be for the last three years. lemonis: alright, so in 2018, you have revenues of $1.63 million. in 2019, $1,387,000 of revenue. 2020, million dollars of revenue. and a 20% drop down to $125,000. ryan: yeah. wendy: we did run into issues with covid because people would not be at work. lemonis: how much money is in the bank today? wendy: we have about $5,000. lemonis: why do you only have five grand left? alphus: mostly because we have a ton of projects that has delayed delivery. lemonis: if you don't start with enough working capital, you start out like this, then you go into this big hole, and then you start moving money around like a shuffleboard and it never gets its head above water. you got to have that bridge. where we started, where we went down, where we went up, and i think the best way to do it is just to start with what the balance sheet is. so the assets are how much?
ryan: our assets are $126,000. lemonis: and your liabilities are? ryan: total liabilities is $204,000. lemonis: meaning that your business has negative tangible net worth of $78,000. you mentioned something outside to me about your financial garbage. how much is the garbage that's out there that you keep describing? ryan: it's $35,000. lemonis: okay, what else do you have out there that's the quote/unquote "garbage"? ryan: sales tax at 45k. lemonis: okay. i'm going to take these numbers tonight. i'm going to digest them, and we'll see where we go from here. wendy: okay. lemonis: we'll see you guys tomorrow. ryan: alright. wendy: thank you so much. lemonis: you got it. woman: ♪ keep asking who's gonna save me ♪ ♪ you know i just might be ♪ ♪ a hero sometimes ♪ ♪ i'll be strong when you're weak ♪ ♪ and i even might fly ♪ lemonis: hey.
how you guys doing? ryan: good. wendy: i'm just -- i'm excited. lemonis: i am, too. so we went over a lot of numbers, right? ryan: yeah, we did. lemonis: good revenue. a killer job keeping your head above water the way that you did in this environment. so lots to celebrate, right? wendy: yeah. lemonis: there are two issues for me. there's the money from the past, the $80,000 that was from a business that didn't work out the way you wanted to. there's a deficiency of about $80,000 in the actual business, and solving for those two problems give the business the ability to get a semi-fresh start. wendy: yes. lemonis: how much money do you think the business needs? wendy: i'm going to say $600,000. lemonis: i don't think the business needs more than $200,000. ryan: okay. lemonis: and so my offer is... $200,000 for 20% of the business. wendy: i'd like you to come in at more. because you don't manufacture and you don't have much overhead, it's less than it would be if you had all those things. wendy: ugh.
lemonis: how late is this job? nathan: three months, lemonis: that's a real problem. that would piss me off if i was the customer. wendy, you have to step up or you're going to burn him out and the company's gonna close. welcome to allstate. (phone notification) where we've just lowered our auto rates. ♪ ♪ ♪ ♪ and savings like that
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get to where we're at. lemonis: okay, the guy's is really talented. wendy: he is. so i'm wondering if 40% would interest you? that's the maximum i'm willing to invest -- $200,000. and so my offer is $200,000 for 20%, so the two of you will own 35% each. i'll own 20%, imani will own 10%, and we'll charge forward. ryan: i think this helps stabilize us. yeah. wendy: right. lemonis: we have a deal? wendy: we have a deal. lemonis: okay. i'm going to give your sister the money. ryan: probably a good idea. wendy: [ laughs ] lemonis: i'm excited. wendy: alright, partner. lemonis: awesome. alright, guys, i'll see you soon. wendy: thanks so much. ryan: thanks, marcus. we are drained. i think our valuation did come lower than we anticipated.
wendy: but, you know, i feel comfortable with where marcus came in because i feel like he wants us to grow together. man: ♪ i will carry you home, back to the fold ♪ ♪ shoulder this load in the skin and bones ♪ ♪ dark days are over, our love will survive ♪ ♪ sing you to sleep ♪ ♪ i'm gonna carry you home ♪ lemonis: good morning. wendy: good morning. lemonis: well, i wanted to recap for you guys what we talked about and have imani understand exactly where we are and hopefully where we're going. alphus: alright. lemonis: so, we made a deal for me to invest $200,000 into mod barn. i'll own 20% of the business. they'll each own 35% of the business. obviously, that adds up to 90%. do you guys want to tell him what we're doing with the other 10%? ryan: we want to... wendy: we want to bring you in. ryan: bring you, yeah. wendy: as a partner. alphus: as a -- are you serious? wendy: yeah.
alphus: [ laughs ] wendy: american dream, buddy. alphus: thank you, guys. lemonis: any time i go into a business, i'm looking for somebody to be a steward of the capital, and i don't feel like wendy and ryan necessarily possess that. imani had a really strong knowledge of the broken process, of the numbers, and he seems to be all rooted in structure. alphus: i mean, it was a surprise today. i left behind everything i know, and i was like, "wow, one day, i want to be a business owner." so, yeah, all this is emotional, 'cause it connects you back to -- to your roots and your job. lemonis: here are the things that i want to think about. number one, we're gonna put a really refined process around determining what products are going to get made, and then we're going to put science behind them. we also want to find a fulfillment partner on the east coast so that as online orders come in, it goes right to the vendor, the vendor makes it on their cnc machines, and it gets delivered, okay? wendy: i love it. lemonis: the next thing i want to do is really make sure that when customers communicate with us, they go into a funnel, and the only way to do that
is we're going to empty out this entire room and we're going to build it as if it's a living space. alphus: wow, that's super cool. that's a really cool start. now the hard work begins. ryan: yeah. alphus: 200k, fix all this stuff. lemonis: so the goal is we're gonna take out everything that's in here. we're going to redesign the space and then we'll measure five rooms, alright? so let me get the movers. guys, you ready? let's move out. ♪♪ let's go. let's go. ♪♪ watch yourself. wendy: i'll take the little stuff. [ chuckles ] ♪♪ you just kind of have to shimmy it. man: yeah, i see. ♪♪ lemonis: watch your fingers. ryan: oh, yeah.
lemonis: so room number one. alright, so then we come over here. i'm going to reimagine the showroom so when a customer enters mod barn, they're going to see five distinct rooms, five different offerings with different floors, different furniture, displaying all the functionality that mod barn can execute on, each one having its own theme -- floor, wall color, and murphy bed configuration. there will also be a dedicated area for customers to see paint swatches, fabrics, different types of woods, and hardware so they can customize their purchase. alright, so that's four and five. i'm going to want to drywall the walls, drywall the ceiling. we'll wallpaper. we're going to decor it, and then you collect all the bills and i'll give you the money. deal? alphus: perfect. ryan: deal. lemonis: okay, you're in charge when i'm not here. river: i'm 100% in charge, okay? lemonis: [ imitates explosion ] raphael: ♪ don't leave me hangin' ♪ ♪ swing over to me ♪ ♪ don't leave me hangin' ♪
lemonis: hi, guys. ryan: hey! lemonis: this is a spectacular space. how are you? i'm marcus. nathan: hi. nathan. lemonis: nice to meet you. nathan: thank you for coming by. lemonis: unbelievable space. so when i think about mod barn's businesses as they've explained it to me, it has a bunch of different components in it. one of them is this idea that they're in the commercial business. and so i asked them to bring me to one of the spots that they're actually doing a commercial job because it represents a significant portion of their annual revenue, but i also want to understand what the process has been like for the customer. what did you guys build out here? ryan: all of the cases here. lemonis: wow. ryan: the cases there. lemonis: so beautiful. have there been any delays on your side? wendy: nathan had a construction delay, so that sets us off a little bit. nathan: why would his construction delay affect your production? because you could produce in-store. wendy: we could, but monetarily, we couldn't sit on the furniture. and we were storing it because we didn't have the space.
we're storing it in a storage facility. lemonis: so your lack of working capital created a cog in his wheel? wendy: yes. lemonis: how late is this job? nathan: i would say about three -- three months. three to four months. lemonis: and so what is your missed revenue opportunity by not being in here? nathan: i say we're burning about $12,000 a month sitting here. lemonis: that's a real problem. that would piss me off if i was the customer. wendy, i'm going to put a little bit of this on you, and i would apply the same thing to you. alphus: 100%. lemonis: and i think this is the moment where you have to step up and really provide the structure and the leadership and the support, or you're going to burn him out and the creativity is going to go away and people are going to stop buying the products and the company's going to close. can you guys stop for a minute, 'cause i need to talk to them. i couldn't tell you how annoyed i am by your e-mail. alphus: yes. lemonis: if we're gonna have an environment where you're protecting them from me,
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lemonis: i think the three of you really yneed to get your act together and the lanes need to be defined and you need to take your expectation of each of yourselves individually and of your business to what this looks like. this is the gold standard. super proud of the work. i'll see you guys back at the shop, okay? wendy: thanks so much. ryan: thanks. ♪♪ woman: ♪ it's a beautiful life ♪ ♪♪ wendy: so, i've been having meltdowns. lemonis: you have? what's wrong? wendy: we need to get customers furniture, you know, and i've made so many excuses. lemonis: there are people that have placed orders. wendy: yes. lemonis: and you don't have the capital to buy the raw materials to finish. wendy: to get it out to them. we probably have about 70 orders in. alphus: hello. lemonis: hi. alphus: how are you? lemonis: good. we're just talking about money. alphus: money, money, ah. yeah. it's -- it's been a challenge for us.
lemonis: i think what has to happen is we got to get some money in the account so you can breathe. and so how much do you think you need as a short-term advance? just for the business? wendy: just for the business? i'm gonna say for raw materials and build, maybe $27,000. that's going to take care of our backlog. alphus: yeah, but then there's also a sales tax. lemonis: you guys should think together, 'cause i'm going to do it one time. wendy: right. lemonis: you can't come back a week later, so i would say do it right one time. wendy: right. lemonis: so what's the number? alphus: $34,000. lemonis: just to summarize, i made a deal to invest $200,000 into mod barn, and normally, i would advance that money right away. but because we're dealing with ryan's past-due liabilities from his previous business and sorting through all of that paperwork, i'm holding off until that's finalized. but now they're asking me to advance the money to deal with customer deposit issues because those jobs aren't getting done. now, it's a huge risk for me to just give them this money. but i also know that it's a bigger risk not to take care of the customer. alphus: thank you, sir. appreciate it.
lemonis: so that should give you some breathing room. i would say we want to get this place built out as fast as we can, and you'll have the cash to do it. so there should be nothing holding it up. just need to be clear. there's no coming back every week. alphus: no. lemonis: and now we're gonna get to work. woman: ♪ california sun is setting and ♪ ♪♪ ryan: what's up, river? what are you doing? river: drywalling. river: can you guys take them over to green goddess? he just ordered these as dividers for the drawers. lemonis: ryan really does have his work cut out for him in getting the showroom ready. between drywalling, staining, wood cutting, prepping the floor before these five individual rooms can even be installed. woman: ♪ turn, turn, turn to me ♪ ♪ wait for you, wait for you to ♪ ♪ turn, turn, turn to me ♪ alphus: are we agreeing on the budget?
what i want to understand, though, is how did you arrive to that number? ryan: so i'd say $2,000 on that one, wendy: i'm going to say that was closer to $1,500, each piece on that. ryan: i think i'm closer to $7,000, actually, with the -- 'cause i was missing that. alphus: it's been frustrating over the last couple of weeks. obviously, we're doing the showroom. we've kind of lost a lot of potential revenue, and so that's frustrating for all of us trying to figure out how to pay the bills and keep the lights going. ryan: i think we're going to add another $4,000 -- rugs, accessories. so we're like at $50-- say $55,000 for the entire showroom. alphus: tell marcus. we need cash. you guys figure it out. the disconnect is what the business can be and what the business should be. lemonis: hey. wendy: hi. lemonis: can you guys stop for a minute, 'cause i need to talk to them. so, to be honest with you, couldn't tell you how annoyed i am by your e-mail. if you're looking to take your business to the next level,
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customer deposit -- wendy: $34,000. lemonis: whatever the amount was. and then you send this e-mail like, "our whole world's been turned upside down and we don't know what's going on here." it was a week ago. i wanted to head back to mod barn because i got this e-mail, and imani is claiming that they're spending all their time and all their money working on the buildout of the showroom. what they tend to forget is that i gave them $34,000 to deal with all these backed-up jobs. what is actually happening here? what i think is that they miscalculated their numbers -- again. let me just read it to you with how i read it. wendy: okay. lemonis: i'm normally calm. i'm not calm, so i'm going to try to get calm. "so financially, we've just jumped off a cliff and have no idea who is going to catch us or the plan to do so." when people start to see me as nothing more than a check, the relationship is broken from the beginning and it usually ends up dead on arrival. it was offensive, and in most cases, most people that do what i do
would basically tell them to pound sand. let me keep reading. let me keep reading. "my job is to protect the financial interests of wendy and ryan." no, your job is to protect the financial interests of the business, which includes me. alphus: yes. lemonis: and so if we're gonna have an environment where you're protecting them from me, i'm out. you're quick to the trigger. before you press the send button, let somebody else read it. alphus: okay. lemonis: he needs to connect his reaction time, and what he says, he needs to process that through his filter first. people want to know how they get to the end and they forget that there's all these other steps in between so they can learn. if you slow down for a minute and if we agree that in 10 days you're going to do one thing and in four days you're going to do another thing and in six days you're going to do another thing, that each one of those stages has lessons inside of them. were, like, acting like a team right now. and we're leaving marcus out, which he's a big part of our team. he's an important part of our team -- lemonis: equal member. ryan: equal member.
and i feel like that e-mail -- i mean, if i read that e-mail, it would really put me in a bad place. alphus: got it. i'll work on my communication. lemonis: everybody's got to chill it out, okay? i'm gonna grab something, and i'll meet you guys in front in a few minutes. wendy: okay, perfect. ryan: sounds good. lemonis: okay. wendy: yeah? lemonis: it looks better. i'm gonna draw my plan for you right there on the wall. i wanted to show them the funnel process from the moment a lead comes in, how it needs to be processed. with the funnel system, the customer inquiry will go into wendy's sales process. the next step is for ryan to design the product for the customer to review and approve. once approved, it will go into a cad drawing. that cad drawing will then get send to a manufacturer in that local area, who will make it, finish it, and deliver it to the client. this process will all be supervised by imani. ryan: this is a great plan, yes. alphus: yes, thank you. how much additional cash do we need
specifically for this project? alphus: we haven't finalized a budget. it's a hard -- that's why i need clari-- 'cause i don't want a miscommunication with you, marcus. lemonis: is there more customer issues that were not resolved in the $34,000? ryan: i think we were about $10,000 off on that. lemonis: so i'm going to give you 41 grand. so how much money will i have given you when i give you this check? alphus: $75,000. lemonis: i would say we want to get this space built out as fast as we can. ryan: alright. lemonis: and and you'll have the cash to do it. ryan: right. ♪♪ keep going, you got to make that one bigger, okay? it's the primary. i'm gonna help you out with it, okay? river: [ laughs ] ♪♪ ♪♪
♪♪ lemonis: whoa! ryan: hey. lemonis: this came out good. ryan: yeah. lemonis: how are you feeling? are you all by yourself? ryan: yeah, my son's with me, but -- lemonis: i do worry that you're by yourself here a lot. and it feels like there's this theme, which is it seems like all the burden falls on you all the time. ryan: the day-to-day burden does definitely fall on me, yes. in an ideal world, yes, i would have more help here. it does get a little trying. i work 12-hour days, five, six days a week, and i could use an extra hand, that's for sure. lemonis: i'm super proud of the fact that you're always grinding, and it shows. i'll see you a little later. ryan: appreciate it, marcus. lemonis: great job as always. ryan: have a good day. lemonis: you too. man: ♪ we own the night ♪
♪ we own the night ♪ ♪ we gon' own the night ♪ alphus: whoa, that was literally a surprise. wow. [ laughter ] lemonis: wow, look at all this. what's funny is this space looks a lot bigger. ryan: i like the transitions. this pattern, it makes you flow into the store. yeah. alphus: he's a genius. alphus: he definitely is. so, imani, are you helping with these projects? alphus: yes, i'm doing most of the costing for all our materials and raw labor and how that's coming together. there's obviously been a significant drop in cash flow because of the remodel. i am in a hurry for the showroom to be open because the revenues are down. lemonis: the revenues are not down because of this room. the fact that imani believes that revenues for the entire company are down because we're renovating a 1,400-square-foot space is nonsensical. the way the sales process works, revenue is generated months and months and months in advance, and what they need to focus on is actually fulfilling
the balance of those orders so they can collect the balance of the revenue. in order to generate new revenue, the showroom is necessary, and sometimes in business, you have to take a pause for one part of your business so that you can actually accelerate for the rest of time. imani just wants to blame people. what i need him to do is solve problems, not point fingers. i have not hesitated to give you money one time. i worry that you're thinking about this differently. you tend to cast something negative before you provide the solution, and you did it here with me today by telling me that me coming here and tearing apart your very spectacular showroom has hurt your business. alphus: yes. lemonis: and i would argue with you that the reason your business was already about to close is because you didn't do it right the first time. tonight is really kicking off what the next four or five years are going to look like. is it finally done? okay. i have a lot of anxiety.
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lemonis: i would argue with you that the reason your business was already about to close is because you didn't do it right the first time. alphus: 100%. lemonis: we're almost home. you got to slow it down, man. how are we doing on cash right now? alphus: we need 34k for the showroom, we need 54k for ryan's previous obligations. lemonis: so my total investment was $200,000. alphus: you put in 75k thus far. lemonis: so if i write you a check for $125,00, you're cleaned up with your stuff. the showroom's built out. the old customers are taken care of.
and we at least have a clear path. and i don't want to talk about money anymore. alphus: yes. lemonis: i think you're a ball breaker. alphus: a ball breaker? lemonis: you know what that is? alphus: no, i don't know. what does that mean? lemonis: it's like a nutcracker. alphus: am i the nut? oh, i'm the tool. lemonis: no, we're the nuts. alphus: oh, my goodness. lemonis: sometimes you break our balls. alphus: he called me a ball buster, which is terrible. i think for me, i have to be a better listener, or sometimes i need to take a back seat and trust the process and focus on what -- like marcus has been saying the whole time. stick to my lane. lemonis: are you sure you want to do this? alphus: 100%. lemonis: okay. alphus: i have never been so pumped. lemonis: is that pumped looks like? what does it look like? alphus: oh, i don't know. lemonis: is it fired up?! alphus: it's fired up! lemonis: there you go. alphus: i'm ready, i'm ready. lemonis: now go cash the check and fix your numbers. alphus: alright, we'll do that. lemonis: see you soon, guys. ryan: alright, thanks. alphus: oh, man. killing me, ryan. i thought me and you are like... ryan: you're throwing yourself under the bus, man. alphus: how am i throwing? ryan: [ laughs ] ♪♪
lemonis: hey, hey, hey! wendy: how are you? lemonis: welcome to my hometown. wendy: wow. this is great. lemonis: this is like a vacation, but not really. how are you, buddy? we're here in miami, and i brought mod barn to grafton furniture. it's a business i invested in about five years ago. i'm looking to add grafton to the funnel for mod barn as an east coast manufacturing partner. okay, so i want you to think about grafton as your east coast manufacturing partner. we want to learn how do you manage the jobs that you've already accepted, how it goes from basic drawing to production out the door. alphus: partnering with them as a manufacturing entity will be super nice. wendy: i think that sounds fantastic. ryan: i'm ready to see the shop. lemonis: are you ready? wendy: yeah, let's do this. lemonis: we're gonna head this way. come here. look at this, ryan. ryan: wow, this is impressive. wow.
lemonis: so this is final inspection and photography, so every job gets photographed for the catalog. it's cool, right? ryan: very cool. lemonis: how are you doing, my man? grafton: how you doing? lemonis: this is ryan. grafton: ryan. ryan: i like your name. what's up, ryan? lemonis: so we have what we call a stoplight program, where it's either red, green, or yellow. every job they have is in an envelope. they know where it is. they know what's happening. it tells you where they're at in the process. every single job. alphus: i'm super impressed. ♪♪ lemonis: i want you to hand sketch a very simple wall unit with a murphy bed. ryan: okay. do you want all measurements and everything? adam: i just need quick dimensions. ryan: alright. adam: so, you hand it to me. go in my computer. so from here, you can start seeing kind of in 3-d how everything's supposed to be looking. wendy: so, it reads this program. adam: it reads the program. alphus: so will that be something you'll be open to support us.
lemonis: are you really asking me for a another check? alphus: no, no, no, no, no. i'm not asking for a check. lemonis: it sounds like it. grafton: here is our cnc machine. al i've never seen one. adam: once we do all the programing inside the actual design lab, we send all the information to the computer. this tells the machine all the coordinates of how to cut it, how deep to go into and how fast to cut. it's amazing. lemonis: historically, mod barn has been selling exclusively on the west coast, so i wanted to bring them to miami. this will give them not only a manufacturing partner on the east coast, but it will allow them to expand their customer base. grafton: the cnc machine does the work of a carpenter's eight-hour day in about 20 minutes. ryan: no way. lemonis: if you're out of the manufacturing business, you become a sales engine, feeding it to people like them to execute it on your standards, but going into their process. you know where i see you, imani? alphus: yeah.
lemonis: all you have to do is watch the money, the margins, and the workflow. you're lifting the entire burden, imani, off of them. alphus: having followed the journey over the years, and now with marcus's involvement, i definitely feel even more empowered to actually put these things in place. ♪♪ ♪♪ lemonis: tonight is really kicking off what the next four or five years are going to look like. and is their presentation to the marketplace? is this the beginning of a well-oiled machine? i have no idea what it's going to look like, and i think my biggest question is is it finally done? let's take a look. ♪♪
okay, this is it. i have a lot of anxiety. i know that the last 90 days were very hard for you guys. when you look at it today, i hope you feel that this was worth the time investment. for exclusives, extras, and business advice, visit... with directv stream, i can get live tv and on demand... together. watch: serena williams... wonder woman. serena... wonder woman... serena... wonder woman... ♪ ♪ ace. advantage! you cannot be serious!
it's beautiful. oh, my gosh. this is awesome. alright, so let's go through each room. this is room one, right? ryan: yes. it's a sitting area. so it's a nice reading -- little nook. lemonis: this is killer. ryan: storage on top. it's bleached walnut. lemonis: does this turn into something? ryan: it does. wendy: wait till you see this. ryan: want to see this magic right here? lemonis: oh, my gosh. i think your choice of colors and accessories and the imagery is perfect. which is room two? river: the toy store. lemonis: this is the most important room here, right? alphus: yes. river: this is the wall bed. and then this is, like, a little playhouse. so you just go up here. and then -- and you can, like, change the colors.
lemonis: so you can sleep, watch tv, read. river: mm-hmm. lemonis: and parents can see you inside. river: you could build legos on here. lemonis: right on the wall? river: uh-huh. ryan: alright, here we go. lemonis: this is pretty awesome. what's interesting about it is the way you built the structure and the floor plan, if it was a girl's room, it's a matter of changing the aesthetic. but the functionality is the same. you've really given people the interchangeability of stuff. wendy: yes. lemonis: let's go to this room. this is room three, right? ryan: normally, you'd have a seat here and this could be your desk. lemonis: okay. ryan: we have any image that you want printed right onto wood. so you're sitting at your desk staring at your favorite vacation picture. and the bed opens. nice and easy. wendy: the rest of the imagery. ryan: and then you have a lot of storage in there. lemonis: i love how you used imagery to not make it so flat. choice of woods are great. the choice of colors are great.
so this is room four. where's the bed here? holy... ryan: yeah. lemonis: i didn't think that was coming. i thought i was gonna be the pull-out. oh, that's just beautiful. ryan: we have nice little cubbies in here with a charging port on both sides. lemonis: i think the thing you guys did really well is your use of color and your use of different materials. a-plus on this room. wendy: alright, space five. ryan: by day, you have your office. lemonis: i did not expect that to pull back, and i like the fact that you can just say, "thank you. goodnight." ryan: yeah, exactly. lemonis: really smart. okay, what's on this side? love it. really beautiful. ryan: another cubbie power port. more storage. lemonis: i love the fact that mod barn was able to pull out different resources from grafton, and they're now using technology here to design things. you can see that the edges are straight,
the measurements are straight. when we first came in here, it looked like hand sketching because when you walked into the space before, nothing worked. so this is really the client table like we had in the design studio in grafton? ryan: yeah, this kind of was an inspiration. wendy: yeah, we have the wood samples we can pull out. lemonis: fabrics. oh, wow. there's, like, stuff to pick. ryan: yeah. there you go. and then we have different wall bed faces that we can switch out. these are all removable. lemonis: it feels like you guys have gone from a woodworking shop to a design studio that happens to actually know how to source the rest of this. and the way that you used lighting and flooring and rugs and accents and wallpaper and colors, it tells me that you understand every single consumer. that's what this space tells me, is, like, doesn't matter what your budget is, we can solve any problem for you. i know that the last 90 days was very hard for you guys. when you look at it today, i hope you feel that this was worth the time investment. wendy: we feel amazing.
ryan: i am so proud of us. it blows me away just looking at what we've done. and i really just -- i appreciate the mentoring that you've provided through this process. lemonis: so now you're ready. i think the most important takeaway for the business is that they fought me all along the way. but as you stand here today, as painful as the process was, in the end, they realized that they're a better business for it. they learned how to work together and they took advantage of the opportunity to take this investment and transform not only the physical part of their business, but the mental part of their business. and as uncomfortable as it was when they kept having to ask for money, i would expect their ability to generate revenue out of this showroom, both online and in person, to be double what it was. the payoff -- tremendous. okay, guys. alphus: alright. lemonis: be in touch. alphus: we will. lemonis: be in touch.
wendy: oh, man. lemonis: thanks, buddy. i had fun with you. i didn't have fun with them, but i had fun with you. [ laughter ] okay, guys. ryan: alright, marcus. lemonis: be in touch. congrats. wendy: thank you. ♪♪ woman: ♪ they said i couldn't, so i did ♪ ♪ they call it luck ♪ ♪ i call it determination ♪ lemonis: i'm here in salt lake city visiting james edwards. he's the owner of james' gourmet. now, they are a sweet potato pie retailer. now, james really identifies himself as one of the best pie makers in america. let's see what it feels like. is this your big kitchen? james: this is a rented, shared kitchen. i want to build a manufacturing facility. i would like to have that done this year. lemonis: tell me what the gourmet pie batter recipe is. the main product for the company. james: um... i'm [bleep] right now.
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