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tv   The Profit  CNBC  January 11, 2016 11:00pm-12:01am EST

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i couldn't have dreamt it any better. it's just absolutely wonderful. lemonis: ta lighting manufacturer.. brightens some of america's biggest companies. larry: everything you see here is all for national-account work. lemonis: but its future is looking darker by the day. larry: am i supposed to go bankrupt? i don't know what to do. lemonis: a slump in sales has sent the owner into a panic. you can't just be cutting everything and cutting everything, 'cause you cut yourself out of business. and with every desperate move to save the business and his family, he only does more damage. larry: i broke the company. you were right. lemonis: if i can't get him to start acting like a leader... why doesn't larry kind of give out the jobs? jason: he has a habit to micromanage to an extent. lemonis: ...and stop acting out of fear... i sympathize with you, but i kind of don't give a...anymore.'ll be lights out at vision quest.
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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... let's go to work. "the profit." based in long island, new york, vision quest is a full-service lighting manufacturer, handling everything from concept development, design, engineering, and fabrication. larry: make sure it goes in like that. nice and professional. lemonis: for years, owner larry lieberman experienced serious growth, churning out custom fixtures for such big-name clients like abercrombie & fitch, chanel, and universal studios. larry: take it to disney. lemonis: but a recent drop in revenue
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has drawn larry into a vicious circle. jason: high-low is officially dead. larry: oh, no. lemonis: anxious to control costs, he's cut much of his staff, hampering operations and putting even more pressure on the business. larry: we've been waiting a couple of weeks for this. lemonis: i'm excited about this opportunity, because let's face it -- everybody needs a light. and despite its troubles, vision quest has a reputation for innovative designs. larry: this is stainless-steel wire with fiber optic that's strapped to it. lemonis: i'm confident i can help larry find the light at the end of the tunnel and emerge stronger than ever. -hello. -maria: hi. how are you? lemonis: good morning. i'm marcus. maria: i'm maria. nice to meet you. -lemonis: how are you? -maria: i'm very well. lemonis: the owner is larry? maria: the owner is larry. lemonis: is larry here? maria: yes, he's here. i'll get him for you. lemonis: thank you. let him know that marcus is here.
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i really didn't know what to expect when i went to vision quest, and when i walked in, there were some really interesting pieces. larry: hey! oh, my god! -lemonis: how you doing? -larry: bring it in, man! -lemonis: how you doing? -larry: oh, my god! you're here! -lemonis: are you -- -larry: oh, my god! look at you! -lemonis: are you larry? -larry: i am. lemonis: 'cause if you weren't larry, i'd be worried. larry: [ laughs ] -so nice to meet you. -lemonis: nice to meet you, too. that's a pretty cool light. -larry: yeah, thank you. -lemonis: the strainer. larry: it was for a national account. everything you see here is all for national-account work. lemonis: so no retail products. larry: no. lemonis: so, i don't just think about vision quest for just this. larry: no, no. -lemonis: design? -larry: that's the least of it. -yes. right. -lemonis: they say to you, "we have this space, and we're looking for x, y, and z -from a design standpoint." -larry: exactly. -lemonis: "can you make it?" -larry: yes. a lot of our ideas are coming from their inspirations. -lemonis: and you started it? -larry: yes. -lemonis: by yourself? -larry: by myself. lemonis: when? -larry: '96 -- 19 years. -lemonis: wow. -larry: yeah, 19 years. -lemonis: why did you start it? larry: i was a theatrical-lighting guy. i like light.
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lemonis: so, any place you go in, you're looking right away at the lights. larry: i just thought everyone did it, but i've come recently to understand i got a little unhealthy thing with lighting. -lemonis: get to light therapy. -larry: i need light therapy. lemonis: what's that there? larry: so, this is something i'm actually really fond of. the designer said, "i want something with spikes, little lamps on the end." lemonis: what does something like this sell for? larry: this was about $5,600. lemonis: and what would something like this cost to make? larry: 4 grand. lemonis: they're not great margins. larry: not this particular one, no. lemonis: why? larry: um... lemonis: 'cause it's a custom piece, and so, typically, i would expect it to come with better margins. larry: yes. lemonis: did you miscalculate it? larry: uh, yes. lemonis: i'm already seeing my first red flag. if larry is miscalculating the cost of jobs, well, it's no wonder they're in trouble. -larry: this is jason. -jason: hi. -lemonis: jason, i'm marcus. -jason: nice to meet you. -lemonis: how are you? -jason: good. lemonis: what do you do here? jason: purchasing, shipping and receiving, inventory, deal with the subcontractors. lemonis: would i call you the general manager?
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jason: uh, no. my title, i think, is purchasing manager. lemonis: why are you doing all those things if you're just the purchasing manager? jason: other people left, and it just fell in my lap. lemonis: is there a general manager? jason: not anymore, no. lemonis: what happened to the general manager? larry: we could not compensate him for what he really needed to be compensated. lemonis: who's in charge of the books? larry: right now, i guess i am in charge of the books. our bookkeeper quit. that has been a turnover position, because they're the first to see how much trouble we're in. so i had a really great bookkeeper, but she took a better job -- -lemonis: got scared. -larry: yeah. lemonis: meeting jason, you can tell that this is a classic case of a company that's downsized. like many small businesses in this country, they've had to make a lot of very difficult decisions. but those decisions are so that you can survive. i give larry credit for that. [ machinery whirring ]
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larry: this is our raw fabrication area. lemonis: there's so much crap in this building i literally feel like i was dropped in a dump yard. are you a collector of things? are you a pack rat? larry: um... lemonis: 'cause i see stuff everywhere. larry: i am a manufacturing hoarder. lemonis: what is all this? larry: these are, like, samples. like, this is a sample that shows the guys how -- you know, what the part is. it is. it is. it is. it's a sample. -lemonis: okay. -larry: i need that. lemonis: so, what's up here -- the inventory? larry: yeah. so, this is the beginning of all my memories. these are customer inventory, customer inventory. re-sellable. these are a lot of samples. lemonis: when you say "sample," is that code for "junk"? larry: at one point, i was told, "you have $1 million in inventory, the bank will lend you money." that money is gone, but now it's in inventory. lemonis: i think what larry has attempted to do here
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is try to artificially inflate the asset value of his business by collecting all these parts and pieces that, in his mind, may add up to $100,000 or $200,000, but in reality, it's just junk sitting on the shelf. i want to sort of have some time away from larry and talk to the employees about how the warehouse actually functions. very cool. so, what's happening here -- testing? -jay: yes. -lemonis: can i see it go on? so, that's the final product right there? jay: yeah. lemonis: well, what kind of business would i see this kind of light in? jay: a warehouse store. lemonis: like a costco type of...? jason: yeah, yeah. lemonis: so, you guys are not only manufacturers, but you're assemblers, as well. -jason: yeah. -jay: yeah. larry: all right, you take it like this... and you go like that. lemonis: jay, who's the shop foreman out here? jay: i would say right now, it's both of us. lemonis: that's really not what you guys should be doing, right? jason: no, the problem is, we're both dispatching,
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and then we don't get done what we got to get done. jay: right now, i spend more time explaining stuff, you know, to people, how to do... lemonis: why doesn't larry kind of give out the jobs? jay: the thing is, you know, larry's split between -- you know, with everything going on, they're short up front also. lemonis: well, he's out here working now. jason: he has a habit to micromanage to an extent. larry: you know what you're doing here? put these in first. nobody showed you how to do this, huh? lemonis: it's clear to me that there's no leadership here on the manufacturing floor. and larry tries to cover it up by sort of spreading himself thin and doing a bunch of different jobs. but that's not gonna cut it in the end. -how are you? -janelle: hi. -it's nice to meet you. -lemonis: i'm marcus. -who are you? -janelle: i'm janelle. lemonis: janelle, what do you do here? janelle: i'm in charge of sales and quoting and drawing a lot of the initial design concepts. lemonis: do you have salespeople that work for you here? janelle: no. so, i'm an army of one at the moment 'cause of money. -lemonis: money. -janelle: yeah. lemonis: larry got rid of his general manager, and his current saleslady is actually doubling as a designer.
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now, i understand that businesses have to cut costs, but when you cut this deep, you run the risk of breaking bones. so, is there a sales problem here or is there a cash-flow, waiting-for-the-jobs-to-come problem? janelle: it's both that stuff. lemonis: what put this business in financial crisis? janelle: four years ago, we were doing the main line for the national account hollister. they changed their purchasing model. we were doing like $3 million, and right now, we're probably, you know, about $1 million, $900,000 in hollister stuff. -lemonis: with them? -janelle: yeah. lemonis: so you lost $2 million worth of business. janelle: yeah. lemonis: why don't we take a walk? -nice meeting you. -janelle: nice meeting you. lemonis: thank you. -is this your office? -larry: it is. lemonis: okay. we'll go in here. larry: this is really messy. -lemonis: i know. -larry: uh-huh. lemonis: why did you call me, by the way? larry: february 20th,
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i did not get money in that week. i had to go home and tell my wife we needed to lend company money. i've already went to my parents. they already lent me $100,000. i couldn't go back. i couldn't go back. we had some money. we had some savings. it was our nest egg. that's for college. lemonis: college for...? larry: my daughter. she's going -- she's in her senior year, and she's going to college next year. lemonis: you guys were gonna have to take money out of your personal account to keep the company open? larry: $65,000. lemonis: your kids' college fund has become the bank. larry: yeah. you're here 'cause of my family. we need to straighten this out. i think i'm going out of business. i don't know what that looks like. i just lent the company a lot of money. should i not lend the money to the company? am i supposed to go bankrupt? i don't know what to do. and i have people around me that believe in me. they believe in me more than, i think...
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...than maybe they should. because i'm not doing such a great job. lemonis: it's clear to me that larry has the best of intentions. but it's more clear to me that he's made some very big mistakes. he's been cutting staff way too deep and borrowing from his daughter's college fund. this is actually setting himself up to fail even more, not succeed. larry: i have a surprise for you. -anne: hi. [ chuckles ] -lemonis: oh, my gosh. hi. -anne: how are you? -lemonis: how are you? anne: my left hand. nice to meet you. i'm anne. lemonis: anne, how are you? i'm marcus. anne: larry's wife. nice to meet you. -max: i'm max. -anne: this is max, my son. -lemonis: max, how are you? -rhea: hi, i'm rhea. lemonis: how are you, rhea? nice to meet you. larry: isn't it cool? he's so shiny. [ laughter ] lemonis: you are a lot nerdier than i thought. [ laughter ] your kids right now are thinking, "please, dad..." well, i thought maybe i could just talk to your mom and dad for a minute. is that okay? -max: yes. -rhea: yep. lemonis: we had a good conversation this morning about kind of everything, the state of the union here,
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and i wanted to get your perspective on it. anne: i don't always know what's going on with the business. he'll withhold information from me. then something will happen, and i'll be like, "how did this happen?!" we thought everything was relatively okay. lemonis: what did february feel like from your perspective? anne: i just sort of felt the ground had sort of been pulled out from underneath me, and i was a little panicked. larry: broken promise. lemonis: what's the broken promise? anne: well, i didn't feel like it was a broken promise, but... larry: my promise was to anne that i'll provide... anne: well... larry: ...and that i would take care of college, and i feel like i broke that promise. lemonis: how come you haven't locked that money down just to keep it away from him? -larry: [ chuckles ] -lemonis: i'm actually serious. anne: well, i didn't know that i had to. larry: well, hold on. i didn't -- anne: well, i-i -- larry: i didn't go out and just give the money. we talked. -anne: oh, oh, oh, oh. -larry: i didn't just take it. -anne: oh, don't. -larry: uh-oh. [ chuckles ] -lemonis: is that not true? -anne: that's not true. larry: actually, that's not true. lemonis: what is the truth?
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anne: he took it. and then i think he thought -- it was offensive, because i think he thought i wouldn't notice and that he would just put it back. i didn't know how bad things were until that happened. and then we were out for dinner, and he told me that he wasn't gonna be able to make payroll. lemonis: how much is the bank debt? larry: $5,000 plus $75,000, so $575,000. lemonis: and what's the collateral for that? larry: inventory, the house. lemonis: your house is pledged? did you know that? larry: you knew that. lemonis: anne, did you know that? larry: what you're looking at is my attempt to try to diversify the company. lemonis: you put your family at risk so that, what? you can have a warehouse full of crap?
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ch is the bank debt? larry: $575,000. lemonis: and what's the collateral for that? larry: inventory.... the house. lemonis: anne, did you know that? anne: i don't think i knew that. lemonis: i think going forward, regardless of whether we're able to make a deal or not, i think you have to know the facts. would you like to be a part of the financial discussion?
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anne: okay. lemonis: look, i always believe that transparency in business is paramount. but what larry is running the risk of is not being transparent to his partner, both in business and in life. not having full disclosure and having surprises for her is gonna create a level of distrust and discomfort, and it's just not okay. larry: this is the balance sheet as of today. last year, we lost $300,000, and $80,000 before that. lemonis: had you shared this, larry, before i do kind of walk anne through this? larry: no. no. i struggle with it, too. lemonis: the way to think about a balance sheet is the health of the company. so, $1,503,000 of liabilities, $1,950,000 of assets. the total assets of the company are $1,950,000, but the drivers of that are merchandise inventory of $1,237,000. i would say this is, at a minimum, worth half of that amount.
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larry has total assets of $1,950,000. his liabilities are $1,503,000, leaving him with total shareholder equity of $447,000. the assets are being driven by $1,237,000 worth of inventory. but the problem is, i don't actually think the inventory's worth that. i think it's worth about half of that -- $618,500. when you factor in the new asset value against the liabilities, then the real shareholder equity is -$171,500. so that makes the company larry: this doesn't show it, but august and july were good months for us. lemonis: do you know what your total revenue break-even analysis is? what you have to do in sales in a month to make money? larry: around $244,000. lemonis: so, in the month of march, you did $257,000, and you lost 60 grand.
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april, you did $141,000, and you lost $16,000. larry: mm-hmm. lemonis: then you go into may. you did $231,000 and you made $65,000. and so the analytics are so bad... larry: they're so hard. you're right. lemonis: right, and so the only point i'm trying to make, and just put a button in it, is you don't know if july and august were good yet. larry: our overhead has gone down. lemonis: you cannot cut your way to a profit. -larry: well... -anne: mm-hmm. lemonis: you can't just be cutting everything and cutting everything, 'cause you know what ends up happening? you cut yourself out of business. larry: i'm not gonna pretend i have a good handle on this. i don't. lemonis: so, here's what's interesting. i'm very intrigued by the quality of the product that i saw outside. i'm very intrigued by the fact that you manufacture it and that you're not just an assembler. and so the good news is that you're in a business that people need the product that you're selling. i mean, that's something to be excited about. larry: yeah. anne: yeah. -careful! -larry: oh, sorry. [ laughter ]
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lemonis: i know you believe in what you do. i know you have passion. it's not just lighting that you do -- you do art. but there are big voids in very big positions in this business. you cut too deep. larry: right. lemonis: i think you broke it, actually. in any manufacturing business, there is front of house, back of house. and the back of the house needs a leader. they have no conductor out here. larry: no. i know that we've had this void out here. we've tried to fill it. it's a huge issue. lemonis: i'm willing to take a chance on this business. larry: okay. lemonis: my offer is $375,000. but i want 50% of the business. larry: even 50%. lemonis: yep. i want to be equal partners with you. i'm putting up $375,000 to hire new people, pay down debt, and still have some money left over for working capital. but my gut tells me that's just the beginning,
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and that's why i'm asking for 50% of the business. it's a big risk for me. -larry: okay, man. -lemonis: okay? larry: let's do it. let's do it. my grandfather's 101. we're gonna be partners for a long time. -lemonis: you and i? -larry: yeah. lemonis: i think i'm gonna outlive you, though. -unless somebody kills me first. -larry: well, you know... lemonis: which, the odds are pretty good. -larry: [ laughs ] -lemonis: we got a deal? larry: all right, my friend. -thank you very much. -lemonis: game on, man. larry: all right. well, so, we're ready to get to work? [ machinery whirring ] lemonis: jason, let's cut the machines off for a minute, okay? good morning. how's everybody doing? all: good. lemonis: so, larry and i made a deal for me to invest $375,000 for 50% of the business so that we can pay our bills on time,
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have money in the account, and start the process of fixing the business. if we need to hire new people, we're gonna bring them in. do you guys feel like you don't have leadership in the shop? man: very much so. man #2: we're ready to follow, but there's no leader. lemonis: i think the other thing that we have to do is invest in you guys. whether it's equipment, whether it's making sure you have the right tools and everything works. you guys don't seem very enthusiastic or excited. jason: we've heard we're gonna get what we need before. we've had meetings like this. larry: they all have been through this with me. lemonis: are they frustrated with you, do you think? larry: absolutely. anne's not the only family i've let down. i mean, there are people here -- torrey's 18 years with me. you know, 5, 8. we've been through hell. this is the guy who's gonna help us make this happen. lemonis: all right? let's go to work. -larry: all right, guys! -lemonis: thanks, guys. what's all that up there? jason: garbage. lemonis: i wanted to walk through the warehouse with larry and the other employees,
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because i wanted them to sort of validate what i was saying but, more importantly, prevent him from making the same mistakes in the future. larry: this is the sample room. jason: it's more like a dumping ground. larry: you're not cleaning this room. woman: uh, yes, we are. lemonis: you should've called "hoarders" before you called me. larry: what you're looking at is my attempt to try to diversify the company. lemonis: larry... here's what i see here. these boxes are the reason that your business almost stopped and died. you put your family at risk so that, what? you can have a warehouse full of crap? larry: we were speculative. lemonis: this can't happen ever again. it can't. there could be a half a million dollars in garbage here. a half a million dollars. prevented you from getting new equipment, required you to lay people off, required you to go into the tuition account, required you to borrow money from your dad, required you to put stuff on your credit card... required you to call me. larry: it's 19 years. it's 19 years of mistakes. not being able to turn it around.
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lemonis: okay. let's walk. larry: this is really hard. jason: garbage. garbage. lemonis: i've asked the staff to go through all of the inventory and separate out what's worth something and toss out what's not. jason: larry, what are you doing down here? larry: i, uh... jason: can you go back to the office? lemonis: this company cannot move forward unless it has the space. and honestly, neither can larry. larry: listen, i'm a creative guy, and i've got a lot of memories in there [ voice breaking ] that i need -- i need access to. wow. lemonis: look, it's clear to me, as i watched larry sort of melt down through this process, that this is hard for him. he's got his heart and soul in this business. but in order for this business to move forward, he's got to trust the process. this isn't just for the business.
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larry needs this, too. larry: it's 19 years, and you can't just throw it all out. you know where the plastic is? jay: you said you were gonna take care of it. larry: it's supposed to go out monday. i have a slight issue with the hospital light. we're missing a critical component. that reminds me... anyone have occasional constipation, diarrhea... ...gas, bloating? yes! one phillips' colon health probiotic cap each day
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and we're currently around $3 million. brian: i got to be honest with you -- that seems a little light to me for new york. i mean, new york is a half-a-billion-dollar market. what kind of work do you guys do? janelle: we have a full design staff. most of our backgrounds are in engineering and design, so if you need something custom, we have a very wide range of manufacturing capabilities. frank: 'cause that's very important. brian: we're doing an emergency room. they do not have the space for a pendant. they want it surface-mounted. the issue that we have is that the maintenance of the fixture... -larry: is this 48 inches? -brian: 48 inches. but it needs to be maintainable. all the solutions that i've given the hospital, they don't like. i'd like to see what you have to offer me. brian: how quick are you turning stuff around? janelle: when we did the revel casino, they needed, you know, 15 different custom items. we did that in four weeks. -brian: that's music to my ears. -janelle: yeah. brian: just in new york alone, i feel like we could probably double your business. lemonis: we better get our...together.
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larry: yeah. lemonis: i'm eager to get started in building this hospital prototype light for gotham. not only am i excited about the business, but i'm really eager to understand the process for vision quest even better. what is this? how does it work? drew: it's a water jet. -lemonis: it cuts stuff? -drew: yeah. larry: these are actually really old. it's not efficient. lemonis: holy crap. larry: so, this is a manual ring-rolling machine. each time he does a pass, he lowers this. and he has to keep doing that manually. lemonis: so now you got to go back again? drew: yep. lemonis: just got to keep going back and forth. drew: yep. lemonis: oh, my god. i knew that larry's shop floor was inefficient, but i didn't think the machinery that we were gonna be working with was from, like, 1965. look, we'll have to make it work for the gotham job, but after that, we need to actually get equipment from this century.
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i'm taking larry to fabtech, north america's largest trade show for metal forming and fabrication. -look at this. -larry: unbelievable. lemonis: his warehouse is badly in need of an equipment upgrade, and this is the place to take him. what is this thing? larry: we're looking at a co2 laser. lemonis: and what's something like this cost? larry: 355. lemonis: $355? larry: move a decimal. [ laughs ] so, you're getting a speed, you're getting a beautiful edge that keeps us from spending money trying to treat this edge later. lemonis: and what materials can you cut? larry: steel, aluminum... -lemonis: plastic? -larry: yeah. so, all those discs that we do now on our jet, we'll be able to do on here. -lemonis: how are you guys? -man: good morning. mr. lemonis, it's nice to meet you. lemonis: i'm marcus. nice to meet you. trying to get a handle on this product. man: yeah. it's an amazing machine. lemonis: if this took an hour on the water jet, how much time does it take on this machine? man: to cut that part is probably three times faster than the water jet.
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lemonis: okay. larry: with our water jet, first we have a run rate of $60 an hour at our place. this is $8. lemonis: when you say $8 versus $60...? man: electricity, gas consumption -- all the consumables that allow this machine to cut that material. lemonis: so, if it took an hour on the water jet, what do we pay our labor per hour on average? -larry: $22. -lemonis: okay. so i could divide that by three and save 1/3 of that -- around $7 -- in labor costs. -man: exactly. -larry: yeah. lemonis: so i have $15 of savings per hour on labor and $52 of savings per hour on the operation of the machine. -so that's $67 per hour. -larry: right. lemonis: and if you operated it on average eight hours a day, that's a $536-a-day savings. and if you run your business 350 days a year, that's $187,600 in savings a year. $187,000 divided by 350,000 is a 53% return on capital.
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and so a $350,000 investment yields you a $187,000 return on that capital. larry: so we should get two. [ laughter ] lemonis: we should get two. -man: i think we've got a deal. -lemonis: okay. -man: thank you very much. -lemonis: thank you very much. man #2: thank you for your business, marcus. -lemonis: thank you very much. -man: thank you very much. lemonis: historically, you struggled with kind of understanding your numbers. larry: but you're really good at this, so you can do it. lemonis: well, i want you to do it. because i'm not gonna go to every sort of event with you, and i want you to apply this lesson to every single analysis that you do. i don't want to negotiate with them. -you're my partner. we're 50/50. -larry: right. that's right. lemonis: so i need to see you do it. man: this is our delta machine. it's our open-end ring roller. lemonis: how much is the machine? larry: $79,000. lemonis: and we have a machine like this back at the shop? it's the one you and i were fussing with? larry: yes. lemonis: why make this investment? larry: well, what this does is automates the process. man: so, we're ready to run. we pull the program up and we just hit "go." lemonis: it's fast. it's going one time. when we did it at the shop, it took us like 100 times.
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larry: yeah, we couldn't do that in that amount of time. lemonis: i want you to do that analysis for me. larry: all right. am i including the labor, the rate? lemonis: i want you to do the same analysis that i did. larry: okay. so, let's add, uh... so, uh... uh... lemonis: if your business is in trouble and you need my help, log on to... ever since i had a pretty bad accident three years ago. the medical bills - the credit card debt all piled up. i knew i had to get serious my credit. so i signed up for experian. they have real, live credit experts i can talk to. they helped educate me on how debt affected my fico score. so i could finally start managing my credit. now my credit and i - are both healing nicely. get serious about your credit. get experian. go to and start your credit tracker trial membership today.
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i use what's already inside me to reach my goals. so i liked when my doctor told me i may reach my blood sugar and a1c goals by activating what's within me. with once-weekly trulicity. trulicity is not insulin. it helps activate my body to do what it's supposed to do release its own insulin. trulicity responds when my blood sugar rises. i take it once a week, and it works 24/7. it comes in an easy-to-use pen and i may even lose a little weight. trulicity is a once-weekly injectable prescription medicine to improve blood sugar in adults with type 2 diabetes. it should be used along with diet and exercise. trulicity is not recommended as the first medicine to treat diabetes and should not be used by people with severe stomach or intestinal problems, or people with type i diabetes or diabetic ketoacidosis. trulicity is not insulin and has not been studied with long-acting insulin. do not take trulicity if you or anyone in your family
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lemonis: i want you to do the salarry: okay.that i did. the machine run is not a lot of money. so, let's add, uh -- well, with repair -- lemonis: just do labor in this analysis. larry: all right. fair enough. lemonis: one of the things that i like about larry is that he's open-minded and he's willing to sort of learn new things. and so he struggles the first couple of times, but in the end, he has to get it. larry: so, we're gonna save $24 an hour. lemonis: okay. larry: i suspect that this thing will run eight hours a day. lemonis: okay. -larry: 330... -lemonis: 50. -larry: ...50 hou-- days a year. -lemonis: right. -larry: $67,200 savings. -lemonis: okay. larry: now, it's gonna be a $79,000 investment to purchase the machine. lemonis: okay, and your return on capital is how much? -larry: 85%. -lemonis: 85%. larry: do you feel comfortable on this? lemonis: well, do yois the question. larry: i feel great about this. lemonis: shake his hand, make a deal. thank you. thank you for your business. larry: thank you. lemonis: we got a ton of great equipment at fabtech, and the co2 cutter is gonna be custom-made for us. we should get it in a couple of months. we spent well over half a million dollars,
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and i don't mind financing it for them because the return on investment is fantastic. [ machinery whirring ] we've got some great equipment on the way, and i'm loving the progress with the gotham job. in fact, i'm loving the progress everywhere. so, larry's asked me to come in to talk about a potential new hire. larry: this is george. george was with me, and business got bad, and he needed to move on. lemonis: are you back here full time? -larry: we haven't hired him. -george: not yet, no. lemonis: how come? what are you waiting for? george: i'm waiting for you guys. lemonis: do we need him? larry: oh, we would love to have him back. lemonis: so, then, what's the decision? what's your cost per hour? -larry: $30 an hour. -lemonis: $30 an hour. what does our typical guy cost? -$17, $18? -larry: about $18. lemonis: okay, so there's a $12 difference. if you give him a light to make that requires welding and you make a $200 margin on it with the $18-an-hour person, okay? and it takes an hour, if he does it in a half-hour, in 30, did your margin get better or worse on the job?
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larry: well, better. lemonis: larry needs to understand that cheaper isn't always better, especially when it comes to labor. if there's two men that are being hired for a job, one at $18 and one at $30, larry would assume that the $18 employee would be better. but what if that $30 employee could actually do it in half the time, making the effective labor rate $15, a 16% savings over the $18 laborer? cheaper isn't always better. you're gonna teach me how to weld? george: i'm gonna teach you how to weld. -lemonis: do i need gloves? -george: yeah. -you're gonna go across. -lemonis: you stay away from it? george: yeah, about 1/4-inch. there you go. lemonis: that was awesome. george: you might want to hire him. lemonis: i'm $29 an hour. larry: i'm doing the math, you know. [ laughter ] one of the things i wanted to look at was the light output.
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you want to buy something that's dimmable. the ballast isn't hidden. it's easy to access. bolt to bolt. lemonis: we made a light that i expect gotham to be thrilled with. we added a dimmer to the light, and we made the ballast easily accessible. and when that happens, maintenance for the actual owner of the light is even easier. now it's up to larry and his crew to actually finish the balance of the production. we should be able to get it done next week. larry: yeah. [ machinery whirring ] yeah, no, it's not working. no. all right. do you know where the plastic is? jay? can you come here? do you know where the plastic is? jay: you said you were gonna take care of it. larry: drew! do you know where the plastic is for this? drew: no. no. no. why? we needed it? larry: yeah, yeah. this is supposed to go out monday. drew: no one's told me anything. larry: we're about to ship. i'm gonna have to call this customer now and tell him, after i promised him it wouldn't be late. i got to call brian.
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[ ringing ] brian: hello? larry: brian, this is larry from vision quest lighting. i have a slight issue with the hospital light. i'm trying to make this delivery for monday, but we're missing a critical component. we may be tuesday. brian: it is what it is. larry: all right, brian. thanks. -brian: have a good weekend. -larry: you too. bye. brian: bye. larry: spectacular. lemonis: i wanted to get an update on the hospital job. what's the status of that? any progress or anything? brian: i felt that it was good. when we showed the sample to the hospital, they were very receptive. -lemonis: so that went well. -brian: yes. but we had one little thing that turned me off a little bit. larry: i broke the company. you were right. lemonis: you've spent a lot of time kind of admitting fault.
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tell your doctor about any medical conditions, medications you are taking, and if you have kidney or liver problems. using invokana® with a sulfonylurea or insulin may increase risk of low blood sugar. imagine life with a lower a1c. are you loving your numbers? there's only one invokana®. ask your doctor about it by name. working on my feet all day gave min my lower back but now, i step on this machine and get my number which matches my dr. scholl's custom fit orthotic inserts. now i get immediate relief from my foot pain. my lower back pain. find a machine at lemonis: i wanted to get anany progress or anything?ob. brian: we had one little thing that turned me off a little bit. on friday afternoon, i got a call from larry. he couldn't make the meeting on monday, and i set that meeting up a week beforehand, so i couldn't even call anybody to cancel on that monday. we had to push it to the tuesday.
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we saved the sale, but it was a little embarrassing. lemonis: because you put your neck out there. brian: absolutely. lemonis: what's the deal with that? larry: one of the problems here is production flow. it's not always apparent. you know, right now we're going through changes. i have to fill in every gap there is in the entire company. -when we grow -- -lemonis: that's not true. -brian: that's -- -larry: as we grow -- -brian: i got to tell you... -lemonis: that's not true. that's never gonna happen. i'm not gonna allow that. larry: i know -- okay. lemonis: we're given a job by gotham, and we're already late on the first job, and i'm not happy about it. [ door opens ] hey, bud. larry: hey. lemonis: i got to be honest -- with brian, he's not wrong about him being disappointed with the deliveries. larry: yeah, no, i know. i know. it's our number-one problem, is deliveries. lemonis: but why, though? larry: because we started constraining. i broke the company. you were right. lemonis: since you and i have been working together, you've spent a lot of time, you know, kind of admitting fault
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and taking responsibility, which i love. but i think we're now at the point where it's like i sympathize with you, but i kind of don't give a...anymore. i'm scared to bring business here. you have to have a production manager. larry: it's a lot of money. lemonis: but i've given you that support. larry: i know. lemonis: i need you to hire this guy, 'cause if he has a lot of experience... larry: yeah. lemonis: ...he's going to improve the process. so we need that help. -larry: yeah. you got it. -lemonis: okay? thanks. i'm bringing larry to my new sweet pete's location in chicago. after what happened with the gotham job and them missing deadlines, i want larry to get out of the production side of things and focus more on the creative. i have a funny feeling that that's where he's gonna shine. i want you to go in and sort of assess what you think is wrong before we kind of have our opening. and i want you to be honest about what's here, what's not working, what you like, don't like. you're not gonna hurt my feelings.
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i know it's a disaster. that's okay. i'll give you some candy at the end. lemonis: okay. [ both laugh ] as you walk the store... -look at how dark it is. -larry: i mean, this is candy. it needs to really, really brighten up. it's got to hit the product, and then all of that light that's gonna shine off the product will light the store. lemonis: look at this wall, even, where all the yogurt is. larry: it's a general area. we need to bring up this whole area. 'cause there's no individual product. but the decorative stuff -- that's the stuff i'm excited about, to be able to do that, especially in a store like this. it needs to say something about the brand, and it needs to be recognizable on its own. and i don't think it's gonna take a whole lot of money. lemonis: i need it in two weeks. i needed it like two weeago. larry: we can -- you know... i don't want to be too negative, but it is gonna take... lemonis: two weeks. the grand opening's already scheduled for. it can't be late.
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-how are you? -larry: welcome. lemonis: i'm excited to head back to vision quest to see the production with the warehouse, the machinery, and all the jobs. but larry's told me he's hired a new production manager, bob. i can't wait to meet him. bob, i have a question for you. what's the number-one thing you thought was wrong when you first got here? bob: the lack of communication and consistency. -lemonis: okay. -bob: no follow-through. all the information was not there. some of it was still in the engineers' heads, versus looking at the packet and saying, "oh, it's all written here." lemonis: has larry been staying out of your way? bob: absolutely. lemonis: that's a lot of progress for you. -larry: yeah. good. -lemonis: do you agree, janelle? -janelle: yeah. -jay: it's huge. -lemonis: do you guys agree? -jay: no, definitely. jason: we can just go to bob now. we don't have to worry about larry. lemonis: i think the fact that bob acknowledges that larry's been letting bob do his job is a sign that larry's not really managing in crisis mode anymore, and that's a good sign for things to come. show me what you have in the shop. larry: okay.
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lemonis: larry has 12 days to create a whole new lighting look for sweet pete's. and i'm not gonna lie to you -- it's a lot of pressure for both of us. if larry gets this right, then he's got 10 or 20 more jobs. but if he gets it wrong, i'm back to the drawing board, 'cause i still need to solve this problem. today's the grand opening of sweet pete's, and as i look around, there is still a ton to do. i'm not sure if this is gonna get done in time. another larry deadline problem. -larry. -larry: yeah? lemonis: how many hours you really think it would take to get this done? larry: 6:00. -lemonis: four hours? -larry: yeah. lemonis: you realize that people are coming at 7:00? i have tons of people coming.
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and in albany, the nanotechnology capital of the world. let us help grow your company's tomorrow, today at [bassist] two late nights in blew an amp.but good nights. sure,music's why we do this,but it's still our business. we spend days booking gigs, then we've gotta put in the miles to get there. but it's not without its perks. like seeing our album sales go through the roof enough to finally start paying meg's little brother- i mean,our new tour manager-with real,actual money. we run on quickbooks.that's how we own it.
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working on my feet all day gave min my knees. but now, i step on this machine and get my number which matches my dr. scholl's custom fit orthotic inserts. now i get immediate relief from my foot pain. my knee pain. find a machine at
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is i have tons of people the ccoming at 7:00. have it literally is the grand opening tonight. larry: i got it. i got it. lemonis: you're gonna get those up in time, as well? larry: yeah. lemonis: and the store's gonna get put back together? larry: yeah. lemonis: and you're not living in fantasyland? larry: come over here. lemonis: 15 minutes, guys.
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15 minutes. [ glass shatters ] [bleep] they're gonna all go on this half. we are literally racing around the clock here trying to get everything done. larry, five minutes. this is his do-or-die moment, and it has to get done. hi, guys. how are you? i guess we're open. you did it. you met a deadline. -by one minute. -larry: [ laughs ] -lemonis: you did a good job. -larry: thanks. lemonis: what did you do over here? larry: these are gummy-bear lights. these are resin-filled gummy bears. you're looking at 3,500 gummy bears. lemonis: little gummy bears. is the light changing on top, there? larry: yeah. lemonis: you did a great job with this light. i expected creative work out of larry, but i never expected something this fantastic.
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this place is bright, it feels fun, the energy level feels even better than i ever thought it could. what's the biggest difference in larry? anne: well, confidence, less worry. -lemonis: you were sad, larry. -anne: yeah. larry: i didn't realize how bad i was. i was really gonna lose everything. anne: as far as the stress that came to the table originally, it's not about that stress anymore. it's not about, you know... larry: it's not financial stress. anne: ...viability. it's about -- lemonis: that make things easier for you, too? anne: yes, absolutely. absolutely. yes, yes. lemonis: thanks for letting larry and anne sort of come into your business and -- larry: trusting me with this. -anne: be in your way. -pete: sure. it looks a lot better with the lighting. -larry: i appreciate that. -pete: you did it. lemonis: so, i wanted to thank everybody for stopping by. this is obviously a big day. it's an opening of a new store for us, but it's the start of a new day for larry.
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you know, when i first met larry, he told me in his office that he felt like he was letting everybody down. you know, all of us have sort of been in a dark place at one point in our lives, but larry's kind of in a bright place now. larry: yeah. i hope you guys enjoyed seeing what we've created, and thanks for coming out today. -man: thank you. yeah! -man #2: yeah! larry: thanks. thanks, bud. lemonis: over my time with vision quest, i've watched not only the business transform, but more importantly, i've watched larry transform. -larry: come on, marcus. -lemonis: all right. [ laughter ] and i think he's finally settled in and gained the sort of self-confidence that vision quest needs him to have. this company is gointo be very successful, and he's gonna make the employees and his family very proud. [ cheers and applause ]
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a candlemaker tries to tcrack a crowded market" with bold designs. sam: this pre-drip candle is what started it all. lemonis: but instead of breaking out, they're on the verge of melting down. sam: we haven't made a profit yet. lemonis: how have you made a living for the past -- sam: ha! lemonis: their strategy is failing. mark: if we don't come up with like, the story, we don't get these design elements. anthony: i don't think anybody gives a [bleep] lemonis: their resources are dwindling. how much cash do you have in the bank right now? mark: like $600. lemonis: $600. and the pressure is taking a toll. sam: 16 grand in credit cards, which i didn't even know about. lemonis: if these owners can't learn to trust my process... sam: when he hears what he doesn't want to hear, he closes off. it's gonna make me cry. lemonis: ...their business will burn out. my name is marcus lemonis,


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