tv The Profit CNBC August 15, 2016 8:00pm-9:01pm EDT
lemonis: tonight on "the profit"... this is surfside beach, a tourist haven on the south carolina coast, and a place where local businesses love their outdoor advertising. you know what i love about highway 17? anthony: it's a lot of signs? lemonis: [ laughing ] all the signs. i've been called by the owner of a small sign company... -banners? -anthony: all day long. lemonis: backlit, non-lit, front-lit? anthony: i sell a lot of stuff. lemonis: ...who won't be satisfied until he's the biggest vendor in the state. anthony: i want to deal with a lot of national companies. i don't want to deal with mom-and-pops anymore. lemonis: he's incredibly ambitious... anthony: i'm a go-getter. i'm a go-go guy. lemonis: ...but overly confident. todd: how long does this take? josh: probably about three weeks. anthony: we can definitely knock this sign out in a week. lemonis: you guys got to get your story straight. if i can figure out how to check his ego, get him to listen... as a potential customer, i have to worry that you're gonna sue me. anthony: you think so? lemonis: ...he might just get to the top.
my name is marcus lemonis, and i fix failing businesses. if you don't like money, don't follow my program. i make the tough decisions. we're closing the store. we're done. i'm not talking about it anymore. i back them up, spending my own money. it's not always pretty... man: perfect flavor. lemonis: ...but this is business. you got to trust the process. i do it to save jobs, and i do it to make money. thanks for your business. this is "the profit." surfside beach is a picturesque resort town. a great place to vacation and a great place to call home. anthony leggio... [ camera shutter clicks ] ...and his girlfriend, kristen christian... kristen: good morning, asl signs. lemonis: ...moved here from long island two years ago to start a family... anthony: i know, you want daddy time. lemonis: ...and a business -- asl signs. anthony: do you want to finish doing this estimate? kristen: oh, yes, please. anthony: oh, boy. here we go.
lemonis: with a $200,000 loan from his dad, louis, anthony was able to get the sign shop up and running quickly. he's got expensive machinery to make the signs, and the trucks to install them. in their second year of operations, asl generated $300,000 in sales and made a $45,000 profit. anthony: come on. come on, get some work done. lemonis: but anthony wants more. -much more. -anthony: i want to go big. that's why i'm here. to make money. lots of it. lemonis: to get there, he's gonna have to do more than just talk big. kristen: he already told me that he will be in, so... anthony: stop arguing with me. let's just get it done. lemonis: he's gonna have to start thinking smarter. anthony: i just want a deposit. and if you don't like us or our company, we'll refund you back the money. josh: yeah, but all of the other sign companies aren't doing that. lemonis: as an owner of a lot of businesses, i spend over $1.5 million a year on signage, and i know that this industry has explosive margins. if i can get anthony to focus on growing strategically while putting the best process in place,
all signs point to making millions. -anthony: hey. -lemonis: how you doing? anthony: mr. marcus lemonis. it's such a pleasure to finally -- -lemonis: are you anthony? -anthony: yes, sir, it is. -lemonis: nice to meet you. -anthony: pleasure to meet you. lemonis: you know what i love about highway 17? anthony: it's a lot of signs? lemonis: [ laughing ] all the signs. anthony: yeah, new signs, we do a lot of. we just did one, the car wash. i don't know if you saw it on the way here. big l.e.d. board, it was about 32 grand. we just finished it. lemonis: oh, whoa. anthony: customer's really stoked about it. lemonis: now, i don't know your business, and i'm excited to learn it. and so i know a little bit about it, 'cause i buy a couple million dollars a year worth of signs across all these businesses. anthony: i know a good sign company. -lemonis: i know you do. -anthony: [ laughs ] lemonis: but i got to get comfortable with what you're doing. so, what exactly does asl signs do? anthony: we are a one-stop shop manufacturing plant. so we do high volume, low labor. -lemonis: banners? -anthony: all day long. -lemonis: for-sale signs? -anthony: as many as you need. -lemonis: signs on the building? -anthony: absolutely. lemonis: backlit, non-lit, front-lit?
anthony: yep. lemonis: do you manufacture it? anthony: we manufacture the signs. we manufacture a larger scale of things, bigger things. lemonis: that's what makes you different. you're not just a sign company. you're a sign manufacturer. anthony: right. and that's what i try pushing. lemonis: i did not know that. i did not know that. now i'm intrigued. do you like the way this showroom's set up? anthony: i feel comfortable with it. lemonis: the showroom at asl is total chaos. the walls are littered with signs. what i'm seeing in here, honestly, as i walk in, is i don't know where to look. and in order to tell a story effectively to the customer, you need to be clear and give them options. but you have to do it in a way that's easy to follow. yeah, that'd be great. -how are you? -kristen: hi. -lemonis: i'm marcus. -kristen: kristen. lemonis: and so, what's your relationship? kristen: this is my boyfriend. lemonis: and where did you guys meet? anthony: new york. lemonis: who's that? anthony: that's this good-looking guy over here. i even got him on the back of my shirts. it's just a little branding. lemonis: what's "asl" stand for?
anthony: that is actually my initials, anthony sal leggio. or american sign legion, i like to call it. kristen: [ laughs ] lemonis: why are you laughing? kristen: first time i've ever heard the american sign anything. lemonis: it just means he's making it up. anthony: no! no, no, no. i've had that. lemonis: you're totally making that up. kristen: i've never heard you say that, ever. josh: it's always been "asil" to me. lemonis: [ chuckles ] -kristen: asil. -anthony: asil. -kristen: [ laughs ] -lemonis: who made the logo? -kristen: josh. -anthony: josh. josh: it was supposed to be a joke. kristen: [ laughs ] anthony: well, joke's on him because now i'm using it. josh: now it's everywhere. lemonis: and so, what happens when you get married? does the sign-company name change or...? anthony: [ sighs ] if she wants. kristen: i don't need my face on there. lemonis: you don't need to be doing this? kristen: he can keep that. lemonis: building a brand in any business is the key to success. and building that brand around the owner is not a bad idea, as long as the owner is likeable and relatable. it's nice to meet you, by the way. josh: hey, nice to meet you. -lemonis: i'm marcus. -josh: joshua thomas. lemonis: so, you do the designs here? josh: i do all the design work, run the machinery, i do all the production renderings. lemonis: and do you do some of the design yourself as well?
kristen: yes. -lemonis: and does he? -kristen: he tries to. lemonis: she's doing all the work? anthony: all the work. every little bit of it. -she's doing everything. -lemonis: what's mr. asl do? josh: we like to keep him outside. lemonis: selling. josh: no, not selling. like, installations. kristen: just doing the work. lemonis: why did everybody say no to you selling? josh: i think a lot of people see him as being overbearing. -kristen: yeah. -anthony: too much? -kristen: he's overwhelming. -anthony: i am not. josh: he's a hundred miles an hour. kristen: he's loud. lemonis: so who does sales around here? -anthony: us three. -josh: yeah, pretty much. lemonis: they're kind of not including you in that sales loop. kristen: the two of us are always in the office. most of the time, he's not in the office. anthony: we have a couple salesmen, and this crew right here that i have is phenomenal. lemonis: then how do you guys get paid? you get a salary out of the business? anthony: yeah, i just started taking a salary maybe a month ago, two months ago, now that bank account's starting to fill up. -and me and her -- -kristen: i don't get paid. anthony: well, she gets paid through my salary. if she needs money, i give it to her. lemonis: uh, let me see if i understand that again. she doesn't get paid. and if she needs something, you'll give it to her?
anthony: whatever she wants. that's correct. lemonis: [ scoffs ] it's surprising to me that kristen is okay leaving anthony in charge of her personal finances. she's helping anthony run the company and she's not even getting a check. anthony: well, i just started taking a salary, too. i suffered for a long time, as well. thank god my father helped me out with a decent amount of stuff. lemonis: is your father in the sign business? anthony: he was a long time ago. lemonis: right. anthony: and he just retired and gave up on it and just sold everything off. lemonis: oh, okay. you know, can we actually look at some of the machinery? anthony: sure, let's go up front. lemonis: anthony's got a great setup. there are machines that can blow up photographs... ...that can cut letters out of stainless steel... ...and he's got people that can work with the latest lighting technology. with all this in-house manufacturing, anthony has to be generating some serious gross profit. anthony: done. lemonis: man, that would take hours to do it the other way. anthony: see, there's no bubbles in it? lemonis: there's nothing. anthony: it's 450 bucks. done.
lemonis: what's this cost? anthony: what, $45, maybe? kristen: maybe $45 of labor. anthony: tremendous markup on this. lemonis: okay. if the sign costs $45 to make, and it sells for $450, the margin is 90%. because anthony makes the signage in house, he's able to retain all of the margin. seeing numbers like this makes investing in this industry a lot more attractive to me. and so, how does the chain of command here work? anthony: we all try to work very well together. -lemonis: who's the boss? -anthony: i'm the boss. i like to be -- and i hate to say it, i like to say, "hey, i'm the boss, let's just do it the way i want to do it." 'cause at the end of the day, if i make the mistake, i can't yell at them. lemonis: you're laughing 'cause you want to say something. -anthony: it's true. -josh: oh, me? oh, yeah, he's just very stubborn. he'll get upset or frustrated when we say, "can't do it that way, man." anthony: i do listen to all parties. josh: he does. but there is a finite line. "okay, i'm sick of talking about it." lemonis: should be interesting.
i still don't quite understand asl's process -- how they generate business and how those orders are executed. so i walked the floor to talk to some of the employees. -man: sir, how are you? -lemonis: nice to meet you. -j.r.: how you doing? -lemonis: j.r.? -nice to meet you guys. -j.r.: nice to meet you. lemonis: how do you know where the jobs are? man #2: we do all the work, so we pretty much know where everything's at. these signs here, i think, came in -- lemonis: so, when these signs come in, do you know what salesperson they belong to? -man #2: no. -man #3: no. -man #2: that we don't know. -lemonis: okay. the shop seems very disorganized, so i wanted to talk to the sales team to find out how these jobs come in. do you know how to follow up on a lead, or...? edmond: i call back. like, all of these that are here are people that i've talked to that said, "call me in a few weeks," "call me in this time." lemonis: i feel like 1985 called, and they want their sales prices back. edmond: i know. mm-hmm. woman: it's definitely not 100% accurate. lemonis: maybe anthony's father, louis, can shed some light about how anthony runs things around here. lemonis: how much money do you have in here? louis: about $220,000, $225,000. somewhere. -lemonis: for real? -louis: yeah.
lemonis: he hasn't paid you anything back? -louis: no, he has not. -lemonis: oh, my gosh. is there anything that i should know about him, be honest, that would drive me crazy that drives you crazy? louis: i'm from the old school. i'm the old man. so, sometimes he thinks he knows it all, and you have to straighten him out, say, "no, you don't know it all." when i was younger, hey, i thought i knew it all, too. lemonis: yeah. it's a terrible sign that anthony doesn't take advice from his father, especially since his father is his banker. i wonder how he's gonna take advice from an outside party? todd: how you doing today? -josh: good. how are you? -todd: pretty good. i need a sign refurbished. do you do that? josh: we can do it all, pretty much. what kind of a sign are we talking about? -pirateland resort? -todd: main sign out front. -josh: okay. -todd: so, are you the owner? -josh: no. -anthony: no, i'm the owner. -todd: what's your name? -anthony: anthony. todd: anthony. todd. how are you? anthony: this is my card, too. lemonis: you would never do that. todd: is your private cellphone on here? anthony: i can put it on there.
kris, do you have a marker, please? lemonis: how do you get the guy to want to come in, other than just giving him a business card? anthony: i can offer some, you know, free business cards if he signs a sign with us. that's one of the things -- lemonis: no, no, no, no. like, he came in to get what? anthony: a re-face on a sign. lemonis: okay, so, what could you do right now that would get the guy to realize you're serious? anthony: i'm thinking. i don't know. lemonis: his business is a mile down the road. kristen: i would go there. lemonis: why are you not going there? anthony: i don't know, marcus. -lemonis: this isn't a test. -anthony: no, i know. we usually would follow it up tomorrow or the next day. lemonis: i wasn't asking you to change your process, i was asking you to tell me what your process was. anthony: i think we have a good system. kristen: i think he doesn't know what to do. lemonis: i see a customer walk in, i see potential business, and anthony's not doing anything to hustle the sale. i'd like to go over the financials with you. kristen: this is the financial statements through '12 to '13.
lemonis: oh, okay. let's start with that. how much cash is in the bank right now? kristen: right now, i'd say about $75,000. -lemonis: that's pretty good. -kristen: yes. lemonis: and how much in receivables? kristen: in receivables, we have $60,000. lemonis: so, $135,000 in assets. and then how much do you owe people? credit cards, bank loans? -kristen: about $25,000. -lemonis: okay. there's $135,000 on the books between cash and receivables, and there's only $25,000 in debt. for a new business, they're actually doing pretty good. any other debt on the books? kristen: just our debt with lou. -lemonis: anthony's dad? -kristen: anthony's dad, yes. lemonis: okay. and how much is that? kristen: roughly about $200,000. lemonis: and so, i don't see that on the balance sheet. is that not on your books, but it's in reality, or...? kristen: yeah, it's not listed within the company. lemonis: okay, so it's not a company asset, -and it's not a company debt. -kristen: right. lemonis: so, what i'm noticing is, pretty good increase in sales. 2012, $105,000. 2013, $278,000. where are you at year to date now? kristen: right now, we're at $441,000. lemonis: okay.
and what would you say you're gonna finish at? kristen: i'm hoping, you know, between $600,000 and $700,000. lemonis: that's pretty good growth. really good growth, actually. how much is the rent here a month? kristen: $2,000 a month. lemonis: okay. and you guys pay that? kristen: lou gives us $1,000. -lemonis: he pays half the rent? -kristen: yeah. lemonis: i mean, thank god he's here. i mean, you couldn't have started this business... -kristen: no way. -lemonis: ...without him. kristen: nope. lemonis: and does he own any shares in the business? kristen: no. lemonis: you and anthony own the equity? -kristen: anthony does. -lemonis: not you? -kristen: no. -lemonis: okay. looks like you're involved in pretty much everything. -and you're not getting paid. -kristen: right. lemonis: everybody else thinks that they're just owed something, and you seem to just want to just put your head down and work for it. kristen: yes. lemonis: i don't get that same sense from anthony. kristen: i can only say he'll always work as hard as i do. lemonis: yeah. no, no, no. i know him and you are very different. kristen: he's rare. and he loves to have fun. you know, he's not trying to be rude all the time, it's just sometimes it comes off that way. but he's really just trying to have fun. lemonis: the problem is,
people's demeanor rub anybody the wrong way, it's a problem. his dad had said that he's a know-it-all. kristen: mm-hmm. lemonis: that can really affect the business. this is a healthy business, and it's got real potential to grow and to grow quickly. and with any partner, i need to be comfortable. and i have to be honest, with anthony, i have some real reservations. you guys have done a great job. anthony: thank you. kristen: thank you. lemonis: i mean, think about it. it's a $500,000-plus business in 36 months. anthony: yeah, very short period of time. lemonis: you've got money in the bank. anthony, why'd you call me here? anthony: i called you here because i'm looking for that next step in my business. i want to deal with a lot of national companies. i don't want to deal with mom-and-pops anymore. with as many businesses that you own and all the people that you know, that you can bring that. lemonis: but for you to say, "i want to be your partner because you can bring me all your businesses," we could just have a relationship -and you could earn my business. -anthony: right. lemonis: we don't have to be partners for us to do that.
i don't see a need for me. i don't think you're gonna listen. i think you think you know it all, and so, that's gonna be a challenge for me. anthony: no. you don't know me that much well. lemonis: well, i don't know you that much. but everybody else, including your father, told me you're a know-it-all. anthony: well, you shouldn't listen to what everybody else. like you said, you should listen to what you feel. lemonis: well, i feel that way, too. yeah, i mean, look, i think you have a bright future. and you're gonna be fine whether i'm in the deal or not. you're gonna be fantastic. you're gonna be in first place. anthony: eventually. lemonis: what is this time thing for you? anthony: i'm a now type of guy. lemonis: but it's a marathon and not a sprint. i want to be in the sign business because i believe that every single person needs a sign. so i'm getting in the sign business. question is, am i getting in the sign business with you?
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whatre here to buy a car. lemonis: i'm getting in the sign business. question is, am i getting in the sign business with you? anthony: you will be. i'm gonna prove to you. lemonis: how do i overcome you not being the most process-, structure-oriented guy? how do i overcome you thinking you're right more often than you are? how do i overcome all that? anthony: well, if you're willing to take a gamble, i'm willing to prove that to you. lemonis: i don't want to gamble. that's the wrong closing line.
i like to bet on people that i know i can count on. i like you as people. i like your product. i just don't know if i could change the process, 'cause i'm not sure you're willing to let that happen. and so, i haven't done this. i'm not prepared to write a check tonight. i'm willing to dedicate time, roll up our sleeves, look at the process, and fix things. and at some point, i'm either gonna write a check... -anthony: or you're not. -lemonis: ...or i'm not. so i'm gonna put my checkbook away... anthony: mm-hmm. lemonis: ...but i'm not walking away. anthony: that's fine. and i respect that. lemonis: okay? all right. i'll see you in the morning. josh: how did it go last night? kristen: it was interesting. josh: like, what kind of interesting?
kristen: i guess he's having a hard time with thinking he can do business with anthony, and he thinks he's a know-it-all. -josh: did he make an offer? -kristen: no. josh: i can't believe that he didn't write a check. anthony: he didn't want to write a check, so i think... louis: well, hopefully you'll clear up any issues he might have. anthony: you want me to be honest with you? i don't want his money. i don't want his check. i want the business that he can bring. louis: well, if he can bring you the business -- anthony: i can always make money. i can always make more money. at the end of the day, if i don't have the business, i don't have the business, whether he's my partner or not. louis: that's true. anthony: i want him to figure out i'm a go-getter. i'm a go-go guy. there's no -- you know, there's only one speed with me. it's just go. louis: well, tell him how you feel. anthony: and if he's willing to give me $1.5 million a year in what he says he has, keep the money. louis: okay. hopefully i can -- anthony: i'm not begging him. i just want the business. louis: well, let me clean this floor. anthony: yeah, get to work. i'm overpaying you. -all righty. -louis: oh, boy.
lemonis: i'm not ready to do a deal with anthony. not yet at least. but i'm willing to start working on the process to improve the experience for customers. first impressions are everything. if i'm a customer and i'm pulling up, i look at all this crap. look at all this stuff back there. anthony: mm-hmm. lemonis: it looks like a disaster. i called in a salvage company to come clean up all the junk that's lying around anthony's building. while the crew is working on the outside, i want to begin clearing up the clutter on the inside. i'm a customer. "welcome to my store." louis: looks trashy. anthony: yeah, you're right. this can be moved. this can be moved. okeydokey! lemonis: and it's also beneficial that the sales presentation has a central focus or a starting point. what's -- what's that down below? kristen: this is a little guide. some people don't know what type of sign they're looking for. they don't know what it's called.
lemonis: i actually think it's awesome. i'd like to see that thing be this big. and when people come in, "what kind of sign are you looking for?" anthony: boom, here it is. lemonis: that's the first place they come to. and then they want to see a sample of it, then we take them to what it is they want to see. once we have this, we have the start of building a sales presentation over here. i wanted to understand how an order actually went from the beginning to the installation, so i spent a little time with josh while he was working on an order from a tanning company. who picks the artwork? josh: i try to point people in an appropriate direction. people also have their opinions, though. lemonis: let me tell you what my issue is. this is not a good sign. who created that logo? josh: anthony picked the font. lemonis: anthony picked the font? josh: yes.
lemonis: why is he picking the font? i thought you were the designer. josh: that's what he wanted to see. well, i'll show you what i started with. lemonis: this is your original design? -josh: yes. -lemonis: very clean. i can read every letter. and the customer didn't like it? josh: the customer never saw it. lemonis: okay, so anthony came in, not a designer, not years in the business, right? -josh: right. -lemonis: and said to you, "i don't like that design. this is the design i want." josh: yes. pretty much. lemonis: when we're doing creative in the sign business, your odds of getting the customer to come back or refer somebody else are exponentially better -if the sign brings in business. -josh: right. lemonis: i have to tell you, i can read that. -can you read that? -josh: yes. -lemonis: can you read that? -josh: no. -lemonis: no. -josh: no. lemonis: so let me grab him. hey, anthony, i need to borrow you real quick -while they're working. -anthony: sure. yes, sir? lemonis: so, i'm trying to understand, who is the designer in this building? anthony: josh is the designer. lemonis: perfect. so you trust his judgment 100%? anthony: i trust his judgment, but sometimes, when i get that vibe off the customer, i like to put my two cents in. lemonis: you had a vibe from this customer?
-anthony: yeah. -lemonis: they saw this logo? anthony: that was the... no, they didn't see that one. lemonis: okay, so here's the issue. this is a good example of how our business can fall off the rails. we start having you in the design department, and all of a sudden, i have no idea what that says. anthony: okay. lemonis: do you...? anthony: it just looks nice. lemonis: does it look nice? anthony: i think it's fancy. i just think it's pretty. lemonis: truthfully, which one can you really read? anthony: the top one. top left. it's the one josh did. lemonis: and so, you got in here and started changing the artwork. the outcome is, even if the customer likes it, it's bad for their business. they can't see it. you're not a designer. you're not an artist. let everybody do their job. yesterday, a customer came in, and anthony wasn't able to seal the deal. so today, we're gonna go to them and find out what they need and see if we can make the sale.
josh: we could definitely do a cloud. illuminate the logo itself, the pirate. anthony: well, i would definitely -- sorry, josh, to interrupt you, but it needs more pop. josh: well, if we went with illumination, you'd definitely get your pop. i probably wouldn't do the yellow face. i would probably go with white, give you more contrast. anthony: you need as much contrast as possible. todd: but then how would you do that with that type of logo? josh: well, that would be a cloud sign. anthony: this would be the cloud, and this would be cut vinyl. josh: one inch thick, so you'd be looking at the same... lemonis: let him talk. todd: so, how long does this take? lemonis: no, just -- yeah, just let him talk. josh: you're looking at probably about three weeks from beginning to end. anthony: i beg to differ. we could definitely knock this sign out in a week with no questions. lemonis: josh, do you believe that a week's possible? josh: not 100%. todd: okay, now i'm lost. lemonis: you guys got to get your story straight. anthony: in my eyes, you're late. lemonis: i don't work for you. anthony: right. and i don't work for you. i'm trying to show you what it takes to put a sign together. so i would appreciate it if you were here a little earlier. lemonis: who do you think you are?
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for cooling relief in a snap. ♪ ♪ isaac hou has mastered gravity defying moves to amaze his audience. great show. here you go. now he's added a new routine. making depositing a check seem so effortless. easy to use chase technology, for whatever you're trying to master. isaac, are you ready? yeah. chase. so you can. todd: so, how long does this take? josh: probably about three weeks from beginning to end. anthony: i beg to differ. we could definitely knock this sign out in a week with no questions. lemonis: josh, do you believe that a week's possible? josh: not 100%. todd: okay, now i'm lost. lemonis: you guys got to get your story straight. anthony: sure. there you go. todd: okay, we're gonna go for the small letters. lemonis: you got to let people do their job. and so, let josh do his job. when he's talking and you're jumping in and you're jumping in, it confuses the guy in the middle.
anthony: yeah, you're right. lemonis: he doesn't know who he's supposed to listen to. -anthony: i'm overwhelming him. -lemonis: yeah. and so, josh technically knows his job better than -- better than you do, to be honest with you. anthony: okay. lemonis: so let him do his thing. -let him do his job. -anthony: thank you. todd: how much is that sign? josh: um...[ sighs ] anthony: josh, i'd feel more comfortable if you didn't say a price because i don't want you to shoot yourself in the foot. because if you're too low, it's bad business, and if you're too high, it's bad business. -todd: really? -anthony: yes, sir. lemonis: anthony cannot stop himself from interrupting, let alone the fact that he doesn't want to give the customer a ballpark estimate. he's got a lot to learn. todd: i need something to look at. josh: i'll get you something to look at tomorrow. todd: okay. anthony: thank you for your time, again. i appreciate it. todd: thank you guys. lemonis: i repeatedly see anthony micromanage his employees, and he doesn't seem open to change. so i want to get him one-on-one to find out what his issue really is. you have to let people do their job, and you're not doing that.
i think what you need to tell me is, what are you looking for me to do? anthony: i'm not looking for money. lemonis: so you don't need any money? anthony: i mean, the money's gonna help grow the business more, but if you say, "ant, i'm not giving you a damn penny, but i'll give you my business," i'm gonna make the money that way. and that's one of the main reasons why we called you, because i know you can shove more work down my throat than i can handle. lemonis: so, really, what i'm hearing from you is you don't really need me involved unless i'm gonna give you my business. you really don't care if we do a deal or not. anthony: no, i care, because i'd love to have you as a partner. we do need to grow bigger and better. lemonis: but you have money in the bank, so what do you need money for? anthony: because if i buy the things that i need, i'll have no money. lemonis: i didn't come here just to give you money. my job is to help fix businesses. but i'm not convinced that i do or don't want to do a deal yet. i'm just -- i don't know yet. anthony: i would love for you to do a deal. lemonis: would you be willing to do a deal with me if i said you'd never get my business? i'll just help you fix your process, and that's it?
anthony: no. -lemonis: you would not? -anthony: no. lemonis: today, i got a facebook message from a previous customer of asl. he heard i was in town, and he wanted to share some important information about anthony. how you doing? i'm marcus. jeff: jeff hype. pleasure to meet you. lemonis: hey, nice to meet you. so, what's up? jeff: i wanted to meet with you in person so that i could talk to you about your potential investment in asl signs. lemonis: okay. how did you know that i was potentially investing? jeff: surfside beach, in itself, is 2.2 miles long. lemonis: small world. jeff: unfortunately, the owner of asl signs, anthony, actually has a very bad reputation in this town. -lemonis: really? -jeff: yes. he came down here with daddy's money and thought that this would be something that was profitable and needed here in myrtle beach. and it would have been if he kept his temper under control.
lemonis: and you've used him before? jeff: i have. the work that they did was very subpar. the lettering was all crooked, it was bubbled up. lemonis: did they try to make it right? were they apologetic? jeff: no. lemonis: did you end up paying for that sign? jeff: well, he actually sued me. yes. i lost $600. lemonis: and he sued you over $600? jeff: exactly. lemonis: [ scoffs ] jeff: i don't think that there's anything that can be done to remove the tarnish of his name and his likeness being associated with that company with the reputation that he already has. you know, he's gotten up in people's faces. lemonis: that's a big risk. jeff: yeah. lemonis: jeff was sued by anthony, so their history has to be taken into account. but i've been around anthony, and hearing this story, it doesn't surprise me. anthony: try to get them as close as you can. man #3: yeah. you want them all to be the same, okay? since this is the top, that's fine. it needs to come down some. do you understand? -man #2: yeah. -man #3: okay.
there's a lip there, okay? should be good there. anthony: hey, josh. how come you didn't put the box line on here this time? -josh: 'cause i -- -anthony: hey! marcus. lemonis: how you doing, buddy? -anthony: you're late. -lemonis: i'm not late. i don't work for you. you work for me. anthony: i don't work for you yet. lemonis: actually, as a customer, you work for me. -anthony: yes. -lemonis: right. so you work for every customer, right? anthony: that's correct. lemonis: okay, so don't tell me i'm late. anthony: well, when you tell me yesterday -- lemonis: don't tell me i'm late. we're not partners. anthony: don't yell at me. don't yell at me. lemonis: don't commence the showboating, telling me i'm late. anthony: i'm not showboating nothing. in my eyes, you're late. lemonis: i don't work for you. anthony: right. and i don't work for you. lemonis: if you want to start going at it this morning, -we can do it. -anthony: no, no, i'm done. lemonis: 'cause i'll make you look stupid. 'cause you're coming at me already. anthony: i'm not coming at you. you're telling me roll up my sleeves, let's get some work done. lemonis: good, get your work done. anthony: we are. we're cranking all day. lemonis: that's good. awesome. awesome. anthony: i want to show you. i want you to be a part of it. i want you to be a part of it, marcus. i'm trying to show you what it takes to put a sign together. so i would appreciate it if you were here a little earlier, and i would like to show you how -- lemonis: who do you think you are?
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anthony: ...so i would appreciate it if you were here a little earlier. lemonis: who do you think you are? i don't talk to you that way, so why are you talking to me this way? anthony: i'm trying to show you so you know the business a little bit better, okay? 'cause you said you don't know the business that well. lemonis: i want to learn. but i want to learn from somebody
who actually understands the business and has a good attitude about it. anthony: i have a great attitude. lemonis: right now, your attitude isn't good. anthony: i wanted to show you this morning how we put things together. lemonis: i'm gonna go take a walk. anthony: okay. take a walk. lemonis: i've seen anthony disrespect his employees, his girlfriend, and at least one of his customers. now that i've cooled off, i want to talk to him about some of the accusations i heard from his customer jeff. -it's a small town, right? -anthony: you're right. lemonis: and so, if a customer has a bad experience, -people know about it. -anthony: yeah. lemonis: so, i got contacted on facebook by somebody that says that you guys sued him. his name is jeff. jeffrey. kristen: yeah. anthony: i bent over backwards for that son of a... lemonis: i'm trying to point out to anthony that his style can be abrasive, but i'm not sure he gets it. quite frankly, all i hear him doing is blaming everybody else. and in the end, he's gonna be the one that loses. he owed me money. we tried getting our money. he refused to pay us. lemonis: once in a while, ...happens, and you let it go.
but you do not want to have a reputation in town that, if you hire asl to do a job and the job doesn't go perfect and there's a discrepancy, the sign company's just gonna sue you. that's not a good idea. anthony: no, that's not how it happened. lemonis: i'm not saying that's how it happened. i'm saying that the perception exists that you're aggressive, that you're a know-it-all, that you tell people that they're wrong, that you tell people, "you get what you pay for," and that you sue your customers. right, wrong, or indifferent, that's their perception. as a potential customer, i have to worry that you're gonna sue me. anthony: well, marcus -- lemonis: and you told me in the car last night, "i don't want to do a deal with you if you're not going to give me your business." anthony: there's things behind that. it's not just saying, "well, if you don't give me business, marcus, i don't want to do a deal with you." lemonis: that's what you said to me. you think you know it all. you think you have all the answers all the time. it's always everybody else's fault. anthony: no. lemonis: everybody else can't always be wrong. anthony: but there's some things that they're not right about. lemonis: this is about business for me. anthony: yeah, i understand that. lemonis: and i came here to help you fix your business,
not give you a handout by giving you my business. and i'm concerned about the fact that your customers, who are the people in this town, don't like you. anthony: you can't make everybody happy, marcus. lemonis: yes, you have to make everybody happy. anthony: i try. i try, but i can't make everybody happy. lemonis: not in your personal life, you may not be able to make everybody happy, but in a business, you have to make everybody happy. which means that sometimes you got to take a pile of poop and stick it in your mouth and shut up. you called me for the wrong reason. -anthony: you think so? -lemonis: i know so. you don't want to change. anthony: no, i do want to change. if i didn't want to change, i wouldn't have start doing -- lemonis: you're not going to convince me. i don't want to be your customer, because i feel like i've gotten an inside view, from the guts inside out. and you told my crew that if i offered you a check, you didn't even know if you'd take it. anthony: yeah, because i want -- lemonis: well, good news. you're not getting one. i hope that you guys learn this lesson. you have potential. it's not about being the biggest.
-anthony: right. -lemonis: it's not. okay? -anthony: mm-hmm. -lemonis: thanks. anthony: thank you. take care. lemonis: there are hundreds of thousands of business struggling in this country, and they would benefit from help and an investment from anybody, let alone me. but anthony didn't call me for help, and he didn't call me for a partnership. he called me for a piece of my business. well, that was the last straw. this is just one that i was not gonna do a deal with. anthony: i was actually shocked. i didn't think he was gonna do that. i made a lot of mistakes. i apologize to all of you. little upset because marcus kicked me right in my ass, and i needed it. i needed this. inside. lemonis: ...the follow-up -- the deal that i had to walk away from. trust and integrity are everything to me. i'm not gonna do business with you. and maybe a shot for a second chance. sharla: i don't want people to think that i was [sniffles] unethical.
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lemonis: every time i go to a new business, i go with the intention to make it work. like asl signs, not every deal works out. but some may deserve a second chance, like this one. i told you that trust and integrity are everything to me. quite frankly, you blew it. that's sharla mcbride. sharla makes gourmet popcorn out of a small shop in southern california. she sold her popcorn at disneyland and out of three concession trailers. good morning. i'm marcus. sharla: how are you? nice to meet you. lemonis: when i first met sharla about a year ago, her company, planet popcorn, was generating about $2.5 million in revenue. despite low overhead, she was still unable to make a profit. -where's accounting? -sharla: she's counting. lemonis: no, where's accounting? sharla: oh, where's accounting? uh... lemonis: but i liked the product. oh, my god. this is amazing. sharla: thank you.
lemonis: i loved the profit margin. the goal is to go from a $2 million company to a $10 million company. and i agreed to invest $200,000 for 50% of the business. let's get to work. but this was a business that was wildly dysfunctional. the problem is, there's $319,000 missing. where is the cash? sharla: couldn't tell you. lemonis: there were inventory issues. are you kidding me? this is ridiculous. there were production issues. she wasn't tracking or protecting her cash. cash, to me, is the most important thing in business. and protecting it is the most important thing. and her accounting system was like nothing i had ever seen before. do you guys just leave money out? sharla: yes. lemonis: this would be a cool place to rob. my plan was simple. i wanted her to open up a gourmet-popcorn shop in a good location, good systems, and track her revenue. we were gonna redesign her website and build a bustling online business. we were going to expand her presence at disney and liquidate her trailer business.
we're getting out of the carnival business. but sharla pushed back. sharla: i am not comfortable selling off the concession side of my business. lemonis: and she was unwilling to change. sharla: this is my company. lemonis: she even went behind my back to try to purchase a website that i already owned. sharla: i wanted to secure it for us so we could do the brand. what's -- i don't understand what's wrong. lemonis: but i told you that i already owned it. i walked away. i wish you a lot of luck, but i'm not gonna do business with you. and when the show aired, sharla was not only devastated by the story that played out, but she lost her number-one source of revenue, her disney contract. it was a big hit. but rather than getting angry, she took stock and began making changes. a few months ago, we began e-mailing and talking again, which is why i decided to go back to planet popcorn, to see if this is a deal that deserved a second look. -how are you? -sharla: how are you? -lemonis: good to see you. -sharla: good to see you, too. i believe when you and i met, it was quite disorganized. lemonis: and your desk was a mess.
sharla: it looks pretty good, huh? lemonis: it does. sharla: i have a babysitter that keeps me clean. -it's called my bookkeeper. -lemonis: okay. sharla: and my mother still comes in. lemonis: and how are things with mom? sharla: great. my mother and i have a great relationship. lemonis: how much money has she borrowed from you? woman: oh...i took a -- sharla: no, she took a second out on her house, and the total was about $100,000. woman: well, i don't know. i owed $125,000 on my home, and now i owe $250-something. lemonis: so that's more than $100,000. woman: and then she owes me $10,000 from my personal account. lemonis: have you paid her anything back? sharla: yes. i've been paying her mortgage, and that's how i pay her back. lemonis: okay. that's good to hear. sharla: want to see the rest of my beautiful office? lemonis: yeah. sharla: this room, it was a mess. our cash room. [ laughs ] lemonis: and i don't see any money on the floor. what are you doing differently? sharla: i put in security cameras to keep an eye on the cash room, and cameras in my trailers. at each location, we have a cash form, and the manager will "z" out the register. and it goes from the venue we're at into that safe, and then into my hands and into the bank. -lemonis: okay. -sharla: it doesn't stay here.
so, this is our inventory system. lemonis: a good inventory system. sharla: this is where we package up all of our popcorn. lemonis: and then you'll what? open from here and fill the order from here? sharla: yes. correct. lemonis: and then this is the finished goods? sharla: mm-hmm. and then we have our popcorn tins over there. lemonis: what does something like this retail for? sharla: that size is $48. this size is $38. lemonis: okay. so let's start with this one. what does the tin cost? sharla: $6.73. lemonis: and what does the popcorn cost that goes in in? sharla: $5. lemonis: what else needs to go in here? sharla: a divider. 45 cents. lemonis: okay. sharla: shrink band, another 45 cents. sticker, 28 cents. lemonis: okay. how much does the labor cost? sharla: a few dollars. lemonis: and so you're right under $17. then you got to pay for shipping. sharla: we have a flat-rate shipping of $5. lemonis: so, what are your margins? sell it for $48. sharla: if we sell it for $48 and it costs me... lemonis: including shipping, call it $24, $25. what are your margins? sharla: well, it's almost 50%. lemonis: this is a new sharla. she knows her numbers and she's tracking her money.
but more importantly, she took responsibility for the things she did, and she's turned it around. sharla, what happened to disney? sharla: what happened to disney? lemonis: what happened to that account? is it fair to say that the disney relationship just didn't work out? sharla: is that what we're here to talk about? lemonis: if i ask you, there's a reason i'm asking. i'm trying to understand it. sharla, you okay? wopen up a lot of dawn. tough on grease...yet gentle.
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lemonis: sharla, you okay? sharla: [ clears throat ] sorry. lemonis: no, i'm being honest with you. i want you to look in my face. no one is here to do anything but help you. sharla: if i hadn't been on tv, marcus, i would not be where i am today with my contracts. after you and i met, some of the contracts that i had... lemonis: got terminated. sharla: ...were terminated. it was a media nightmare. but i don't want people to think that what happened to me was because i was [sniffles] unethical or dishonest. i started looking back at everything you said, and thought, "okay, i'm not a loser. "i'm not a failure. "this is a great company, and i'm gonna pick it back up. "i'm gonna pull myself back up by my boot straps, and i'm gonna figure out how to make this right." lemonis: when i first came to planet popcorn, the business needed a lot of help, but sharla wasn't willing to make the changes.
since then, she's reflected and learned. and i think if you can be humble enough to own up to your mistakes, then you deserve a second chance. most people will scratch their head, wondering why in the hell we're sitting together. it's very rare that i come back to the table again. it's rare. and so, why did you think it was a good idea for us to meet? what can i do for you to help your business? sharla: i was hoping you would make an investment. i really want to focus on planetpopcorn.com. lemonis: let me see what you have to show. sharla: i just brought you some information and some quotes. we need more packaging, i need equipment. lemonis: so, it's almost $50,000. what would i get for $50,000? -sharla: 10%. -lemonis: 10%. you're in the popcorn business. i'm not. it's a commodity. i can buy it anywhere. and so, $50,000 is a lot of money, especially in a deal that i walked away from. sharla: how about 20%? sharla: 10%, 20%, it's been awesome to see you, and i think that you've made a lot of strides --
sharla: do you have a number in your head? lemonis: i wouldn't do it for less than 50%. -sharla: 50%? -lemonis: yep. sharla: how about 25%? lemonis: i'll do 25% if i get $1 a package. sharla: you won't go any lower than 50% without a royalty? lemonis: no. because i have no guaranteed return. what percentage is important to you? sharla: i would like to own at least 60%. lemonis: okay. i'll give you my final offer. i'll do 40%, but i get 50 cents a bag. sharla: you have a deal. lemonis: okay. sharla: okay. lemonis: i made this deal with sharla because i believe she's changed. but i'm also going to make money on this deal. with my investment of $50,000, i can make a 10% annual return by only selling 850 bags of popcorn a month. if i were to put that money in a bank,
my annual return would be less than 2%. and while i'm happy that sharla made all the changes, what i'm really happy about is that we're gonna make a lot of money selling a lot of popcorn. sharla, the fact that i... sharla: [ sniffles ] i'm supposed to be tough. [ chuckles ] no tears. just...thank you for helping. now let's go make money. lemonis: we got to get it right this time, okay? we have a lot of work to do, but i want you to get it right. -i'm gonna help you make money. -sharla: okay. lemonis: let's go make some popcorn.
>> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ with a product she believes will help cat lovers everywhere. ♪ i'm rebecca rescate. i live in yardley, pennsylvania, with my family and my loving cat samantha. a few years ago, we were living in a tiny apartment in manhattan. problem was...as soon as you walked in our front door, you knew we had a cat. you could smell the litter box no matter how often we cleaned it.