tv The Profit CNBC October 26, 2017 12:00am-1:00am EDT
tonight on "the profit"... oh, my gosh! look at that hair. at a family-run hair-care business in north carolina... you have a business that does a $1.5 million a year. ...the profits are going right down the drain. ramona: we almost lost everything. lemonis: one of the owners won't stop pursuing expensive side projects. michael: we have corporate events, weddings. we did a television station. lemonis: ...leaving his wife and partner at wits' end... ramona: i have to cross every "t," dot every "i." lemonis: you mean do the work. ramona: yes. lemonis: ...and his daughter questioning her role in the company. taylore: it's tough when you have all these ideas, but you get this war in order to implement them. michael: you can't throw these away. lemonis: if i can't find a way to get him focused... michael: shake it!
lemonis: ...and help his daughter come into her own... i know you're capable of more. ...this great family success story may not continue. 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. ...is "the profit." ♪ in 1994, michael and ramona woods launched ashtae -- a line of multicultural hair-care products based in greensboro, north carolina. ramona: we have a total of 29 items. lemonis: the woods focused on salons and beauty schools within the region, and the response was unbelievable. over time, sales broke through the $1 million mark.
and as the business grew, their daughter taylore started pitching in. taylore: the numbers change every day. if we're gonna do inventory, we just need to knock it out. lemonis: but there's one big problem. the company's profits go out almost as soon as they come in due to michael's costly side projects. michael: i've been working pretty aggressively on this app. it's the next big thing. lemonis: his lack of focus has hindered ashtae's growth, preventing it from expanding into new markets. ramona: can you imagine how successful we would be if you actually gave the company 100%? lemonis: and it's left ramona exhausted and overwhelmed. ramona: my plate has been overflowing. i can't handle that. lemonis: i've been in the hair-care business for a while now with my company erika cole, and i think ashtae products would be a great addition. i'm confident that i can turn it around... assuming i can find the place. there's this gigantic building.
i can't tell where the correct entrance is. is this, like, a little village? is it a big strip mall? or is this their headquarters? i don't know. hello. hi. taylore: hi. how are you? woman: hi. how are you? ramona: oh, jesus! lemonis: [ laughs ] i'm marcus. ramona: i'm ramona. lemonis: ramona, nice to meet you. ramona: oh, god. taylore: hi. i'm taylore. lemonis: taylore, nice to meet you. taylore: nice to meet you. lemonis: so, is this whole complex you guys? taylore: yeah. we rent out office space, salon space, barbershops. lemonis: do you own those businesses? taylore: no, no, no. ramona: we own the building. lemonis: okay, you own the building. ramona: yes, but my husband, i think he is... michael: don't talk about me without me being around. lemonis: how are you, sir? i'm marcus. michael: so nice to meet you, marcus. lemonis: nice to meet you. michael: michael woods. lemonis: michael, do you dress like this every day? michael: every day. ramona: every day. lemonis: you look like a million bucks. michael: thank you. lemonis: so, tell me about ashtae. ramona: we are a multicultural hair-care company. we only sell directly to beauty salons. lemonis: okay. you're not in any retail? ramona: right. michael: we service salons door to door. lemonis: and when you say "door to door,"
go to a salon, meet somebody for the first time, shake their hand. michael: correct. lemonis: and what region do you do business in? michael: south carolina. that's where the bulk comes in. lemonis: if michael's going door to door, and that's how he's generating his revenue, it's kind of obvious to me why they haven't broken outside of the carolinas. door-to-door selling is wildly inefficient. taylore, what do you do here? taylore: a little bit of everything. lemonis: well, what is your actual job title? ramona: well, right now, taylore is a little in limbo. lemonis: what does that mean? ramona: deciding whether she's gonna work here or not. taylore: i was frustrated with not being able to actually implement things. like, we need to update all the computers. michael: well, we've never invested in next-age technology. lemonis: is a computer the next age, or is it today? michael: well, no. taylore: it's always an argument. lemonis: is there a place where all the product's displayed or i could see it or... ramona: yeah. michael: we can go see the products. ♪ lemonis: so, how many different skus are there?
ramona: 29. lemonis: okay. what's special about this product? ramona: well, the formula. lemonis: so you have a special formula. ramona: absolutely. lemonis: and how did you come up with that? ramona: as we would develop, i started sending products to stylists, and they would say, "oh, this works great. oh, this is not working." and we did that for almost two years. lemonis: that was, like, your focus group. ramona: absolutely. lemonis: and that's how you ended up with this proprietary solution. ramona: yeah. lemonis: do you like the bottles? michael: i do. i like this look. i like this sleek look. taylore: to me, the bottles don't read upscale. i would change the design. michael: it has bold colors. the black, the white, and the red stand out. lemonis: let me just give you my opinion. it looks like a wholesale line. michael: okay. lemonis: not a consumer line, right? you have to wow people with packaging. salon owners and consumers have tons of choices. and one of the most important things in making that choice is the package itself. this package couldn't be any more unappealing. what are the margins on things like shampoo?
michael: it costs four times cost of goods. so if a shampoo costs us 7 bucks, we sell it for about 35 bucks. lemonis: so it's great margins. ramona: yeah. we have great margins. lemonis: can you give me a tour? michael: mm-hmm. lemonis: oh, my goodness. what is all this? there's an accounting office here. michael: accounting office, beauty salon, beauty salon. we have corporate events here. we have weddings here. we have a church here. lemonis: there literally is a church here. michael: they rent out the space. lemonis: i understand what a big building looks like. i have big buildings. this place is massive. michael: bail-bonds company, dance studio. taylore: photography studio. michael: photography studio. lemonis: what day is this place really busy? michael: every friday, saturday, it's jumping. lemonis: it's like he's running his own small city. how much was the building? do you mind sharing that? michael: yes. about $1.9 million. it was passion that i had to help other businesses that are looking for a start to have a place to grow their business. ramona: we try to help everyone get started by providing furniture. like, every single business, he outfitted for them.
lemonis: so you, all of a sudden, went from owning a hair-care-products company to subdividing property and becoming a master landlord... which is not a distraction at all. taylore: no. lemonis: look, i don't fault michael for wanting to invest in a piece of property. it's a safe asset. it has cash flow to it. as a potential investor, i worry about, where is his focus gonna be? ♪ ramona: this is wendy. lemonis: how are you, wendy? wendy: excellent. lemonis: nice to meet you. ramona: she owns a beauty salon. lemonis: so you own your own salon. and what's happening in here? wendy: we're doing hair. michael: this client has natural hair. we really separate ourselves because we deal with different textures of hair. the product smooths hair out. so it makes it look like it's relaxed. it adds moisture to the hair, keeps the hair from being dry and brittle. wendy: and i love the fact that it's not very heavily fragranced, so it doesn't clash with your other products. lemonis: you know what? i'd like you to shampoo my hair. wendy: oh. lemonis: i want the treatment. wendy: okay.
lemonis: i want clarify, emulsify, whatever all the big words are. wendy: comfortable? lemonis: am i comfortable? no. [ laughter ] i'm not comfortable. it's a lot, a lot softer. ♪ so, what actually happens in this warehouse? walk me through it. michael: everything comes in in barrels. and then we'll fill the product. all the products are made in chicago. lemonis: so you have a co-packer? michael: correct. lemonis: why doesn't your co-packer actually give you finished goods in a bottle, in a case? michael: 'cause they're saying that our volumes aren't large enough. lemonis: so, you have not been able to find a co-packer that can give you a finished good in a case ready to go? michael: we haven't looked. lemonis: why? michael: because, see, we own our formulas. so it's not that difficult to make the product. lemonis: is your vision to have a full-fledged factory here? michael: it is.
lemonis: what are these? michael: these are the containers that we purchase to be able to get ready for the actual manufacturing. as we grow, we're gonna have to go much larger. we could be the laboratories for other companies. lemonis: become a co-packer for other people? michael: absolutely. taylore: yes. lemonis: i'm not quite sure if he's ever been to a true co-packing facility to understand the technology that's required, the systems that are required. it isn't as simple as mixing things in a pot and then pouring them into the bottle. whose desk is this? ramona: this is my desk. lemonis: so, is this where all the payables happen? ramona: yes. lemonis: walk me through what's actually happening here. ramona: this is what you call multitasking. lemonis: who does payroll? ramona: i do. lemonis: who does the payables? ramona: i do. lemonis: who collects the receivables from the customers? ramona: i do. lemonis: who sets up the trade shows? ramona: i do. lemonis: who's helping you? ramona: nobody. [ laughs ] lemonis: okay. michael: honey, i'm sorry. sorry. we got a few clients who've got some bulbs out on the other side.
can you make sure that these right here get done? and these are the receipts that need to be taken care of. lemonis: does this kind of stuff happen with him all the time? ramona: it happens every day. lemonis: earlier, i was trying to figure out how michael gets everything done, having all these tenants and doing all this build-out, having a hair-care company. it's clear to me now -- he just dumps it on ramona. okay, let's keep going. what is all of this equipment? michael: that's all the equipment that we have left over from the television station. lemonis: what television -- i don't -- i'm sorry. help me out here. michael: yeah. taylore: basically, we tried to create a television station, and everything went south. lemonis: how much money did you spend on that venture? michael: about $200,000. taylore: what?! ramona: michael! taylore: what?! close to $1 million -- payroll, equipment, traveling. michael: well, i have failed at very few things. i've failed at very few things. everything that i've done had a trajectory of that. now, are there mistakes made? yes. but we were on our way to a multimillion-dollar venture.
lemonis: taylore, can you and i just chat for a minute? taylore: yep. lemonis: well, ramona and taylore were getting frustrated because michael was unwilling to accept the fact that this stuff was worthless and it was a big mistake. and what a giant waste of money. i want to sit down with each of them so that i can get their side of story without michael around. taylore: i told my parents that that station wasn't a good idea. i said it multiple times! it's tough when you have this vision, and you have all these ideas, but you can't implement them, or you get this war in order to implement them. lemonis: i can see why you were frustrated by it. taylore: oh, absolutely. so, we were supposed to meet and talk about, what are gonna be the terms and conditions of my role here? and the main condition is, they have to make me c.o.o. lemonis: chief operating officer. taylore: yes. i have to have control over certain areas. lemonis: what was their response
when you gave them that condition? taylore: we haven't met yet. lemonis: oh, you haven't? taylore: no. lemonis: all right. we'll talk in a little bit. taylore: okay. ♪ lemonis: all these different ideas that michael's had, the profits from ashtae get used to funds those ideas. ramona: yes. lemonis: do you believe this business has been held back... ramona: sure. lemonis: ...by those ideas? ramona: absolutely. [ voice breaking ] we put every penny we ever saved into all these ideas. and we... you know, my husband, i love this man to death, but there were some moments that i would just cry. lemonis: i'm amazed at how well you carry that pressure on your shoulders, 'cause there's a lot of crazy-ass ideas around here. ramona: yeah.
♪ lemonis: what i'd like to do is go over the financials. ramona: this is the total... lemonis: revenue. ramona: uh-huh. lemonis: so, last year, business did $1,453,000 of revenue and a net profit of $204,000. and how much cash in the bank right now? ramona: one account is $50,000. lemonis: okay. ramona: and this account, there's $10,000. lemonis: so that's $60,000 in cash. that's an asset. ramona: right. lemonis: and against that, is there any debt in the company? ramona: yes. we owe $30,000 in cards. lemonis: credit cards? ramona: mm-hmm. and then a supplier that we owe $60,000. lemonis: so that's $90,000 in total debt. so even after $1 million of business, we got a problem, 'cause i have $60,000 in cash and $90,000 of people asking me for cash. and the reason for that is that your ideas cost money. and the money's leaving the business to go...
ramona: [ laughs ] lemonis: i want to look over the financials a little bit more, but i had a really enjoyable time today. thank you very much. taylore: thank you for coming. lemonis: nice meeting you. take care, guys. ramona: thank you. lemonis: thank you. ♪ hey, guys, i wanted us to be able to talk away from everybody. so, you have a business that does $1.5 million a year, and makes $200,000, which is a very high rate of return on not a lot of revenue. how much of an investment, michael, do you think the business needs? michael: i would probably say about $500,000. lemonis: okay. what is your number? ramona: $300,000. lemonis: what do you want to do with the money? michael: when i look at the business, i look at opportunity. i look down the road and say, "well, what can we do that can be cutting edge?" lemonis: i don't agree with how much cash the business needs. i think the business needs to be debt-free. so that's $90,000. and i think the balance of the money needs to really go into product development.
so my offer is $200,000 for 25% of the business. michael: i think the number is just way too low. if you said to me, "i'm gonna put $200,000 into the company and that that's gonna make it all better," well, what is better? lemonis: it's actually making the company entirely debt-free. michael: but what value does that increase in our sales? that doesn't necessarily increase in our sales. lemonis: no, but, michael, i'm asking you to justify what you're gonna do with the $500,000, and you're taking me to, "what's the $200,000 gonna do for my company?" michael: okay. lemonis: the value in me isn't just supposed to be in my checkbook. michael: we're not asking for the checkbook. lemonis: you are asking for the checkbook, 'cause you're asking for more. if i am just a checkbook, i'm the wrong guy. if your business is in trouble and you need my help, log on to...
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lemonis: the value in me isn't just supposed to be in my checkbook. michael: we're not asking for the checkbook. lemonis: you are asking for the checkbook, 'cause you're asking for more. if i am just a checkbook, i'm the wrong guy. michael: no, i'm asking for a fair value for the company that i believe that you're investing in. lemonis: okay, so this is value question. michael: absolutely. lemonis: okay. so, what do you think the right percentage should be for $200,000? michael: maybe 10%. lemonis: 10%? it's like, i can't even think of ever being that low.
if you need more than $200,000, just tell me why... 'cause pay off your debt and you put the rest in the bank. what else do you need the money for? ramona: the reason i would like to see $300,000 versus $200,000 is, i've been tight for so long. lemonis: mm-hmm. you just need more cushion. ramona: i just don't want the tightness. lemonis: okay. if i give you this check for $300,000 for 25%, i want to have permission from you to find extra cash wherever i can. michael: okay. lemonis: great. do we have a deal? michael: we have a deal. lemonis: do we have a deal? ramona: deal. yes. you gave it to the right person. lemonis: i know i did. michael: [ laughs ] ♪
lemonis: so, yesterday, michael and ramona and i made a deal for me to invest $300,000 into the company. i invest in people, process, and product. i know we have the people, and i really know we have the product, 'cause i used it. the process... michael: it's coming. lemonis: it's coming? michael: [ laughs ] lemonis: or it's not here? how many people here, by show of hands, think michael has great focus on ashtae? [ laughter ] michael: can we get one hand? [ laughter ] lemonis: but all kidding aside, we need to put some focus into the company, so you will no longer be bottling in this building. this is a distraction. i want to understand how we're gonna find new customers. we're gonna look at the branding, how to make more money, how to deliver it easier, where to make it, where to bottle it. we're gonna do everything. you ready to go to work? michael: let's do it. lemonis: who's excited?
taylore: yes! [ cheers and applause ] ♪ lemonis: excited? michael: hey! lemonis: we're about to get sold. michael: [ laughs ] lemonis: i keep hearing about how great michael is with his customers and how much they love him. well, the only way to find out if it's true is to go on a sales call with him. so, walk me through your strategy of, you know, making these individual sales calls all the time. michael: well, it's not necessarily i'm making sales calls. we're serving people. we're serving people our gift. lemonis: but just in this neighborhood, really. so, i would think that a market like atlanta would be a huge target for you. michael: the next big event that we do is there. it's called the bronner bros. show. that's the largest african-american trade show in the industry. lemonis: i'm a lover of conventions because you can get your product in front of thousands of people and reach a much-wider audience. if bronner bros. is the next big event that comes up for ashtae, and it's really as big as michael says it is, then i want to really be prepared for it. michael: good morning, good morning. how are you? how are you?
what's going on, miss lady? good to see you. what's up? toya: good to see you, too. lemonis: how are you? toya: i'm really good. lemonis: i'm marcus. nice to meet you. do you own the shop? toya: i do. lemonis: and do you also sell the product to your customers? toya: absolutely. we have somebody waiting just now. lemonis: where are the products that you would sell? toya: we're sold out. we've got a display. lemonis: that's normally where the display is? toya: yes. lemonis: so, you literally have nothing? toya: right. we were really waiting on you all yesterday. lemonis: does it seem odd that you have to wait for michael to come for you to get product on the shelf? toya: true. and i got people waiting on it. so, i had people placing orders for stuff. michael: 'cause the products sell quickly. lemonis: yes, but there's literally, literally nothing here. toya: right. lemonis: this looks to me like we were negligent in helping them figure out how to make money. michael: got you. lemonis: i was scratching my head while i was standing in the salon, thinking, "this guy is so charming." i have never seen people so happy to see a salesman in my whole life. but there's got to be a science to it. what michael should be doing every time he goes into a salon is understanding the sales history of his products in the previous week or month.
he would then take that data and then give the salon a recommended stocking amount. so if they sold four bottles a week, and he only comes there every two weeks, they should have eight bottles on the shelf. sell-through will lead to stocking. stocking will lead to the appropriate amount, and it will generate sales. michael: and now you all can sell. now you all can make some money now. this won't happen again. woman: never. michael: [ laughs ] i'm gonna make sure of that. lemonis: i love the enthusiasm. let's put a little science with the love. michael: toya. toya: yes, sir. michael: let me see you for one second. one of the things that we do always talk about is that we always want you to make this look fresh. and what i'm gonna do is, i'm gonna get this upholstered. i think you have a little screwdriver. lemonis: are we taking a chair with us now? michael: yeah. i'm gonna put it in the car. ♪ toya: a wrench. michael: a pair of pliers. toya: pliers. do we have pliers somewhere? lemonis: this seems to be a trend with michael, where instead of focusing on product sales, he wants to repair their chair. charming -- yes.
hurting profitability for both parties -- definitely yes. ♪ michael: hey, i'm just gonna go put this in the back. ramona: honey, you are stretching your focus too much. was that not our argument? michael: but this is -- okay. this is my last chair. this is my last chair. ramona: but, honey, you told me that. i can't believe you did this in front of marcus. michael: this is my last chair. lemonis: do you believe him? ramona: no. lemonis: and everything's falling on you. ramona: yes. where are your sales? michael: yeah, i didn't write a receipt for them. lemonis: you did spend more time fussing with this than you did talking about a way to get the inventory moving and get it on the shelf and never be out. michael: my friend marcus threw me under the bus. [ laughter ] lemonis: i'm out of here. you're on your own, buddy. michael: see? that's what i'm... lemonis: you are on your own. ♪ taylore had expressed to me some concerns about her role in the company.
and before we started digging in and rebranding and relaunching things, i wanted to get those issues behind us. so i asked the family to meet me off property, where we can we have a private, quiet conversation without distractions. so, taylore mentioned to me that, as a family, you were contemplating getting together. taylore has to determine if what is being offered to her from the company is gonna satisfy her, as well. taylore: okay. so, these are a few things i need -- or i would like. let me say that. you guys say you want me to take ownership. well... i would like to be chief operations officer. michael: the role that you're asking for -- there's a lot of responsibility that comes with that. lemonis: is it a yes or a no? ♪ ramona: jesus, don't go in here. michael: you can't throw these away.
ramona: michael! michael: that's a good speaker system here, honey. taylore: you can't take my red off! like paperless, multi-car, and safe driver, that help them save on their car insurance. any questions? -yeah. -how do you go to the bathroom? great. any insurance-related questions? -mm-hmm. -do you have a girlfriend? uh, i'm actually focusing on my career right now, saving people nearly $600 when they switch, so...
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...to enjoy the amenities of the vip suite. your all new compass. michael: the role that you're asking for -- there's a lot of responsibility that comes with that. lemonis: is it a yes or a no? ♪ taylore: i'm concerned. i think you guys work too hard, to a point that it's unhealthy. [ voice breaking ] and, mom, the thing is, you know it's unhealthy. ramona: and i'm -- i-i -- i'm sincerely working on giving myself just a little bit more balance. and once i get 100% from both of you, right, then my quality of living will change, because i'll be able to let go of so much. lemonis: part of it is, you guys have no structure.
nobody knows what they're doing. there's no assigned roles. maybe the best thing for taylore is that she would be the director of seminars and trade shows. michael: i'm definitely comfortable with that. lemonis: okay. you say you want to have a big role. your new challenge is for you to execute bronner and have a successful show. the fact that taylore wants to take on responsibility and work harder is a good character quality, but the only way that she's gonna be qualified to take on this business someday is for her to do a job, excel at it, hit the goal, and move on to the next one. bronner bros. is a perfect opportunity for her to have her first real task. i need to know -- are you committed to that? taylore: yes. 100%. i can do this. ramona: i believe you. lemonis: we're gonna see. let's go to work. ♪ today, michael and i are in new york meeting with rejuvenol, a top manufacturer for hair-care products and cosmetics. i want michael to clearly understand
why it makes zero sense for him to manufacture or bottle his own products, let alone somebody else's. woman: this is where we make the raw material. i want to show you the big tank. michael: oh, yes. huge. woman: this is our cooling tank. they cool the jar, the pomades. lemonis: when you can find a partner like this that's invested almost $22 million in this facility, utilize that asset. in a given day, michael could fill 1,000 bottles. in a facility like this, they could fill 20,000 on that same day. if michael's sales goals continue to go up, there's no way his current facility could ever meet the demand. so this co-packer is a nonnegotiable. and you're focused on doing what? michael: selling. lemonis: selling. michael: it's what we do best. ♪ man: is it an adventurous brand? lemonis: the key to marketing and growing your business is to have attractive packaging and attractive branding. we don't have that today. so i brought in vsa partners, a branding expert.
they're gonna help us develop a whole new look. man: other words that come to mind? just... taylore: big. ramona: we push the stylists to think big. man: what we want you to do is just, everybody kind of works on their own. pick out images that really remind you of what ashtae wants to be. taylore: this just sort of shows that we're for all ethnicities, all textures, all hair types, all ages, all lengths, all colors, everything. ramona: i like that. man: i think we have everything we need, and we'll show you some ideas. ramona: thank you so much. taylore: thank you. ♪ lemonis: we're getting ready to "go, team, go." i see a lot of wasted space in this building. there's two post-its here. you all are gonna share these. i'm gonna participate. if you mark it green, that means it's going to be sold to collect cash. if you mark it red, that means it's going into the... taylore: trash. lemonis: ...trash. taylore: anything's up for game? lemonis: anything. the purpose of decluttering -- number one, generate some cash.
but i also want michael to go through this process of ridding himself of things that don't help him focus on the business and move the business forward. ramona: jesus, don't go in here. woman: what is this? michael: that's cash. lemonis: no, no, no. don't ask him. don't ask him. [ laughter ] don't ask him. don't ask. michael: i can't find much to put a red sticker on. that is a piece of furniture. lemonis: no, no. don't. michael: [ laughs ] all the stuff you have red on, taylore, those items are still lights that are good. ramona: you can't take all the red off, michael. michael: no, but, look. you can't throw these away. taylore: i didn't put it on the to throw it away. i put this on to give away. you can't sell it. michael: you can. ramona: michael! michael: that's a good speaker system here, honey. taylore: you can't take my red off! lemonis: what the [bleep]
taylore: what's wrong? lemonis: where's all the personality? look, the booth looks terrible. michael: you can't throw these away. [and her new business: i do, to jeanetgo. jeanette was excellent at marrying people. but had trouble getting paid. not a good time, jeanette. even worse. now i'm uncomfortable. but here's the good news, jeanette got quickbooks.
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ramona: michael! the one and only cadillac escalade. michael: that's a good speaker system here, honey. taylore: you can't take my red off! ramona: let it go, babe. michael: i know, but put cash on that, not trash. ramona: no. the deal was, we can do some trash. honey, honey. let it go, babe. let it go.
lemonis: hold on, hold on. go ahead. what were you gonna do? michael: i mean, the fan is just not any good anymore. taylore: wait. what? ramona: you gonna trash it? oh, good for you. taylore: where? on the fan? michael: there's a trash there, yeah. lemonis: that's your first red one. michael: that doesn't work there. i know that doesn't work. i'll put trash on this one over here. i'm gonna join in, put some red stickers on it, too. all right, red over here. lemonis: the fact that he's picking up little trinkets to start getting rid of, it's a sign that michael really recognizes that in order for this business to move forward, he has to compromise. ♪ we were able to raise around $23,000 by clearing out the entire building. i want to take that money and reinvest it back into ashtae, where it should have gone in the first place. the warehouse and several other rooms of junk are gonna be repurposed for offices for ramona and the entire events business. meanwhile, we have three weeks
until the bronner bros. convention. so we're headed to chicago to vsa to finalize the branding. woman: drumroll, please. taylore: ohh! oh, my god! i love the logo. i love the all black. michael: i guess the only the thing that sticks out to me is the black bottles. lemonis: so, look at the vessel in white. taylore: it is more playful. lemonis: in this case, we're going to have to stratify the packaging options for our two groups of consumers. we're gonna use white for the salon owners, and we're gonna use dark graphite for their customers. now that we've all agreed on the design, we can move forward on production, getting ready for bronner bros. woman: so, this is the screen for the 4-ounce. michael: okay, cool. woman: this is the screen for the 8-ounce. lemonis: look how cool that is. michael: that's a big step, yeah. lemonis: for bronner bros., i really want you to be responsible for the product. they need to use the color palette that vsa provided. that's for the trade show. you tell them.
imagery's got to look like this. the font's got to look like this. the color palette has to look like that. all right? michael: right. lemonis: meanwhile, back in greensboro... taylore: hey, quick question. can we talk about bronner bros. for a quick second? lemonis: ...taylore is hard at work, designing the booth for the event. this is her first real test as the director of seminars and trade shows. and my expectations are very high. ♪ michael: yes, michael woods speaking. lemonis: hi, michael. marcus. michael: hey, marcus. lemonis: we're a week away from bronner bros., and i've gotten an e-mail that is quite concerning. so i wanted to give michael a call and find out what the heck's going on. the e-mail that i'm reading says that you specifically are making changes to the package that is slowing the process down. michael: we have to have the back of the container correct. lemonis: michael, i cannot believe that this product is not ready yet. i cannot believe it. it's got to be ready by sunday. i asked michael to make sure that the bottles were done and ready and produced for bronner. but now i'm hearing that he's making changes to them,
slowing down the process and putting the process at risk. and this is a good example of him not being focused on one task. this is a big deal. it's a big deal for you. it's a big deal for me. you're confident that this stuff will be done for the event? michael: oh, yeah. i'm very confident it will be done for the event. lemonis: okay, buddy. i'm looking forward to seeing it. i'm excited. michael: yes. lemonis: see you there. michael: all right. thanks. ♪ lemonis: i just arrived at the bronner bros. convention, and the energy and the excitement and the number of people -- i've been to hundreds of conventions in my business career... [ woman speaking indistinctly ] [ man speaking indistinctly ] ...but i've never seen anything like this. michael: hey! how's it going? [ laughs ] how's it going today?
lemonis: how you doing? michael: you just getting in? lemonis: yeah, i just got here. so, the old products are still out? michael: the old products are still out, yep. so... lemonis: so, none of the new stuff came? michael: none of the new stuff came. i know. i know, i know. lemonis: when i realize the bottles aren't there, we're in the middle of a trade show. there's customers everywhere. so i keep my emotion in check. but i'm just telling you, i'm pissed. all right, we'll make the best of it. michael: all right. lemonis: if the product's gonna be missing, then the rest of the booth better be on point. what the [bleep] honestly, we look average. stage is too small. the banner across the back is crooked. there's really no flow for people to get around. the energy of the booth does not come even close to being what anybody at the front of the show looked like.
taylore. taylore: hi. lemonis: hi. how do you think the booth looks? taylore: better than it did last year. lemonis: it looks better than it did last year? taylore: what's wrong? lemonis: i think the biggest issue for me is, i don't like how dark it is. where's all the personality? taylore: right. lemonis: whereyour personality? it's all so serious and... you look at the banner, it's looks... taylore: yeah. lemonis: look, i know you're capable of more, but the booth looks terrible. claire: hey, michael. i've got an issue going on. michael: i've been loading up for the event for tonight. claire: no, i need you to come to the salon. michael: one of my tenants...
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the strikingly designed impolexus nx turbore. and hybrid. lease the 2017 nx turbo for $299 a month for 36 months. experience amazing at your lexus dealer. lemonis: look, i know you're capable of more, but the booth looks terrible. taylore: what should i change? lemonis: i think what we need to do going forward is get with a company that makes trade-show booths and bring some color to life. taylore: okay. lemonis: could i have given her more direction? sure. but the key for this task for me was seeing if she could actually solve these problems on her own. the most important thing is what she's going to do with that criticism and how she's gonna turn that into a positive. but aside from all my issues with the booth, we're here to sell. michael: for $36, you can get six.
you wanted the detangling shampoo? the four colors for $60. you get your moisture plus. you get your sculpting lotion. that makes a gallon. you get your curl wax. $25. woman: thank you. michael: that one's sold. thank you, dear. thank you, thank you. lemonis: it's impressive for me to watch michael do his thing. michael: let me see. can you hold it? can you hold it? can you hold it? and it still doesn't mess up? lemonis: we need to get him on the home shopping network. ramona: exactly. woman: so, we went in with our moisture plus. michael: shake it! lemonis: the guy's perpetual motion, and his energy level and his enthusiasm for what he's doing is infectious. michael: give me some walking-out music. give me some walking-out music, ladies and gentlemen. lemonis: i knew when that when i made this investment, i was investing in him and his ability to pitch product. michael: here we go, here we go, here we go! lemonis: and i had not really seen him in action like this, but i would say the guy's awesome at it. michael: [ laughs ] lemonis: i leave here impressed by your sales ability.
for taylore's first time, i would say that we got a ways to go. i want you to be thinking about a product launch where we can actually invite stylists from around the community and we literally do a red-carpet product launch. i'm gonna put you in charge of it. you're gonna have a $10,000 budget. after seeing taylore's poor performance at bronner, i wanted to give her a second chance. so i tasked her with putting on a product-launch event. i want to see the right marketing materials, the right branding, the final product, and i want to see her put on a show. let's see how to create a grassroots effort to get the product out there, okay? ♪ the team has one week to prepare for the product-launch party that will take place in charlotte, north carolina. and with the newly completed offices, everyone should be able to focus -- finally. we spent over $25,000 to upgrade the entire space
and create professional offices for everyone. taylore: what is you-alls time frame for having that available? michael: i wanted to definitely stop by to talk to you about the ashtae line, and some of your stylists, as well. woman: okay. lemonis: while taylore is in charge of logistics, michael's in charge of inviting new clients. michael used to do all of his sales within a 300-mile radius of the office. but now he's gonna reach out to salon owners all over the southeast, from virginia to florida. this will dramatically expand his client base. ♪ i just want to make sure that everything for tonight is set. tonight's the big product launch, and i couldn't be more excited, but there's clearly a lot that still has to get done. so, are there salon owners coming? taylore: yes. lemonis: professionals? people in the industry? michael: yep. lemonis: where's the product? michael: already there. lemonis: okay. let's get back to work. michael: all right. ramona: okay. let's load up.
claire: hey, michael. michael: hey. what's up, girl? unknown: i've got an issue going on in the salon. i need you to help me. michael: right now? claire: yes. michael: i've been loading up for the event for tonight. claire: no, i need you to come to the salon. lemonis: i walk outside, and i see michael talking to a salon owner about a problem, and i think to myself, "okay, i've seen this movie before." and i can tell that he wants to go and help. michael: we have a client. one of our tenants has some dryer issues. lemonis: in this brief moment, i'm thinking to myself, "if he tries to solve this problem, him and i are gonna have our own problem." claire: mm-hmm. and i need michael to come fix my dryer. lemonis: for exclusives, extras, and business advice, visit...
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claire: mm-hmm. and i need michael to come fix my dryer. lemonis: i'm worried to see how michael's gonna handle this. michael: give me two minutes. lemonis: if he actually bites, i may lose confidence in him. claire: you can't come look at it? michael: let me send dennis over there. i got to finish up here, but dennis will definitely take care of you. claire: all right. michael: all right. lemonis: the fact that he was able to solve the problem and delegate it seems like a small thing to most people, but it was a really big thing for michael. i'm not even sure what i saw just happen. michael: well, i can't just deal with the smaller things. i can't deal with the things that really are time-consuming, but not profitable for the company. lemonis: i'd like to know where michael woods went. michael: [ laughs ]
♪ lemonis: tonight's a big night for ashtae, because it's a chance for them not only to launch their new brand and their new look, but talk to salon owners from throughout the east coast. i'm very nervous. i don't even know if the packaging's gonna be right. oh, this is nice. ♪ how are you, sir? michael: hey, looking sweet. lemonis: how are you? michael: looking sweet. woman: do you like it? lemonis: yeah, i love it. woman: good. lemonis: where's the product? michael: let's go. lemonis: i'm excited. michael: all right, all right. lemonis: honestly, it looks... ramona: amazing. lemonis: ...amazing. it looks amazing. let's go have some fun. michael: that's it. lemonis: wow. this place is beautiful. michael: ladies and gentlemen,
we thank you all for coming out for our launch party. and we're about to set it off here in charlotte, north carolina. [ cheers and applause ] lemonis: oh, my gosh! look at that hair. this runway walk was done to not only excite the salon owners that were at the show, but to show people these are the types of styles that you can create using ashtae products. wow! quality styles, quality products. well, we know what that means -- quality earnings. taylore: everyone give out a big, big round of applause. those ladies worked it nice. [ cheers and applause ] lemonis: all right, ready? look at us. look how good we look! taylore: yeah! yeah! lemonis: hey, i want to tell you something. you really impressed me, 'cause the event looks amazing. it just feels really classy, and i really feel like you've come a long way.
i do. taylore: thank you. i appreciate that. lemonis: one of the benefits of taylore having some success is that she'll gain confidence in herself and ramona will gain confidence in assigning more things to her and make her even more valuable to the business. ramona, this organization, you are the heartbeat of it. but you have to continue to learn how to delegate. thank you for everything. the success of this company is dependent on ramona and michael. and ramona's got to be able to function without the level of stress and without being burdened. i want to compliment you tonight. i tell you that i'm very proud of how you got focused. i'll see you guys soon. michael: will do. all right. thanks a million. lemonis: thank you. it really feels like just the beginning. ashtae products have a new look, a new feel, a new purpose, a new direction, and this thing is going to be wildly profitable.
♪ . tonight on the profit. dina: welcome to zoe's. lemonis: at a family-run chocolate shop in pennsylvania, the treats are delicious... lemonis: that was really good. -dina: yeah. lemonis: ...but the business is in meltdown. zoe: the last couple years, it's just been declining, and i can't figure out why. lemonis: though the owners, three siblings, have made great sacrifices, they've failed to properly market their product... sean: our initial reaction was that we didn't know how it connected to you. zoe: what's the story to this, that we're greek? lemonis: ...and they're resistant to even the smallest change. petros: we don't want to be mainstream and do what everyone else is doing. that's how we've gotten to 18 awesome chocolate pieces. lemonis: in 10 years. lemonis: if i can't get them to open up and try new things...