Lemonis and i gave the employees a 25 equity stake. You now have more ownership and authority than he does. But after seeing real growth, some parts of the business are now struggling. Dan we have 6,000 square feet. It is not busy enough. Lemonis and the problem may just be the staff. Why does he still work here . Dan its like pulling teeth to get him to do anything. Lemonis remember shulers . A tiny little roadside barbecue restaurant in South Carolina . Norton if the fat aint dripping on the coals, its not barbecue. Lemonis its still got charm, but its no longer so tiny. Oh, my gosh. I made one of my biggest investments. Its gonna be about 1. 9 million. But now the business may be so big that it might just be overwhelming my partners. You guys have zero experience in setting up a retail store. Zero. Ibuenos dias all ibuenos dias lemonis im back in miami to visit grafton, a fatherandson furniture business that looked as if it wouldnt make it to the next generation. If this came to my house, id send it back. But we rebuilt the factory floor, improved our manufacturing process. Oh, my god. This is totally different. Steve totally. Lemonis im hoping its an investment that pays off. Holy cannolis. And while i may never go on tour with a rock band. That was pretty good. I did buy into a bostonbased drum business, sjc drums, that was started by two brothers. Great product. Jack a really consistent tone and sound from it. Lemonis . But major financial questions. Chris we dont have enough money to cover payroll for next week. Lemonis . And even bigger family issues. Scott what did i ever do to you . Lemonis but while i brought the business back from the brink, the bad blood remains. Whats your relationship like with him these days . Chris i honestly dont want to talk about it. Lemonis why . Mike im done talking about it. Lemonis its another progress report, tonight, on the profit. My name is marcus lemonis, and i risk my own money to save struggling businesses. Were not gonna wake up every morning wondering if we have a job. Were gonna wake up every morning wondering how many jobs we have to do. Its not always pretty. Everythings gonna change. Everything. But i do it to save jobs, and i do it to make money. This. Lets go to work. Is the profit. Amazing grapes is a combination wine bar and store in southern california. When i first visited, amazing grapes did just under 3 million in revenue. But it was anything but successful. The store was bursting with inventory that wasnt selling. Why is there crap everywhere . Too much inventory . Man exactly. Lemonis and the bar, which had the best margins, was relegated to a hidden corner in the store. After nine years, the owners were still looking for a winning formula. Man we have never seen a profit from this store. Lemonis i actually thought it might be better to just shut the doors. I dont know that i have a deal to make. Cut your losses, liquidate your inventory, pay your vendors, work your way out of your lease, and go home. But i was inspired by the staff at amazing grapes. There was geri, the chef who turned out delicious food, despite being forced to work in a closetlike atmosphere with two hot plates. Geri this is someplace i love, i love coming to every day. This place just means a lot to me. Lemonis and dan, the wine buyer who brought enthusiasm and passion. Dan what i brought to the business was a book of business that id built over 20 years. Lemonis whoa. And mike, who was the bar manager. I was so blown away by their dedication that i made a deal, but one with a catch. I put in 300,000 for 76 of the business. But 25 of my share would be handed over directly to the employees. [ laughter ] people, for me, is the only reason that businesses fail or they survive. Man guys, to a new beginning. Lemonis cheers. With the staff now truly empowered, we went to work. I spent an additional 350,000 renovating the entire restaurant. There you go. Man aah lemonis . The real moneymaker. And while there were some bumps along the way. Well, gregs not in charge anymore. Im in charge. Man yeah, i understand. Lemonis do we understand that . Man absolutely. Lemonis . The new amazing grapes was amazing. Mike, this is crazy, how busy it is. Mike yeah, its yeah, its been unbelievable. Lemonis with our seating now doubled, our weekly revenue went from 11,000 a week to 34,000 a week. And with our new customerfriendly layout and our new website, wine and beer sales went up by 12 . Dan its actually better than it used to be. Lemonis how much . Dan by 10 to 15 , and i just see it growing from there. Lemonis all right, great job, buddy. Amazing grapes was a restaurant on the rise. Man thank you for saving us. Lemonis 15 months later, im heading back to amazing grapes to check in on the business, but more importantly, check in on the staff. It looks nice in here. Dan how are you . Lemonis you got smaller. Dan maybe a few pounds. Lemonis by any definition, amazing grapes is a vastly improved business, and ive continued to invest money new equipment, more working capital, a new website, but a major category of the business has started to decline in sales, and i want to find out why. Well, matt, youre at the table now. Matt yeah. Lemonis hows it going . Matt its good. Beers doing great. Lemonis is it . Matt yeah. Lemonis beer sales, as a percentage of total sales, have actually slipped a little. Is that because of the time of year . Matt um, time of year, but if you look at last year, its slipped since last year, too. Lemonis about a year ago, i invested in a comprehensive tap system, and we doubled the number of beers that we stocked on the retail side. Everyone knows that craft beers are expanding in popularity, but our numbers are falling, and that makes no sense. We got how many tables and chairs in here . Mike about 145 people, yeah. Lemonis and so 145 seats should turn two times a night. Thats 2,030 people a week should come through here. How many guests a week are you seeing . Man 600 to 700. Lemonis youre operating at less than 40 capacity. We need to have that Retail Restaurant bar be busier more often. So, the bar business and the Internet Business are operating separately, right . Who buys the wine for the Internet Business . Man dan. Lemonis are we selling enough on the web . Dan no. We used to at its peak, was probably 50,000, 60,000 a month. Lemonis and what happened to it . Dan there is no web business. I think if we had everything online that we have in house right now, we would definitely sell more. Lemonis great. We need to sell more wine online, all right . Woman great. Lemonis all right. Thanks, guys. Lets talk about your section of the business. I still dont understand where all the volume went. Dan matt has not done a great job getting things uploaded to the web. Mike went and did a count of how many wines we had up there, and there was only a hundred and something out of all that we have. Ive been on matt every week to get more up there, get more up there. He thinks its cumbersome, and so he just avoids it. But i felt ignored, often. Lemonis by him . Dan yes. Lemonis so why didnt you fire his ass . At amazing grapes, we carry over 500 different wines in stock at one time, but only a fraction of them are on the website. You cant sell what you dont show. By the way, this is matts job, the guy whose beer sales are also stinky. When matt didnt do this job, you shouldve let him go. You basically just said to me, the reason our web business is off is we only have 20 of our total wine up on the website. It aint that hard. I mean, either he does this job right or he does a different job right or he doesnt work here. Geri i got a shrimp taco solo. Lemonis i think one of the biggest holdbacks we have is this kitchen. The size limits the amount of food that she can prepare and the speed that she can get it out to the customer. If we really believe that this Restaurant Bar needs more, kitchens still too small. You need a bigger menu and need the space to make it. Dan so youre talking about expanding the kitchen. Lemonis yep. Ive invested a great deal of money already in amazing grapes, but expanding the kitchen is the right move. With just 75,000, we can buy new equipment and add new stations, allowing geri to create more ambitious dishes and get them out faster. Thatll help us increase our check average, feed more customers, and, in the end, nearly double our sales. Make the kitchen a little bigger, put the pantry in there, and then you could also have some extra space for you to store wine. Dan this, i believe, needs to become a cold box. Lemonis how do you feel about that . Mike i agree. Lemonis okay, so. Mike yeah, it drives margin, and. Lemonis so change number one is. Geri thats 100 . Lemonis . These bathrooms need to turn into a cold box. Mike right. Lemonis turning around a business takes time and patience, and i feel like everybody at amazing grapes is really pitching in, and theyre coming up with ideas, and theyre working together really well. Well, almost everyone. Wheres matt at . The guy who isnt maintaining the website and isnt selling beer is a noshow. [ door opens ] how much does it cost to put that cold box in . Matt i have no idea. Lemonis thats not a good answer. How much more beer are you gonna sell if you put that room in . Matt uh, lots. Lemonis lots doesnt help me pay the bills. Matt okay. Uh, the difference in margin . Lemonis how much in dollars . I cant pay my bills with percentages. Matt i would need to see the dollars. Lemonis how much inventory do you have in there . Matt not quite sure. Lemonis youre the beer guy. You need to know that. Get them by the end of the day . Matt sure. Lemonis okay. Im not gonna lie to you im frustrated, because he doesnt know the margins, he doesnt know how much inventory he has. But im willing to give him a chance to sort of get his act together, show some effort, show some enthusiasm. Anything short of that im not gonna be happy with. How you guys doing . Woman good. How are you . Lemonis good . Have you been here before . Woman 2 yes. Lemonis whats your favorite thing . Woman 2 oh, i think the seating is totally better than it used to be. Now it looks a little more upscale. Lemonis do you ever buy wine here and take it home . Woman 3 yes. Lemonis you do . Thank you for coming. What were ultimately doing today is trying to come up with creative ways to sort of learn how to crosssell product. If people are in there and theyre enjoying a meal, are theyre gonna remember that experience and come back . Were trying sort of different marketing ideas but live, in the moment, and thats important to do when youre in a business like this, because its a very competitive space. Is matt sitting at the bar . I dont want to ever see that. You know, hes just hes just chillin. Mike right. Lemonis you know, while everybody on the staff is sort of working hard, i see matt just chillin out at the bar, the same guy that doesnt even know what the return on investments gonna be for the beer cooler. You got to be kidding me. Hey, matt. Did you get me those numbers we talked about . Matt no, i havent havent had time. Lemonis you can get it for me at some point . Matt yeah. Lemonis okay. Matt definitely. Lemonis okay. All right, thank you, buddy. I mean, im not looking to fire matt, but im looking to say, why does he still work here . Dan ive known for a long time that the guys lazy. Nobody wants to fire anybody, but its like pulling teeth to get him to do anything. Lemonis so what is the solution on matthew . This bale of hay almost derailed the ranch. When a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. Faced with horses that needed feeding the owners were forced to place an emergency order of hay. Thankfully, mary miller banks with chase for business. And with a complete view of her finances, she could control her cash flow, and keep the ranch running. Chase for business. So you can own it. So youre a Small Business expert from at t . Usiness. Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep it all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberry apple scones smell about done. Ahh, youre good. I like to bake. Get expert advice for your Small Business at att. Com Small Business. So we know how to cover almost alanything. Ything, even a stag pool party. party music splashing destruction splashing destruction burke and we covered it, october twentyseventh, 2014. Talk to farmers. We know a thing or two because weve seen a thing or two. We are farmers. Bumpadum, bum billions are spent to confuse and, dare i say it, flummox the american public. Save 16 on car insurance. Switch now. Well at compare. Com, we say enoughs enough. So weve created this mind boggling facility. Where were constantly scrutinizing millions of rates. Answering the question who has the lowest. Go to compare. Com, plug in some simple info and get up to 50 free quotes. Choose the lowest, and hit purchase. Its fast and easy. Compare. Com saving humanity from high insurance rates. But im looking to say, why does he still work here . Tt, dan ive known for a long time that the guys lazy. But, god, its like pulling teeth to get him to do anything. The website, its a mess. It should never have gotten this bad. Lemonis so what is the solution on matthew . Man im happy to let him go. You know, hes gonna be replaced. Mike go ahead. Have a seat. We appreciate all that youve brought to the table in the past, but were gonna make a break. Were gonna let you go. Performance and stuff has, you know, not been kind of up to par. Marcus was looking for information from you. For all intents and purposes, you kind of blew him off. And the fact that hes coming back and requesting a second time is just a poor call. Weve had the conversation before. Youre given assignments, and you decide kind of what you want to do and not want to do, and we just continue to kind of circle back to the same points, and, you know, in my heart of hearts, im not sure that that doesnt happen again. These situations stink, but, you know, we wish you the best. Matt okay. Mike okay. Lemonis the reason that i made this initial investment is cause i believed in the people, but i want to believe in all of the people, and if theres somebody on the team thats gonna sort of change the culture that i have invested in, no, thanks. Sorry. Okay, guys, lets get out there and thank people for coming and move forward, okay . Come on. The last year and a half has been good at amazing grapes. Its gone from under 3 million to close to 4 million in business. But im not done. In any business, you cant be complacent. You cant just settle in. If you do, youre gonna youre gonna go backwards. And so there are continuous small tweaks and investments that you have to make. Im committed to doing all those things, but my expectation when i come back next time is that were getting close to 5 million in sales. I think you guys have matured as business owners. When i first met you guys, you were employees here. I know that you guys have a passion about stuff. Youre focused on making sure the whole business works. I feel like you guys have made a lot of progress. Okay, thanks, guys. Great job. Truthfully, latta, South Carolina, isnt one of the biggest cities in the state, with the closest airport being 90 miles, but its home to shulers barbque. And once you taste the food. This meal was amazing. Youll realize that its a trip worth taking. Woman excellent barbecue. Some of the best i have ever had. Norton thank you, maam. Lemonis when i met lynne and norton from shulers barbque, it was operating in a small roadside restaurant, serving about 500 customers a night. Despite being open just three days a week, they still managed to earn just under 1 million a year. 723,000 in sales. Making 145,000, its got a lot of potential. But they had problems. Food costs were high, and their profits were low. 5. 50 is what it costs us on lunch. So your food costs are actually closer to 61 . And they were feeling the pressure, because this business had a special purpose. It was something that they wanted to pass down to their adopted son shuler. Lynne this business is us, and we owe him part of it. Lemonis after trying their barbecue. These ribs are ridiculous. And lynnes famous biscuits. I love it. Lynne oh, good. Great. Lemonis . I was convinced that this business had huge potential for growth, so i made a deal. For 500,000, i got 40 of the business. Lynne now we can really take this place and go with it. Lemonis 1, 2, 3. All shulers lemonis lets go to work. I found norton a new and less expensive meat supply. I built a new deck, adding an additional 100 seats, resulting in an increase of revenue of over 300,000 a year. This looks unbelievable. Norton it is massive. Lemonis but i saw shulers as more than a roadside restaurant. I saw it as a destination, a South Carolina landmark. So we decided to expand, doubling the size of the restaurant and adding a general store. Lynne thats great. Lemonis thank you, sir, very much. Appreciate it. Over the last year, i spent an additional 1. 4 million, taking shulers from 4,000 square feet to almost 20,000 square feet. Shulers is gonna have a general store, a brandnew kitchen and catering center, a fullservice bakery, and a huge banquet hall that can serve up to 170 people. Today, im heading down south to see the finished building thats just about to open to the public for the first time. Wow. Even i was blown away. Before, there was just an empty field next to a tiny restaurant. Now theres a huge expansion, but it managed to keep the same roadside charm that i discovered on my first visit. Im looking for the general store. Lynne i think youre here. Lemonis holy moses. Lynne [ laughs ] lemonis how are you . Lynne im good. Norton how you doing . What you think . Lemonis holy moses. Norton what you think . Lemonis i havent had a chance to take it in, but, oh, my gosh. I am shocked with how amazing it looks. Its warm, and its inviting, something that i can see people loading up their family in the car and coming from north carolina, virginia, tennessee, florida. How you doing, buddy . Oy what do you think of the store . Shuler its big. Lynne its big. Norton you know what i call it . Marcusizing. Lemonis you marcusized this place . Norton no, you marcusized it. Lemonis okay. So, can you kind of give me a tour of the place . Lynne okay. Well start off with our grilling section, which were still adding to it. Lemonis what about lynne this is our western wear. Norton i think theyll sell. Lemonis i just think this is a giant mistake. Norton you got to remember youre in South Carolina. These things do sell here better than they will a lot of places. Lemonis i dont think its about where we are. I think its about what were trying to be. Getting in the apparel business is a totally different element. The problem with selling apparel is that if youre gonna get into the generalstore business, you have to sort of walk before you run. And carrying things that require sizes and fitting rooms, i think lets lets slow down a little bit. Nice to meet you. So, what is your role here . Lisa i am the manager. Lemonis of the general store . Lisa yes, sir. Lemonis and so who picked a lot of the products that are in the store . Who selected them . Lisa lynne and i did. Lemonis i dont feel a lot of shulers branded stuff. I think the store feels very cluttered. Theres too much merchandise. I feel like they shouldve called me or asked my opinion before they went out and bought all this stuff. And whether its the product or the layout, im seeing a ton of mistakes. How much do we have invested in the whole project . Norton about 1. 8 million. Lemonis how much . Norton about 1. 85 million. Lemonis how much . Norton it wont hit 1. 9 million. Lemonis its gonna be about 1. 9 million. We need to get a return on our investment. Norton thats why we want your help. Thats why youre here. Lemonis but you havent asked for it. Norton well, wed hate to bug you if youre busy. Lemonis norton, we always text. I really believe that you really wanted to do it yourself. Not only do they have a whole store full of oddball apparel and knickknacks, but then i found a whole room of stuff that was even odder. A pink tie. Come to barbecue restaurant buying this or not buying this . Yes or no . Lisa no. Lemonis no. Okay. This . Lynne yes. That came that is from that is handcrafted out of barrels. Lemonis barbecue restaurant, belly full. Norton i dont want to buy it. Lemonis what is this . Lisa thats a book. Lynne this is for babies. Lemonis so, are we basically a Department Store . Lynne no. Lemonis while pink flamingos and orange ties are kind of funny in the moment, my humors wearing off real quick, because im looking around at all this money that i have tied up here. You guys really just said, were gonna take it from here. Lynne im sorry. We did it, and we didnt ask for help. I apologize. Lemonis [ chuckles ] okay. You didnt ask me what i thought about the layout. You didnt ask me if i had any opinions on where you were gonna source product from. You told me you got it. If your business is in trouble and you need my help, log on to. Yeah . Cell phone vibrates. sigh youre okay. Hes okay, he made it jason. What do you mean . We were very bad boys. Alexa whats in the news . Alexa heres the news, alec baldwin and Jason Schwartzman were seen mooning paparazzi. Baldwin threw his shoe at photographers before making a run for it. My poor cashmere socks. Alexa, will you order another pair of brescianis. Reordering bresciani socks. Okay listen. Can you send some lawyers or something . moaning . Alec . They say that in life, we shouldnt sweat the small stuff. But when youre building a mercedesbenz, there really is no small stuff. Every decision. Every component. Is an integral part of what makes the 2016 cclass one of our most sophisticated cars ever. Because when youre setting a new benchmark for refinement, it is the small stuff. That makes the biggest impression. The 2016 cclass. Lease the c300 for 399 a month at your local mercedesbenz dealer. Lemonis you didnt ask mee what iif i had any opinionsyout. On where you were gonna source product from. You told me you got it. You guys have zero experience in setting up a retail store. Zero. Lynne im sorry. Im the kind of person that, when i go into a business, its gonna work, and ill just do what i have to to make it work. Lemonis if you take your original investment in here and the land and the original building you put in and the money that weve just recently put in, collectively, we have 3 million of your hardearned money and my hardearned money invested in here. Lynne well, well work on it. Lemonis i dont want to take anything away from lynne and nortons efforts to get the store open. Its not like this is a disaster. But i feel like if they wouldve called me or consulted me or asked me my opinion, we couldve avoided a lot of these mistakes. I just want to be kept in the loop. But this banquet room, it came out great. Whats the goal with this room . Lynne to have functions here that we can serve. Weve got parties, rehearsals, weddings. Lemonis company parties. Lynne everything. Lemonis i estimated that it probably cost about 200,000 to build this room. Norton yep. Lemonis if we just have this place book two nights a week, at an average of 100 people per night, at an average of 20 per person, thats 200,000 of revenue a year, just out of this room. You generate 200,000 of gross profit. Lynne right. Lemonis for a 200,000 room, is that i mean, where else where else can we do more of them . Ill do 10 of them. I wasnt thrilled that they didnt contact me about the merchandise in the store, but the banquet room turned out great. And i know were on track to make really good money here. Were gonna open up the doors in about a halfhour, guys. Were gonna rearrange the entire store. Tonight is the grand opening of the general store, but theres a long line of people waiting, and there is still a ton to do. Norton, can you go around and find any shulers branded stuff . From the time you walk in to the time you go to that front door, its everything shulers. Shuler . Shuler yes, sir . Lemonis grab each one of these pigs and move them around the store in places that remind people where they are, okay . Come on. Norton get savannah to help you with that. Lemonis 15 minutes, guys. Think we want to try to stay as pigthemed as possible. Everything on this table, shulers branded. We got about two minutes before we got to open these doors. What we want to have people see is sort of like a sampling of everything we have shulers as they come through. All right, lets pick it up. Norton all right, yall come on in. Come on in. Lemonis how are you . Welcome. Welcome to the general store. Norton how you doing . Good to see you. Lemonis make your way through the store. Give us your feedback. Yall been here before . Man oh, yes, several times. Lemonis what do you think of the store . Woman i love it, i love it. It is very much the embodiment of who they are. Lemonis there you go. Great. Were off to a good start with the merchandise for the general store, but we need to pare some things down and put a real plan in place. Im confident well ultimately get it right. Lynne i would like to thank everyone for coming for our soft opening today. Its been a long, rocky road. But lemonis but. . [ laughter ] whyd you look at me . Lynne im just kidding. Norton this is a culmination of something ive always in the back of my mind had a dream of. My father had an old country store. I watch shuler run around here, and i see him doing the same things i did. It just brings back all the memories to me. Lemonis this store is not was not built for them. Lynne no. Lemonis who was it built for . Lynne shuler. Lemonis it was for shuler. So often i meet people where i give them some direction, and they go off to the left or the right, but these two, seriously, have not only become great friends but great business partners. Norton we thank everybody for coming. Its weve worked hard, a lot of people. Were glad to have marcus as a partner, because without him, it wouldnt be possible, not just for the money but encouragement hes given us all along the way. Lemonis enjoy yourselves, and, obviously, tell your friends and family about it, cause were very proud of what we have. Thank you very much for coming. [ applause ] im confident this is gonna be a wild success. With lynne and norton, i could give them every worldly possession that i have, and i know theyre gonna respect it, but i do need to stay in closer contact with them, because while theyre unbelievably hard workers, theres some things that they just dont know, and thats where sort of having resources and the Partnership Makes sense. Coming up. Does it feel weird that hes gone . Steven yeah. Lemonis how has it affected your dad . Steven you know, im just trying to be strong and follow his lead. I. Just me. Me andrd my four daughters. Ah, theres a lot of dancing and pageants that go on in our kitchens and living rooms and things like that. Ive had to learn to accept certain things like the fact that my toe nails and finger nails are going to be painted constantly. But its really awesome to watch them at their own things. Theyre great kids. All of them. Whatever home means to you, well help you find it. Zillow. Oh hey. Ive been using you hey mforever. Youre grimy. Grimy . Naw, thats personality who you talking to. . Hey, the wife jump in, lets all shave change that filthy razor change blades . Wooooh, rich folk alert fooled me with your linoleum tile. Stop hanging out with a dirtbag razor cause new ones are so expensive. Dollar shave club. Amazing razors delivered for a few bucks. Shave with a fresh blade anytime. Try dollar shave club. Com watching tvs get sharper, youve had it tough. Bigger, smugger. And you . Rubbery buttons. Enter the x1 voice remote. Now when someone says. Show me funny movies. Watch discovery. Record this. Voila. Remotes, come out from the cushions, you are back. The x1 voice remote is here. Lemonis last year, Steve Grafton reached out to me about his familys struggling furniture business. Steven this doesnt have a sticker. Is it done . Steve no, its not done. Lemonis i was intrigued by his story of a familyowned, multigenerational furniture business started in 1964 by his cubanimmigrant father, esteban, who came to this country with no money. So i headed down to my hometown of miami, florida, to meet steve and his family. Youre steven, also . Steven yes. Lemonis three generations right here. The quality of the product was underwhelming. Their facility was outdated and filled with old equipment. Steve and some of the machinery here are 50 years old. Lemonis the company was almost 1 million in debt. A business like this should have no debt. But what i also found is a company that represented the pure definition of the american dream. So youre the true american success story. Steve they call him maestro around here. Lemonis maestro . Three generations of a loving family were doing everything they could to keep their business afloat. I made a deal to invest 1. 5 million for 45 of the business, keeping my share below 50 to ensure this remained a family company. Thank you. Steve thank you. Lemonis im looking forward to it. We changed the entire layout of the building to improve efficiency and flow. We added new lighting, we added airconditioning and ventilation, we even built out a Design Center to help customers get inspired. This is a good investment right here. Steve this is awesome. Lemonis and we created a quickship chair line that would be available for customers to make a quick purchase. Target price point . Steve 495. Lemonis cost . Steve 250. Lemonis grafton furniture was finally heading in the right direction. Man you got a great product. I think its a Wonderful Partnership for the future. Steve awesome. Lemonis but shortly after we finished the first episode, esteban, the patriarch, the heart and soul of this business, passed away. Today, im heading back to miami to check in on the grafton family and see the progress that theyre making. Hey. Steve hey, marcus. Whats going on . Lemonis so, lets take a tour through the whole factory. Steve to the left, up here, we made our little break room for the guys, and so we named it abuelos cafe. When i inaugurated abuelos cafe, i made a speech that this room is here because of my dad, and we stock it for them, free of charge. Lemonis from him. Steve from him. Lemonis its actually the first time ive seen you since he passed. Steve i know. Lemonis as you walk through the warehouse, you feel this void of esteban. He was quite a character. He had sort of a personality larger than life, and you feel his absence. Does it feel weird that hes gone . Steven yeah, yeah. Lemonis how has it affected your dad . Steven its been you know, its hard. He was the guy who taught him. It was his dad. I couldnt imagine. Im just trying to be strong and follow his lead. Lemonis are you finding that youre using this room . Steve we are. Lemonis we built out the design room so that when designers come to grafton furniture, they feel like theyre in a really professional environment. So, walk me through kind of what will happen here. Steve 90 of what weve done is c. O. M. Customers own materials. Lemonis yeah. Steve so the interior designers buy the fabric at kravet or robert allen or romo, and theyll ship it here. But if we cut them off at the path and we have kravet and romo and robert allen here, then they might just say, well, lets use this fabric on that piece. Lemonis an extra margin when you do that here for you . Steve oh, yeah. Yeah. Lemonis so youve really this room has given you the opportunity to sort of upsell the services that you do. Steve correct. Lemonis okay. Steve i would say the margin could well exceed 250,000. Lemonis if this room can generate 250,000 of gross profit on a 75,000 investment, if theres any other space in the building that can do that, i want to build it now. Steve [ chuckles ] okay. Lemonis holy cannolis. I thought we were getting, like, a little one. Steve no. Lemonis like a little table with zzz steve no. No. No, no. This ones got the autofeed. Lemonis one of the things that i wanted to work on in grafton was the margins on each piece of furniture. So we invested in a new cnc machine. The investment into the cnc machine was a big one about 100,000. But the production that weve seen out of it is that weve been able to lower our labor costs, ultimately resulting in a much higher finished margin. And so what did it cost, historically, to make one of those Pacific Coast highway chairs . Man about 25 hours a chair, the whole process. Lemonis at an average wage of how much an hour . Man about 17. Lemonis so it used to be 425 just in labor. Now what will it cut that down to . Man half that price. Lemonis wow. Im surprised by what i see in here. And im surprised by sort of the effect on margins. And so if it used to take four hours to make a chair and it now takes two hours, thats monumental progress. And basically, what that is is, four hours to two hours is just margin expansion. Steve correct. Lemonis because youre selling the chair for the same amount. Steve correct. Lemonis and youre just putting less into it. Steve correct. Lemonis ill give Steve Grafton a lot of credit. He has done an amazing job. Prior to my investment, grafton furniture was doing just about 2 million in sales. Since the renovation and the investment, its gone up to an annualized 2. 8 million in sales, a 32 increase. I think esteban would be really proud on where the business is going. Whats your relationship like with him these days . Mike its not, like, better, by any means. Lemonis its not better . Mike iii honestly dont want to talk about it. Lemonis why . Mike im done talking about it. Its intelligent drive is msystems. Ng. Paradigmshifting. Its technologyfilled cabin. Jawdropping. Its performance. Breathtaking. Its selfparking. And selfbraking. Showstopping. The allnew glc. Mercedesbenz resets the bar for the luxury suv. Starting at 38,950. [bassist] two late nights in blew an amp. But good nights. Sure,musics why we do this,but its still our business. We spend days booking gigs, then weve gotta put in the miles to get there. But its not without its perks. Like seeing our album sales go through the roof enough to finally start paying megs little brother i mean,our new tour managerwith real,actual money. We run on quickbooks. Thats how we own it. So we know how to cover almost alanything. Thing, even turkey jerks. [turkey] gobble. [butcher] im sorry burke covered march fourth,2014. Talk to farmers. Weve seen almost everything, so we know how to cover almost anything. We are farmers. Bumpadum, bumbumbumbum theres Something Special i about the relationship. Between people who are related and what that brings to the business. It can be a great dynamic. When it goes bad, it can be ugly. Man i was not one day late. Lemonis that was the case with a business i visited last year, sjc custom drums, in southbridge, massachusetts. Started in 2000 by brothers scott and mike, their drums are topoftheline works of art that performers like imagine dragons, lady gaga, and green day swear by. But three years ago, the brothers had a falling out. Mike we are 50 50 partners. Lemonis how much did you pay to buy him out . Mike to buy him out 533,000. Lemonis the brothers stopped talking, and the cost of the buyout was putting a huge burden on the business. Mike our relationship has been so far gone for so long. Lemonis mike, along with his friend chris, who ran the manufacturing and finances, did their best to keep the company going. Who generates the actual sale order, the quote . Mike i do. Lemonis and who makes sure that its priced properly . Chris i created the pricing tool, and mike said, these prices are too high. Lemonis the margins on their drums were way too low, and the manufacturing process was way too slow. Man every time we try to set a schedule, youre constantly stopping and going back because this kit ends up being more of a priority. Lemonis and while their drums had amazing quality, the high prices put them out of reach for the average consumer. How much is a setup like this . Man this set is about 6,000. Lemonis high prices, debt, and not enough sales coming in the door . Chris we dont have enough money to cover payroll for next week. Were at zero right now. Lemonis sjc was bleeding money. Margins are terrible. This is a bad deal. It wouldve been easy to walk away, but sjc drums was special. If we can come up with a less expensive drum without compromising quality and sound, this company could be a winner. So i made a deal for 33 of the business. 400,000 check. We have a deal . Mike we have a deal. Lemonis what i say, goes. Mike understood. Lemonis our first order of business lowering the cost of the drums, both to the consumer and what it costs to manufacture. They hit a wall. How you guys doing . Chris were having some trouble trying to get the price down. Lemonis so i reached out to mikes brother, scott, who started the company and knew the drum business better than anybody. You were the artist. Lets just call it like it is. Scott yeah, when it came to putting your hands on it and doing it, that was all me. Lemonis bringing back scott meant opening up old wounds. Scott what did i ever do to you . Lemonis but i didnt care. It was about fixing the business. Scott i think you go one flat finish, but its a natural satin stain cause then youre eliminating the cost of the laminate, and youre eliminating an extra step when youre doing the baring edges. Lemonis hes got some crazy [bleep] in his head. Hes very smart. I spent over 50,000 on new equipment to get their shop in shape. Working together, mike, chris, and scott developed a new drum kit that could be retailed for under 900. Matthew thats not a beginner kit. Lemonis but its beginner price. Matthew yeah. Lemonis we took the new kit to a major music retailer, and with a handshake, mike landed a brandnew account. Richard wed love to do it. Mike thank you so much. Lemonis sjc is now making money. Mikes now going out on the road and traveling on the alternative press magazine tour. Hes there to support the bands that use sjc drums, but hes also there to drum up new business. Mike dude, yeah, our turnaround time last year was like six or seven months. Right now, its only four weeks, so. Brendon thats insane. Lemonis the plan is, mike would set up shop and display his drums at each one of the tour stops. Mike make sure the shirts are visible, make sure youre getting emails on the ipad. Lemonis im investing 53,000 in this idea. In order for this investment to make sense, mike would have to generate 100,000 worth of drumkit sales. Those drum kits range from under 900 to 6,000, and they have 50 margins. Im going to sjc today to make a little bit of a surprise visit. I want to see how things are going, but more importantly, i want to see what the shop looks like. Hey. How you doing, buddy . Mike good. How are you . Chris how are you . Lemonis what happened to your beard . What is this . Chris yeah, im growing it out. Lemonis whats happening . Chris not too much. Were in the middle of a huge transition right now, moving a lot of stuff around. Lemonis what does that mean . Chris we needed more room for a lot of the parts that are coming in, so were getting a big shipment of parts today. Lemonis so, really, youve had to stock up so much more parts and pieces that you had to shift around the space. Chris right. Were shipping a lot more drums. Weve been shipping 50 shells a week. Lemonis so we used to make 20 a week. Now were up to 50 a week. Chris yep. Lemonis you have a lot of new equipment. Chris a lot of new sanding equipment. Lemonis oh, this is the cnc machine . Chris yeah. Lemonis how much was this . Chris 115,000. Lemonis so, walk me through why it wasnt a mistake, please. Chris okay. Lemonis oh, jesus, please. Chris before, matt would take the drum, and hed put it on a layout mat. Hed put pieces of tape on it everywhere where it needed lines. Hed bring it over to the drill press. Hed drill it all by hand, go over to the edger, edge everything by hand, sand it down. Lemonis so, how much time did that take . In labor hours . Matt anywhere from 45 minutes to an hour and a half, depending on the kit. Lemonis thats just for one set . Matt one threepiece set. Lemonis what does it take with this machine . Matt nine minutes. Lemonis since we spent 115 grand on this machine, i would just like to actually see how it works. It used to take 45 minutes to an hour and a half to sand, drill, and trim down one set of drums. Now it takes them nine minutes. Thats an 80 increase in efficiency. The increase in sales at sjc is now requiring them to have a lot more raw inventory, and i mean a lot. Chris got to sell some damn drums cause this is a lot of [bleep] lemonis how would you rate the tour . Mike uh, i sold 25 grand on the tour. We had a 20foot trailer full of drums empty. Lemonis you sold all of it . Mike all of it. Got about 80 solid leads. Out of those, i feel half of them will actually pull the trigger. Ill sell another 80,000 to 100,000. Lemonis okay, so, youre gonna do over 100,000 worth of sales. Mike yep. Lemonis cost 50,000 to go, so you probably got your money back. Mike right. Lemonis . From all your investors, plus all the leads you generated. I was pleased to hear that mike did 25,000 in sales while he was on tour, but i was more impressed with the 80 leads. If hes able to close just 1 3 of those leads, well average an additional 75,000. What are these . Mike these are the cajons that scott made. Lemonis scott made these . Mike yeah. Sit on it and play it. Lemonis while scott may no longer be working with his brother at sjc, hes still making other percussion instruments and wholesaling them. One of his customers is mike. Lemonis whats your relationship like with him these days . Mike um. Lemonis be honest. Mike yeah. Its different. Its not its not, like, better by any means. Were, like lemonis its not better . Mike iii honestly dont want to talk about it. Lemonis why . Mike im done talking about it. Lemonis for exclusives, extras, and business advice, visit. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep it all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberry apple scones smell about done. Ahh, youre good. I like to bake. Get expert advice for your Small Business at att. Com Small Business. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Because you cant build the business of tomorrow let the moment stop you. Not the miles. The Jeep Grand Cherokee with a 730mile range. The most awarded, rewarding suv ever. Jons that scott made. Lemonis whats your relationship like with him these days . Mike iii honestly dont want to talk about it. Im trying to just have a very clear relationship with my brother outside of money and. Business stuff because that got us into where we were before. I had nothing to do with these, but we owe him money for them. Lemonis if the goal was to rebuild the relationship and not worry about the personal side. Mike yeah. Lemonis . But just have the business side be right. Mike right. Lemonis . Then why are you not executing on that . Mike ii tried executing on that. Lemonis you guys agreed to the numbers before he made them . Mike chris and him did, not me. Lemonis wheres chris at . Grab chris. Mike yo, chris . Chris yeah . Lemonis hey. Chris hey. Lemonis whats the story with these . Chris i try to use the good, better, best model for cajons, okay . Lemonis yeah. Chris i placed an original order with scott. Lemonis how many . Chris for six good and six better. Lemonis 12 total. 6 good and 6 better . Chris yeah. Lemonis and the six good how many did you get of those . Chris zero. Mike and scott brought all of these and handed us an invoice for a lot of money. Lemonis what was the bill for each of them . Chris he charged us 195. Lemonis and so, if any other vendor had delivered us what we didnt ask for, what would we do . Chris i would return it all. Lemonis right. Chris i didnt want to ruin that relationship. It seems like scott hasnt gotten over some of the. Past when mike is trying to bridge that gap and move on. Lemonis you should be able to go to bed at night im just being straight with you and feel like youve done your part because i know how hard you genuinely tried. The product is beautiful, and its wellmade, and its branded properly, but it doesnt give scott the right to just decide to do what he wants to do. And we all have an agreement hes got to follow that process, and the fact that he did that and mike just took it is a sign of mike still continuing to try to make things work. I was hard on you about the way things were with your brother cause i wanted you to work it out. You did everything and more than anybody would ever do, and you should when you lay your head down at night, you should feel good about that. I think chris feels that way, too, about it. I think we both feel like you did everything you had to. And youve been the bigger man. And you should never stop being that person. Namm is the National Association of music merchandisers. Its an annual convention in anaheim, california, that displays the best of the best of Musical Instruments and all the components that go with it. Mike hey whats going on . Lemonis this is, like, a revisit of the first time we met. Mike full circle. Chris yeah. Lemonis you know, we met right here a year ago. Mike yeah. Lemonis the booth looks good. Chris thank you. Lemonis whats sort of the response that youre getting . Mike awesome. Lemonis sjc has been going to namm for 9 or 10 years, and its a big part of their business because there are dealers there that represent their product all over the country. So, like, last year, what did you sell in total . Chris at namm, we sold about 25,000. Lemonis what are you projecting to do here this year . Mike well, yesterday we landed a deal. Theres a dealer that wants to do 100k a year. So lemonis 100,000 . Mike a year, so if we get that deal, wed be wed be. Lemonis how do you like the sound . Man it sounds great. Like, theres a nice thickness to them which you cant really find much place else. Lemonis when i first invested at sjc, it was doing just under a Million Dollars a year. With the continued enhancement of inventory, i would expect that our business gets to 2 million by the end of 2016. With mike and chris, what you see is what you get good effort, good commitment, good passion. Now its turning into good results. Theyre two guys that i can see myself being partners with for a very long time. Narrator bring on the cheer. Narrator its a special holiday episode of shark tank. Nailed it. How did you come up with this idea . Did you have a bad dream . Narrator in the tank, entrepreneurs seek an investment to start, grow, or save their business. If i have to take out another mortgage on my house, i will. Whoa. I have rechristened you the beast. Narrator if the sharks hear a great idea, theyll invest their own money. What youve done is amazing. And fight each other for a deal. You have a history of taking real crap and turning it into gold. [ laughs ] narrator but the entrepreneurs must get the full amount theyre asking for, or theyll walk away with nothing. Im a creative mind on crack. I think you have a long way to go. Maybe you just saved yourself from death. You got to leave with a shark