I know youre 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. 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. In 1994, michael and ramona woods launched ashtae a line of multicultural haircare 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 were gonna do inventory, we just need to knock it out. Lemonis but theres one big problem. The companys profits go out almost as soon as they come in due to michaels costly side projects. Michael ive been working pretty aggressively on this app. Its the next big thing. Lemonis his lack of focus has hindered ashtaes 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 its left ramona exhausted and overwhelmed. Ramona my plate has been overflowing. I cant handle that. Lemonis ive been in the haircare business for a while now with my company erika cole, and i think ashtae products would be a great addition. Im confident that i can turn it around. Assuming i can find the place. Theres this gigantic building. I cant tell where the correct entrance is. Is this, like, a Little Village . Is it a big strip mall . Or is this their headquarters . I dont know. Hello. Hi. Taylore hi. How are you . Woman hi. How are you . Ramona oh, jesus lemonis [ laughs ] im marcus. Ramona im ramona. Lemonis ramona, nice to meet you. Ramona oh, god. Taylore hi. Im 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 dont talk about me without me being around. Lemonis how are you, sir . Im 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 haircare company. We only sell directly to beauty salons. Lemonis okay. Youre 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. Thats where the bulk comes in. Lemonis if michaels going door to door, and thats how hes generating his revenue, its kind of obvious to me why they havent broken outside of the carolinas. Doortodoor 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 shes 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, weve never invested in nextage technology. Lemonis is a computer the next age, or is it today . Michael well, no. Taylore its always an argument. Lemonis is there a place where all the products 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. Whats 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 thats 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 dont 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 couldnt 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 its great margins. Ramona yeah. We have great margins. Lemonis can you give me a tour . Michael mmhmm. Lemonis oh, my goodness. What is all this . Theres 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 bailbonds company, dance studio. Taylore photography studio. Michael photography studio. Lemonis what day is this place really busy . Michael every friday, saturday, its jumping. Lemonis its like hes 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 haircareproducts company to subdividing property and becoming a master landlord. Which is not a distraction at all. Taylore no. Lemonis look, i dont fault michael for wanting to invest in a piece of property. Its 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 whats happening in here . Wendy were 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 its relaxed. It adds moisture to the hair, keeps the hair from being dry and brittle. Wendy and i love the fact that its not very heavily fragranced, so it doesnt clash with your other products. Lemonis you know what . Id 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 ] im not comfortable. Its a lot, a lot softer. So, what actually happens in this warehouse . Walk me through it. Michael everything comes in in barrels. And then well fill the product. All the products are made in chicago. Lemonis so you have a copacker . Michael correct. Lemonis why doesnt your copacker actually give you finished goods in a bottle, in a case . Michael cause theyre saying that our volumes arent large enough. Lemonis so, you have not been able to find a copacker that can give you a finished good in a case ready to go . Michael we havent looked. Lemonis why . Michael because, see, we own our formulas. So its not that difficult to make the product. Lemonis is your vision to have a fullfledged 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, were gonna have to go much larger. We could be the laboratories for other companies. Lemonis become a copacker for other people . Michael absolutely. Taylore yes. Lemonis im not quite sure if hes ever been to a true copacking facility to understand the technology thats required, the systems that are required. It isnt 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 whats 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 whos helping you . Ramona nobody. [ laughs ] lemonis okay. Michael honey, im sorry. Sorry. We got a few clients whove 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 buildout, having a haircare company. Its clear to me now he just dumps it on ramona. Okay, lets keep going. What is all of this equipment . Michael thats all the equipment that we have left over from the television station. Lemonis what television i dont im 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. Ive failed at very few things. Everything that ive done had a trajectory of that. Now, are there mistakes made . Yes. But we were on our way to a multimilliondollar 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 wasnt a good idea. I said it multiple times its tough when you have this vision, and you have all these ideas, but you cant 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 havent met yet. Lemonis oh, you havent . Taylore no. Lemonis all right. Well talk in a little bit. Taylore okay. Lemonis all these different ideas that michaels 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 im amazed at how well you carry that pressure on your shoulders, cause theres a lot of crazyass ideas around here. Ramona yeah. Lemonis what id like to do is go over the financials. Ramona this is the total. Lemonis revenue. Ramona uhhuh. 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, theres 10,000. Lemonis so thats 60,000 in cash. Thats 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 mmhmm. And then a supplier that we owe 60,000. Lemonis so thats 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 moneys 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 dont agree with how much cash the Business Needs. I think the Business Needs to be debtfree. So thats 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, im gonna put 200,000 into the company and that thats gonna make it all better, well, what is better . Lemonis its actually making the company entirely debtfree. Michael but what value does that increase in our sales . That doesnt necessarily increase in our sales. Lemonis no, but, michael, im asking you to justify what youre gonna do with the 500,000, and youre taking me to, whats the 200,000 gonna do for my company . Michael okay. Lemonis the value in me isnt just supposed to be in my checkbook. Michael were not asking for the checkbook. Lemonis you are asking for the checkbook, cause youre asking for more. If i am just a checkbook, im the wrong guy. If your business is in trouble and you need my help, log on to. Come to a complete stop. Recalculating. In one mile, arrive at a place where you make your own lane, only to discover. It has traffic jams too. Your all new compass. Lemonis the value in me isnt just supposed to be in my checkbook. Michael were not asking for the checkbook. Lemonis you are asking for the checkbook, cause youre asking for more. If i am just a checkbook, im the wrong guy. Michael no, im asking for a fair value for the company that i believe that youre 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 . Its like, i cant 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, ive been tight for so long. Lemonis mmhmm. You just need more cushion. Ramona i just dont 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 its coming. Lemonis its coming . Michael [ laughs ] lemonis or its 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 were gonna find new customers. Were gonna look at the branding, how to make more money, how to deliver it easier, where to make it, where to bottle it. Were gonna do everything. You ready to go to work . Michael lets do it. Lemonis whos excited . Taylore yes [ cheers and applause ] lemonis excited . Michael hey lemonis were 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 its 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, its not necessarily im making sales calls. Were serving people. Were 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. Its called the bronner bros. Show. Thats the largest africanamerican trade show in the industry. Lemonis im a lover of conventions because you can get your product in front of thousands of people and reach a muchwider audience. If bronner bros. Is the next big event that comes up for ashtae, and its 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 . Whats going on, miss lady . Good to see you. Whats up . Toya good to see you, too. Lemonis how are you . Toya im really good. Lemonis im 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 were sold out. Weve got a display. Lemonis thats 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 theres 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 theres got to be a science to it. What michael should be doing every time he goes int