[bleep] is gonna change. I do it save jobs. Check you out. And i do it to make money. This the profit. [upbeat music] [truck beeping] watch your back. A. Stein Meat Products is a prime beef wholesale business in brooklyn, new york. For 75 years, theyve been selling Quality Meats to new yorks finest restaurants and butcher shops. Thats beautiful. And shipping their product all over the country. We carry a lot of choice and prime meat. We only carry a highend product. Howard mora. I also need about 20 prime loins. And alan buxbaum. What are you waiting for . Are sons of the original two founders. Together, they now run stein meats. And over the last 18 years, theyve grown their revenue from 4 million to 50 million annually. When our fathers first started, it was much smaller. It really expanded the business. Meat is a competitive business. And sellers like stein work on a very low profit margin. Meats priced like the stock exchange. You sell stuff for pennies a pound over your cost. And even with 50 million in revenue last year, stein is still struggling to make a profit. Um, we still have a balance of 2,300. Last year, stein meat showed a loss of over 400,000. Were losing money. Its been pretty tough over the last couple years. If the losses continue, stein meats will be forced to close its doors in the very near future. Without some major adjustments, 47 stein meats employees will be out of work, and alan and howard will lose everything theyve worked so hard to build. Im scared that this business will close. I dont wanna see this disappear. Its been my whole life. We dont wanna fail. Stein meats sells a great product, and they generate over 50 million of revenue. Im positive with some tweaks, i can find a way to turn a profit. Good morning. Sir, were going to stein meats in brooklyn, please. Good morning, im marcus. Marcus, how are you . Tony. Nice to meet you. Tony, nice to meet you. Nice to meet you. A lot going on this morning. Yeah, theres quite a bit going on. This is when our usual action happens. And wherewhere is all this going . Restaurants, butcher shops, diners. How long have you been here . Ive been here for 24 years. 24, thats it . Yeah, thats it. Oh, my gosh. Can you show me around . Absolutely. But before you go in, you need a hairnet, a hat, and a white coat. Okay. So what do you do here . Im one of the foremen here. Lets head in and check it out. Okay, lets go. Come on in. This is where it happens. Wow. Wow, wow, wow. This is our beef department, all the hanging beef. How about i get howard and alan down here . Theyll really give you a good tour. Marcus is here. Nice meeting you, pleasure. Nice to meet you. You got a nice operation. Thank you. Do you love it . After 40 years, i have to love it. You better love it. I dont have a choice anymore. So are you alan . How are you . Im marcus. Good. How are you, marcus . Nice to meet you, sir. Pleasure to meet you. This is a nice place. Now are you guys brothers . No. Partners. Just partners. Closer than brothers. And are you guys 50 50 partners . 50 50. Our fathers were partners. Okay. They left the empire to us. And so, walk me through the process of how it works. This is the receiving area. We got all our fresh meat through here. Then we also get lamb and veal in this way too. And those cuts will go into the other room next door, where theyll be broken down into subprimals. Theyll be packaged or shipped out as orders. So how much revenue will you do a year . Uh, we should do about 50. 50 million . 50 million. Thats a big business. How big is that electric bill . Uh, about 30 a month. Wow. A big business like this comes with big overhead. How much is your rent . About 32,000 a month. Wow. Theres rent and cooling cost averaging over 60,000 a month. Theres union labor costs. Theres seven delivery trucks. Thats a lot of money being spent. But theres 50 million of revenue coming in, so im a bit baffled by the annual losses. This is almost a 50 million business, how much do you think youll lose this year . About 400,000. How much is inventory at one given time . Probably between 800,000 and 900,000. How much leaves here a day . 150,000 to 200,000. Youre turning your inventory pretty quick. Right. And so do you guys have any debt . Right now our bank is lending us about 3 1 2 million. The fabricating room, where we cut up, make the orders, process the meat. Hey, david, i got that order for wolfgangs. I need 40 short loins as soon as possible. Corey, i need three boxes of our boneless legs of lamb. Whos this guy . Thats frank, our general manager. Come on, we gotta get these trucks out of here. Lets go. He seems to know what hes doing. Yes, he does. Frank. Frank, im marcus. Hey, marcus, how you doing . Both nice to meet you. How long have you been here . Five years. Do you love it . Yeah, its good business. You know, everybodys gotta eat. [chuckles] uhhuh. Do you mind giving me kind of we could walk through, give me kind of a rundown of what goes on here. Well, this is our production room. We fabricate orders. How do you measure the efficiency . Uh, ive never really analyzed it, never thought about it. I just look and see what i can get done in a given day. And so how many pounds do we generate a day . Um do you know that number . No, i dont. So what other things could you guys do here to generate some money . Well, we started a new item. We made the Brooklyn Burger. Its a brandnew item. The conception of it was from some of the prime Meat Products that we dont get the top dollar for, make an excellent hamburger. So it something you sell to butcher shops or restaurants . How does ithow does it work . We sell it to the sports stadiums. Were the official hamburger of the new york yankees, the new york mets. Oh. The Brooklyn Nets. And how does that work . You have, likelike, a Marketing Arrangement or uh, corporate Sponsorship Agreement with the teams. And how much does that cost a year . About 400,000 a year. Oh, wow. 400,000 is a lot of money to spend marketing one product, especially only three locations. Im gonna have to take a look at these contracts and make sure i know what were getting for that. What id like to see is how the Brooklyn Burger is made. Cut the meat here. Now i dont know if you wanted to try cutting a piece of meat. Well, id like to try it. I wanna learn. Ill stand over here, okay . And break it up into what . Three pieces is fine. Just watch your fingers. Aah. [chuckles] its all solid muscle. Brooklyn burgers only accounts for about 1 million in sales. And its sold at three major sports venues as the premium burger. So it could be a great stepping stone for something big, like getting into Grocery Stores around the country. The Brooklyn Burger could be our golden goose. You know, what i love about it is the color. It really looks so fresh. Perfect flavor. [indistinct chatter] oh, it puts the paper and everything. I think the Brooklyn Burger concept is a real winner, with a very efficient manufacturing process. You put that together with the brooklyn name, what a great way to market a product. You remember the lucy show with all the chocolate going by . Holy crap. [laughter] [phone ringing] good morning. Stein. Sure. Whos calling . Look, these guys know meat, and they sell one heck of a product. But theyre a little shaky on the numbers. I wanna head up to accounting and meat the people that actually put the numbers together. Im marcus. Donna. Nice to meet you. How are you, donna . Good. Thank you. What do you do here . Are you in charge . Im the office manager. I oversee the accounts payable, the accounts receivable, enter invoices. So do you have anything to do with accounting . No, howard and alan take care of that, or attempt to, or try to, whatever. So, ill ask howard and alan later, how they handle the books. And how long have you been here . 20 years. Youre the one that contacted me, right, to come here . I am. What was your motivation . It needs a whole overhaul. I mean what are the things that just eat at you . Um, absolutely the receivables. Customers pay late. Theres a lot of money out there. So the money that the customers owe us, those are the receivables . Correct. How much is our total receivables right now . A couple hundred thousand . We have almost 4 million on the streets. Are you kidding me . Business that generates 200,000 a day in sales, 50 million a year, can expect to have a certain amount of receivables. But 4 million in uncollected funds . Thats totally unacceptable. And how much of it is old . 1. 1 million. Is any of it really old . Some could be well over two years old. Youre not gonna see that again. No. Of the 4 million of receivables, 1 million is at risk . Yeah. Okay. All right. Im gonna go chat with them. Thanks, donna. Youre welcome. So i got the receivables list. Theres 4 million of receivables. But i think whats more alarming is of the 4 million, of the money the customers owe us, 1 million of it is over a month old. Both we know that. Thats yourthats the best response you got . Well, a lot of them have been paying those down. But i saw a couple on here that were huge. Like, [bleep] meats, 50,000 . Well, he had a problem with his family. And hes paying medical bills now. [bleep] packing. 117,000 . Hes a little slow, a lot slow. He buys every week. But theyre still a customer of yours . Yes. Why would you still sell to people that owe you that much money . 117,000 this guy owes you. Whew. I dont know if these guys are the nicest guys in the world, or the most irresponsible. Look, i understand trying to help other people. But if they dont take care of themselves, theyre gonna be out of business. There are hundreds of thousands of dollars of receivables that are associated with businesses that are either closed or the accounts are dead. I should apply for a loan with you guys. You wanna know why . I dont ever have to pay it back. Not collecting payment from the customers that buy their product is gonna lead to serious cash flow problems. They have millions of dollars tied up in ioweyous. You cant pay bills with ioweyous. How much do we owe in payables to our vendors . How much is that, approximately . Probably about 2 million. And how much of that is past due, by your definition . Probably about 1 2 million. Ill see you guys in a little bit, okay . Okay. Im shocked at what im seeing in stein. Steins assets consist of less than 1 million of inventory on the floor, and 4 million of receivables, of which 1 million is past due, and maybe not even collectible. Steins total liabilities are made of a 3 1 2 Million Bank Loan that they use to Fund Expenses and make up for receivables that they dont collect, and about 2 million in outstanding payables that are owed to companies they buy meat from. Right now, stein owes more money than it has, by about 1 2 million. Is it scary that oh, absolutely. Ii see the bills, and its like, well, i dont know i dont know how much longer were gonna be here. Do you feel like you guys are pretty close to that . Are you scared about that . I am, because i was selling my house and purchasing another house. And i told my husband, lets not do it now. I was too afraid to do it, just because i didnt wanna not have a paycheck or worry about it. The girls live paycheck to paycheck. Im married. Ive married a long time. I have a husband. Ill be okay. But these girls live paycheck to paycheck. I said, if something happens im like, ones buying a car, and, like, i just wanted to tell her, dont buy the car. Because if something happens, she has two kids, and now she has a car payment. If you cant get a job the situation at stein is far more dire than alan and howard think it is. It doesnt even look like theres any relief in sight. And if i dont get involved, and not only put some money in, but force them to make some cuts, there is no way this business is gonna make it. I know i can help, but its gonna take a lot of changes in order for this business to really make it. Hey, guys. Hello. How are you . Good to see you. So we decided to meet at peter lugers steak house, one of the best steak houses in america, and also one of steins biggest customers. This steak is ridiculous. [chuckles] when you think about credibility, i think being in a place like this i think it says a lot about the quality of your business. But you guys have heard me talk about people, process, and product. I know that theres great people. The producti dont know that ive had a better steak. And im not telling you that because i wanna make you feel good. If i didnt like it, id tell ya. But the last part is that the process is broken. Youre in a competitive business. Its a commodity, very thin margins. If you dont collect the receivables, your business is wildly vulnerable. Your employees, theyre all scared. You know that, right . Do you have a fear that you guys could lose it all . Yes, i do. There are night that i dont sleep. Were in a desperate situation. Im scared that this business will close, after its been a Family Business for over 75 years. We wanna survive. So what is the number that you guys want, and what can i have for it . We were actually discussing a 5 million input into the business. Uhhuh, and whats the share of the business . A 1 3 share. Did you calculate a break . Howd you come up with that . Inot through any math or anything that we did. Obviously. Because the business loses money today. It sells a lot, you just dont make anything. Well, i think that im not doing a deal for less than 50 . I can tell you that right now. Because i think the Business Needs so much lifting and so much capital to dig itself out of a 1 2 million hole and 2 million of payables. If you dont do a deal with somebody, youre gonna own 100 of nothing. My offer is 1 million to provide working capital for the business, and bring the payables into an acceptable range. The percentage that i own will be 50 . [tense music] um coming up. You doing okay . You look a little stressed. I really have a lot of thoughts that i just wanna quit. And later. All these people out here that are scared to buy a car, because theyre scared theyre gonna lose their job, well, they have a reason to be scared. Because this business is two weeks away from closing. We switched to tide purclean, because its made with plants. We switched to tide purclean, it gets stains out of his pants. Tide purclean, they dont put phosphates in. 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My offer is 1 million to provide working capital for the business, and bring the payables into an acceptable range. The percentage that i own will be 50 . [tense music] um these guys were actually expecting a bigger offer. I thought my offer was plenty generous. Theyre losing money every month. Theyre 1 2 million in the hole. My paidin capital was gonna solve all those problems. Could we have a minute . Yeah, you can have a minute. If we can get on the right path, all of us will make a lot of money. The way i feel, i mean, we still have a 50 million business. Yes, its poorly run. And thats where we need the direction. Lets see if we can counteroffer. 4 million . So what do you guys think . We decided we would do the deal at 4 million. No. Alan and howard, this is were here. If those receivables and those payables dont start matching up, you will not be in business in the next year. I am not writing a check for more than a million bucks. Do we have a deal . Yeah. Yes. Come here, you big guy. We came from 5 million down to the 1, to be more realistic. Im very comfortable with the Million Dollars, especially with everything that hes going to add to the business. See ya in the morning. Good morning. My name is marcus lemonis. And i fix failing businesses. This business last year did 50 million of business. Unfortunately, we didnt make any money. You guys sell a lot, but theres one thing that you dont do very well. What is that . Collect. Collect money. So last night at dinner, i made a deal with alan and howard. And im putting in a Million Dollars. But you know what they forgot to do last night . They forgot to ask me for my money. Its a theme, but its not funny. Because your paychecks and the rent, all get paid when we collect the money, not when the stuff leaves on the truck. Theres the money. Thank you. Thank you. [applause] from this point forward, im in charge. The first thing were gonna do is fix the accounts receivable process, so that i know for sure what meats coming in and what meats going out. I wanna know how much were selling, how much were collecting, and who owes what. Were gonna start by getting on the phone, and calling these customers that owe us money. We need to be paid. And from now on, when we deliver meat, we need to get paid on time. We are not