Lemonis and i thought every five years, i got to come beat you up a little bit. Tonnie okay, im ready for it, i think. Lemonis tonight, were going to give you an inside look at an episode from season 3, tonnies minis, one of the most challenging episodes that ive ever been a part of, but i learned a lot from it. And tonight the three of us are going to share the things that worked for us, the things that didnt work for us, and were going to provide you some tips on how you can get through these new times. Lemonis in the last seven years of doing the profit, ive visited nearly 100 businesses. Lets go make some money [ horn honking ] and ive traveled the country trying to fix the people. And you do 1 million a year . You should be proud of that. Man but we dont know how to keep any of it. Lemonis . Fix the process. You see . It flimsy. Dont ever make these again. You dont sell them. And create a few products. Juli it reduces anxiety and depression. Lemonis i kind of like it. I spent countless days working on these companies. How much money did you burn through . Parker 650,000. Lemonis but we cant always fit everything im thinking into the show. Tonight, were going to give you an inside look at an episode from season 3, tonnies minis. Its kind of a tight space. Lemonis oh. Oh, thanks for clearing that one up. [ both laugh ] over the next hour, im gonna take you behind the scenes to show you what i was actually thinking during filming. Tonnie it doesnt really work that way. Lemonis no, no, no. Let me give you a little news flash. Does work that way. I sensed the talent, and i sensed the dedication, and if i didnt sense that, i wouldnt have stayed. Share some secrets. Right now, were losing money every day. Were closing the store. I want to apologize to you for how hard i was on you, to a degree. Tamika [ gasps ] lemonis . And give you an honest assessment of my decisions. Do you think im taking advantage of you . Tonnie yes. Lemonis i dont want to be in a relationship where somebody feels like theyre getting taken advantage of. Tonnie i questioned if i wanted to do this again out of embarrassment for the way i behaved oncamera. Lemonis my name is marcus lemonis, and this is an inside look at the profit. Part of the reason why i wanted to do this episode is back then, the cupcake craze was on fire. And i wanted to find somebody in new york city, the biggest market in america, where there would be an opportunity for me to at least learn the process, understand why people were so crazy, understand the margins, understand where the moneymaking opportunity was. And anytime i think about investing in a business, its always good to start small, like minis. Lemonis inwood is at the northern tip of manhattan. Its an upandcoming neighborhood with a lot of renovation, and theres a lot of new restaurants and new retail, and its you feel like its really growing. But tonnies minis has the worst retail entrance ive ever seen. This buildyourown cupcake better be great. I remember when i was walking up broadway, and i couldnt find the store, and all i saw was all this scaffolding. Couldnt see the sign. Couldnt see anything. And i thought to myself, well, heres problem number one. Tonnie i agree, 100 . Lemonis how you doing . Tonnie how are you . Lemonis are you tonnie . Tonnie i am. Lemonis im marcus. Tonnie pleasure to meet you, sir. Pleasure to meet you. Lemonis nice to meet you. This is a small space. Tonnie its yes. Its been challenging. Lemonis im expecting to find a bright, fun retail environment and what i end up seeing is no display and a bunch of packaged cupcakes that are made in the back. I mean, who would want to come here . What was your expectation when i walked in the door . Tonnie we were thinking, okay, heres a shot to kind of gather the team and kind of, for the first time, step out and get it right. Lemonis and, you know, when you used to say things to me like, i want to get my team together, you know that that was an eyerolling moment for me, right . Tonnie i didnt know that. No, i didnt know that. What do you mean . Lemonis we had one little shop here, and it almost made me feel like you had a little bit of a delusion of grandeur. Tonnie what the world didnt know, that was one of four stores at the time. We were doing 20,000 day in cupcakes. I was supplying one of the largest restaurants in new york city. I had a deal with macys on the table. So im thinking ive made all these steps that were leading up to this point right here in preparation for your coming. Tonnie how are you . Woman good. Tonnie welcome to tonnies. What can i do for you today . Woman let me get the cream cheese. Tonnie can i offer you a cupcake, marcus, at the same time . Lemonis you surprise me. So, thats the base . Tonnie so, the beauty of tonnies minis is you walk in, you pick your cupcake out, you pick your topping. Woman i like it. It means make your own cupcake, essentially. Lemonis you a cupcake eater . Woman yes, actually. Thank you so much. Have a wonderful day. Tonnie take care. Lemonis cupcakes good. Tonnie always happy to hear that. Lemonis the frostings good. The process seemed a little. Nonexistent. I would have thought there would have been a bit of an assembly line, like base, frosting, topping. I dont necessarily see that. Tonnies idea of a buildyourown cupcake, quite frankly, is phenomenal. But the idea i thought i was coming for i just dont see. Somebody takes a cake off a rack and then the toppings are, like, hidden under the counter. I mean, its terrible. How much business are you doing in this location . Tonnie average is 500 a day. Lemonis and what are your margins on that 500 . Tonnie um. Cupcake costs me a quarter to make. Lemonis wrapper, frosting, labor, everything . Tonnie so it, uh. Lemonis one cupcake what does that cost to make . Tonnie so, the cost of the cupcake would be closer to. 33 cents. Lemonis are you winging it . Tonnie im estimating. Lemonis i wouldnt call it estimating. Im gonna call it guesstimating. Tonnie touche. Lemonis my biggest mistake in the entire episode, and im being very serious right now, was showing up in a bow tie. Tamika mm, maybe. Lemonis the worst wardrobe choice of all time. Lemonis what are you selling them for . Tonnie starting at 2. 25. If it costs tonnie 33 cents to make a cupcake and he sells it for 2. 25, hes got great margin. The worry here is that hes shaky on his numbers, and at 500 a day in sales, there is no room for error. Kind of a tight space. Tonnie this is the oven. Lemonis this is the only oven you have . Tonnie this is the only oven i have, yeah. Lemonis there is no workflow in this place, and its cramped and its hard to maneuver. Tonnie yeah. Lemonis yeah, what . Tonnie [ laughs ] so, that space was cramped. Lemonis oh. Oh, thanks for clearing that one up. [ both laugh ] tamika hi, marcus. Tamika. Lemonis tamika, nice to meet you. Tamika you, too. Lemonis how are you . Are you the sister . Tamika yes. Lemonis id love to kind of spend a few minutes with you if you dont mind. Tamika okay. Lemonis whos the manager here . Tamika im onagain, offagain. Lemonis walk me through that. Tamika i worked for, like, really, really low pay, which was okay with me. Lemonis for how long . Tamika like a year. Lemonis wow. Does he listen to you . Tamika no. Lemonis no . Tamika no. Lemonis tonnie, why werent you listening . Tonnie its not that i dont listen. Its more of, its never as simple as someone saying, lets do theres always more to it than that. So, theres a lot going on with tonnies minis right now as we speak. Im doing a project in newark thats close to being finalized. The people who are giving me the space, theyre building out the store. Lemonis at their expense . Tonnie at their expense. So what i have to supply is equipment, the first months deposit, working capital. Lemonis and theyre giving you the money to do that . Tonnie theyre loaning me the money to do that. Lemonis do you feel like youre ready for more expansion . Tonnie i am now. Lemonis the only time a business should be expanding is when its totally proven out its model. You have the product right, you have the right people, you have the right process, and it makes money. Hi. Erenisse hi. How are you . Lemonis how are you . Erenisse im erenisse. Lemonis are you tonnies wife . Erenisse yes, i am. Lemonis hi. Nice to meet you. Erenisse nice to meet you. Lemonis what do you think of the store . Erenisse i think it needs an upgrade. Thats why i wrote you. Lemonis oh, okay. Tonnie, i thought it was you. Tonnie no, it was it was it was her. Erenisse the Business Aspect of it has placed a lot of stress on our marriage. Its to the point that im not giving any more money. Lemonis how much money do you have invested in this business . Erenisse like 250,000. Tamika ooh tonnie yeah. Tamika thats a serious number. That was where i was thoroughly convinced that she loved my brother. No, i knew that before. Erenisse i think he needs you. I think he needs your expertise. If he hears it from you, maybe hell take it. Lemonis he doesnt listen to you . Erenisse not all the time. Not quite. Lemonis tonnie doesnt listen to his wife, whos invested a ton of money. He doesnt listen to his sister, who works there virtually for free. How do i know hes gonna listen to me . What does it cost you to open up the place every day . Tonnie the rent would be 100 a day. Lemonis all the employees how much do they cost a day . Tonnie average day is 180. Lemonis how about electricity . Tonnie 75 a day. Lemonis how about insurance . How about maintenance . How about Office Supplies . How about the phone . Youre already well over 350. With 500 a day in revenue, if you factor in all of the operating costs plus baked goods, paper supplies, et cetera, hes already operating at a loss. Were gonna do a little math. The total revenue that it shows on this p l is 250,000 for the year, and you lost 76,000. Theres the 250,000 that you put in. For this discussion, i consider that equity. Because you guys are married. Thats your business. Its the fact that you own, today, 100 of the business. Erenisse i agree. Lemonis theres 134,000 that is owed to other people. So what do we owe other people . Tonnie the payroll tax is 11,000. Federal state tax, 35,000. Theres 15,000 in arrears, of which is february rent and water escrow. And then late fees. Erenisse 15,000 . Tonnie then theres denise, 12,000. Robert is 25,000. My mom for 13,000. Michelle for 7,000. Erenisse wait a minute. Is this for her services, or she lent you money . Tonnie no, this is this is her. Lemonis this was tough. Tonnie . Loaning me the money. Lemonis this was tense. Tonnie then theres [bleep] 10,000. Lemonis whos [bleep] . Tonnie so [bleep] is the person who i borrowed money from and he picks up a weekly payment from me. Lemonis like a like a like a loan shark . Tonnie yes. Tamika i was surprised by some of the stuff that came out at that table. Lemonis do you mean like the loan shark . Tamika maybe that one. [ laughter ] lemonis youre the only person in profit history that ever had a deal with a loan shark. We beeped it cause i didnt want somebody to come beat your ass. [ both laugh ] tonnie and i appreciate that, sincerely. Tamika crazy lemonis whats wrong . Erenisse im just upset, cause i didnt know about all those people that we owe money to. You know how i feel about that. Sorry. Tonnie i mean, mama, you know i would never do anything to have you sitting here crying, but i did whatever i could to keep a door open, to keep from closing, to pay staff, whatever it took. So me hiding these numbers was not intentional. It was a mistake. It was foolish. Would it happen again . Never again. Lemonis tonnie, hows your wife . Tonnie she is wonderful. Lemonis she kept you around, huh . Tonnie yeah, she did. Very blessed, very fortunate. Lemonis im sorry she couldnt be here tonight. Well, i remember the fear that you had about disclosing certain information from your wife. I dont think you ever hid anything from her. I think you tried to insulate her. Tonnie right, that is that is probably the best way to place it. Thank you. Lemonis but it did come off a little shady. Tonnie after watching it, it did, yeah. Lemonis the reason that i came to this business was because i liked your idea. So my offer is 100,000 for 20 of the business. Tonnie im having a really hard time with that. The number i had in my mind was 600,000. Lemonis 600,000 for how much . Tonnie id say 33 . Lemonis you thought i was gonna write you a check for 600,000, everybody was gonna get paid, and i was gonna have a third of the business, and i wasnt gonna tell you what you could or couldnt do . Tonnie no, no. And, again lemonis wrong show. Do you think im taking advantage of you . Tonnie yes. Its been awesome knowing you, nice meeting you. But i dont want to be in a relationship where somebody feels like theyre getting taken advantage of. Tonnie watching the video, i questioned if i wanted to do this again out of embarrassment for the way i behaved oncamera. Its the simple joy of washing your hands,. Without ever touching a faucet. Its the Little Things that matter. Thats why we create moments to feel kohler clean, every day. Right now, there are over a million Walmart Associates doing their best to keep our nation going. Because despite everything thats changed, one thing hasnt and thats our devotion to you and our communities. Our priority will always be to keep you and our associates safe, while making sure you can still get the essentials you need. We ateams has given us the9 techpossibilityonse on teams. To continue to innovate. I can bring them in, i can actually share my screen and show the xrays. We can do that in a visit like this. Were living on teams. Its as simple as that. It started with a few fifty dollars here. Eighty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com lemonis you thought i was gonna write you a check for 600,000, everybody was gonna get paid, and i was gonna have a third of the business, and i wasnt gonna tell you what you could or couldnt do . Tonnie no, no. And, again lemonis wrong show. So, what are you thinking right now . Erenisse im uncomfortable with [bleep] lemonis you mean the loan shark . Erenisse yeah. I dont know what these people are about. Im uncomfortable with that scenario altogether. Lemonis so it would make you happy if that got paid. Erenisse yes. Tonnie i love my wife to the moon and back and then back again. Weve always had a very open and honest relationship. Never had an argument. Weve never yelled and screamed after being together i think 11 or 12 years i was kind of at a loss because i couldnt take back what was said. I couldnt take back what was done. I didnt think she was going to leave me, but my concern was, how do i fix this . And i couldnt. Lemonis so, then ill up my offer to 125,000, and instead of 20 , well go to 25 . And im giving you about, like, maybe 10 seconds. Tamika you know what you having full control ends up being. So now see what sharing control ends up being. Lemonis we got a deal . Tonnie we got a deal, marcus. Lemonis you know that when you take my check, i am 100 in charge . Tonnie 100 in charge you said . Lemonis she knows that. Thats why she called me. She wants me to be 100 in charge. Is that right . Erenisse yes, absolutely. Lemonis when i got in the van that night after spending time with your wife, i told the crew that i was scared of her because she was very serious, and i thought, okay, this is this is gonna get bad for a minute. Tamika mmmm. Lemonis heres the scene from the morning after. How was it at home last night . Tonnie no conversation. She hasnt spoken to me. Just no words. Lemonis thats understandable. I get it. cause she feels stung. You kind of you kind of [bleep] up. Tonnie so this is a show, but when the show is over and the cameras are off, i have to deal with this. Lemonis yeah, thats right. And when the shows over and the cameras are off, i still have to deal with it too. She didnt know certain things that its not that unreasonable for her to know. You shouldve shared it with her like months ago when you started getting the money. Lets just call it like it is. Just own it. [ laughter ] tonnie so, i obviously she came around at some point but there was definitely a concern of the fact that i had reached out to so many different people. Lemonis lets get everybody together. So, what i want to do is i want to understand the cost of one cupcake. I want the raw ingredients, i want the package, and i want the frosting and the sprinkles. I want it all. Youre telling me that one batch makes 24, so when we add up all these costs, were gonna divide it by 24. You ready to go . Tonnie eggs are 15 dozen. I pay 24. Lemonis 180 eggs, about 14 cents an egg. Tonnie this needs three eggs. Lemonis so thats 42 cents. Tonnie the buttermilk is 1. 40 per quart, and we use 1 1 4 cups. Lemonis okay. 44 cents. Something you didnt like about that math . Tonnie no, it just seems higher than i thought. Lemonis Pay Attention to everybody. This is one of my favorite things to do, right here. We have paper and packaging at 5 cents. We have toppings at 5 cents. 8. 33 for materials only. Well divide that by 24. 35 cents apiece. By the way, you havent factored in waste the mistakes that you make, the stuff that drips. So its actually costs you 38 cents a cupcake. Now we have 15 cents a cupcake in labor. Thats 53 cents. So 53 cents is the minimum that it costs to make this before factoring in the lights, the electricity, the workers comp, the telephone bill, and all the other things. Tonnie right. Lemonis okay . Tonnie so i didnt know the importance of identifying those small details. Lemonis so the tip for you and for everybody else is that money is made or lost in the details. And what happens is is that when you have inefficiencies in your process theres just a little here and a little there and theres a small mistake there, but its not that big those Little Things start to add up and thats the difference between in business and out of business. Tonnie correct. Lemonis free cupcakes. Free cupcakes for everybody. Tonights the last night were open. Were closing the store. Woman aww. Tonnie [ sighs ] lemonis tonnie, were not closing forever. You looked angry and you looked guarded. You felt that way to me. Tonnie yeah, youre right. In hindsight there was some moments where i felt like whatevers being touched upon was being pointed, like, this is incorrect. This is wrong. And it was all true, but nonetheless i probably took offense, which is why my response and my facial expression was what it was. Lemonis whats going through your head right now . Tonnie uh [chuckles] you know, its just kind of sudden. I would have preferred to have some notice of some sort. Lemonis well, right now, were losing money every day, and so im trying to stop the bleeding. Tonnie you dont say, tonnie, guess what. We got 10 minutes to clear the house. Were gonna close the store. I questioned if i wanted to do this again out of embarrassment for the way i behaved oncamera. Like, i never understood the emails i got about, you know, you should be