Itll be lights out at vision quest. 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. Based in long island, new york, vision quest is a fullservice lighting manufacturer, handling everything from concept development, design, engineering, and fabrication. Larry make sure it goes in like that. Nice and professional. Lemonis for years, owner Larry Lieberman experienced serious growth, churning out custom fixtures for such bigname clients like abercrombie fitch, chanel, and universal studios. Larry take it to disney. Lemonis but a recent drop in revenue has drawn larry into a vicious circle. Jason highlow is officially dead. Larry oh, no. Lemonis anxious to control costs, hes cut much of his staff, hampering operations and putting even more pressure on the business. Larry weve been waiting a couple of weeks for this. Lemonis im excited about this opportunity, because lets face it Everybody Needs a light. And despite its troubles, vision quest has a reputation for innovative designs. Larry this is stainlesssteel wire with fiber optic thats strapped to it. Lemonis im confident i can help larry find the light at the end of the tunnel and emerge stronger than ever. Hello. Maria hi. How are you . Lemonis good morning. Im marcus. Maria im maria. Nice to meet you. Lemonis how are you . Maria im very well. Lemonis the owner is larry . Maria the owner is larry. Lemonis is larry here . Maria yes, hes here. Ill get him for you. Lemonis thank you. Let him know that marcus is here. I really didnt know what to expect when i went to vision quest, and when i walked in, there were some really interesting pieces. Larry hey oh, my god lemonis how you doing . Larry bring it in, man lemonis how you doing . Larry oh, my god youre here lemonis are you larry oh, my god look at you lemonis are you larry . Larry i am. Lemonis cause if you werent larry, id be worried. Larry [ laughs ] so nice to meet you. Lemonis nice to meet you, too. Thats a pretty cool light. Larry yeah, thank you. Lemonis the strainer. Larry it was for a National Account. Everything you see here is all for nationalaccount work. Lemonis so no retail products. Larry no. Lemonis so, i dont just think about vision quest for just this. Larry no, no. Lemonis design . Larry thats the least of it. Yes. Right. Lemonis they say to you, we have this space, and were looking for x, y, and z from a design standpoint. Larry exactly. Lemonis can you make it . Larry yes. A lot of our ideas are coming from their inspirations. Lemonis and you started it . Larry yes. Lemonis by yourself . Larry by myself. Lemonis when . Larry 96 19 years. Lemonis wow. Larry yeah, 19 years. Lemonis why did you start it . Larry i was a theatricallighting guy. I like light. Lemonis so, any place you go in, youre looking right away at the lights. Larry i just thought everyone did it, but ive come recently to understand i got a little unhealthy thing with lighting. Lemonis get to light therapy. Larry i need light therapy. Lemonis whats that there . Larry so, this is something im actually really fond of. The designer said, i want something with spikes, little lamps on the end. Lemonis what does Something Like this sell for . Larry this was about 5,600. Lemonis and what would Something Like this cost to make . Larry 4 grand. Lemonis theyre not great margins. Larry not this particular one, no. Lemonis why . Larry um. Lemonis cause its a custom piece, and so, typically, i would expect it to come with better margins. Larry yes. Lemonis did you miscalculate it . Larry uh, yes. Lemonis im already seeing my first red flag. If larry is miscalculating the cost of jobs, well, its no wonder theyre in trouble. Larry this is jason. Jason hi. Lemonis jason, im marcus. Jason nice to meet you. Lemonis how are you . Jason good. Lemonis what do you do here . Jason purchasing, shipping and receiving, inventory, deal with the subcontractors. Lemonis would i call you the general manager . Jason uh, no. My title, i think, is purchasing manager. Lemonis why are you doing all those things if youre just the purchasing manager . Jason other people left, and it just fell in my lap. Lemonis is there a general manager . Jason not anymore, no. Lemonis what happened to the general manager . Larry we could not compensate him for what he really needed to be compensated. Lemonis whos in charge of the books . Larry right now, i guess i am in charge of the books. Our bookkeeper quit. That has been a turnover position, because theyre the first to see how much trouble were in. So i had a really great bookkeeper, but she took a better job lemonis got scared. Larry yeah. Lemonis meeting jason, you can tell that this is a classic case of a company thats downsized. Like many Small Businesses in this country, theyve had to make a lot of very difficult decisions. But those decisions are so that you can survive. I give larry credit for that. [ machinery whirring ] larry this is our raw fabrication area. Lemonis theres so much crap in this building i literally feel like i was dropped in a dump yard. Are you a collector of things . Are you a pack rat . Larry um. Lemonis cause i see stuff everywhere. Larry i am a manufacturing hoarder. Lemonis what is all this . Larry these are, like, samples. Like, this is a sample that shows the guys how you know, what the part is. It is. It is. It is. Its a sample. Lemonis okay. Larry i need that. Lemonis so, whats up here the inventory . Larry yeah. So, this is the beginning of all my memories. These are customer inventory, customer inventory. Resellable. These are a lot of samples. Lemonis when you say sample, is that code for junk . Larry at one point, i was told, you have 1 million in inventory, the bank will lend you money. That money is gone, but now its in inventory. Lemonis i think what larry has attempted to do here is try to artificially inflate the asset value of his business by collecting all these parts and pieces that, in his mind, may add up to 100,000 or 200,000, but in reality, its just junk sitting on the shelf. I want to sort of have some time away from larry and talk to the employees about how the warehouse actually functions. Very cool. So, whats happening here testing . Jay yes. Lemonis can i see it go on . So, thats the final product right there . Jay yeah. Lemonis well, what kind of business would i see this kind of light in . Jay a warehouse store. Lemonis like a costco type of. . Jason yeah, yeah. Lemonis so, you guys are not only manufacturers, but youre assemblers, as well. Jason yeah. Jay yeah. Larry all right, you take it like this. And you go like that. Lemonis jay, whos the shop foreman out here . Jay i would say right now, its both of us. Lemonis thats really not what you guys should be doing, right . Jason no, the problem is, were both dispatching, and then we dont get done what we got to get done. Jay right now, i spend more time explaining stuff, you know, to people, how to do. Lemonis why doesnt larry kind of give out the jobs . Jay the thing is, you know, larrys split between you know, with everything going on, theyre short up front also. Lemonis well, hes out here working now. Jason he has a habit to micromanage to an extent. Larry you know what youre doing here . Put these in first. Nobody showed you how to do this, huh . Lemonis its clear to me that theres no leadership here on the manufacturing floor. And larry tries to cover it up by sort of spreading himself thin and doing a bunch of different jobs. But thats not gonna cut it in the end. How are you . Janelle hi. Its nice to meet you. Lemonis im marcus. Who are you . Janelle im janelle. Lemonis janelle, what do you do here . Janelle im in charge of sales and quoting and drawing a lot of the initial design concepts. Lemonis do you have salespeople that work for you here . Janelle no. So, im an army of one at the moment cause of money. Lemonis money. Janelle yeah. Lemonis larry got rid of his general manager, and his current saleslady is actually doubling as a designer. Now, i understand that businesses have to cut costs, but when you cut this deep, you run the risk of breaking bones. So, is there a Sales Problem here or is there a cashflow, waitingforthejobstocome problem . Janelle its both that stuff. Lemonis what put this business in financial crisis . Janelle four years ago, we were doing the main line for the National Account hollister. They changed their purchasing model. We were doing like 3 million, and right now, were probably, you know, about 1 million, 900,000 in hollister stuff. Lemonis with them . Janelle yeah. Lemonis so you lost 2 million worth of business. Janelle yeah. Lemonis why dont we take a walk . Nice meeting you. Janelle nice meeting you. Lemonis thank you. Is this your office . Larry it is. Lemonis okay. Well go in here. Larry this is really messy. Lemonis i know. Larry uhhuh. Lemonis why did you call me, by the way . Larry february 20th, i did not get money in that week. I had to go home and tell my wife we needed to lend company money. Ive already went to my parents. They already lent me 100,000. I couldnt go back. I couldnt go back. We had some money. We had some savings. It was our nest egg. Thats for college. Lemonis college for. . Larry my daughter. Shes going shes in her senior year, and shes going to college next year. Lemonis you guys were gonna have to take money out of your personal account to keep the company open . Larry 65,000. Lemonis your Kids College Fund has become the bank. Larry yeah. Youre here cause of my family. We need to straighten this out. I think im going out of business. I dont know what that looks like. I just lent the company a lot of money. Should i not lend the money to the company . Am i supposed to go bankrupt . I dont know what to do. And i have people around me that believe in me. They believe in me more than, i think. Than maybe they should. Because im not doing such a great job. Lemonis its clear to me that larry has the best of intentions. But its more clear to me that hes made some very big mistakes. Hes been cutting staff way too deep and borrowing from his Daughters College fund. This is actually setting himself up to fail even more, not succeed. Larry i have a surprise for you. Anne hi. [ chuckles ] lemonis oh, my gosh. Hi. Anne how are you . Lemonis how are you . Anne my left hand. Nice to meet you. Im anne. Lemonis anne, how are you . Im marcus. Anne larrys wife. Nice to meet you. Max im max. Anne this is max, my son. Lemonis max, how are you . Rhea hi, im rhea. Lemonis how are you, rhea . Nice to meet you. Larry isnt it cool . Hes so shiny. [ laughter ] lemonis you are a lot nerdier than i thought. [ laughter ] your kids right now are thinking, please, dad. Well, i thought maybe i could just talk to your mom and dad for a minute. Is that okay . Max yes. Rhea yep. Lemonis we had a good conversation this morning about kind of everything, the state of the union here, and i wanted to get your perspective on it. Anne i dont always know whats going on with the business. Hell withhold information from me. Then something will happen, and ill be like, how did this happen . we thought everything was relatively okay. Lemonis what did february feel like from your perspective . Anne i just sort of felt the ground had sort of been pulled out from underneath me, and i was a little panicked. Larry broken promise. Lemonis whats the broken promise . Anne well, i didnt feel like it was a broken promise, but. Larry my promise was to anne that ill provide. Anne well. Larry . And that i would take care of college, and i feel like i broke that promise. Lemonis how come you havent locked that money down just to keep it away from him . Larry [ chuckles ] lemonis im actually serious. Anne well, i didnt know that i had to. Larry well, hold on. I didnt anne well, ii larry i didnt go out and just give the money. We talked. Anne oh, oh, oh, oh. Larry i didnt just take it. Anne oh, dont. Larry uhoh. [ chuckles ] lemonis is that not true . Anne thats not true. Larry actually, thats not true. Lemonis what is the truth . Anne he took it. And then i think he thought it was offensive, because i think he thought i wouldnt notice and that he would just put it back. I didnt know how bad things were until that happened. And then we were out for dinner, and he told me that he wasnt gonna be able to make payroll. Lemonis how much is the bank debt . Larry 5,000 plus 75,000, so 575,000. Lemonis and whats the collateral for that . Larry inventory, the house. Lemonis your house is pledged . Did you know that . Larry you knew that. Lemonis anne, did you know that . Larry what youre looking at is my attempt to try to diversify the company. Lemonis you put your family at risk so that, what . You can have a warehouse full of crap . Ch is the bank debt . Larry 575,000. Lemonis and whats the collateral for that . Larry inventory. The house. Lemonis anne, did you know that . Anne i dont think i knew that. Lemonis i think going forward, regardless of whether were able to make a deal or not, i think you have to know the facts. Would you like to be a part of the financial discussion . Anne okay. Lemonis look, i always believe that transparency in business is paramount. But what larry is running the risk of is not being transparent to his partner, both in business and in life. Not having full disclosure and having surprises for her is gonna create a level of distrust and discomfort, and its just not okay. Larry this is the Balance Sheet as of today. Last year, we lost 300,000, and 80,000 before that. Lemonis had you shared this, larry, before i do kind of walk anne through this . Larry no. No. I struggle with it, too. Lemonis the way to think about a Balance Sheet is the health of the company. So, 1,503,000 of liabilities, 1,950,000 of assets. The total assets of the company are 1,950,000, but the drivers of that are merchandise inventory of 1,237,000. I would say this is, at a minimum, worth half of that amount. Larry has total assets of 1,950,000. His liabilities are 1,503,000, leaving him with total Shareholder Equity of 447,000. The assets are being driven by 1,237,000 worth of inventory. But the problem is, i dont actually think the inventorys worth that. I think its worth about half of that 618,500. When you factor in the new asset value against the liabilities, then the real Shareholder Equity is 171,500. So that makes the company worth. Zippo. Larry this doesnt show it, but august and july were good months for us. Lemonis do you know what your total revenue breakeven analysis is . What you have to do in sales in a month to make money . Larry around 244,000. Lemonis so, in the month of march, you did 257,000, and you lost 60 grand. April, you did 141,000, and you lost 16,000. Larry mmhmm. Lemonis then you go into may. You did 231,000 and you made 65,000. And so the analytics are so bad. Larry theyre so hard. Youre right. Lemonis right, and so the only point im trying to make, and just put a button in it, is you dont know if july and august were good yet. Larry our overhead has gone down. Lemonis you cannot cut your way to a profit. Larry well. Anne mmhmm. Lemonis you cant just be cutting everything and cutting everything, cause you know what ends up happening . You cut yourself out of business. Larry im not gonna pretend i have a good handle on this. I dont. Lemonis so, heres whats interesting. Im very intrigued by the quality of the product that i saw outside. Im very intrigued by the fact that you manufacture it and that youre not just an assembler. And so the good news is that youre in a business that people need the product that youre selling. I mean, thats something to be excited about. Larry yeah. Anne yeah. Careful larry oh, sorry. [ laughter ] lemonis i know you believe in what you do. I know you have passion. Its not just lighting that you do you do art. But there are big voids in very big positions in this business. You cut too deep. Larry right. Lemonis i think you broke it, actually. In any manufacturing business, there is front of house, back of house. And the back of the house needs a leader. They have no conductor out here. Larry no. I know that weve had this void out here. Weve tried to fill it. Its a huge issue. Lemonis im willing to take a chance on this business. Larry okay. Lemonis my offer is 375,000. But i want 50 of the business. Larry even 50 . Lemonis yep. I want to be equal partners with you. Im putting up 375,000 to hire new people, pay down debt, and still have some money left over for working capital. But my gut tells me thats just the beginning, and thats why im asking for 50 of the business. Its a big risk for me. Larry okay, man. Lemonis okay . Larry lets do it. Lets do it. My grandfathers 101. Were gonna be partners for a long time. Lemonis you and i . Larry yeah. Lemonis i think im gonna outlive you, though. Unless somebody kills me first. Larry well, you know. Lemonis which, the odds are pretty good. Larry [ laughs ] lemonis we got a deal . Larry all right, my friend. Thank you very much. Lemonis game on, man. Larry all right. Well, so, were ready to get to work . [ machinery whirring ] lemonis jason, lets cut the machines off for a minute, okay . Good morning. Hows everybody doing . All good. Lemonis so, larry and i made a deal for me to invest 375,000 for 50 of the business so that we can pay our bills on time, have money in the account, and start the process of fixing the business. If we need to hire new people, were gonna bring them in. Do you guys feel like you dont have leadership in the shop . Man very much so. Man 2 were ready to follow, but theres no leader. Lemonis i think the other thing that we have to do is invest in you guys. Whether its equipment, whether its making sure you have the right tools and everything works. You guys dont seem very enthusiastic or excited. Jason weve heard were gonna get what we need before. Weve had meetings like this. Larry they all have been through this with me. Lemonis are they frustrated with you, do you think . Larry absolutely. Annes not the only family ive let down. I mean, there are people here torreys 18 years with me. You know, 5, 8. Weve been through hell. This is the guy whos gonna help us make this happen. Lemonis all right . Lets go to work. Larry all right, guys lemonis thanks, guys. Whats all that up there . Jason garbage. Lemonis i wanted to walk through the warehouse with larry and the other employees, because i wanted them to sort of validate what i was saying but, more importantly, prevent him from making the same mistakes in the future. Larry this is the sample room. Jason its more like a dumping ground. Larry youre not cleaning this room. Woman uh, yes, we are. Lemonis you shouldve called hoarders before you called me. Larry what youre looking at is my attempt to try to diversify the c