Bruce nothing fits right now. We need to tweak it. Lemonis his sales pitch definitely needs work. I think you guys have done a [bleep] job explaining to them why they need to own it. And his Business Plan needs a reality check. I think your numbers are obscenely wrong. If i cant get him to loosen up and work on collaborating. Ethan i think there were a lot of people that were saying the same thing about a car, when henry ford came out with the car. They were happy with the horsedrawn carriages, but i think that, you know, longterm, worked out in a different way. Lemonis . This company may be up a creek without a paddle. Weve got a deal . Ethan uh. Uh, well, i, the. Um. Lemonis 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. [ train whistle blows ] im heavily invested in the outdoor space with Companies Like camping world and gander outdoors. And so when the company reached out for help and i went online and did a little research, i was intrigued because there were products that i had never seen before. Theres a level of technical ingenuity that you just dont find in most outdoor products. And if i can figure out a way to strike a deal and get access to distribute these products, it could be a winwin for everybody. Ethan hello. Lemonis hey, how are you . Lemonis pretty good. How are you . Lemonis im good. Im marcus. Ethan yeah, welcome. Nice to see you. Lemonis what is your name . Ethan im ethan. Lemonis ethan, nice to meet you. This is cool. Ethan yeah. Lemonis so, smithfly, tell me a little bit about the company. Are you a fly fisherman . Ethan oh, yeah. And i was just frustrated with what was on the market at the time. I started doing some of my own design work. So, this was the core product line, which is based on kind of the military concept of modular packs and bags. Like, this is molle webbing, which stands for modular lightweight, loadbearing equipment. You can mount multiple pouches, too. I sort of introduced it to the fly fishing side of things. So, like, i brought it to them. Lemonis so, what is this bag used for . Ethan uh, so, it holds tippets, spools, and like, fly boxes and kind of everything you need to be on the water to fish. Lemonis this is for fly fishing. Ethan mmhmm. Yep. Lemonis and are these straps right here . Ethan those are for, like, a belt. But the cool part is, straps mount to here or a padded like waist belt that you can mount multiple patches to. So, the idea is people can build their own packs. Lemonis this is awesome. Ethan yeah. Lemonis whats really cool about ethans designs is that the user can actually customize exactly how theyre going to use his products, and its almost like legos for an outdoorsman, where they can bolt on Different Things or strap them on. Its kind of fascinating. What did you do before this . Ethan uh, i was in retail design. We actually did the original Gander Mountain design, like, believe it or not, like. Lemonis the inside of the store . Ethan yeah, the whole retail design was like, our package. Lemonis did you design all this, as well . Ethan yeah. And the interesting part about this is, these little lasercut slits is a pretty unique feature that i designed. Lemonis is it ventilation . Ethan no, its actually for my pouches. Lemonis so, all these slats have a purpose. Ethan right. And theres nobody else that makes this. Lemonis this stuff is fricking awesome. Its more of a tool than it is a jacket. But feels a little big. Ethan ive always said that like, im not really in the fashion business, im like an industrial designer. Function comes first for me a lot of times, so like, in the industry, ive gotten a lot of critiques from the soft goods side that say my stuffs a little drab. But im like, hey, you know, like, theres the people who get it, get it. Lemonis i thought it was odd that ethan got really defensive over something as simple as me commenting that the product that i just put on was a little big. I wasnt criticizing the product. Whats the name of the boat . Ethan the big shoals raft. Shoals means, you know, shallow water, and big means big. So, its a big thing that you can put on really shallow water. Were doing it better than other people cause it weighs 125 pounds, so two guys can pick it up and carry it to water. And we use materials that are really, really good. So, the competitions making stuff in china, and were using really thickwalled aluminum, doing all the bending and welding inhouse, solid onepiece welded frame. And thats what people love about it, is its stability, the lightweightness. Lemonis this. Ethan yeah. Lemonis and then, whats this . Ethan thats the same boat, just different color. It fits in the back of a pickup truck. Lemonis what does this cost to make . Ethan 1,500 bucks. Lemonis and what are you selling it directtoconsumer for . Ethan right now, were at 3,848, is the msrp. Lemonis thats a pretty good margin. Ethan its okay. That includes 500 bucks for shipping. Lemonis mmm. Ethan cause then the people i know. And its like, logistics on these things have been a fricking nightmare. Lemonis heres the problem, right. We have the same problem in the rv business. People are going to shop the price, and if you bury it in the price, your competitors are going to prey on that. In todays competitive ecommerce environment, consumers are going to start by shopping on price. Ethan gives himself an immediate disadvantage by the way he presents the price to the consumer. Because the competition is going to sell the product, then theyre going to add shipping and whatever other costs are associated with that. Right out of the gates on a comparative basis, he loses. I mean, honestly, i would buy one of these, and i dont i dont even know what i would do with it. Ethan youd have a lot of fun. Lemonis id probably put it in my pool or something. How did this come to be . Ethan its pretty cool, isnt it . I said, how about we merge the raft and the tent . Its a big thing that you can put on really shallow water. Lemonis im going to say, this is the coolest fricking thing ive ever seen. Ethan weve had 100 million views on facebook of this. Theres never been one in the world. Like, this is the first one. Lemonis i think theres things that you can still add to it. Ethan we just tell everybody like, when they buy this, you have to know and understand your safety regulations. So youve got to have life jackets, youve got to have an anchor, youve got to have paddles, you know, youve got to have backup paddles lemonis and you have all that . Ethan no, we dont sell that lemonis you should sell all of it. Ethan oh, i know. Lemonis how many have you sold of these . Ethan 50. 50 or 60. I cant ive lost track right now. Lemonis and what does it cost to make this, fully set up . Ethan its about 500 bucks and it sells for 1,499. Lemonis dude . That price needs to go. Ethan up, you think . Lemonis yes ethan im im with you. Im just not that hardass, and i need to be more. Lemonis ill ill be the hard ass. Ethan thats why youre here. Lemonis have you ever been to an event where you go into this booth and theres wind and theres cash moving around . Ethan oh, yeah. Lemonis thats what this thing is. Okay . This thing is a giant cash machine. Ethan oh. Well, im glad you think so, too. Lemonis how do i get from point a to point b . Ethan we build a trailer thatll hold this and the tent. Lemonis how do you sell today, directtoconsumer . Ethan pretty much. Yep. Lemonis online . Ethan yep. Everythings ready to go. We just have to be caught up on production, which weve never been able to get, cause i cant float all that money out there. Lemonis are all of your inventory issues exclusively related to working capital . Ethan almost entirely. Lemonis whos handling, like, the ordering overseas . Raw materials, picking the colors, coming up with new ideas . So, theres no help . Ethan jules. Like, its me and jules. Jules hi. Lemonis and, jules, what is your role here . Jules to do whatever ethan asks me to do. Lemonis you do the accounting . Jules i do. Ethan the office manager, admin kind of position. Jules and i really wanted to work here. So, i took guiding trips and learned to fly fish and lemonis just for this job . Jules just for this job. But i totally believe in what hes got here, and theres so many opportunities that we miss. We have rafts that are back ordered right now. And we lost sales on the tent because we couldnt fulfill the orders. Lemonis and you didnt have them in stock because you didnt have the working capital to actually put them in stock, right . Jules right. Lemonis if you dont have excess working capital, it could be just as detrimental to a business that has too much inventory. Its like everything just gets locked. Ethan oh, yeah, stuff gets pretty tight and scary. Lemonis and what about where they would all get stored . Like, if you had halfamillion dollars in cash, you could buy inventory, where would it go . Ethan ive got a huge basement that i can store stuff in, and i do have like but like, were working on buying the building across the street. Lemonis how big is it . Ethan its 55,000squarefeet. Lemonis im not sure i understand what ethans business logic is, of wanting to buy a 55,000squarefoot building to store inventory that he doesnt even have, and furthermore, hes got a building that has a basement. Jules when i started last year, it was ethan and his dad and his fatherinlaw. Lemonis oh, your dad works here, too . Ethan uh, he did for awhile, yeah. My mom kind of got sick again, and so hes been taking a break for a little while. Lemonis your mom okay . Ethan yeah. Yeah, yeah. Well, actually, the day i quit my last job to start this, she got diagnosed with stage 4 lung cancer. Lemonis oh, man, im sorry. Ethan yeah. And, um, yeah, so, sh um, it was the same day i left my job. But, like, they think theres lots of options, still. Shes still got a lot of life in lemonis hows she doing now . Ethan actually, shes doing pretty well. So, anyway, hes hes kind of taking a little bit of a break. But then weve got some new guys in from the Welding School that are absolutely topnotch, like, worldclass welder. Lemonis so, what, are these the frames . Ethan yeah, these are the frames that are raw before they go across the street for powder coat. Lemonis so, what does that frame cost . Ethan probably 750 bucks. Lemonis your boat costs about 1,500 to make today, and the frame is half of it, at 750 . Ethan right. Lemonis hey, ethan, im going to spend a minute with jules, without you, if thats all right . What do you ultimately want to do here . Jules me . Lemonis yeah, you. Jules i personally think i would be awesome at the sales. Lemonis you do . Jules im passionate about the products. When people call and i get the call, not ethan, i can sell the boat just like ethan can. Lemonis any time i meet somebody thats raising their hand saying, i want to be part of the sales organization, tells me that they believe in the product and they want to be part of the future of it. Thank you for chatting. Jules oh, no, of course. Lemonis see you in a little bit, okay . Jules yes. Ethan okay, so this is one of the trailers. Lemonis is it pretty sturdy . Ethan yeah, you can climb up there. Lemonis yeah. The trailer looks janky. Ethan janky . Lemonis see like, theres a lot of sharp edges on this. But you can tell its its homemade. cause you just need somebody that does mass welding. I give ethan a lot of credit that hes thinking outside the box, looking for additional products to add to the company. And while that may happen in the future, its probably better for him to outsource some of those things and focus on making the Core Products that he has perfect. Wheres our tent . Blow that bad boy up. Ethan comes already set up. Lemonis hold on, im going to time this, cause thats important. Okay. [ air pump whirring ] [ whirring stops ] ethan what happened . Jules i dont know. Lemonis fuse . Ethan blew a fuse. Lemonis try again. So, if im spending how many thousands . Ethan 1,500. Lemonis 1,500. Youve got to just remember that this changes the experience for somebody. Theyre like, what the. . Ethan yep. Lemonis if you werent by a car, what would you do . Big problem to solve. Jules mmhmm. Lemonis huge. Ethan i can go get the other pump, and we can be pumping both at the same time. Lemonis yes, please. Jules [ laughs ] where are we . Lemonis 22 minutes. Ethan its coming alive. Lemonis ready . Ethan yep. Lemonis turn sideways, ethan. Ethan its easier to paddle from the side. Lemonis this thing is awesome. Ethan thank you. Theres an airbnb for nature in australia that wants to do, like, 500 of em. Lemonis the fact that ethan has demand from a place as far away as australia tells me that theres an international play here. Ethan highfive. Lemonis whats to say that people in south america or in europe may not have the same interest . Ethan we wouldnt be able to do this with a real, you know, heavy jon boat or Something Like that with a big motor on it. Lemonis i still think you could figure out how to take weight out of it. Ethan uh, no, you cant. Lemonis couple comments on the seat. It is flimsy. Ethan dont lean back like that. Lemonis and its a little yeah, but you need to be youve got to think that somebodys going to want to. Ethan pull it up, pull it up. Lemonis am i holding my hand right . Ethan yep. And then just throw the line back. Its really a stop at 10 00 and 2 00 is what they say, so its 10 00 on the clock face. Lemonis stop. Ethan yep. A lot longer on that back half. Lemonis i feel like i fly fish very well. You didnt see my wrist, how about it . My outfit was right, i was good. Where do you think the business can get in the next five years . Ethan ive got a plan that i think we could do 20 million in revenue. Were not there now. Like, this years breakeven. We lost money last two years in a row, so. Lemonis you did . How much did you lose . Ethan last year, i think, 68 grand. Lemonis and how are you funding that loss . Ethan with duct tape and bailing twine. No. Lines of credit. Like, ive just not paid myself at all. But yeah, i mean, i think with the right scale and the right partners, you know, we could get to 10 million, 20 million a year in revenue, i mean lemonis okay. Well, why dont we go back, lets dig into the financials, and lets see if we can do something. Ethan okay. Yeah, yeah, absolutely. [ train whistle blows ] lemonis how are you, buddy . Ethan good. How are you . Lemonis everything good . Ethan yeah, yeah, have a seat. Lemonis yeah. Ethan its great. Lemonis so, did you bring your Financial Statements . Ethan uhhuh. I dont know what we want to start with or whatever, but. Lemonis lets start with the pnl. Ethan okay. Lemonis what year is this . Ethan these are just vendors. This is this year. These are sales, raft sales here. Lemonis 238,000. Ethan and then theres shoal tent sales here, was 70,000. Lemonis so, the business, you think youll do 400,000 for the year . Ethan yeah. Lemonis 400,000 a year, plus or minus some revenue. What was your revenue last year . Ethan about 250,000. And about 150,000 the year before that. Lemonis 150,000 of revenue you lost. Ethan 48,000. Lemonis 2017. Ethan 68,000. Lemonis 68,000. And this year, youll probably do around 400,000. Ethan we could be close to breaking even. Lemonis how much debt do you have today . Ethan 240,000. Theres a sheet over here with that. Lemonis liabilities, 36,000 in payables, which are just your vendors. Ethan mmhmm. Lemonis and 238,000 in loans. Ethan mmhmm. Lemonis you own 100 of the Business Today . Ethan mmhmm. Lemonis i like the product, i like the way it was made. I like the fact that a lot of the parts and pieces are made here. I like the fact that you think about the functionality of it. And so, id like to make an offer to invest in you and invest in the business. My offer would be 1 million for 50 of the business. Weve got a deal . Ethan uh. Uh, well, i, the. So, um. Baker when i think party raft, i think of, how do you put a cooler in it, how do you put cup holders in it . Ethan and we got 100 million views of it, right . Its a unique product. Chris its a tough sell. Bruce yeah. Lemonis i think you guys have done a [bleep] job explaining to them why they need to own it. Lemoi feel like weredeal . Forglet me check. Ing. Xfinity home gives you peace of mind from anywhere with professionally monitored Home Security built around you. No, i think were good. Good. So when youre away, you dont have to worry. The tent. We forgot. The tent. Except about that. Xfinity home. Simple. Easy. Awesome. Hey look, i found the tent get xfinity home with no Term Contract required. Click or call today. Uh, well, i, the. So, um. Weve got a deal, yeah. Lemonis im excited. Ethan i am, too. Itll itll be good. Lemonis all right, my man. Ethan awesome, man. We had fun. Lemonis okay, my man. Ill see you soon. Ethan thanks. Lemonis thank you. Welcome to kenosha in order to hit the ground running, i brought ethan and jules to my gander outdoors store in wisconsin. What i ultimately wanted to find out is, do the people that work at the stores and the people that shop at the stores actually like the products . What are the things they think could be better, and what do they think would sell right away . Ethan the frame we make inhouse. Its all one piece, so its never going to creak or squeak or get loose. Chris the seat would worry me a little bit. Ethan but they are the lightest seat on the market. Bruce if the seat breaks, you kind of lose a little bit of credibility with the quality of the boat. Youve got to get the seat right. Lemonis chris, does it need to have a trailer . Ethan inflated, it fits in the back of a pickup truck. Lemonis okay. But not everybody has a ethan oh, right, right. Bruce itd have to be a pickup. Lemonis well, lets lets take it a step further. Whats our primary business . So, how is this transporting in an rv . That frames not fitting in there. Ethan no. Chris youd still have to break it, sidetoside. Lemonis were going to need a frame that is a collapsible frame as an option. Bruce nothing fits right now, so youre really limiting yourself to only be a toy hauler owner that can take the boat. We need to tweak it, we need to get it right. Lemonis what do you think of the brand name, smithfly . Chris in this, it makes me think about fly fishing. I mean, you might pigeon hole. Would definitely, you know, see it as a fly fishing application. I notice everythings green, green and black. Is there different colors . Youve got. Ethan we dont do a ton of different colors right now. I mean, its pretty drab. Fly fisherman are pretty boring. Chris could you see it as a hunting application . Could you see it as camo . Ethan no. This is the jacket weve probably sold the most of, but its, uh, for fly fishermen. Lemonis i understand that ethan cut his teeth on fly fishing, but in order for the company to truly grow, he has to change his thinking. Lets get away from si