And i fix failing businesses. 2. 5 Million People visit key west a year, and you only sell 40,000 pies. I make tough decisions. Were closing the store. Were done. Im not talking about it anymore. And i back them up with my own cash. Check that out. Its not always pretty. Tired of this bull[bleep]. But this is business. Were gonna have a battle on this one. I do it to save jobs. I got to get some stuff done and youre gonna be our leader here. And i do it to make money. This the profit. [theme music] u. S. Key lime pie company is a pie maker located in beautiful and sunny key west, florida. Jim brush. Jeff and his girlfriend, alison sloat, bought the company, recipes and all, over ten years ago for just 1,200, and have grown the business from selling pies on the side of the road to having their key lime pie named the nations best pie by the american pie counsel. Even though they generate 1. 4 million in sales, they have yet to turn a profit. We really are a victim of our own success right now. Damn it, im tired of this and theyve stretched their resources over multiple locations, including a shipping facility thats not making any money. Today, im losing 1,000 by not being able to deliver pies. I cant do this every week. Jim and alison have a staff of employees that are beyond dedicated. Order it today, cause we need to get it into stores, cause were very low on that [bleep]. I know, i know. With increasing debt and mounting losses. Theres, like, three weeks of outstanding bills here. You owe 2,400 bucks. Key west Key Lime Pie Company is facing major cutbacks. I dont want to see the company destroyed. At 56 years old, what do i start over with . But with the right process in place and a product that you cant get anywhere else, i know this business will be successful. [parking brake cranks] hi, how are you . Hi, im marcus. Amber, nice to meet you. Nice to meet you. Is jim here . Yeah. Do you want me to go grab him for you . Thatd be great. Sure. The first thing i noticed about key west Key Lime Pie Company when i walk in, is there are a ton of random Brands Taking up most of the store. Wheres the pie . Greetings. Jim marcus. How you doing . Good, nice to meet you. Good to meet you. Pleasure. Well, theres no shortage of everything key lime here. No. And so is all this stuff as an example, is this yours, or no, thats not our product. Theres a lot of companies that do carry that. How about this one, floribbean . Is this yours . No, thats not mine. It seems like a bit of a key lime grocery store. It is. One thing people come to the florida keys for are key lime products. What kind of margin do you make on all this stuff . These cost me abouti think theyre 2. 30 and i sell em for 3. 25. These are 4. 50 and i sell em for 5. 50. The retail margins on these products are not great. Theyre between 20 and 25 , but they take up the vast majority of the floor space in the store, which is supposed to be a specialty pie shop. Can i try the pie . Sure. This is just athis is the basic deal . Just basic slice of key lime pie. What are the ingredients . We have the sweetened condensed milk. Second ingredient would be the key lime juice. Comes in 1gallon pails. Its already reconstituted, and we put a wet topping in there, which gives it the creaminess. Its actually the same topping thats on top of the pie. We put that in there and it fluffs in the actual in the actual pie itself, yes. And what is that made of . That is a powdered product. I was really surprised to find out that jims pie is made with a pie filling from powder. I would have thought that an awardwinning pie would have natural ingredients. Our retail price for the pie is 18. 99. Cost us 3. 75 to make a key lime pie. And how many slices can i get out of that . Typically, you get about eight slices out of it. Uhhuh. And a slice is 4. 50. Margins are good. Margins very good. Are you the only owner . The business belongs to myself and my girlfriend, alison. Were both 50 50. Is she here . Shes in big pine. Whats in big pine . Big pine, we have a retail store there, and we also do all of our shipping fulfillment. Okay. So how much will the business do in total revenue this year . The whole company, 1. 4 million. Oh. Nonbranded product will generate probably about 250,000 in gross sales. We still have payroll taxes that were past due on. How much is that . 70. 70,000 in payroll taxes . Yeah. So how much do you have in total payables . 66,000. Whoa. Its about 130,000 that you owe people . Yes. Between theand how much cash do you have toyou have 130,000 in the bank . No. No cash . We run on a daytoday, but and its almost been like that since day one. Of their total revenue of 1. 4 million, 80 of the revenue comes from selling pies, which has fantastic margins. The retail store generates 20 of their total revenue, which has terrible margins. I cant figure out why they think its important to dedicate more than 60 of their space to a part of the business that generates no revenue and no margin. Id love to see where the pies are made. Sure, come on in the back. Jeff, you got pies rolling . Yeah, i just started em. You cant use that on the yeah, you can. Okay. But what is this . Were gonna run out of shrink wrap today. Why . cause theyre out of stock because we waited to order until why did we wait to order . I dont know, i brought it up before. Jeff, do you have an answer for that question . When did you tell me to order it . Uh, i call bull[bleep] to that. Is there anybody that does anything competent down in the florida keys . I want you to order it today. If they have any problems with it, then they can call me. You want me to order it even though there may or may not be enough money to pay for it, and dont worry about that portion. Okay . Im tired of this bull[bleep]. Jim, whats going on . Well, every time i walk back here, i mean, things just dont get done. You unfortunately have not known me, except for a short time now. Yeah, i just got a little preview. And i just want things done, thats all, and i want it done my way. How we doing . Everybody happy . Youre not gonna have that baby today, are you . Two weeks. You excited . Well, i have eightyearold twins already, so you do . Tamis probably the only one that i say, okay, youre right, and i let it go. Shes a great employee. She does everything that needs to get done, and she works 2 1 2 days a week at her other job. She works two jobs . How much do you pay her . About 300 a week right now. I mean, shes got two kids. Shes got rent, everyi wish i could pay her more money, but i cant afford it right now. Im very worried that somebody who seems to be a key employee is only making 300 a week. I need to really understand tamis role. Can i chat with you for a minute . Okay. The inventory, are you managing that . Yeah, and every week, its a fight to find out what they need, which is just ridiculous. And what else are you managing . Staffing, any Human Resource issues. Right. Any customer complaints, scheduling, special events. Employee issues . Tami really impressed me. For 300 a week, shes doing everything. How do you get it all done . I dont. Have you talked to jim about this . Yes, but he believes that everybody should work really hard, and so its disheartening. Its hard. How are you . Good, hows it going . Im marcus. Stefanie. Nice to meet you. What are these for . For the key lime pie that we sell in the store. You guys dont make your own crust . No, we dont. Why would somebody buy from you when they can buy the crust . Jim, has thathave you ever gotten any complaints about that . Weve never had complaint one about the product that we have. I mean, weve won numerous awards with these key lime pies. We sell to macys, we sell them thousands of key lime pies every year, and the customers in new york love it. And i think what that proves is that youre a great marketer. The challenge that i have is, i cant invest in something that isnt proprietary, and heres why, if you make a pie and theres no secret ingredient or secret recipe, the next guy down the block can make it. I want to be able to look people in the face and tell them that i have something thats special and thats unique. Im on my way to big pine, the companys other retail location. Im gonna meet alison, jims 50 50 partner. I want to find out how this store is doing. The big pine key store. Big pine. Hello. Hey, how you doing . How are you . Im marcus. David. Nice to meet you. Nice to meet you. Im alison. Nice to meet you. Its an honor to meet you. Nice to meet you. So what makes this location different from the one that i was at earlier on greene street . This store is a small percentage of our business, but we also do all of our shipping here. How much business will this store do, this location right here, a year . Retail sales as opposed to the whole company . 10, 12 . Okay. So what will i find in here . I mean, pretty much the same kind of stuff we saw at the other place . This has pretty much the same stuff. So youhow many pies do you make a year . 40,000. Do you make pies in this we do not make pies in this location. We only make pies in our greene street location. And this is our shipping area where david packs up our packages to ship. These are our products that we use for shipping, and we have dry ice here for shipping. This store costs more to run than it brings in, in revenue, but we need it because of because were doing our shipping out of here. Oh. The big pine location has two functioning separate businesses, a retail location, and the other is their shipping department. The retail location accounts for less than 10 of the total revenue, but after you add rent and labor and utilities, well that accounts for a lot of the loss. But when you have high rent factors, every one of these tiles, which is a square foot. Has a dollar on it. Costs money. How much are you losing a year . This stores probably losing about 20,000, 25,000 a year. And how much is your rent . About 25,000 a year. So its the same. So thats what you have to really be thinking about. Okay. Key west Key Lime Pie Company does 1. 4 million a year in sales, but its losing money operating multiple locations. I know that if i can improve the product and consolidate all the operations to one location at greene street, well stand to make a lot of money. You guys should be very proud of yourself. I mean, you have a 1. 4 million business. Yeah. Thank you. Heres the problem. You guys know that im a people, process, product guy, and im a little disillusioned by the product. I thought, when i came down, i was coming to see a proprietary recipe. Thats why i came down. Okay. But im not impressed that i walked in to the kitchen and i found keebler premade pie crusts. Well, those products im not impressed that its prebought key lime juice. I want to partner with people that have the best product, that have a good process, and theyre good people. Well, right now, the process and the people we have. Well, who determined that you have the process . I do. I can tell you, you dont. Whens the last time you took a paycheck . Six, seven months ago. Okay. So your process has to be a little broken. Youre 130,000 in debt. Your business doesnt make any money today, but it generates 1. 4 million worth of sales. You cant produce more than 40,000 pies or the system really breaks. Correct. Things have to change. Oh, it all depends on what you propose. Give us your offer. So my offer is, i will up to 450,000 to satisfy the payables as needed, build out the greene street location, but the recipe has to be proprietary. I will have 51 . You will have 49 . No, thats not gonna happen. Never would i do that. Okay, so what are you opposed to . Giving up control of the company. Im not opposed to that. No, no, no, no. Ii just am. Ii am. I just dont like giving up what i started to somebody else. Im not interested. This is a bunch of bull[bleep]. Coming up. Box it up and get it out. I dont agree with that. Everythings a dollar come on in then later. Were closing the store. I dont like surprises like this i will have 51 . You will have 49 . Im not interested. This is a bunch of bull[bleep]. All right, so let me ask you a question. What if we make for a wage 1 for every pie that we sell . If we sell 400,000 pies, you make 400,000. You make a million pies, you make a million dollars. You will have 49 of the stock and you will have a dollar for every pie that we produce. For the rest of my life . For the rest of your life. I just dont like giving up what i started to somebody else. You want to be in control. What if we flipped it and you were 51 and i was 49, and i got a dollar a pie and you didnt . I would be more than happy to give up 2 Percentage Points for a dollar a pie. If that control is that important to you, its not that big of deal for me. I sounds different. Id be glad to work for you. I think its a but youre gonna pay me first. No, i think its a control iiim sorry to say this, but i think its a control issue for you. I guess i just dont want to wind up. Yeah, weve met in our being the face of the company and thats it. I want the dollar of the pie. I think you need to let go of the control issue. This is the way ive been my whole life. Okay, maybe its time to change. And how is that working for you . Oh, stop it. Take the offer. The original offer is better for us, and i like it. I think this is the right decision. Take my hand and take a leap of faith. Lets do it. Okay. Yes . Yes. Yes. We have a deal . We have a deal. We have a deal. We have a deal . Good. So believe it or not, im actually gonna write you a check today. Right now . Right now. Okay. Youre kidding. Check that out. Salud. [laughter] tami . Yup, yup. Everybody come on out here for a minute. Tami . Yup, yup, yup. Okay. I wanted to get you guys together to let you know that yesterday, alison and jim and i made a deal. I agreed to put 450,000 in this business. The purpose of that is to take care of all the bills, put some working capital in the business. Im 100 in charge. What i say goes. I believe in people, i believe in process, and i definitely believe in product. Were no longer gonna be pie assemblers. Were gonna be a piemaking company. If we dont make it, we will not sell it. Jim, hows this sitting with you . Yes . Yes, i agree with you. In addition to that, were gonna change the way this store looks. I actually think it looks awful. We want a Flagship Store where theres plenty of places to sit and that people walk an extra mile just to come here. The other thing is, were gonna pay a little bit better than everybody else in town, i have to be honest. Were gonna have high performance, high reward. Its my job to make sure that people feel like they can have one job, not two. And were gonna come up with a small incentive plan, just like i gave the two of you an incentive plan. The team is gonna get a piece of every pie we make, because every one of you brings something to the table. Tami, what ive noticed that you do for this business is overwhelming, dealing with employees and dealing with vendors. You dont make a lot. You work your fanny off. All of you work hard. Were gonna operate like a family. How soon . Tomorrow sounds good. [laughs] im ready. Ive been ready. [laughter] its time to clear out the smallmargin generic items from the store. The pies come with a huge 80 to 90 margin, but the retail stuff, it drags along a 20 to 25 margin, and so every square foot that we utilize to sell lowmargin product isnt gonna help us make money. What i need to do is to convert that space into fastermoving products like pies. So heres what we need to do, box it up and get it out. All right, box it up, get it out. Yup. No, we havent made a final decision on that. Have you done your demographics on people who want to come in and get slushies and pie bars and key lime soda . Im gonna get you whatever you need for amnesia. Remember what i said, if we dont make it, were not selling it. We all agreed on that. Tami, you dont think people should have opportunity to buy these things . Not here. Its all this same [bleep] that they have everywhere. I dont, uhi dont agree with that. If we dont make it, we dont sell it. Period, end of discussion. I mean, we need this to get done, like, today. Where are we gonna put it . Were gonna liquidate it, but we need to start but why dont we leave it on the shelves and mark down the pricing . As people come in, we get rid of it that way. Well, cause i dont want to wait till next christmas. Sort that. Well, marcus, what are we gonna do with this stuff now . Sell it. Why dont we put up a couple signs . And lets start working on that. Tami, make up signs. Everythings a dollar. If we dont make it we dont sell it. Everythings a dollar come on in get all of your souvenirs and save an amazing amount of money. How you doing . How you doing . Everythings a dollar. Were gonna make it easier for people to buy stuff. We have a store full of customers. People have been coming and buying stuff like its going out of style. Im gonna make you a millionaire, but you have to trust the process. [cash register dings] what i want to do is, i rented out this commercial kitchen and i hired three chefs. Weve got to figure out this recipe thing. Key west Key Lime Pie Company has been using powdered mixes and premade crust in order to save money. I hired three of the best pastry chefs in the key west area to help me come up with a new and better product. What we really want to do is come up with a proprietary recipe and know that we have a recipe that will last for the ages, something we can pass on. Well, i got to say, marcus, my recipe has stood the test of time too. This has been around for decades. When people come into the store, they expect to get the pie that was from scratch, and theyre not getting that, so we cant do that anymore. That is a triedandtrue product. Would you use a keebler crust . No, i would make my own. 2. 5 Million People visit key west a year. You only sell 40,000 pies. All right, guys, well, listen, can we get started . Oh, yeah. Sure. Thatd be great. Absolutely. What is this base . This is 50 graham crackers, 50 oreos, and macadamia paste. Its all well and good to experiment, but you bake the crust. Once the crust is set, then i have a pot here of chocolate. That gets poured across the bottom of it. Very laborious. So theres no sweetened and condensed milk in this. Yeah, its just straight eggs, sugar, and lime juice. I dont see it working. All right, so im doing a cereal crust. Its half honey nut cheerios, half graham cracker. For the filling, my secret ingredient is vanilla ice cream. Now, with the ice cream going in, i upped the number of eggs. That ones good. The crusti dont get a whole lot of flavor from the crust. Its all pretty and everything, but you cant do that for 100. You cant do it for 20. Mine was taken, like, right out of here with the scoop. Yeah. The idea is to have some of the crust on the side. My idea behind it, just let people play. To me, its key west in a jar as well. Its a pain in the ass. Well, jim, we can have our own preferences. I have mine, you have yours, but what matters is the consumers opinion, right . They sign our paychecks. They pay our rent. So id like to take these pies back to the store and let people taste em and see what they think. Were gonna