it actually costs barb money to be in this business. kurt: well, that's...yeah. lemonis: but i see spectacular potential here. barb: we're nationwide at whole foods, and that is new, a sku. lemonis: you're nationwide? barb: we are, 168 stores. lemonis: pretty awesome. but if i can't get barb to toughen up... you should almost shut this business down. ...this business will be killed by kindness. barb: [ sobbing ] lemonis: i'm marcus lemonis. and i risk my own money to help businesses. i love investing in american businesses. woman #1: these people are here because they care. lemonis: it's not always easy, but i do it to create jobs, and i do it to make money. we have a deal? let's rock and roll. man #1: yeah! lemonis: this is "the profit." when i travel back and forth to los angeles, there's times where i visit different places, and it just so happens that b sweet is somewhere that i had been before, and i actually really loved it, and they contacted me because they've been expanding into new areas and they've hit some hiccups. when i walk in the store, i was surprised at how busy the place was. in fact, there was a line almost out the door, and you can see that people are enthusiastic about what they're doing, and there's tons of sweets and desserts. man #2: awesome, thank you. lemonis: i'm definitely, definitely excited. barb: hi, marcus. lemonis: hi. how are you? nice to meet you. i was just ordering. i was just getting in line to order stuff. barb: okay. how are you? lemonis: do you know that i've been here before? i used to come here all the time to get different things, and every time i came, the menu got bigger and bigger. barb: i've got so much going on, marcus. lemonis: so these are all the items? barb: so these are all the desserts that we have, so i like to showcase them, so people know what they look like. so i'd started 10 years ago, and so i opened the restaurant because it's something that i've always wanted to do. i was doing sweets. i have an amazing vegan carrot cake. lemonis: wow. barb: and then we also have ube. it's a filipino purple yam. lemonis: can i try it? barb: oh, please. can i grab you one? lemonis: yeah, please. i love every kind of cake, but i've never had purple cake. i've heard of ube, but i didn't know what it was going to taste like. don't knock it until you try it. barb: in the philippines, it's a big flavor. lemonis: it's really good. what was your motivation to start this? barb: my husband, greg, says, "well, you know what? you should open your own business," because everybody tells me and writes to me about this banana bread. he used to give it out to his clients every year instead of a bottle of wine. lemonis: is that the famous banana bread? barb: that's the chocolate chip banana bread. lemonis: my first impression of barb is that she's effervescent. what's it taste like? she's bright and bold. now, everybody knows that i love sweets and desserts. the question is, i'm not sure what exactly they want help with. what's the on-tap stuff here? barb: so the on-tap, we have a coffee, a green tea, the matcha, and that is our thai tea. this is what we did first, so the nitro coffee. it's just coffee, water, and then a little bit of nitrogen, which is the nitro in it. you give it a good shake to activate the nitrogen. lemonis: nitro coffee is a manufacturing process that actually adds nitrogen to the keg or to the can that gives it a sense of creaminess. so this is just black coffee with nitrogen? barb: yeah. lemonis: ooh, it's strong. barb: yeah? lemonis: so this is matcha tea? it's like green tea, though. barb: yes, a matcha green tea. it's very light. lemonis: okay, it's different. let me try this one. barb: yeah, the thai tea. it has oat milk and a little bit of monk fruit sugar. it's a fruit that grows in china. lemonis: it's really good. barb: yeah. so this is the hibiscus. lemonis: it's very different than what i thought it was going to be. there's no calories in here? barb: there's no calories. it's coffee, water and nitrogen. lemonis: okay, this one has no calories, as well? barb: yeah. lemonis: so none in this. the thai tea has 45 calories. barb: yeah. the whole line is vegan. we're nationwide in whole foods, and that is new, a sku. lemonis: you're nationwide? barb: we are. you know where we have it? 168 stores back east called fresh market. lemonis: you guys make them here? barb: we do in camarillo. we have a brewery that we do it there, and they do it for us. they can, and they can there. lemonis: is it a copacker for you? barb: correct, yes, yes, yes. lemonis: okay. i just want to remind everybody that the beverage business is now a billion-dollar business. it's one of the most competitive spaces in all of packaged goods in a grocery store. the fact that they do more than coffee is what's getting my attention. all these other flavors that are really exotic and different, honestly, now i'm interested. are there others in development? barb: yeah, there are, so we're working on an ube latte. whole foods has asked us to work on a matcha-green-tea latte. lemonis: who comes up with all the flavors you've come up with? barb: kurt does. so my very best friend, our family friend who's like a brother to me, and i call him my business partner, developed the coffee. lemonis: do you own 100% of the equity? barb: i own 100%, yes. lemonis: but you treat him like a partner? barb: of course, yeah. lemonis: but the paperwork -- barb: does not say that. lemonis: like, if you got hit by a bus, nobody would know other than you and him. barb: that's right. lemonis: okay. barb: this is kurt. lemonis: how are you doing, my friend? nice to meet you. kurt: nice to meet you. lemonis: how did you guys meet? kurt: got the entrepreneurial itch, and i opened my gym with her husband 16-ish years ago. barb: 16 years ago. kurt: so she came in every day and helped me for nothing. barb: the gym eventually closed down, but... lemonis: the gym lose a lot? kurt: total, probably half a million. lemonis: all gone. kurt: yeah. lemonis: did you invest, too? barb: $60,000. lemonis: gone. barb: gone. lemonis: heartbreaking? barb: the money wasn't the heartbreaker. it was seeing my friend lose everything that he worked really hard for. that was the most difficult thing, so it was like, "how do i help him?" my husband, greg, he's like, "you should have kurt help you with the business." lemonis: you guys are like brothers and sisters. barb: pretty much. kurt: 16 years, we've been best friends now, so she is one of a kind, for sure. lemonis: you're kind of awesome. who's in charge between the two of you? barb: he's my ceo. kurt has really huge dreams, and so he's like, "you know, we've got to get our own trucks," and i said, "how are we going to afford this, you know? with what, your good looks?" and... lemonis: you are good-looking, so maybe it'll happen. kurt: i'm the work husband, basically. lemonis: look, it's clear to me that barb and kurt have a long-standing relationship. he kind of has equity, but it is not documented, and she invested in his business, and it went bad. it's not really conventional. so should i think about the business as this location? barb: i have another store, you know, eight doors down... lemonis: oh, you do? barb: ...which is big boi. lemonis: what is that? barb: it's a filipino restaurant. lemonis: what? another store? okay, hold on, canned-tea business, a dessert business, a food truck business. now she's got another shop a couple doors down? what is that? barb: it's named after my late father. these are my parents. so angel is my dad's real name, but boi is his nickname. lemonis: is that a filipino thing? barb: yeah, all the recipes are my mom's. sorry, she just passed away in april. lemonis: aw, i'm sorry. barb: so that's a tough one to talk about, so i still can't do it without a lump in my throat. my dad has been gone for six years. lemonis: oh, my gosh. barb: yeah, it's tough. lemonis: when i meet somebody that has such a strong love and commitment to family, there's a sense of honesty about that. can we walk down to the other counter... barb: yeah, please. lemonis: ...so i can see this? we're going this way? barb: this way, yeah. so welcome to big boi. the logo, which kurt created for me, are the two bees, but they're the three hearts entwined, so it's my mom, my dad, and me. kurt: everything is made in-house. lemonis: holy moses, look at all this. who does all of this, the pictures and the graphic? who does all that? you do? wow, you guys are busy. i think big boi looks like an amazing concept, but while i am super impressed, honestly, it's too much. barb: i mean, kurt's wanted to open two or three stores by now. lemonis: and you said, "why don't we do this ourselves?" kurt: yes, but that's the thing. lemonis: "because we don't have enough going on. we need more distractions." kurt: that's always my thought. barb: i'm so glad you understand me. lemonis: "kurt, what are you doing to me?" one of the challenges that exists with solid entrepreneurs is that they have more ideas than they have hours in the day, and i don't want to dismiss any of the ideas, but it is important to understand that you can only pick so many at a time. what does this retail for? kurt: the coffee is $3.99. lemonis: what does it cost you to make? kurt: $1.40. lemonis: and what do you wholesale it for? kurt: $1.77. lemonis: so not a spectacular margin. barb: it's not. kurt: not yet. lemonis: even at his current cost and current retail, the margins aren't great, and so if you had to bring the retail down to find your way into more markets, that means the margins are even going to get worse. hi, sir. greg: how you doing? barb: and there's greg. lemonis: oh, it's your husband! barb: yeah! lemonis: how you doing, sir? nice to meet you. you have an awesome wife. greg: oh, i know. yeah. [ laughter ] lemonis: and who's in charge between the two of you? greg: she's definitely in charge. lemonis: do you have the financials for the separate businesses? barb: yeah, joe can print them. lemonis: so why don't you guys gather those up? and then we can sit down in here and go through it. does that work? barb: yes. lemonis: okay, so b sweet has catering, big boi, and the b sweet shop. last year's financials, business did $2.1 million in revenue, all the businesses combined, and lost $17,000. this is year-to-date for this year, nine months. so, so far, b sweet's done $1 million, then big boi is... it's only done $352,000. so let's say another three, four months of business, it's going to get to $550,000, $600,000, so for the year, it'll probably get to $2 million for everything, and it's lost 100 grand year to date. greg: you spent a lot of money on the coffee this year, haven't you? barb: that's correct. lemonis: so that's why i asked about separating the financials, because the original core business is being tasked with research and development all for the nitro can business. greg: exactly. lemonis: and that's putting capital pressure on the b sweet, big boi business. when you keep opening things, it just keeps leapfrogging, taking the capital out to put it in the next one, taking the capital out, and putting it... and unfortunately, the challenge is, if you don't have a plan for the one that's sucking up the most cash, it could kill all of them. now, the catering business is inside of b sweet, and so there are three distinct entities that operate here. there's the b sweet sweet shop, there's the big boi filipino fast-casual restaurant, and there's the canned business. the b sweet business makes money and does quite well. the thing that's making the most is actually funding the other things that are not. barb: it's just been a struggle. i'm so tired of this coffee thing. i'm so exhausted, but i know it's good, but i'm dying. i'm tired. i'm exhausted, and i don't know what to do. [ sobs ] lemonis: what barb and kurt have to realize is that in order to come up with new ideas, you have to put in fresh working capital. there's just not enough working capital and not enough human capital to go around. the brewer that makes everything, do you owe them some money today? barb: uh-huh, i do. i owe them $50,000. lemonis: and do you have other payables that are backed up a little bit? barb: i think maybe the coffee but not so much. i think it's about $10,000. lemonis: so you owe $60,000 to your vendors in the nitro can business. barb: correct. lemonis: and how much is your receivable that you're owed? barb: i'm thinking about $30,000. kurt: probably. lemonis: so right now, you're upside down 30 grand. kurt: for this month, yeah. lemonis: so why don't we do this? i feel like i understand the financials. i'm going to take a minute and just sort of look around myself, and then we can sit down, and we'll figure out if there's something here. it's a bit of a danger for me to invest in something where i feel like the person is all over the place. she is spread way too thin. if it costs you $1.83 to make it, and you're selling it for $1.77, it actually costs barb money to be in this business. kurt: that's...yeah. 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(vo) save over 40 hours a month with intuit quickbooks. the easy way to a happier business. to digest lemonall of the information,week and it's clear to me that barb is spread way too thin, and what i want to clarify is her real motivation for being in the beverage business and that it's not just to appease kurt. how are you? barb: i'm good. lemonis: i feel like big boi is a labor of love that's you and your family, and i feel like b sweet is like your baby, and honestly, i don't think either of those businesses need me. i only have interest in investing in the beverage business. barb: okay. lemonis: i think we have to work on flavor development, drink development, and i don't like the name b sweet on it. it doesn't describe what it is. it creates an illusion of something that isn't really there, like calories, and it's not actually sweet. barb: i am concerned about changing it. people recognize the name because they recognize b sweet the brand. it has made a name for itself. i feel strongly about that. lemonis: well, you don't do much business today. i mean, it's not out there. barb: it is out there. i mean, it's nationwide. it's a nationwide product. lemonis: i think the business needs to clean up its debt. i think it has to clean up its copacking/potential self-manufacturing process, a real business plan... barb: i need that help. lemonis: ...a legitimate process. barb: i don't know how to do all those things. lemonis: for that business, we need people that have specialty in all those areas. i want to invest in the beverage business, in a standalone entity that doesn't have the restaurant or the sweet shop inside of it. i think if you could relieve yourself of the burden and know that that's not putting pressure on those two businesses and you could sleep at night, i think you would feel different. barb: i believe that's true. lemonis: okay, so i want to make an offer. my offer is $250,000 for 50% of the business. only in the canned-beverage business. $50,000 would clean up the past-due stuff that's keeping you up at night, and then the other $200,000 would be dedicated to product development and inventory. barb: i've never had to make a decision like this before. i'm nervous, you know? lemonis: you should be, and it's a big decision. think about it for a minute. if you want to call greg. barb: i need to feel good about what i say yes to, and i don't think anybody can tell me that, not even my husband. lemonis: i love the fact that barb said that to me. if i'm good with it, it don't matter how everybody else feels. she understands the importance of the decision and the fact that ultimately, it's her call. what i love about what you've come up with with the beverages is that i think there's a lot of crossover with other businesses that i have, and i think the ability to scale it could be pretty exciting. barb: okay. lemonis: we have a deal? barb: you have a deal. lemonis: okay. barb: thank you, marcus. ♪ lemonis: what's up? barb: hi, marcus. how are you? lemonis: is this your commercial setup? kurt: it is. lemonis: any time i go and invest in a business, i'm looking for the people, the process, and the product. i clearly love the people, and the product is amazing, but it's still unclear to me what the process is, so i wanted to visit their commercial kitchen to understand how they develop ideas and how they bring them to market. kurt: so because the oat milk market is really growing... lemonis: yeah. kurt: ...you know, there's some that we've worked with before. these guys are local, so they're willing to kind of work with us on, like, size. lemonis: califia is in california. kurt: they're here in l.a. lemonis: you got a hibiscus, a green, a coffee, and a thai. what's the next flavor? kurt: i have an ube latte kegged and ready to go. lemonis: that [bleep] is purple. kurt: yeah, so you see how that comes out. lemonis: feel like i'm drinking barney. [ laughter ] is there oat milk in here? kurt: that one is almond and coconut. that's what we've been doing on tap so far. lemonis: well, what is your proposed for cans? kurt: probably oat milk. lemonis: so then why don't you test it the right way the first time? kurt: i haven't gotten to the ube part yet. lemonis: well, yeah, you are. it's right here. kurt: we're testing for sure. like you said, i'm the impatient one. i would love to keep launching. lemonis: if oat milk is going to be the premise behind it, then fine. if it's not, then that's okay. i just want to know what the process is. so if i said to you, "i want to make ube with oat milk the same way you make everything else," could you do it? kurt: yeah, so oat milk and a little bit of sweetener. that was completely eye-balled so far. barb: it's good. lemonis: i kind of like it better now. i don't like the fact that kurt is starting to show that there's a little bit of inconsistency with his process. so what's still not clear to me is how you actually develop a flavor, and what the written process is to do that. barb: we don't have one. lemonis: so we can't have a business where we don't have one. kurt: mm-hmm. ♪ lemonis: hey, barb. barb: oh, hey! lemonis: how are you? i asked barb and kurt to meet me at the copacker in california. i wanted to understand, who's making their product, what's the process like, how sophisticated is it, and is is scalable? if we want to sell a million cans a month, can this place do it? jay: so this is our canning machine. our coffee goes into this buffer tank. it uses pressure to push the coffee out through the bottom. lemonis: putting a little nitro in there. jay: the bubbles of nitrogen are very small, and they provide a sweetness and texture element, so like a guinness. lemonis: [bleep] what was that? kurt: oh, uh-oh. lemonis: snafus like that don't normally... i was not impressed. the place did not look as organized as i wanted it to be. i want to be able to eat off of a production-facility floor. i want to know that the machinery is the most sophisticated automated facility that i can find. i feel like "laverne & shirley." ♪ so this machine can do how many an hour? kurt: 2,000 to 3,000 cans an hour. lemonis: so it seems like if we got to a million cans a year, i think they would fumble a little bit. kurt: yeah, no, i mean, we have had our ups and downs over the years. lemonis: have you looked for alternatives? kurt: yep, we've been making some calls. lemonis: i would have alternatives even if they're not -- if you have a west coast one, a midwest one, an east coast one. one of the m