Before, we just didnt know it. I make tough decisions. Gregs not in charge anymore. Im in charge. And i back them up with my own cash. Its not always pretty. Every days not gonna be like this . No, gonna get much worse. But this is business. Cut your losses and go home. I do it to save jobs. Things are going to change. And i do it to make money. This the profit. [theme music] nine years ago, amazing grapes opened its doors in the heart of orange county, a wealthy community about an hour south of los angeles. It was the vision of Greg Schroeder. This is good stuff. A wealthy real estate consultant who loved collecting wines and decided to turn his hobby into a business. We had to drive 35 miles to find the nearest fine wine store, and i thought, just open a store closer to home. Today, amazing grapes sells some of the finest wines in the world, and while the business generates about 3. 5 million in revenue, last year, they lost money. We have never seen a profit from this store in the nine years weve been open. And havent even made a dent in paying down a debt thats well over 500,000. There are 17 employees at amazing grapes, but without a strategy to generate sales and increase profit margins, this business will be done before the end of the year. Youre selling wine too cheap. Let me stop you right there. Im not done. I dont see myself walking away from amazing grapes. Im trying everything i can to keep this alive. In the u. S. , wine retailers generate over 9. 5 billion every year. I think amazing grapes can be turned around, and i want a piece of it. All these boxes. I always believe that First Impressions are lasting impressions, and my First Impression of walking into amazing grapes is theres clutter everywhere. Its disturbing. Live music in a wine store. [laughs] ayyiyi. Wow. I couldnt believe how much inventory was in this place. Sometimes, too much selection is awful. How are you . Im marcus. How you doing . Brian, pleasure, welcome. Nice to meet you. You too. Its a little bit bigger than i thought it was gonna be. 1,800 different skus of wine in this space. Is that whats in here, 1,800 . Yeah. Huh. No one has time to look at 1,800 varieties. Id be willing to bet that half of it doesnt even sell. How long have you worked here . Todays my second day. Is it . Yeah. Look what you were signing up for. Every days not gonna be like this . No, gonna get much worse. [laughs] take a walk around, just check it out. Is the owner here . Um. Not sure. [scanner beeps] your total todays gonna be 56. 86, sir. Im marcus. Im daniel. What do you do here . I specialize in the beer, definitely. So i mean, ive been inive been in the scene for about four years now. The beer scene . The beer scene. Just kind of learning everything i can. I do a lot of research. How do you know what to pick . Ugh, a lot of drinking. A lot of drinking and a lot of expertise. All i know in this world is beer. So who do you work for . I work for, you know, the owners, bill and greg. They come in every once in awhile. But theyre not here every day . No. Its one of the issues that i think that we are facing here. Huh. All right, brother, thanks. Hey, no worries. Whos hiding in the aisles . Im dan. Dan, what do you do here . Im the wine bar, and i spend most of my time selling. How long have you been in the business . 22 years. Whoa. What i brought to the business was a book of business that i had built over 20 years dealing with folks by selling to them directly via email or phone call. Thats worth a lot of money. Right, right. Whats your favorite wine . Uh, well, i mean, my true love are the wines from bordeaux, so do you have a lafite . Okay, now youre getting to the top. Nah, i dont want that. I cant afford it. I have a question for you. Sure. Why is there crap everywhere . Too much inventory . Exactly. Whos responsible ultimately for overbuying inventory . Greg wants to be in charge of that. My approach to buying is, is i buy what i think i can sell within 30 days. And would you know how to liquidate it if you had to . Yeah. And so why havent you suggested that to greg . Well, i tried, marcus. Im not in charge. Hes my boss. Dan definitely knows what hes talking about. To take a guy with 20 Years Experience and handcuff him seems silly to me. Where are the owners . Well, Greg Schroeder is the one owner that i think youve maybe met. I have not. Boy, um ive been here a good amount of time, and i still havent met greg. It isnt like he didnt know i was coming. All right, well, im gonna walk over to the wine bar. We can meet some more people. Sure. The layout of the bar makes absolutely no sense. Its literally hidden in the corner of the business. And what else is odd is i feel like im standing in two different businesses. I mean, youre paying rent for the square footage, but youre failing to actually capitalize on the fact that its there. Are you mike . I am, yes. Nice meeting you. Nice to meet you. What do you do here . I oversee the kitchen and manage thisthe bar side of the operation. How much revenue will the bar and restaurant do here . The bar right nowgross sales for us this year would be a little under 500,000. Okay. Youre responsible for the layout and everything . Thats gregs decision. Greg is the operational piece. We never see him, so its two different businesses under one roof really. Its odd when i walk into this place because i dont actually see the bar. Its kind of tucked over into the corner. We want our patrons at the bar to actually get up and buy a bottle or a case of whatever wine they were just drinking. Its common sense to have the bar help drive retail sales, but you cant do it if its clear across the other side of the room. Im marcus. Matt. What do you do here, matt . I guess you can call me, like, the retail manager. You know what i havent seen . Where are the owners at . Greg, i thinki mean, im not sure. How often is he here . About, you know, once a month, twice a month. Its kind of usually us on a daily basis. Theres no leadership. No, not outside of me, mike, and dan. I really invest in businesses with absentee owners. Interesting thing here is that the employees have taken it upon themselves to do all the things that the owners should be doing. Thats something you cant put a price on. These guys are clearly keeping this ship afloat. You know, you would think that if somebody called you and said, hey, come help fix my business, they would be here. Uh, yeah. Seems odd to me too. [laughs] its odd to you too. Okay, good. Can you give me a little tour of the place . Of course. Thats the kitchen . Thats the kitchen, yeah. The whole kitchen . Thats everything, yeah. How are you . Im marcus. Hi. Hi, marcus, gerri. Gerri, nice to meet you. [horn honks] this is the whole kitchen . This is the entire kitchen. This kitchen is tiny. Im shocked by the size of this kitchen and the lack of equipment in there. I dont know how she even cooks anything, let alone contribute to the 500,000 coming out of her department. Be nice if you had more space. It would be great to have more space. Thats the biggest problem we have. When were plating at night and a full bar of 75 people, its really hard. Its tight. [car alarm chirps] just hearing from some of the other team members about the place, i think the biggest thing is there is no leader. No. No . When i was called to come here, i think they assumed that i would just come in and just write a check. Yeah. [laughs] and the reality of it is, is that i am not convinced yet. Are you the grim reaper, or[laughs] me . Yeah. Sometimes. I dont really know where the leadership is. I dont know who the owners really are. If theres changes to be made and sacrifice to be made, were willing. Okay. Thats good to know. cause we care. What do these people that you work with mean to you . Wow. Its not just a job, marcus, really. This is someplace i love, i love coming to everyday. I interact with so many people that i care about, and that door would close, and i wouldnt have that. This place just means a lot to me. Marcus, im Greg Schroeder. Oh, hey, greg, how are you . Nice to meet you. One of the owners . Im one of the owners, yup. Okay. Nice meeting you. Nice meeting you, marcus. Thank you. You do a nice job, by the way. Guess who decided to show up . Finally. So what do you do fulltime . This isyou dont come here every day. No, i come in here probably two, three times a week. Two or three times a week . Yeah. Or two or three times a month . [laughs] these guys have been here for a while, and they know how to run things. Uhhuh. How much revenue will you do this year . Projected about 3. 5 million. How much inventory do you have . About 350,000. You have any debt . Yes. Right now, 540,000 of that is for inventory, 90 but you just said there was only 350 in inventory. Yes. So right now, youd be upside down. Correct. Couple hundred grand. This business is in real trouble. Amazing grapes currently owes 540,000 in payables to vendors that they bought inventory from, but if they were to liquidate everything tomorrow, it would only cover 350,000 of that total debt. That means were 200,000 in the hole and no cash to cover it. I need to take a closer look at these financials. Walk me through this again. And heres how it kind of breaks down on a monthly basis. So about 300 grand a month in business. Correct. Were doing 65 of our business through email and internet, which is what dan does. Of the 3 1 2 million of revenue, almost 2 million. So dan is really responsible for most of the sales. That is correct. And do you know the margin is on that . The bar margins about 37 overall. Okay. The wine on average, theyre probably around 14 to 17 total. And is there a difference in margin between the walkin business and the web business . No, theyre all about the same, cause its the same price for everybody on those transactions. Not good. How much is your rent here . Its 14,000 a month, so so youre essentially giving the retail customer a wholesale price if the margins are that low, except on the internet, you have no rent. In here, you have 14,000 a month. The fact that they do 3 1 2 million of sales a year is irrelevant because they dont make enough margin to cover their operating expenses. Theres no way out of the hole other than money going in. No way. Whats the most profitable part of this business . The bar. The bars the best. Very early on, what looks like to be the flaw in this business, too much floor space. Youre not a wine discount depot. Not enough tables. I dont know that the space is too big. I think the use of the space is wrong. You can cut the retail store in half. Your margins would change so dramatically if you could do more wholesale over the web, a little less retail space cause youre not getting it anyway, and get to that bar easier. The bar and restaurant has the highest margins in the entire business at nearly 40 , and it makes up 14 of the revenue. The problem is, it only makes up 10 of the square footage. I want to focus on the high margin business, the bar and the restaurant, and minimize the amount of Space Dedicated to the low margin business, the wine walkin Retail Business. I know that if i can add tables and chairs, my margins will go up immediately. But as an owner, you have to be there to connect the dots. The problem that exists today here, theres no leader, and the owners are absent. And because of that, the business loses money, and because of that, the business is upside down. So what do you do . This is why we called you. Whens the last time you guys had a staff meeting . We dont have them. I been here three years. Theres been one. No staff meetings. How do you know whats going on . You dont. When the [bleep] hits the fan, thats when we learn about it. Thisits likethis is like the definition of insanity. How many total employees here . 17 employees. If the business does go out, thats 17 people that are on the street, and you guys lose a lot of money. I think bill, he doesnt even sleep at night. Whos bill . Bill garys my partner. Hes the one who handles all the financials and does all the book work. The one that doesnt come. Hes not coming. And why didnt he were to be here again . Theyre Business Consultants themselves, and they just felt that it would be im not a consultant. I write checks. Right, theyre consultants. Theres a big difference between me and them. Yeah, i know. So what they would probably worry about is, if they cant fix their own business, how are they gonna fix somebody elses . Wow. Shame on them. Lets try to call em if you can. I dont know if you have any way to call him. Yup. [phone ringing] hey, bill, how are you . Youre on the speakerphone. I got marcus here with me. [on phone] how are you doing . Hey, good, bill. How are you . Good. I wish you were here. Well, i wish i couldve made it. I may try to swing by this afternoon, but im got some conflicts in my work schedule. If i can get out of here, i will try to make it. Bill is a partner at amazing grapes, and in order for me to do a deal with this business, i need to talk to the guy who actually puts together the financials. I flew here from chicago, as you know. So what time can i expect you . Yeah. How about 5 00 . Ill plan on seeing you then. Thanks a lot. Do you drink much wine . I dont drink much. No . It impairs my decisionmaking. [laughs] and i write checks that i shouldnt write. [laughs] glass of wine over here, please. Hey, im marcus. Nice to meet you, marcus. Bill gary. Hey, bill, how are you . How you doing . Nice to meet you. Hey, greg, good to see you. Welcome. Why dont we go sit down and kind of get down to business. Terrific, great. Is that all right . Yeah, thatd be great. Okay. How much money do you guys have invested so far in this venture . About 3 4 million, and then five silent partners who put in another 1 2 million. And how much are the payables today . All of our liabilities is about 575,000. Almost 600,000. Almost 600,000. Are the other partners in addition to yourself prepared to write a check to get the business right . None of the partners are willing to do that. Not even you guys. The math is very simple. Theyve invested over 1 million into this business, but they currently owe their vendors 600,000. I dont care that they do 3 1 2 million a year in business. They dont make any margin, so theres nowhere to pay the bills from. Here are the problems that i see terrible communication. Not having a leader in place is devastating to a business. People, process, and product is all i care about, and youve screwed em up. At this point, the business is essentially zero. So i dont know that i have a deal to make. I think unfortunately where were at is cut your losses, liquidate your inventory, pay your vendors, work your way out of your lease, and go home. What is all that . Its gregs band. Hes never here to work, but he has time to come have his band here . You ever get the urge to go a little crazy . You know what im talking about, right karen . Huh . You wanna let yourself woah, but you cant do it here. Or here. It hurts more when you fight it. But totally cool here. Woah and here. Woaaaahh oh yeah. Woah, kid. She gets it. [ roars ] woah get it all out. So when youre ready to let yourself woah, theres only one place to go. Universal, baby if youre 55 and up, tmobile has a plan designed just for you. And, for a limited time only, now you can get two lines for just 55, including unlimited talk, text and data. Plus no annual service contracts. Only at tmobile. Its either the assucertification process. Or it isnt. Its either testing an array of advanced safety systems. Or it isnt. Its either the peace of mind of a standard unlimited mileage warranty. Or it isnt. For those who never settle, its either mercedesbenz certified preowned. Or it isnt. The mercedesbenz certified preowned sales event. Now through march 2nd. Only at your authorized mercedesbenz dealer. In getting key nutrients peopfrom food alone. One a day, covers all of them. In just one serving. One a day, and done. I think unfortunately where were at is cut your losses, liquidate your inventory, pay your vendors, work your way out of your lease, and go home. You dont have the time. The other scenario isits a little like a hail mary. You should let somebody else run the business, and hope that somebody else can execute it because you dont have the time. I grew up in retail. To me, this is second nature. I love this. I love coming in here and rolling up my sleeves. Greg, im not sensing that you have really been involved to date. No ones ever here. Whos in charge . I dont know. Im not here every day. I readily admit that. I cant imagine not being involved. And how about you, bill . I could be not involved. Heres my offer. My offer is ill put 300,000 into the business. I would own 51 of the business. The Management Team would own 25. And the current ownership would own whatevers left. I mean, im shocked by this quite frankly. It just doesnt seem to compute. You guys have any suggestions . What im seeing is 25 . I mean holy [bleep]. With all due respect, i would never do a deal where i would be less than 51 , and the reason that im not 100 is because i want the employees to have something. I cant do it without them, and potentially even having them be one of the general managers. I dont know that. I cant make that assessment that quickly. What i love about these employees is not only are they knowledgeable, not only are they hardworking, but they have put up with a lot of nonsense. Owners not showing up, no leadership, and despite all of that, theyve stuck together, and theyve allowed this business to still generate 3. 5 million a year. Yeah, whats different . Whats the magic formula . Going forward, and were gonna put a leader in place. Were gonna put a process in place to buy inventory the right way so that we measure turn, so were not sitting with hundreds of thousands of dollars worth of inventory. You got to show up, and you got to participate. Look it, you know, if. If nothing else to take the pressure off, you know, and we can buywe can pay our vendors, i mean, thats huge. So do we have a deal . We have a deal. Im gonna write you a check. My offer of 300,000 for 76 of the business is solely to go towards paying down the vendors. We knew that they were in trouble by about 250,000, and i wanted to make sure that all the vendors were brought current. Going forward, after you take this check, im 100 in charge. Do you understand that . Yes. Okay. Thank you. Thank you. Lets toast. Thank you for saving us. Come on up. Dan, shawn, ed. I was asked to come to this business because this business last year did 3. 6 million, and we lost money. Just silence. The owners here i think take most of the responsibility. They have been halfass, absentee owners, and typically, i do not invest when there are absentee owners, but last night, i wrote a check for 300,000. I now own 51 of the business. [laughs] people, for me, is the only reason that businesses fail or they survive. So the Management Team, the people that i believe are here for the long haul, will own 25 of the business. Whoa. And the current ownership structures gonna go along with whatever we decide. Yes. Knowing that i have ownership in this business now, it just really shows me how