And gain some perspective. You just made it about money. Thats how it makes me feel. You just made it about money. Or her beloved business will die on the vine. Christina i dont want to be that person that cries on tape. I really dont. 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. Lets go to work. This is the profit. In 2010, Christina Stembel planted the seeds for Farmgirl Flowers, a unique ecommerce florist located in san francisco. Originally a farm girl herself, christina first got the idea while working at stanford where she saw firsthand how much businesses spend on floral arrangements. Christina get some of these. Dont just put the pale ones in. Lemonis researching the industry further, she realized how much florists rely on imported flowers. And that their huge selections often lead to lots of waste. And thats when she decided to start a streamlined Daily Delivery Service that exclusively uses american flowers. Christina that looks gorgeous, kim. Lemonis while farmgirl generates millions in revenue, other online startups are hot on its heels. And christina needs more than just money to stay ahead. There are plenty of opportunities to make a floral ecommerce business grow into a national presence, not only in the residential sector but also in the commercial and hospitality markets. With her unique twist on the domestic based flower company, im excited to get a closer look at what christina does and help this business grow to its fullest potential. Do you know where Farmgirl Flowers is . Farmgirl flowers is in the heart of downtown san francisco, at the flower market. Nobody else had the sort of signage that she had. It was made of carnival letters. It was bright, and you could really feel that it had some energy to it. Is christina here . Christina i am lemonis nice to meet you. Christina nice to meet you. Lemonis why is you place a little jazzier than everybody elses . Christina cause were a hip, young flower startup. Lemonis is that what you would call yourself a startup . Christina yes. Were an Online Flower company. 99. 9 of our business goes through our website. Lemonis okay. Well, take me inside. I want to see what it is that you do. Christina let me take you on a tour. Christina this is veronica. Sasha. Katie. Katie hi nice to meet you. Allie and im allie. Lemonis allie. Christina and this is tati. Lemonis how many work here . Christina 30. Lemonis are they all women . Ian man coming through. Lemonis man coming through [ laughter ] ian tada lemonis i was like, holy. Im in trouble. Christina so, this is our assembly line. We run it like a manufacturing facility. Our lead designer puts the recipe here, so the designers will all know what goes in each one. We have quota systems for the designers, so when they come in, theyre given a quota they have to do each day. Lemonis i thought flowers were supposed to be fun. Christina they are fun. Lemonis sounds intense. Christina we have a very fun environment. We take a lot of pride in that. Lemonis you started this business, when . Christina november 7, 2010, was our launch date. I quit my job at stanford. Lemonis what did you do there . Christina i was a director of Alumni Relations and Campaign Outreach for the law school there. I wanted to do something that actually did something good in the world. My numberone mission is to support american flower farmers. Competitors of ours, their quality i believe is subpar. Ours look much better. Lemonis what do you do thats more innovative than them . Christina domestic product. Lemonis nobody has domestic product . Christina none of the big guys. Were able to provide designerquality arrangements at generic ecommerce prices. And instead of having 40 waste like industry standard, we have less than 1 waste. We use everything that we buy because we only do one daily arrangement. So you dont get to pick what any of the flowers are. We pick for you. Lemonis i cant pick my flowers . So if i want something for my mother thats orange or pink christina well let you do that for our extralarges. But if you just want to order off our menu, you dont get to pick. Lemonis i have to hand it to christina. Shes on to something with this one daily arrangement. Think of southwest airlines. It became one of the most Profitable Airlines by offering one type of plane, one type of seat, and one type of inflight service. That allowed it to keep its operating costs way down and passing those savings on to the consumer. The same goes for farmgirl offering just one arrangement eliminates a lot of waste, allowing her to sell highquality american flowers at affordable prices. Even better, it keeps customers coming back, and they can be pleasantly surprised by whats in the next delivery. Small, medium, and large. Christina you pick if you want a vase, our trademark burlap wrap which is reused coffee bags or if you want a living plant. Lemonis nine variations. And thats the basic business . Christina thats the basic business. Lemonis of the nine, whats the most popular . Christina small burlap. 38. 30 . Lemonis thats 30 of your business . Christina yes. And medium vase, 78, and medium burlap, 58, are about tied for second. Lemonis that would make up how much of your business . Christina between these three, about 65 of our business. Lemonis okay. Christina yep. Lemonis good. Christina greens are the hardest part, actually. Were gonna make a fan shape. So im gonna put some here. You got to cross them in your hand more. Remember the fan shape . Yours is gonna end up looking like a pancake. Lemonis im not thinking that yours looks that much better. Looks like you just basically picked up a bunch of stuff and threw it together. Christina really . So then youre gonna take two of these. Lemonis what if theres a bunch like that . Christina they will all be bunches. What we try to do is we keep walking. Lemonis well, youre in my way. Christina then you wouldnt have to stop as much. Lemonis whats the cost of all these . Just flowers. Christina 11. All right. And were gonna take it over to the chopping block. Youre gonna be really careful, and youre gonna have to go really hard, okay . Like that. Hey, what do you guys think between marcus and mine . Lemonis its not a contest. When you train people, youre supposed to motivate them. Christina i think it looks great. Lemonis do me a favor. Nobody take credit for that one. [ laughter ] christina this is our shipping center. This is stephanie. Shes our new manager here. Stephanie its nice to meet you. Lemonis nice to meet you. How long have you been here . Stephanie three weeks . Lemonis how many orders will you process a day through here . Christina its, on average, 250. Lemonis what does it cost to ship . Christina its 16 to about 39, depending on where its going in the country. We Just Launched national shipping. And, so, thats how we get to a billiondollar company, is by shipping national. Lemonis its obvious to me that christina has started to crack the code with this flower delivery model. But the problem really comes in when you have to ship them. If you just ordered a 39 arrangement, and youre shipping it across the country, you have to add another 39 for delivery. Now the arrangements 78 not so affordable. One way to fix that is to add a distribution facility on the east coast, allowing the shipping costs to be cut in half. But the problem with that is that it takes money and expertise. What is your role here . Ian my role is that im the courier manager. So i manage all of our deliveries. Lemonis okay. Ian were grabbing them out of here, and we wrap it in a piece of burlap, which is our, kind of, signature. Christina you can see they pack up their bikes and their pack thats on their back. Lemonis holy moses. Christina you want to try to put it on . Lemonis and now im gonna get on a bike . Christina and now youre gonna get on a bike. Lemonis [ laughs ] here we go. Ian all right. I think weve got a new hire. Christina yep. Lemonis this is a hard job. Christi not eng trouble placing something online, on our website. Lemonis so, let me look at that. Lauren yeah. Yours . Pick any of the goodies or anything if they want any. Lemonis add. Okay, now i want to check out. Checking it back after i was checking out. Lauren yeah, i saw that. Lemonis its not a great website. Its kind of ironic to be in Silicon Valley and have the website sort of be. Average. Well, i was hoping that i would find an unbelievable Technology Platform that would allow any product to be delivered through that infrastructure. I placed an order online. Christina mmhmm. Lemonis it wasnt easy. Christina yeah, its definitely too many steps and too many clickthroughs. Lemonis whyd you call me here . Christina weve completely changed the way customers buy flowers online now, from the burlap to not getting to choose, to the bike courier delivery. But the benchmark for success here, in Silicon Valley, is if youve raised money. I did spend a good year of my life pitching to v. C. S. And to not be able to raise capital, and then to see competitors come in and rais and beat me to market, that does affect me. Everything i do, i try to do it the right way keeping all the employees inhouse and giving them medical benefits. [ voice breaking ] so it is frustrating. I dont want to be that person that cries on tape. I really dont. Do you mind if i just go calm down really quick . Im really sorry. Just let me [ sniffles ] okay. So, heres the thing. I want to do things that make a difference, and i want to do it the right way. Lemonis why havent you been able to raise money . Christina because im a woman. I have less than a 5 chance. Lemonis of what . Christina of raising capital. Its just stats. Ive been told by female v. C. S to take my husband in with me. Why . So i can answer the questions . Lemonis i can sense that shes frustrated about the difficulty in women raising money in a very maledominated world. You can tell that its sort of taking its toll on her. Christina like, my dream job is to build a couple businesses, sell them for a lot of money, and then i would love to just invest in female entrepreneurs. Lemonis at the end of the day, your goal is to take your success and give other people a chance that you werent given in your mind. Christina yes. And i did think about this in reaching out to you. Do i really want the message to be that this guy had to come in and save our company . Lemonis theres nothing broken. Christina youre right. Lemonis except your ecommerce christina i just need money to be able and im very aware that i can get that. Lemonis ah, you need more than money. You need knowledge. Christina i think im aware of my limitations. Lemonis okay. Thats good. So, if i was a woman. Christina mmhmm . Lemonis . Would you have a totally different perspective . Be honest. I was the same person but a woman. Coming up. Christina i think we have a phenomenal company. Lemonis did i say you didnt . Christina well, earlier, it felt like you were interrogating me. Lemonis i am. Im doing due diligence. Save without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Christina mmhmm . Lemonis . Would you have a totally different perspective . Be honest. I was the same person but a woman. Christina if you were a woman, i probably would have reached out earlier. Lemonis the fact that christina admits that she considered my gender before reaching out to me is troubling. Im not sure how that makes her any different than the Venture Capitalists shes criticizing. The fact that she went through these issues is terrible, and im sympathetic to it. But i dont want to be indicted for it. And i dont want it to affect her business judgement. Thats gonna be even a bigger problem. You dont want to be dismissed cause youre a woman. Christina yes. Lemonis i dont want to be dismissed cause im a man. What matters to me is that you have a business, youre open to change, and youre willing to work hard. And so you cant play the gender card with me. Christina mmhmm. Lemonis cause im blind to it. Christina yep. Lemonis plenty of men and plenty of women would invest in you, by the way. Maybe i just know cooler people. Or something. Christina maybe you hang out with lemonis non ass bleep . Christina maybe not on san hill road, here. Lemonis okay. Now that ive gotten a sense of her process and her Business Model, i want to dig into her financials and find out how well shes really doing. So, what do you want to take me through first . Christina do you want to talk about overall numbers . Lemonis i do. Lets look at revenue. 2011 56,000 in sales. 2012 276,000. 2015 on your way to 4. 2 million. 2. 9 million as of now. Wheres the net profit . Christina here it is zero. [ chuckles ] lemonis zero. Christina we have about 80,000 in debt right now. Lemonis how did you fund the 80,000 loss . Christina credit cards. Lemonis your personal ones . Christina no. Business credit cards. Lemonis and the reason that youre showing a loss is why . Christina is because we decided to launch national shipping. Lemonis so, wheres your wage for 2015 . Christina i dont pull a salary. Lemonis zero . Christina zero. Lemonis you make no money . Christina no money. Lemonis how do you pay your bills . Christina my husband is very understanding, and weve decided to reinvest it into farmgirls growth because we think well get it at the end. Lemonis the fact that she doesnt take a salary not acceptable. But im impressed by the growth that shes had, and im even more excited about how easily some of these problems can be solved. She has some debt. Its not terrible. Its easy to solve by paying it off. So, on a small burlap, retail of 38, cost of 27. 79, gross margin, 10. 21, 26. 8 profit. Christina mmhmm. Lemonis and thats 30 of the business. Christina yes. This is with delivery. Lemonis but where have you actually put your delivery collection fee in here . Christina so, thats an extra 10. So that would bring our margins much higher. Lemonis right. Instead of saying 38 , total revenue collected for this column isnt 38 . Its 48 , taking the margin from 26. 8 exploding to 46. 6 . Christina thats great. So that will help significantly. Lemonis its gonna help. Christina told me that she struggled to raise money because she was woman. But the fact that shes going in with margins that are lower than they really are mistakes could be a big contributor to why she wasnt able to raise money. And this is what i thinks exciting. When i look at your projections july, 133,000 is what you did last year . This year, youve already done 337,000. Christina mmhmm. Mmhmm. Lemonis so youre generating the top line. Christina like, next year, i know were gonna hit 6 million. And if we actually had Investment Capital wed be doing 8. 4 million. Lemonis not in this space, you wouldnt. Theres not enough labor and hours in the day. And so when when you say, i know were gonna do it, somethings got to change, right . Christina ill figure it out. I think we have a phenomenal company here. Lemonis did i say you didnt . Christina well, earlier, it felt like you were interrogating me. Lemonis i am. Im doing due diligence. Christina yeah. You are. You are. Lemonis right . Shes, like, annoyed that im asking her questions about her financials. Did she think that somebodys just going to walk in and say, oh, you have a beautiful flower arrangement. Heres a check. I mean, no. Christina i called you here because. Im really scared. [ voice breaking ]. That our competitors are gonna beat us. I cant believe im crying. I dont cry. Lemonis who cares . Christina im not a weak woman. Lemonis i dont think youre a weak woman. Christina im worried that theyre gonna beat us to market because of the money theyve raised. Lemonis and why do you think they got it . Christina i know that part of it is that im a solo female founder. Lemonis are you a man hater . Christina no, im not. Im married im not a man hater. Lemonis okay. Your confidence in your numbers makes me a little nervous. But i leave here today impressed. I am very impressed by her Business Model and even more impressed by her tenacity. But what im unimpressed by is the way she glosses over the issues that exist in her business, and some of the amateurish math mistakes shes made. This business is not as tight as she thinks it is. Good morning. Christina good morning. Lemonis how are you . Christina good to see you. Lemonis good to see you. First of all, i have to compliment you. The idea that you came up with is fantastic. Christina thank you. Lemonis you didnt walk in with a huge checkbook and a huge pot of money, and you have been able to do one hell of a job. Christina i really appreciate that a lot. I do have one quick question. I do know im not willing to negotiate on imports. Im very confident in this area. Its not something im willing to negotiate on. And i hope that you would respect me. Lemonis its never a good way to start by saying words like nonnegotiable. Thats not the greatest way to lead into a productive discussion about doing a deal together. Lemonis at any point in our time together, have you heard me talk about bringing flowers in from china . Christina no. Lemonis i havent even talked about that. I think that the help that i bring to the table is different than you walking into a Venture Capital. Its just, how much money can you bring, and what do you want for it . Christina yeah. Lemonis and, so, im not that person. Christina mmhmm. Lemonis and im a guy, by the way. Christina i do believe that part of not being able to raise capital is because im a woman. I have no bitterness over it. I really dont. Lemonis but you have resentment. Christina you know what i have . I want to share my story. Wanting to be a champion for women is part of me. Lemonis i care about you and me. Christina yes. Lemonis im a guy, and im interested in investing. Lemonis christina doesnt want to let this gender thing go, and im trying to be sensitive to her feelings. But im here to focus on her business, not her personal hangups. I want to make an offer. Christina okay. Lemonis you have a business that has a good idea. Christina 900,000 is what i need in the next 12 months. 5 million is what i think that im gonna need in the next