Transcripts For CNBC The Profit 20240712

Lemonis he makes terrible investments. This feels like a show that you went to with no research. And hes even using the company as his own personal piggy bank. Skyler i mean, theres so many personal expenses in here. Lemonis what if the business doesnt have the money to pay it . Matthew it does. Were making millions. Lemonis if i cant teach him to respect his people and his company. Theyve done nothing but eat from a bag of [ bleep ] since i met you. The casery will fall apart. 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. [ cellphone ringing ] [ text message alert ] the casery has been around for about 3 years now, and in that short period of time, well, its had remarkable success. So, im excited to check it out. The mobileaccessory industry is about 100 billion business. So, just a small piece of that well, you do the math. Oh, wow. This place is huge. Hello . Hey, how are you . Im marcus. Matthew hey, marcus. Im matthew. Lemonis matthew . Matthew yeah. Nice to meet you. Lemonis nice to meet you. Matthew im the owner. Lemonis oh, you are . Okay, thats cool. Matthew welcome. Lemonis nice to see you. Matthew yeah. Lemonis its a big building. Matthew yeah. We just moved. And were still kind of transitioning right now, still. We got an amazing rate on the place, but we had to put some work into it, for sure. Lemonis can you introduce me to everybody . Matthew yeah. Absolutely. Lemonis that would be great. Matthew id love to. Lemonis so, who are these folks here . Matthew okay, this is the production staff. Lemonis hey, guys. How are you . Matthew will you all introduce yourself for marcus . Lemonis do you know their names . Matthew i know about half of them. I dont know yours. Mason mason. Lemonis mason. So, you know masons name . How are you . Im marcus. Briana briana. Lemonis nice to meet you. Do you know brianas name . Matthew no, i dont. Lemonis id like to introduce you guys. Matthew yeah. Lemonis my First Impression of matt is that he seems like a nice enough guy, and the company has really grown fast, so hes adding staff on a daily basis. But he should probably learn his employees names. Do you guys use all these products yourselves . Does everybody have one on their phone . Man no. Lemonis do you have one on your phone . Briana no. Lemonis do you . Man no. Lemonis do you have one . Mason i actually dont have an iphone. Lemonis so, just iphone cases . Matthew right now. If youre, like, the type of girl who likes to change their phone case every 6 to 8 weeks, generally, you have an iphone. Lemonis is this only for girls . Matthew yes. This market is basically all women. You do not find this in mens sections anywhere. Lemonis and so, wheres the bulk of your business come from . Matthew wholesale b to b. So, we have small, independent retailers, probably a few thousand, we sell to. Lemonis and so, you go to shows like new york now and stuff . Matthew yeah, we were there. Lemonis you were at new york now . Matthew we do it all. We do about 18 shows each season. Lemonis wow. How much do you spend on trade shows . Matthew probably 350,000 to 400,000 january, february, march, another 350 to 400. Lemonis and what kind of revenue are you generating out of those . Matthew less than that. Lemonis oh, really . Matthew its marketing and revenue. Lemonis look, trade shows are a good idea. But if youre not making money, which is by generating revenue thats greater than the expense, then you shouldnt go to them. Hi. Charlotte hi, im charlotte. Lemonis charlotte . Charlotte yeah. Lemonis im marcus. Charlotte nice to meet you. Lemonis nice to meet you. Charlotte thanks for coming. Skyler skyler. Nice to meet you. Lemonis nice to meet you. And are you the only owner . No. So, i own 90 . Charlotte owns 7 , and skyler owns 3 . Lemonis and what are your roles here . Charlotte im the creative director. Lemonis so, all of the designs . Charlotte yeah. I oversee all of it and come up with all the ideas. Skyler so, im the c. O. O. I also, basically, take on a lot of the c. F. O. Responsibilities. So. Ive been doing a lot of the. Lemonis thats an interesting crossover. Skyler it is. It is. Lemonis as the finance person, youre the steward of the assets, which includes knowing whats there, how much it is, where its moving, how to track it. How do you actually do a physical count . Matthew we did count, and it was a little messy cause we dont bar code. Lemonis but you need bar coding so you know what the hell you have. Skyler thatd be great. Lemonis can you guys pull the different products you have, so i can just understand. Matthew sure. So, lets start with a screen protector. Lemonis okay. Matthew 20 retail. Lemonis 20 retail to the consumer. What are you wholesaling it for . Matthew 10. Lemonis and what does it cost you to make . Matthew 1. 75. Lemonis item two. Matthew here we go. Lemonis these wallets. What do you call these . Matthew pockets. Lemonis pockets . Matthew they wholesale for 7, and they retail for 15. Lemonis what does it cost you to make . Matthew probably 2. 25. Lemonis okay. Whats number three . Matthew number three would be the rings. It sticks on the back of your phone. You can use it as a stand. Our cost for these is 1. 95. Lemonis wholesale for. Matthew 7. Lemonis and retailed for. Matthew 15. Lemonis okay. Matthew then, you have your case. Our cost 4. Wholesale for 14. Lemonis 14 . Matthew retail 32. Lemonis okay. This is a nice case. Matthew yeah. Thank you. Lemonis i like it. It feels good in my hand. Skyler its got, really, the good balance of thickness and protectiveness that doesnt actually bother you. Lemonis my phone actually feels lighter. So, im gonna throw my phone on the ground. Matthew 4 feet. Skyler yeah. Lemonis if it breaks, youre buying me a new phone. Matthew sure. 4 feet. Lemonis so, 4 feet . Matthew why dont we do 10 . Not guaranteed on that. Lemonis well, that was 5, so. Matthew pretty good, right . Lemonis yeah, and of the four skus, how much business did you do in the last 12 months . Matthew well, last year, we did 1. 7. Lemonis 1. 7 million . And of the 1. 7 million, make money . Skyler no. Matthew no. Lemonis no . Matthew loss. Lemonis with those kind of margins . Skyler no. Lemonis if 1. 7 million was the amount that went through the till. What was the total margin that went through the till 50 , 60 . Skyler no, it was about 60 percent. Lemonis okay, so, its a million 20 in gross profit. Is there a ton of overhead that im not seeing . Skyler about 1 million overhead. Lemonis okay. And so, you broke even . Skyler it was a small loss for the year. Lemonis how much . Skyler 70 to 90. Lemonis okay. So, a million one in overheads. Matthew and at the same time, were in debt. Lemonis who started the business . You did . Charlotte he started it, but i was there from inception, really. Lemonis how did you guys know each other . Charlotte we went to usc together. Lemonis ah. Matthew we were dating. Lemonis oh, interesting. Matthew yeah. Lemonis not dating now . Charlotte not dating. Matthew not dating now. Lemonis and then, who put money in to start the business . Matthew i did. Lemonis all by yourself . Matthew yes. Lemonis and how much did you put in . Matthew i dont even know the exact number maybe, roughly, a half a million or Something Like that. Lemonis how do you not know that number . Its kind of like not knowing peoples names. Those are two things you should know your employees names and how much money you put in the business. And how did you end up with a 90 and 7 . Charlotte oh. Matthew oh. Charlotte so, the 7 comes from, like, actual funds that i put into the company. Lemonis how much money did you put in . Skyler more than 250,000. Matthew keep in mind, this was much later. This was, like, in the last 6 months. Lemonis who cares when it was . 250,000 you put in . Charlotte well. Matthew well, also, we got another 350,000 loan that was given to us at the lowest Interest Rate possible as, like, a gift without being taxed. Lemonis by who . Charlotte my dad. Matthew. Yeah. It was really nice. [ laughs ] lemonis so, let me just recap for you. You put in 500,000 super admirable starting a business. Charlotte comes around. Shes like, ill put in 250,000. Youre like, great. You can get 7 percent for that. And then, after that, you need more money. And so, you call your dad. How much do you need . 350,000, taking the total to a total of 600,000 coincidentally, more than he put in. And you still have. Skyler seven . Charlotte mmhmm. Lemonis . 7 . Skyler yeah. Lemonis and then, how did you get 3 . Skyler just for the immense value i provide to the company. Lemonis okay. Id like to spend a little bit of time with you. Charlotte sure. Lemonis and so, ill just well just chat in your office. Charlotte oh, sure. Lemonis all right . Charlotte sounds good. Lemonis okay. So, is this where the design magic happens or starts . Charlotte it is. Lemonis and so who does the designing . Charlotte sunshine does. Lemonis that is your name . Sunshine that is my name. Lemonis that is freaking awesome, and so, who comes up with the artwork . Sunshine i would say charlotte, mostly, and then, we kind of tag team. Charlotte i mean, we do Work Together really closely. We usually, like, look at other products and other packaging. Lemonis ooh, i like that one. That is sick. Sunshine oh, thanks. Lemonis how come you only do stuff for women . Theyre nice cases, but it doesnt always have to be bubble gum with unicorns. This could be something unisex. Charlotte yeah. Lemonis you know, im not that surprised that the company is skewing female. We know the female consumer makes up more than 50 of the marketplace. But id like to see some level of balance. It feels like, maybe, theres some opportunity. Lemonis and so do, you guys start with a color board of, these are the type of fonts we want to work with, and these are the type of imagery we want to work with . Charlotte honestly, the second we get assigned to it, were already behind schedule. Lemonis and whos making it fast . Charlotte matthew. Sunshine yeah. Charlotte hes very, like, impulsive. Lemonis does he listen . Charlotte no. Not very well. I mean, a lot of times, we just do what needs to be done, even though he doesnt want us to. Lemonis i dont ever fault the owner of the business for wanting to be involved in the different steps. But if the company is gonna grow, you have to be able to hire people and respect what theyre doing and not break their deadlines. Because, ultimately, what youre gonna do is, youre going to break morale, and once morale breaks, particularly in the design department, there goes your creativity. Are you eric . Eric yeah. I am. Lemonis eric, im marcus. Eric nice to meet you. Lemonis so, do you run the whole print shop . Eric yeah. Lemonis whats the capacity of the shop . Eric on a good night, i would say we could get about 600 cases. Lemonis and so, thats a pretty big number. Eric yeah. Lemonis im impressed with everybody im meeting at the casery. You handle all of the online imaging . Xavier yeah. Lemonis and you did all of this . Xavier yeah. Lemonis this is one of the best flip books ive ever seen. Xavier thank you very much. Lemonis matt may not know the names of his employees, and he may not know how much money he put in, and he may not be generous with his equity when somebody else puts in a lot of money, but he has hired some good people. Howd you guys meet . Skyler honestly, i just applied through the usc career board. Lemonis is that where you went to school . Skyler yeah. I was a 3year graduate. Lemonis wow. Skyler yeah, so im. Lemonis its not like youve been out of. Skyler im 23. I run the office daytoday. You know, matt is not here most of the time, so. I found the suppliers. Lemonis you do . Skyler yeah. And i think that matt is really overconfident with a lot of his business knowledge, and thinking that he knows whats right always, and so, that, kind of, in combination with charlotte being kind of uncertain of her business knowledge, it puts us in a situation that is, financially, really poor for the company, you know, because were not profitable every month. Lemonis you have a pretty good head on your shoulders for being out of school for a couple years. Skyler thank you. Lemonis all right. Lets go look at the financials. What do you say . Skyler sounds good. Lemonis all right. Okay. Skyler all right. So, this is the cashflow estimation. Here is the profit and loss, and the balance sheet. Lemonis so, you go through these expenses. Advertising and promotion 110,000. Education and training. Whats that . Matthew that would be, like, any sort of personal development or coaching or things like that, too. Lemonis whos being coached for 27,000 . Matthew i took a course last year. I started taking on, like, meditation and being, like, taught about that. So, it really changed my. Lemonis why would the business pay for that . Skyler i mean, theres so many personal expenses in here. Lemonis your personal expenses . Skyler matts personal expenses. Matthew hes talking about mine. cause i wasnt paying myself salary, so a lot of things did probably get grouped in here that probably shouldnt be. Lemonis does it bother you that his personal expenses are in the business . Charlotte only because its, like, not quantifiable. Like, we have no idea how much youve been, like, paid. You know what i mean . Matthew because i wasnt paying myself a salary. So, if i pay myself a salary, it wouldve been fine. So, thats what we decided to do, marcus. So, i am now officially on payroll. So, i didnt pay myself for the 2 years before that. I still didnt want to take a salary to any capacity, so i charged, literally, what i had to. Lemonis lets go through the p l. Revenue of 1,798,000. Gross profit of 1,102,000. Total expenses of 1,129,000. 27,000 loss. Add depreciation in 66,000 its a 93,000 loss. Skyler yeah. Lemonis how are you funding that loss . Skyler we are not funding it. Charlotte were not. Skyler it is going unfunded. Matthew but thats not the track were on. You can see that as the growth has gone up. Charlotte but we dont have money to pay the 93,000. Matthew thats correct. Right now, were not. Charlotte you got to wrap your head around that. Matthew oh, i do. Also wrap your head around that i did 500,000 in sales this month, and its gonna keep going up. Were going to do 5 million to 10 million this year. Money is of no issue. Lemonis matt, i get all that, and i can sense youre getting frustrated with the three of us. Matthew i get frustrated because these two are not on the same page with me, as you can tell. Were doing international distribution. We have distributors hounding us. Weve got the capability to do massive numbers. Lemonis your assets and your liabilities arent far apart from each other. Matthew yes. Lemonis and your earnings are not positive. And thats what theyre freaked out about. Matthew oh, i got that. Lemonis and when she says to you, you have to wrap your head around that, shes not trying to insult you. Shes saying, you need to just change your thinking a little bit. To lose 93,000 on a product that you buy for 1. 50 and sell for 7 is not so great. But you guys took a very simple concept a cellphone case and you made it attractive. 2 million in a very short period of time is a hell of a job. So, im gonna make an offer. I want to invest 700,000. I dont want to invest a penny more than that, cause i dont think the Business Needs it. This Business Needs to be workingcapital rich and debtfree. And it needs to understand where it wants to distribute, who it wants to distribute to. And it could have multiple identities, because the one thing about this particular product is that everybody in this building is a consumer of it, as well, and they have their own perspective. You should make products for more than just iphones because not everybody has an iphone. Matthew i know. Lemonis whats important to me is where i see the value of the business today. I dont see the value, probably, as high as you do. And so, for that 700,000, i would want 41 of the business. Matthew thats a very high percentage. Lemonis its huge. Matthew together, you would have 51 combined, and, like, you guys could overturn me. Lemonis ill also buy the loan out that her father has, and ill put a longer term on it, so she doesnt have to call her dad and tell him that he got screwed. Matthew well, look at what we were able to accomplish with me leading it. We went into the most oversaturated market in the world, and we are killing it. Trust me to keep 51 . Go down to 39 . Lemonis no. Not a chance. You have put in the least amount of money of the three of us, and youll still be the largest shareholder. Like, that, to me, seems odd. Matthew i got that. And, like, i steer us well. Are you willing to move at all . Lemonis no. Matthew well, i dont know. I dont know. Its tough. Lemonis if your business is in trouble and you need my help, log on to theprofitcasting. Com. Lemonis you have put in the least amount of money, and youll still be the largest shareholder. Like, that, to me, seems odd. Matthew are you willing to move at all . Lemonis no. Matthew well, i dont know. Its tough. Charlotte i mean, i think you know how we feel about it. I think its great in so many more ways than the money. Matthew i dont like the idea of being less than 51 . And, like, now you guys could overturn me. Now, im stuck. Charlotte but thats how we are right now. Matthew i dont like that. Charlotte were stuck because youre making this, like, your decision. Skyler theres just so many situations that make the percentage of ownership irrelevant in the context of, how much profit did you actually take in from the business. Matthew im. Yeah. All right. All right, marcus. Welcome to the company. Lemonis all right. Thank you. So, a little twist. Matthew all right. Lemonis im willing to double your equity and double your equity, but i have to control your vote. Matthew so, he gets full control. Lemonis it isnt about control. Matthew all right. Lemonis its about fairness for me. I want them to be able to have a voice. If you want to do 9 million in trade shows, and the two of them are, like, setting the alarm off. Matthew yeah. Lemonis . I want to be able to stop you. So, do we have a deal . Matthew we have a deal, marcus. Welcome to the casery. Lemonis thank you. Whats the good word . All right. Lets get everybody together. Okay, normally, i give everybody a rundown of exactly what the heck is happening, but you want to tell them the deal . Matthew marcus and i and charlotte and skyler have made a deal. Lemonis how much did we invest . Matthew 700,000. So, hes now a partner in the business. I own 49 . Charlotte owns 14 . Skyler owns 6 . Lemonis oh, hold on a second. Matthew and marcus owns 31 . Lemonis come here. Im sorry. Okay, can you say that one more time . Matthew yeah. 49 , 51 . Lemonis but youre still the largest shareholder. Matthew correct. Lemonis . And still the leader of our group. But i wanted to ensure that we make decisions differently Going Forward, and that every department sees value in themselves, and people can be creative, and that were not changing things every 5 minutes. The 700,000 is gonna go in to solve a number of issues design new packaging, come up with new ideas, put the warehouse in order. We know we need to make more products, and we know we need to talk to people before we make them. Matthew were spending a ton on marketing expenses, and our sales are going way up. Lemonis including the trade shows. Matthew yeah. Lemonis . Which we dont know for sure are always profitable. I cant promise you that everything the company does Going Forward is gonna be for a female teenager. Xavier sick. Mason thats valid. Lemonis did you see that reaction . Matthew yeah, marcus, thats not a good idea. These guys dont buy cases. Xavier if i could get a cool case for my phone, i would, from the casery. I would get it. Lemonis me, too. Matthew dude. Lemonis you dont know everything about everything. Matthew i dont. I know a lot about the demo. Lemonis but you like to speak like you know everything about everything. And thats the one thing that you have to change in working with me. We should just be openminded. This is a big world. Were ready to go. Lets go. You guys can boogie. Matthew thats it. Lemonis whats happening . Charlotte hey, how are you . Lemonis how are you . Its great seeing you. I wanted to take the team to do a little sidewalk focus group outside of a College Campus ucla where everybodys young and hip and fun, and see what they have to say. I know this is your target market, which is why i brought you to this corner. But you said to me, vehemently, that this is not a product for men. Matthew yes. You want to test that . Lemonis so, bring whoever you want. Lets get feedback from everybody. Free cases give us your feedback, well give you a free case. Want to take a look at these cases . See what you think of them. Charlotte so, were the casery. We make phone cases and phone accessories. And were just kind of here getting some feedback. Man i was gonna say, its very feminine. Its doesnt seem like youre speaking to me, as a customer. Lemonis if you saw one you liked, would you be open to buying it . Man yes. Lemonis now, is this an Android Phone . Man yes. Lemonis okay. Man you dont have the androids, do you . Matthew no. Charlotte we get that feedback a lot. Man for me, it looks a little bit more. I dont know if this is, like, a pc thing to say, but it looks more feminine. Matthew and would you ever consider getting a new case . Man if it was a cool design, i would replace mine. Matthew you would . Lemonis do you buy cases . Lemonis look, i know the bulk of the cellphones in the marketplace are iphones. The data supports that. But not all of them are. And i know that women buy cellphone cases more than men, but that doesnt mean that men dont buy cell phone cases. Your Current Business strategy is too limited. Charlotte true. Lemonis were you surprised by how many men organically came over . No more blanket statements without all the research and all the facts. Charlotte i guess that would mean, right now, doing fewer skus for women. Matthew not necessarily. Charlotte . And changing one of those over to be more gender neutral or. Matthew not necessarily. We did have men. They were interested to some capacity. Were not sure exactly why, but they did come in, and wanted to talk about phone cases. Lemonis its like. Matthew well, youre making assumptions off what we saw. Lemonis i didnt make any assumptions today. What i really learned at the end of the westwood experience is that matts not gonna listen to anybody other than himself. Hes not even willing to be openminded about getting better. Just think about the market in totality. Ill see you back at the office . Charlotte cool. Matthew okay. Lemonis okay . Matthew sounds good. Charlotte sounds good. Lemonis okay, guys, thank you. Matthew see you, marcus. Lemonis have you not been here before . Matthew never been to cooper. Lemonis oh. Matthew ive been to the other one, you know, the la mart . Lemonis this is far more contemporary. Matthew thats what ive heard. Lemonis trade shows have been one of the single biggest investments for matt and the casery, but they dont seem to get much out of them, and i want to really understand why. So, today, were at brand assembly. Its a trade show for highend fashion brands. Matts had a sales rep there for 2 days now, and so, i want to check in with her directly and get honest feedback about what shes seeing and how she feels about it. Hows it going here . Angela its good. Its a little bit slower, just cause were newer. We dont know all the buyers yet. Lemonis how much did it cost to come here . Angela i actually dont know that information. Lemonis okay. Angela yeah. Lemonis and so, how much do you have to sell to make it worthwhile . Angela i actually dont know that information, either. Lemonis okay. Angela yes. Lemonis so, how much do you think youll do throughout the show . Angela so far, with the numbers that ive been getting, i think were gonna do about 5,000. Lemonis 5,000. Angela yeah. Lemonis are your margins 90 . Matthew margins are about 66 , 67 , Something Like that. Lemonis so, lets do the math. Skyler 5,000 times 67. So, 3,350. Lemonis and the cost to fulfill the orders . Skyler a hundred bucks. Lemonis okay. What did it cost to come to the show . Skyler 3,800. Matthew thirtyeight. Lemonis just to pay for the show . Skyler just the booth space. Lemonis okay. And then, free giveaways . Skyler i dont know how many cases were giving away, but, maybe, 200. Lemonis so, lets say 200. How much do they cost . Skyler two. Matthew 2. Lemonis okay. So, thats 400. Skyler then, weve got the 4day show, so, a per diem of 75 a day. And then, weve got angelas time. Matthew 1,200. Skyler you know, shes here 4 full days. Lemonis so, the booth rental, the giveaway. The per diem. And labor. Skyler yeah. Lemonis . To another 100 in materials. So, now, its 5,900. So, basically, you lost almost, like 2,600 coming to this show. Matthew yeah. Skyler right. Lemonis like ive said, i am all for trade shows. But if youre losing money in doing them, youre either doing it wrong or youre going to the wrong ones. So, no more shows without a plan, at all. Theres got to be a process to make the decision of whether to go or not understanding the type of customer youre going to have, what the presentation is gonna look like. If it was just presented different. Change the packaging completely. Matthew yeah. Well, i dont know about that, but everything else. Angela i think it would do better if it was in a different packaging, just cause here, its not selling, cause this audience thought, maybe, it wasnt right for their store. Lemonis look at this. This is not your customer. Matthew no. Its not. Lemonis these are highend bags. This feels like a show that you went to with no research. Start designing new packaging for different audiences. Matthew well, i dont know about that. Im not sure its the answer. I dont think you are, either, though. I think we need to actually test it and know. And i feel like were fighting back and forth. Like, its upsetting. Lemonis lets roll. Thank you. Angela yeah, thank you. Lemonis thanks for your honest feedback. [ indistinct conversation ] matt is resistant to every single thing i suggest. And i cant imagine that tweaking the packaging should get this sort of reaction, so i need to find out whats actually happening. Matthew i would like for us to be more of a partner. Lemonis explain it to me so i can just, maybe, change my approach. Matthew okay. I think its unfair, cause youre taking control of the company that i have control of, that i put everything into my whole life and everything. And im not accepting a lot of things youre doing. And the team turned against me when you came here, and theyre ganging up on me. Lemonis your insecurity is getting the best of you. Matthew its upsetting. Its. Skyler whats upsetting to me is because its, like. Matthew like, these guys are so excited to work for you because they gain twice, so you have. Lemonis working with me. Matthew . Like, okay, good. Youre doubling both their equities. Skyler and the thing is, you keep saying that, but you didnt do that. Matthew i literally did with charlotte. We sat the [bleep] down. Lemonis you dont have to get that crazy. Matthew it pisses me the [ bleep ] off. Ive given him equity in a company that i value incredibly high, that i put everything into. Know what youre talking about. Were rewriting the contract right now as it goes. You get my perspective a little . Matthew well, now these guys have it that they can do whatever the [ bleep ] they want. Guess what . Thats not [ bleep ] true. If im acting c. E. O. , i am still in control of this company. Lemonis you dont have to get that crazy. Itchy . Scratchy . Family not get charmin ultra strong. It just cleans better, so your family can use less. Hello clean bottom enjoy the go with charmin. Matthew it pisses me the [bleep] off. Matthew ive given him equity in a company that i value incredibly high, that i put everything into. Know what youre talking about. You get my perspective a little . cause i actually get what youre saying. Lemonis i do get your perspective. But i dont necessarily understand it. Youre, like, inside your own head too much, and you feel like everybody is out to get you, and theyre just not. But i dont know how to help you cope with it other than, you have to just work through it. Matthew try not to be an [ bleep ] either. Lemonis im not an [ bleep ] to you. Matthew you were day one. Lemonis was i an [bleep] to you . Matthew no, only to me. Lemonis only to you. Matthew right . Lemonis yeah, maybe because you didnt know your employees names. I was a little bothered by it. Come on. Were going this way. Matthew yeah. Lemonis whats happening . Charlotte hi. Lemonis its been hard to get anything done with all this drama, but i decided to share some good news i received in telling them about a killer opportunity. I have a relationship with tmobile, and theyre one of the biggest retailers of cellphones and Cellphone Accessories nationwide. Jon just last year, we opened up 1,500 new stores. Lemonis and theyre open about the idea of us pitching our new product lines to carry in their Stores Across the country. Lemonis we would like permission to come to seattle, bring a full presentation, and were going to bring you 12 to 18 designs that are exclusive to you, that we will not put in the market. With thousands of stores in the u. S. Alone, an order from tmobile would result in millions of revenue for the casery. But before a new line gets created, i want to make sure theres an Inventory System in place to account for all of it. So, ive put skyler in charge of executing that. All right. Is the color tape indicating something . Skyler yes. So, weve colorcoded everything red, green, blue by size. Lemonis highfive on that, brother. It looks really good. Okay, meet jason. Ive also connected the casery with public pool, a company that connects brands with designers from around the world to come up with new and fresh ideas. Jason these are some designs from a public pool designer that we think is a good direction to go in. Lemonis the current demographic is women 13 to 35, and in order for this company to be successful, it has to be gender neutral. Xavier i really like this one, for sure. Charlotte i really like this one, too. I think this is really cool. I think that some guys would actually wear that. Jason so, this is just the first step in a filtering process to get down to your final designs. Lemonis jason and the team at public pool will help charlotte have additional hands creating things so that all the burden doesnt fall on her. This is, like, a sick opportunity. Charlotte yeah. This is really cool. Lemonis all right . Charlotte very cool. Lemonis thank you very much. Charlotte awesome. Yeah. Thank you guys. Lemonis thank you guys. What are you frustrated about . Skyler i dont know. Its been a long time. Lemonis want to go in here, and well talk, wait for everybody . Skyler sure, man, thats fine. Lemonis hey, charlotte and matt, come on back. I got a call this morning from a very frustrated skyler and charlotte, wanting to meet immediately to discuss one thing the lack of progress. Skyler honestly, its a little frustrating cause it kind of feels like were avoiding getting the work done. Lemonis are you upset with matt . Skyler a little bit, definitely. Lemonis so, this is just, like, we shouldnt, like. Lets just right to the point. Like, you werent gonna be here today, right . Matthew no. I had a 2day training on scheduling. Lemonis on scheduling . Matthew yes. Lemonis what does that mean . Matthew so, its a program that is used for people who have, like, incredibly busy lives in order to, like, live in empowering context through rescheduling. So, but really, at the end of the day, it allows you to get more done in less time and be specific with what you can get done, which is a good thing. Charlotte yeah, but you do a lot of bull[bleep] trainings and courses. Lemonis how much is it . Matthew 700, 675. Lemonis and who pays for that . Matthew the company. Skyler i didnt even know the company was paying for it. Charlotte i didnt know the company was paying for it, either. Matthew you did. Lemonis do you keep track of everything thats been put through the company that you dont think should be . Skyler i keep an eye on it. Lemonis do you have a total . Skyler 150,000 to 200,000. Lemonis of money that should not have gone through the company . Skyler yeah. Matthew well, i wouldnt say that. Lemonis but he did. Matthew well, now, these guys have it that they can do whatever the [ bleep ] they want, and you can make decisions that go against me. Guess what . Thats not [ bleep ] true. If im acting c. E. O. , we go with my decision until you vote me out. I am still in control of this company. Matthew what i said is, put me on payroll right now. Lemonis right. Matthew but i didnt have it that was going to cover all my costs. I dont think anyone did. Lemonis but what your Living Expenses are are irrelevant to the company. Matthew but my Living Expenses need to be paid. Lemonis it doesnt work that way, matt. Charmin ultra soft is so soft thmuch are you, hon . Youll have to remind your family they can use less. Charmin ultra soft is twice as absorbent so you can use less. Enjoy the go with charmin. That they can make decisions that go against me. Guess what . Thats not [ bleep ] true. If im acting c. E. O. , i am still in control of this company. Its just, like, still respect my decisions and let me lead the company. Dont have this as some, like, now i can be a dick. Charlotte you cant take that as us being dicks, because were calling you out on the last 3 years of bull[bleep]. Skyler i mean, the thing is is that youre still being completely selfcentered about it. Its all about you. Its all you know, its all your authority. Youre all afraid of losing your power. Matthew id like you to trust me more. Charlotte you have to earn that. Matthew i got that. Charlotte and thats what i dont know that you understand. Matthew i got it. Lemonis the two of you have to also understand that its not gang up on matt and beat his ass day. Its hold him accountable, make him better. Skyler totally, yeah. Lemonis cause im investing in you guys. Skyler okay. Lemonis i think if the people here feel that theres progress, regardless of whos calling the shots, theyll want to move with you. Okay . All right. Okay. Skyler thanks. Lemonis god, you need a hug or something. Charlotte all right. Lemonis see you. Charlotte thanks. Lemonis please, lets get this tmobile thing moving, okay . Charlotte yes. Lemonis my man, whats happening . Skyler hey, marcus. Lemonis how are you . Skyler pretty nice. Lemonis good to see you. Matt gave me the impression that hes now on payroll, and that he doesnt run his expenses through the company anymore. But based on our last meeting, that doesnt appear to be the case. And so, i asked matt and skyler to come down, and sit down, and lets go through these Financial Reports page by page, line by line, to really understand whats happening. Okay. Let me just look at this real quick. Jackies bakery, jackies bakery. Matthew mmhmm. Lemonis . Balloon coffee. Ambar cuisine of india. Matthew uhhuh. Lemonis you got, like, weight watchers. Car wash. Matthew yep. Thats mine. Skyler you know, its like, we said, matt, were putting you on payroll, and then, you know, you pay rent through the company, and so, we take your off payroll. Matthew what i said is, put me on payroll right now. Lemonis yeah. Matthew and it was like, i can start paying for a lot of stuff myself. But i didnt have it that was going to cover all my costs. I dont think anyone did. Lemonis but what your Living Expenses are are irrelevant to the company. Matthew but my Living Expenses need to be paid. Lemonis it doesnt work that way, matt. What if the business doesnt have the money to pay it . Matthew it does. Were making millions. Skyler and that, also, is the attitude that pisses off charlotte so much is, like, oh, theres no way i could possibly reduce my Living Expenses no matter what. Lemonis the challenge everybody has with you is, the expenses are not controlled. And the assets, they feel like you just dip in and take what you want. Unfortunately, when you own a business, whether its 90 or 100 , when the business doesnt make money, the owner usually ends up taking nothing. Because there is nothing. Matthew right. Lemonis i dont think anybody objects to you making a living, just as long as youre not making a living and taking money out of the company. Lets make sure that we have a clear understanding how the expense control is gonna work, and that everybodys payroll is appropriate and commensurate for their job. And then, were gonna look at all the expenses and say, holy [ bleep ], you better sell 20 million, or this place isnt gonna make it. Look, so, i got this random call from matt telling me that there was some emergency cash crisis, and he essentially said to me that they didnt have money to pay bills and to pay vendors, which is surprising to me, because last week, he told me the company is at an alltime high. So, theres a cash problem . I have to be honest i dont understand it. I dont understand what happened. Matthew its a cashflow issue, a cashflow crisis, if you want to call it. Skyler for me, the problem is that our inventory is never sold before we have the inventory payments due. Basically, the second we get one more bill, and we dont have that inventory shipped to us and liquidated before we get the bill, were in the crisis again. Lemonis i dont understand because the day we met. Matthew this is the state weve always been in. Lemonis . Were doing great. Matthew we are doing pretty well, and were also having a cash problem. Lemonis do you see why im confused, though . When somebody says to me, like, things are awesome. Were gonna do 10 million this year. And right now, youre saying to me, like, holy [ bleep ], were out of business. Skyler its not looking good. We spent 450,000 on trade shows, and its like, weve got all these bills due for our suppliers that we were banking on the shows doing a lot better than they did. Lemonis the day i met matt, he said he personally sold 500,000 worth of product, and that the company was gonna do between 5 million to 10 million that year. Well, apparently, that wasnt true. And whether matt was lying to me or to himself or to both of us, it doesnt seem to be panning out. Now, the way the casery has historically ordered product from their factory is based on projected sales. And that products come in, and now, the bills due. Whats the cash need in the next week . Matthew 150,000 that would cover us right now. Lemonis so, im gonna give you an immediate bandaid of 150,000 . It sort of takes the immediate pressure off. But i want a dollar a product for the rest of your life. [ suspenseful music plays ] matthew no. Thats really high, cause you know that we need it now. Lemonis no, in fairness, matt, you definitely presented the business differently than what actually exists today. Matthew i dont think so. Charlotte no, i mean, i think thats the case. I think you hyped it up a lot. Youre [ bleep ] overselling everything. Matthew but to be honest, i dont necessarily agree. I gave you all the numbers specific. Lemonis i dont think so. Matthew this is really unfair. Like, i want. Lemonis it seems unfair that you misrepresented the business. Matthew i did not. Lemonis you did not misrepresent the business . Matthew i did not. I gave you exactly the numbers. Lemonis you did not sell me a shiny piece of [ bleep ], and then tell me now, a month later, that its different . You did not do that . Matthew i told you exactly what i knew. Lemonis yes or no. You have disrespect towards her, and disrespect towards him, and theyve done nothing but eat from a bag of [bleep] since i met you. Matthew to be honest, i gave you all the numbers specific. Lemonis i dont think so. Matthew this is really unfair. Lemonis it seems unfair that you misrepresented the business. Matthew i did not. Lemonis you did not misrepresent the business . Matthew i did not. I gave you exactly the numbers. Lemonis you did not sell me a shiny piece of [ bleep ], and then tell me now, a month later, that its different . You did not do that . Matthew i told you exactly what i knew at the time. Lemonis yes or no. Matthew yes. Lemonis okay. Now, youre going to pay for selling me a piece of [ bleep ], so, its not that im trying to extract or exploit. Im trying to protect myself. I have to buy some schmuck insurance. I dont know if i trust your presentation of the reality. Matthew what can i do . Lemonis just dont exaggerate. Thats all. Matthew all right. Lemonis you know the business. You are super talented, but you scare me. Matthew fair enough. Lemonis would you like me to wire you 150,000 tomorrow . Do you have your wire instructions . Skyler yeah. Ill print it out. Lemonis thats gonna pay the vendors. Charlotte we really all appreciate that. Lemonis okay. Charlotte thank you. Lemonis okay, guys. Ill see you soon. Well, hey, guys. Aimee hi, im aimee. Nice to meet you. Lemonis i brought the team to jd customs its a company i invested in a year ago to build the display that would be specific and unique for tmobile. Aimee so, we wanted to come up with something a little bit different. Charlotte i really like the pink outline. Its a really cool way to include the pink without it being too much. Lemonis it gives us a chance to go into a professional presentation looking like weve properly planned. Thank you, guys. Recently, charlottes been really working on expanding the companys revenue by designing new cases for all genders and all age groups, as well. Lemonis these designs are awesome. The line felt limited, and these are kickass. Skyler hey, marcus. Charlotte hi. Lemonis hey, guys. Charlotte hows it going . Lemonis how are you . Were a little over a week away before the tmobile presentation, and ive asked the team to brief me on where we are in designs and what exactly their strategy is gonna be for the meeting. I think, ultimately, i thought we would be presenting three distinct boards we would print a small quantity of, to say, these are the kinds of things we can do, and this is how we see the pairings, here. Charlotte we just dont really have a sales pitch. Like, whats the actual breakdown of the, like, look, this is what we feel like is gonna work for you. We can make it happen in x, y, z. Skyler how many designs are we bringing on mockups . And, like, lets start placing them in. Lemonis i dont mean to be. Like, wouldnt you be giving them this direction . Matthew yeah. Yeah. Skyler its like, were not getting any direction. You didnt even come to the meeting about it this morning. Its like, you realize the meeting is in 10 days . Matthew try not to be so hostile. This doesnt work. Like, we cant kill each other off. Like, we talk. We have to be a team if were going to do this. Skyler yeah. So, like, join the team. Charlotte seriously, this has not been. Matthew or its worth what it is. Charlotte . Near the forefront of your mind. Lemonis and i think its a respect issue, that, people feel like theyre working, and youre just kind of not showing up. The house was burning down a week ago, and so, 150,000 came over. Bills got paid. Matthew no. We didnt use it. So, what i went in and did is, i went in and looked at our finances in detail, because i didnt trust everything being presented to me as it was by skyler. cause youre doing so much. Lemonis youre saying he lied . Matthew no. I think he just didnt get the whole world of it all. So, i took it over. Lemonis why is it that you hate having partners so much . Matthew you guys are very upset, and you dont want me to come in and lead you. Charlotte no, we dont. Matthew yeah. Charlotte i dont. I just think we need a leader that puts the company first, and not himself. Matthew i know. Lemonis you have a mini revolt on your hands. Matthew absolutely. Theres been one since at least i met you, and it became a lot more clear with whats happened in the last 45 or 50 days. Lemonis what happened in the last 45 to 60 days is that you started to feel like you werent gonna be able to do what you want and say what you want and spend what you want, and that you were starting to feel like you were going to be accountable to a group of people. And you dont like that. Matthew it doesnt work for me to work with the deal as it is. Lemonis why is that . Matthew where im not maintaining the majority ownership. I just want it to be my company. Lemonis and you want all of us just to get in the row boat, and hopefully it works out . Matthew not necessarily. Lemonis well, what are the other alternatives . Matthew i want to offer three options. Lemonis what are your options . Number one you want to have full control. Matthew, option two would be buy me out. Lemonis whats option three . Matthew no deal. Lemonis so, option one was full control. Matthew yeah. Lemonis thats a no. Option two is buy you out. Thats a no. Option three is no deal, and you give me my 150,000 back. Thats a yes because youre a smug prick. And you have disrespect towards her, and disrespect towards him, and theyve done nothing eat from a bag of [ bleep ] since i met you. For exclusives, extras and business advice, visit theprofit. Cnbc. Com. Itchy . Scratchy . Family not get charmin ultra strong. It just cleans better, so your family can use less. Hello clean bottom enjoy the go with charmin. Charmin ultra soft is so soft much are you, hon . Youll have to remind your family they can use less. Charmin ultra soft is twice as absorbent so you can use less. Enjoy the go with charmin. Matthew yeah. Lemonis thats a no. Option two is buy you out. Lemonis thats a no. Option three is no deal, and you give me my 150,000 back. Thats a yes because youre a smug [ bleep ]. And you have no respect for your people, and theyve done nothing but eat from a bag of [ bleep ] since i met you. Matthew what do you want to do . Lemonis you gave me my ultimatum. Matthew no. Im for a negotiation. Lemonis we already negotiated. Skyler thats what you dont understand is that, youre putting the ultimatum on everyone. Its not a negotiation. Charlotte you cant just keep saying, like, im breaking the deal. The deal is not happening. Lemonis its obvious to me that matt is trying to weasel out the deal. But he doesnt want to give up control. He doesnt want to be accountable. He doesnt want to be told that he cant spend the companys money, and he doesnt want to show up to meetings. And he knows thats not gonna fly. Its selfish behavior, not really caring about how his other partners feel or how the rest of the employees feel. Matthew so, what can we do . Lemonis we can shake hands, and i can wish you luck, and you can give me my money back. I cant function, matt. I think the challenge that i have is, i cant function. And i think you need to learn this lesson in how you treat other people. You cant agree to something. Matthew yeah. Lemonis . And then change. Youre not a people person, and that matters to me more than anything. I cant be on this roller coaster with you. Matthew i understand. Lemonis okay, buddy, thank you. Ill swing by and pick up the check, okay . Thank you. Well see you around. Skyler thanks, man. Lemonis thank you. People always wonder how the three ps actually apply to a business, and heres how they actually apply to the casery dont disrespect your people, have a product thats relevant to the marketplace, that it appeals to as many people as it can, and participate in the process to ensure that the business is actually functional. From my perspective, matt really ruined this opportunity for all of us. And im disappointed that i have to leave the team, and for everything to unravel this way. [ phone ringing ] hello . And then, 2 weeks later, i get a phone call. Hi. Good. Whats going on . Oh, really . I didnt expect to hear from charlotte, but im open to hearing what they have to say. Id love to sit down and talk about helping you. Bye, bye. Maybe this isnt the end after all. Lways wear your glasses . Aristotle i do. Always wearing the product. Lemonis . An entrepreneur has bet it all building his brand of highend sunglasses, but while the business keeps gaining customers. Woman your glasses are awesome. Aristotle thank you. I appreciate that. Lemonis . It also keeps losing money. How much did you lose in 2014 . Lamar one fiftyone. Lemonis okay, 15 . Ian one thirtyseven. Lemonis 16 . Jeremy one fortynine. Lemonis their ceo, aristotle, has trouble moving beyond a personal tragedy. Aristotle my mother. Lemonis you dont know if shes alive or not . And its now affected every aspect of the business, from his branding. Aristotle we set out to create a Sunglass Company that embraces a natural act of loss. Man but were trying to sell something. Were not trying to have that be the main theme