Theres a steady stream of employees heading for the exits. Cody its difficult to stay here. Theres only so high that you can go. Lemonis the ones whove stayed question whether theyre valued. Jennifer as a businessperson, youre required to have some coldness. Lemonis if i cant help her loosen the reins and learn to value her team. Whats your deal with people . It may not be long before its lights out. Jennifer [ voice breaking ] this has been five years. It just doesnt sit well with me. 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. This. Lets go to work. Is the profit. There are a number of things that drew me to hangout lighting. Number one, i know the lighting business can have spectacular margins. Number two, i have a portfolio of businesses that could really take advantage of hangouts assets. And number three, the fact that its in chicago, it allows me to stop by and really be more involved in the business. Hi. Jennifer hi, marcus. Lemonis how are you . Jennifer im wonderful. Lemonis nice to meet you. Look how cool this is. Jennifer yeah, this is hangout lighting. Lemonis is it like a hangout . Jennifer were always hanging out. Lemonis how big is the place . Jennifer yeah, lets check it out. Lemonis holy [bleep] this place is huge. Jennifer yeah. Even as a kid, like, my room was full of rope lights and black lights on, like on three different switches so i could have, like set different moods. I just always thought it was fun how much you can do with it. Lemonis so, this is the inventory. Jennifer yeah. Lemonis how many different combinations is there . Jennifer its infinite. Lemonis when you look at the way people are decorating today, people want to be able to be crafty on their own. They want to pick their own colors, pick their own bulbs, and theres a real market for it. When did this business start . Jennifer this started out of my house. I was making lights in my bedroom, and i just, like, made one, so i listed it on etsy. It took like a week to get a sale. And i was like, oh, this this is easy lemonis this is kind of cool jennifer this is easy i should do more of this. Lemonis right. Jennifer so thats when i realized, like, im selling a 300 light for 15 worth of supplies. Wow. I really have something here. Lemonis with killer margins. Jennifer yeah. Lemonis whats the price point for one light . Jennifer it starts at 50. Lemonis pretty affordable. Jennifer yeah, absolutely. So, it starts with a single pendant, and then weve got a three cluster, a five cluster, seven cluster. All the way up to 19 pendants is the largest. And then the wood chandeliers. Lemonis and how much revenue did you do in 2017 . Jennifer 730,000. Lemonis 730,000. Jennifer yeah. Lemonis thats a lot jennifer so, im hoping to do 1 million this year, for sure. Lemonis so, of your 730,000, how much of it is online . Jennifer 95 . Lemonis that means that you really have no commercial sales. Jennifer yeah, im overwhelmed at times trying to do everything, and i dont know how to scale it to large orders with Big Companies and managing people. Lemonis and so, whos actually the Sales Manager . Jennifer no one. Me. Lemonis and whos Customer Service . Jennifer me. Lemonis and whos the Operations Manager . Jennifer me. Lemonis who does the accounting . Jennifer me. I kind of do everything. Lemonis okay. A lot of Business Owners will say, look, people arent gonna do it right. Ill just do it myself. If i was investing in a business that didnt have any growth expectation, jen could take the orders, make the lights, put them in a box, and ship them. Business will never grow, but it would do just fine if you were okay making 40,000 on your investment. Brian hi. Brian. Nice to meet you. Lemonis brian, nice to meet you. What do you do here, brian . Brian mainly marketing and sales. Lemonis okay. Jennifer i call him the technology guy. He built the website. Hes kind of my main, like, goto, where we sit and talk about big picture. Lemonis how long have you been here . Jennifer since the beginning. I mean, we were dating when i started it. Lemonis and are you still dating . Both no. Lemonis okay. Brian nope. Jennifer a year and a half. Should i answer the phone . Lemonis i mean, if its somebody that wants to buy something, yes. Jennifer hangout lighting. This is jen. How can i help you . Lemonis you kind of got saved by the bell on the whole dating thing. Dustin im dustin. Lemonis dustin, im marcus. Dustin nice to meet you, man. Lemonis nice to meet you. Dustin hows it going . Lemonis what do you do here . Dustin right now, just production. I was running the social media for a while, too. No ones officially been given a title. Lemonis so, every Single Person here reports to jen. Dustin yep. Lemonis theres nobody supervising things other than her. Dustin yeah. Lemonis and so the social media how come youre not doing that anymore . Dustin im actually getting ready to leave. Lemonis youre leaving the company . Dustin yeah. Yeah. Lemonis how come . Dustin i am starting my own thing. Its a bongwater flavoring and glass protectant. Lemonis yeah, i dont know what that is. Dustin so, uh. Lemonis sorry. Dustin plus i bartend at night, and i mean, i can make more money bartending. Whats crazy is even on the slowest of slow nights, i still make more money there than here. Lemonis so, if you could work here fulltime, would you want to . Dustin oh, id love to. If i was paid, oh, man. Jennifer dustin, your ubers actually here. Dustin cool. I got to go. Lemonis sounds like you got to go. Get to work. Come on. Lets go. Dustin sounds good. Lemonis so, can you and i make a light . Jennifer sure. Id say start with a cord color. We used to have mostly, like, primary colors, and recently, weve added a lot more of the, like, kind of neutrals. Lemonis what color is this . Wine. Jennifer we got to pick out our sockets. Lemonis okay, now where do we go . Jennifer to one of these assembly stations. So, you want to open up your socket. Lemonis okay. What was your name again . Cody cody. Lemonis cody, im marcus. Cody nice to meet you. Lemonis nice to meet you. Thank you. So, how long have you worked here . Cody a year and a half. Lemonis do you like it . Cody yeah, kind of. I think everyone here is super passionate about this company, but its difficult to stay here because theres only so high that you can go. Lemonis look, ive spoken to two people on the floor, and neither have told me they see a Bright Future for themselves in the company. Not exactly the right culture. And is there anything about the business that you would improve or change . Cody it would be nice if we had everything in stock more often. Jennifer codys always telling me were out of things. Lemonis and so nobodys really managing the inventory. Jennifer correct. Lemonis so, what is the reason youre out . Jennifer im too busy, and it slipped past me. Lemonis couldnt i make the argument that having the inventory manager would actually turn orders quicker, create happier customers, create return orders . Jennifer yeah. Yeah. Cody you got to flip the switch. Ah lemonis watch out jennifer good job. Lemonis can you take me through the website . Brian okay. So, this is the home page. Lemonis this is what i see when i land . Brian yeah. Lemonis wheres the start designing now . Brian so, if you scroll down, theres all these forms that lemonis so, thats it . Single pendant. Brian yeah. Lemonis okay. Now i start with choose my style. So lets say i pick antique grass. How do i know what to do . Like, whats recommended . How high is my ceiling . How do i know what to do . Brian theres always an issue with designing it for the average consumer. Lemonis cause i would get here, and id be like, oh, yeah, i need help. I somebody gonna help me . Sure. Fill out a form. Well call you. Jennifer yeah. Lemonis so, what happens if i fill out that form . Jennifer it goes to me. Right now the customerservice person. Lemonis okay. Are you doing the Web Development . Brian yeah. Lemonis so, dont laugh when i say this everything thats missing is because you havent put it in there. Brian correct. Lemonis okay. How is the equity who owns the company . Jennifer i own 100 . Lemonis and did you ever have equity . Brian nope. Lemonis never. Brian weve had conversations about it, and ive asked. Jennifer yeah, hes been asking since the beginning. I think i was scared to commit. I dont want to give him equity when i dont feel comfortable with it. Brian i feel that hangout lighting is where it is today because of my impact. Ive steered and been a part of just about every major decision. Jennifer like, i just feel like i do everything. Brian i tell you all the time i will do anything if you ask me to help. Lemonis she touches everything instead of letting other people do their job. As the leader of this business, she needs to delegate tasks so people know what their role is. Whats the real reason you called me . Jennifer i think the employee structure who to hire and what roles and how to scale getting everything off my plate. Its really hard to delegate. I have a lot of, like, anxiety about that. Lemonis as a business owner, you have to trust the people that are around you. And quite frankly, the business isnt just you. Its all the people that work here. Its your customers. Its your vendors. Its your landlord. Your job, as the owner of the business, is really you have to think about yourself more as the steward of the business, and you cant do everything and everybodys job. If we are gonna be in business together, i have to teach you how to be a Better Business leader, but i am gonna push you to deal with it. Jennifer mmhmm. Lemonis you have some financials we can look at . Jennifer sure. Lemonis so, this is the Balance Sheet as of right now. Jennifer as of today . Yep. Lemonis and this the p l. So, 2014 is when the business started . Jennifer correct. Lemonis so, 183,000 in sales the first year. 2015 597,000 in sales. 2016 844,000 in sales. And then it dropped to 728,000 in 2017. Jennifer i didnt expect it to go down. I wasnt pushing sales. I was moving into this new space, which was from 600 square feet to 4,500 square feet. Lemonis yeah. Current assets 78,000 in the bank. Total assets 92,000. And then in terms of debt. Jennifer no debt. Lemonis you have 78,000 in the bank. Your business over four years has made money. Your margins are spectacular. Jennifer we still need your help, though. Lemonis i know you do. I dont only help businesses that need money. I help businesses that have dysfunction. What are the things that scare you about your business . What are the things that you worry about . Jennifer ul listing is a safety certification. Our parts are assembled at a ulcertified manufacturer, and theyre all stamped and marked. Our products, as a whole entire product, are not. Lemonis parts and pieces are, total assembled is not. Jennifer correct. Im concerned about how much the process and the product is gonna have to change in order to comply with the book of rules thats that thick. Lemonis i think what does scare me is you doing everything. Jennifer i joke, like, is this jens basement still, or is this a real business . Lemonis this idea isnt really a longterm strategy. I think growing the business commercially into Retail Businesses and restaurants and hotels is something that looks like a possibility. What would you ultimately like to see happen . Brian i think moving forward, i would like to have equity, have jen appreciate what i bring to the table. Jennifer im gonna advocate against it. Brian giving me equity . Jennifer absolutely. Brian why . What . jennifer i mean, i could easily hire a professional Website Company to build me a brandnew, pretty website. Brian i dont understand where your feelings are coming from. Jennifer there was definitely times when i was like, i dont even know what youre doing. Can you send me emails with, like, what youre working on . Like, i feel like sometimes i ask for help, and i feel like he only does what he does. He doesnt help. Brian okay. Lemonis theres definitely a frustration from her, brian, and this is the thing that we are going to work on. So, my offer is 250,000 for 33 of the business. I have to have full financial control because i want to make sure that were relieving the burden of you having to do all this stuff. Jennifer um. Honestly, that is a lower valuation than i was expecting. Lemonis people leave because they dont understand what their path is. Jennifer [ crying ] i cant make that decision it just doesnt sit well with me. Jethan i was expecting. That is a lower valuation theres a lot of assets here. 30 is definitely, like, the max that i wanted to give up in general. Coming into today, i had 500,000 for 30 . Lemonis my valuation was at 750,000. Your valuation was north of 1. 6 million. Jennifer thats cause i know how profitable it is. Were making netting 50,000 this year. You know, if i didnt make a deal at all, i just delay this all one year, and ill have the 250,000. Lemonis respectfully, i dont know how sustainable this is for you to be wearing all these hats, with half the staff and a website that still isnt functional. Jennifer absolutely. And im not just looking for cash, but its really about Everything Else that you bring to the table. Lemonis okay. So, im 250,000 for 33 . Youre 500,000 for 30 . My counter and my final offer is 250,000 for 25 . Jennifer you have a deal. Lemonis thank you. Jennifer thank you. Im so excited. Lemonis good decision. Jennifer thank you. Lemonis congratulations. Youve done a great job. Youve really built a nice business. Brian, thank you for your help today. Brian thank you. Lemonis thank you. Jennifer [ chuckles ] lemonis so, jen and i made a deal for me to invest 250,000 into the company for 25 of the business. Were gonna improve our inventory process. Were gonna work on having two clear lines of revenue directtoconsumer, meaning an individual, and directtoconsumer, meaning companies. Were gonna work on the website to make it robust so that the User Experience is simple and easy and clear. I think the last thing is we want to make sure that everybody understands their role and their opportunity. Jen wants to have full control. Shes so used to doing everything herself. And if she wants to grow her business, she has to truly understand what the value of each of her people is and how to put them in a job that increases their chances of success. Everybody excited . All yes lemonis all right, lets light this thing up good morning jennifer oh, good morning lemonis how are you . Jennifer lets do this. Lemonis good to see you. Jennifer you, too. Lemonis good morning. Good morning. So, i brought you guys out to hinsdale, which, as you know, is a suburb of chicago, and i bought a Historic Building thats been here since early 1800s. And im renovating it to just preserve it and bring it back to life. And its really up to you guys to resolve the lighting for the entire building. So. Brian whoa. Whats gonna go in here . Lemonis shouldnt matter. This is a buildingpreservation project. Jennifer okay. Lemonis part of what i want to see is your process. Jennifer sure. Lemonis id like to put on a beautiful event to reveal hangout lighting to the chicago construction realestate architecture community. We need lighting both for aesthetics and for light. Jennifer weve never actually done much design consultation. Lemonis im not looking for you to consult. Im looking for you to solve the problem. Dustin i think this is 100 doable. Even not having a designer, this does not seem, like, out of the realm of possibilities. Jennifer i feel like our style doesnt exactly fit the current style. I think itll be a little bit more modern. Dustin maybe some of those, like, spoke those, like the brass spokes. I think anything with a cage, too. Jennifer yeah, but all this intricate woodworking its definitely a different style. Dustin i want like 150 bulbs in this room lemonis jen seems petrified, and dustins like, all right, man, we could do this. We could do that. What about this . What about that . And what hes doing, in my mind, is hes selling the client before the client has even said yes. Thats a great salesperson in my mind. Dustin oh, my god, the exposed rafters i want to wrap stuff around this so bad. Id say 150 pendants on the second floor. Lemonis a couple observations. Theres not a clear mission. Its like, okay, we dont know what to do. Kelsea i think, like, with jen she used to do all the things. And i just think one person should just be taking something and doing that. Brian but i think everyone can benefit from more defined roles. Lemonis and whose job is it to define your role . Brian jens. Jennifer i feel like its my job to say that, but my reaction wants to be, like, asking you. Brian im not sure were answering marcus question. Lemonis i think in terms of delegating, you and i just need to work on, youre going to work on this. Youre going to work on that. I know its new. I just think we have to get better at that. And then dustin saying hes leaving. I love the fact that youre here and that youre excited about it. But it sounds like, maybe i dont want to leave if i can find a role and i can make more money and i can contribute. Dustin yeah, absolutely. Lemonis okay, so, are you ready to go back to the office . Jennifer yeah. Lemonis okay, thanks, guys. Kelsea thank you. Lemonis so, i want you to go through and put people in defined roles so they understand what their contribution is to the team. Jennifer ill be i dont know how to do that, honestly. Like, i dont know how to be, like, you do this. You do that, like right now. Lemonis so, why dont you grab my favorite tool the whiteboard . And lets just think, okay, whats the end goal . Whos doing what . Jennifer presentation and signoff i would say a combination of me and catherine. Lemonis whos asking for the money . Jennifer right now, me. Lemonis are you the best salesperson . Jennifer no. Lemonis whos the best salesperson in the room . Jennifer dustin. Lemonis okay, keep going. Assign roles. Jennifer definitely me. Sourcing thats thats definitely me. Dustin your name is already on this list three times, jen its already too much. Lemonis it may be hard for jen, but delegating specific roles to people on her team are gonna be whats required to move this company forward. All of us want to contribute and be a part of it. And you like to do this because maybe you feel like you have to. We want to help. Does everybody agree . Okay. Thanks, guys. Jennifer thank you. Lemonis that was fun. Hi. Jennifer hi, marcus. Lemonis do you want to talk . Jennifer i would love to talk. Lemonis okay. I received a phone call from jen wanting to discuss the deal that she made with me, and she wouldnt tell me good or bad. Sh