50 miles north of philadelphia just outside quaker country, brothers keith and dean lyden have established their very own graphics and millwork company, Precise Graphix. From interior design to fabrication to installation, precise has been providing signage and decor to retailers for over 12 years. As an owner of several businesses, i know how important it is to create a great retail environment, and thats one of the reasons im excited to go to Precise Graphix. Tina hi. How are you . Im tina. Lemonis hey, tina. How are you . Im marcus. Tina nice to meet you, marcus. Lemonis nice to meet you. Is this the main office . Tina this is the main office, yes. Lemonis okay. Tina, what do you do here . Tina i do payroll and human resources, most accounting functions. Lemonis you love it here . Tina yeah. Im keiths wife, so. Lemonis okay. I didnt know that. I didnt even know that. Tina yeah, so i have a little different perspective on it. Lemonis id love to meet keith. Tina yes. Come on. Im assuming hes right next door. You have visitors. Lemonis how are you doing . Im marcus. Keith marcus. Keith lyden. Lemonis nice to meet you, keith. How you doing . Dean im good. Dean lyden. Nice to meet you. Lemonis dean, how are you . Keith my brother. Lemonis oh, this is your brother . Okay. When did you start the business . Keith 2004. Lemonis and who put in all the money . Keith all the finance came from me. Think were up to about 160,000. Lemonis 160,000 . Dean originally, i had some screening equipment and some sign software, but not much. He primarily got us going financially. Lemonis and what is the equity split . 70 30 . Keith 50 50. Lemonis 50 50. Dean i had a graphics background and i had been doing this. I didnt have the financing to do it, so it was a perfect match. Lemonis so, you have a good brother, right . Dean if you cant trust your family, who can you trust, right . Lemonis well. While i appreciate keith recognizing his brothers experience, im not quite sure that 50 50 is exactly the right formula. If i asked most of the employees here who is in charge, what would they say . Matt . Your name is matt, right . Matt yes, sir. Lemonis whos in charge between the two of them . If the building is burning down, who do you go ask . Matt i call 911. [ laughter ] lemonis when you have a situation where theres 50 50 partners, you also have 50 50 leaders with no one clearly in charge. What is the total revenue of the business . Keith last year, our revenues were down a little bit. We did three and a half. Lemonis 3. 5 million . Keith yeah, just over 3. 5 million. The two years prior to that, we were 4. 3 million and 4. 4 million, respectively. Lemonis so, business is down. Keith one of my bigger customers, they slowed down for a couple months. Lemonis whats the name . Keith weis markets. Lemonis weis markets . Okay. Of the 3. 5 million, how much do they do a year with you . Keith last year, they were just over 2 million. Lemonis so, more than 50 of your business is one retailer . Keith yeah, last year. Lemonis and if they decide to change vendors, youre toast. Keith yeah, wed be in a little bit of trouble. Lemonis its risky for me to invest in a business where 65 of the revenue comes from one client. If weis decides to go with somebody else, i mean, precise could be out of business. Can i get a tour of the warehouse . Keith absolutely. Lemonis this is typically what id see, a wall graphic. Dean correct. Lemonis if youve ever been in any Grocery Store and seen all the signage, from bakery to produce to checkout, any kind of sign in any kind of Retail Business, thats the kind of signage that precise does. This is something that you designed by yourself . Dean yes. Lemonis the concept. Precise works out of a 30,000squarefoot facility. Cool letters, huh . Theres an area for design, but most of the floor is dedicated to fabrication. Dean this primarily is where we do all the decor, the graphics stuff. Lemonis theres a machine that shapes wood, and it also forms foam into letters. Man heres where i assess whats called a tool path. Tells the machine where to go, pretty much. Lemonis very cool. And a machine that prints largeformat images, anything you need to make a sign. This looks like a trade show display. Do you guys go to trade shows . Dean we do not. Lemonis but how do you find new customers if you dont go to trade shows . Keith weve always had a different sort of opinion with that. Dean you just brought up a yeah, where we disagree. Lemonis whats the worst thing that could happen . Keith ive always been concerned about getting a customer and then losing them. Lemonis but you got to get one to find out if youre gonna lose them. Keith youre right. Youre right. Lemonis i mean, you got to start somewhere, because the fact that you have this much capacity right now, its almost like youre driving with your foot on the gas and the brake at the same time. What are you worried about . Keith when we get busy, we miss a lot of the finer details and we make a lot of mistakes. Lemonis like what would be a good example . On the letters, on the vinyls, on the signs, on the banners . Keith i had a sign up that we made, installed, was hanging in the store that was misspelled. Lemonis there was definitely a red flag that keith was conservative about wanting to grow the business. Hes already uptight or tense about some of the work that theyre putting out, the number of mistakes that theyre making. Maybe thats his very quiet way of kind of protesting the quality. Guys, im gonna spend some time with some of the other employees. Keith okay. Lemonis this is a beautiful old factory that was probably built about 100 years ago. Unfortunately, a lot of the equipment looks dated, as well. Some of it broken and not working, and some not working up to full capacity. The groove in there is a little off. Why dont they fix that . Whose call is that . The sign and graphics industry requires stateoftheart technology and equipment, but unfortunately for precise, theyre operating with old and outdated equipment thats not only causing inefficiencies, its creating a ton of mistakes. If this was your company, what would be the numberone thing youd change . Kevin i would like to get better equipment, some reliable equipment. Lemonis two things are going through my head when i look at the old equipment. Number one, do they have the money to actually upgrade their equipment . And after spending just a little time with keith, is he just too cheap or too conservative to do it . So, who do you report to . Man dean and keith. Lemonis well, which one, though . Man um. Lemonis whos in charge . Man i dont know. Lemonis hard to say . Man i dont know. Lemonis i think my Biggest Issue with their business is whos on first . Who do you report to . Paul i report to dean and keith. Lemonis whos in charge . Paul honestly, i would say neither and both. Lemonis okay. Any time you have employees saying they dont know whos in charge, thats a problem. Typically, people want to be led, and the fact that the employees dont know who to listen to or whos in charge leaves them like a rudderless ship. Do you feel like theres enough business here today . Do you feel like you could do more . Paul that is pushing it. Right now with the machinery that we have, millworkwise, were antiquated because right now, were running on sending programs and stuff out on that. Lemonis im sorry. People still do business on floppy disks . [ laughs ] i understand that this place was built in the 1920s, and i think the machinery was here from the beginning, but floppy disks . Really . How long have you worked here . Maria itll be six years in april. Lemonis wheres the system broken, in your mind . Maria everywhere. We dont have systems in place. We dont have the processes. I mean, i say we dont have enough of them. Matt everybody works hard. I think everybodys passionate about what they do. The main thing is is we have one big egg in our basket. Lemonis weis markets . Matt yeah. If you took that away from Precise Graphix, 70 of this wont need to be here. Lemonis be out of business. Matt yeah. Lemonis how many days are you on the road . Matt usually almost every day. Lemonis you have kids . Matt actually, since ive started working here, ive had two children and i still only took one day off of work. [ laughs ] lemonis thats not good. Matt its reality. Lemonis must be hard on your family. Matt yeah. Lemonis even with no technology, the lack of leadership, these people are waking up every morning and giving 150 to keith and dean, and theyre the heartbeat of this business. They bleed for this place. But with this much confusion on the floor, maybe thats why they have problems with their profit margins. You have 650,000 of assets from bank accounts, inventory receivables, prepaid expenses. When i look at the total liabilities, you have 835,000 from accounts payable, credit cards, taxes payable, longterm debt, shortterm debt, and note to officers. Which means youre 180,000, essentially, underwater on paper. Precise has some real assets. They have some cash and some inventory. But they also have some real liabilities. Theyre about 180,000 upside down. While theyre not a company thats ready to go bankrupt, they are on some very thin ice. Your Balance Sheet is upside down. Your process is a disaster. The warehouse is a mess. The accountability is missing in this business. Everybody that i asked here, whos in charge, theres always a pause. Not having a clear leader is a big problem in any business. A lack of leadership provides a lack of clarity. A lack of clarity provides a lack of efficiency. And as efficiency drops, so do the margins and so does the morale of the workplace. All of that equals bad margins and less business. You guys dont have the same management style, do you . Keith i think dean can do a better job of managing the production, absolutely. Dean i mean, i got to say i disagree with that. Ill be the first to admit we work different. We dont agree with the way each other works. Keith we dont discuss issues out there as much as we should. Hes 100 right. Lemonis cause you dont want to jeopardize the personal relationship, the family relationship. I get that. Dean correct. Lemonis maybe you guys shouldnt work together. One of the things that you can definitely tell with keith and dean is that they really dont like conflict, and so theyre not really addressing the issues that are kind of underlying. The fact that theyre brothers and the fact that theyre not addressing any of the issues, it probably is part of the reason why no one knows whats going on there. The only way im willing to move forward is if you understand that things are gonna have to change dramatically. Guys. Keith whats up . Lemonis i think you guys would be great guys to be in business with. Hes a facts and figures guy. Youre a creative guy. Its a fantastic combination of people. I think the people that work here are committed. Whether thats maria or your wife, tina, or people in the back or kevin or paul, i think theres a real commitment to working here. What do you think the business is worth . Keith you know, maybe, i dont know, 2. 5 million. 2 million, 2. 5 million. Lemonis basically, the tangible net worth, the enterprise value of the business is 270,000. Keith hm. Lemonis the formula that ive used is ive taken all of the assets of 650,000, all of the liabilities of 835,000, which includes the money that you and tina put in, and then i come up with the difference there, which is 185,000. And then on the other side, i look at the earnings of 143,000, i put a threetime multiple on it. Its around 450,000, a little less, but well call it 450,000 for this discussion. And then i subtract the extra liabilities because theres not any assets to cover it. And so, basically, the tangible net worth is 270,000. You dont agree with that number . Keith i had it a little bit higher, but i dont have anything to back it up, i got to be honest with you. Lemonis but i have to make decisions based on it. Keith i understand that. Lemonis so, what do i do . Keith we could just use the figure youre talking about cause i dont have anything to back it up, so. 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We can push buttons and make cars appear out of thin air. Find love anywhere. Hes cute. And buy things from, well, everywhere. How . Because our phones have evolved. So isnt it time our networks did too . Introducing americas largest, most reliable 4g lte combined with the most wifi hotspots. Its a new kind of network. Xfinity mobile. Lemonis would you sell the business . Give you your 160,000 back plus 270,000. Would you do it . Keith i dont know if id do that. Dean i think the potential just is too great. Keith yeah. Lemonis that was honestly the only reason your answer is the only reason that i will stay here, because i dont want to be in business with people that dont want to be here. So, im willing to offer 270,000 for a third of the company. Heres the caveat. I am not willing to do anything other than be 100 in charge of all of the decisionmaking. And i dont mean just financial. Im not convinced that youre decisive enough to move the business forward and make the changes and put the process in place, and youre not willing to hold people accountable. And i have no problem doing it. And so, you have risk. You could get fired. One thing id like to do before i give you this check is id like to get tinas input. So, do you want to grab her . Keith i sure will. Lemonis while i couldve asked for a much bigger percentage, i felt like the only way this deal was gonna work is if i put in a reasonable amount of money to solve problems but i left them with enough equity to feel like they were still driving the bus and would keep them interested. My offer is 270,000 for 1 3 of the business. But im gonna be totally in charge. Its not for a day, its not for a week. Its forever. Tina we need the help. We need the help. Lemonis we have a deal . Dean we have a deal. Lemonis we have a deal . Keith we have a deal. Lemonis we have a deal . Tina we have a deal. Lemonis im gonna give the money to you. Keith absolutely. Absolutely. Lemonis so. Tina this is good. Lemonis . I have one last twist. Tina [ laughs ] lemonis in order for you to be able to deposit that check, you have to prove to me that you can do a job. And if its good, were partners for life. And if its bad, no business, no deal. Keith okay. Tina mmhmm. Lemonis well, good morning. All good morning. Lemonis last night i made a deal to put 270,000 in this business for 33 . I feel like this business is representative of this country, and when you stand in this factory, you see hardworking people just trying to make a living, to provide for their family. It feels like how this country was built. One thing that i am critical of is that i dont feel like theres been good leadership. So, even though ill have only 33 1 3 , i call all the shots. The second thing is, going forward, theres gonna be Clear Department managers. The Creative Design department is gonna be managed by dean. And our leader of this business, while its me in terms of having the authority, our daytoday leader is keith. In order for this business to succeed, i need to give keith and dean very defined roles. Dean is a guy with 25 years of design experience, so im gonna take advantage of that. I want him fully in charge of design. With keith, he seems like he has the potential to be a great leader, and i want somebody to oversee the entire operation. 65 to 70 of our business comes from weis. No company would ever let that much of their percentage of business be with one customer, because if something changes in their business, what happens to us . Have you thought about that . Jess it has gotten less and less and less, and it is a concern, cause you dont know. Youre gonna come in one day, theres no gonna be any work, were scrounging, and you dont know if youre gonna have a job in another couple weeks. Matt if something would happen, i got, you know, two little ones at home, a mortgage. Just nervous, to be honest. Lemonis right. Maria, whats wrong . Maria my biggest thing is i dont want to go look for a job. I love my job. But i want to feel like im gonna have a job for a long time. And you dont think that right now. Im always afraid its gonna close. Lemonis my responsibility is to make sure that you have a job, make sure that you make money, and make sure that i keep this place as stable as i can. Together, were gonna grow this business. Together, were gonna make sure that we do it right, but theres one catch. I gave them a check for 270,000. And i told them they cannot deposit it until they can prove to me that you can do one job with precision. And they dont know what job it is. But i will tell you, if you cant to the job, i cant do business here. All right . Lets go to work. Thanks, guys. [ applause ] we need to get going on our field trip. She has the address. Keith oh, you have the address. Okay. Lemonis see you there, okay . Lets get on the road. Keith you got it. Lemonis the only way that i could do a deal with these guys is to be sure that their work is great. This isnt a drum company or a furniture manufacturer or a burger place, where i can actually see and feel the product in my hands. Keith camping world. Tina camping world. Lemonis and so the only thing i can do is offer up one of my own businesses as kind of the experiment. I mean, this could be a winwin for me, but it also co