oh, it mattered to her. she went from being, you know, executive-like to -- the entrepreneur in her came out. capman: where is it? -- man #2: go grab it. go. amber: here i am! speaker: we're rolling. man: rolling. speed. lemonis: tonight, we're gonna give you an inside look at an episode from season 3? amber: yeah. lemonis: season 3. it's grafton furniture, in my hometown of miami. now -- it's in miami. amber: your hometown of hialeah. lemonis: it's on the border of hialeah and miami. but part of the reason why i wanted to come back to miami is that i wanted to really invest in a small business here, in south florida, because of what this community had done for me and what i felt like i could give back to it. and, when the grafton family applied as a multigenerational business, and we know that, more often than not, these multigenerational businesses fail. melissa: okay, yes. there are always arguments.

there are always little fireball moments. stevie: boom, boom, boom. let's set the stage, baby. lemonis: in the last seven years of doing "the profit," i've visited nearly 100 businesses. let's go make some money. [ horn honking ] i've traveled the country trying to fix the people... and you do $1 million a year. you should be proud of it. man: but we don't know how to keep any of it. lemonis: ...fix the process... see? it is flimsy. don't ever make these again. you don't sell them. ...and create a few products. woman: it reduces anxiety and depression. lemonis: i kinda like it. i spend countless days working on these companies. man: [laughs] lemonis: how much money did you burn through? man: $650,000. ♪ lemonis: but we can't always fit everything i'm thinking into the show. [ musical powerdown ] so, tonight, we're gonna give you an inside look at a business from season 3: grafton furniture. over the next hour, i'm gonna take you behind the scenes to find out how a struggling custom furniture company... and what is it worth with this nick? stevie: nothing.

lemonis: what else do you wanna show me? 'cause i'm really excited to buy furniture here. amber: what was marcus thinking when he walked in? stevie: "what is all this garbage here?" amber: not garbage! lemonis: ...run by headstrong business owners... stevie: which really should be his job. lemonis: have you assigned him that job? stevie: no. lemonis: then how is he supposed to know that? [ laughter ] ...completely transform their business... effective today, steven is 100% in charge of the quality and i'm gonna get him yellow stickers and, if it doesn't have the dot, it doesn't go out. ...and their family... stevie: congratulations. esteban: you did it. you did it. lemonis: ...and left a lasting impression on me. one of the most honest guys i've ever worked with stevie: yeah. lemonis: and the most creative person that i know. stevie: wow. amber: wow. lemonis: those two things. my name is marcus lemonis, and this is an inside look at "the profit." [ bell ringing ] woman: okay, guys. we're rolling. amber: so the whole family is gonna work in the business? stevie: yes. amber: do you guys all do something different? lemonis: why don't you guys

describe what you do for amber because i know what you do. melissa: i'm melissa and i'm in sales. ryan: i'm ryan. i'm the operations manager. matthew: i am matthew. i'm the youngest son, working logistics. amber: okay, so, and you're stevie... stevie: i'm stevie, yes. amber: ...in case people forgot. lemonis: who can forget that face? man: aww. amber: i can't. but stevie was the only one of the kids in the original episode, right? steve: yeah, he was the only one on the episode. ryan was working here at that time. ryan: i was part-time here, looking, actually, to leave the business and, with this show, i was brought back. lemonis: not because of the show. that's not why you were brought back. you were brought back 'cause you're the only one that knows math. amber: so marcus wouldn't feel comfortable without you. ryan: yeah. stevie: he's really good at it. [ laughter ] he's good at it. melissa: he's the smart one. lemonis: why don't we watch the episode. [ latin music plays ] miami is my hometown and it's oh, yeah. also home to over a million cuban americans. they bring their culture while embracing the american dream.

grafton furniture is a shining example. [ camera shutter clicking ] started in 1964 by esteban grafton. his son steve now runs the business and designs most of the furniture... amber: steve, that shirt. [laughing] mary: he threw it away. it's gone. lemonis: ...and is 50/50 partners with his wife, mary. their son, also steve, is there to learn the business and keep it going for another generation. but, without some dramatic changes, [ suspenseful music plays ] the future of this business is in serious doubt. [ clang ] [ whimsical tune plays ] my first impression of grafton furniture is that i like what i see. i like the look and feel of the place. amber: you look so different. lemonis: how are you doing? steve: marcus. lemonis: how are you? steve: i'm great. lemonis: are you steven? steve: i'm steve grafton. lemonis: nice to meet you. i was just trying out some of your furniture. steve: nice. lemonis: who do you primarily make your furniture for? steve: interior designers. lemonis: and so, a customer cannot come here and buy this stuff? steve: this is stuff that i've had from years ago,

and i just put this showroom together over the last 6 to 9 months. and what i need is to merchandise this with current inventory that we sell today. lemonis: why do you laugh, stevie? stevie: now i know exactly what you were thinking. it's funny. amber: what was marcus thinking when he walked in? stevie: why all this? what is all this garbage here? amber: not garbage. stevie: no, but, like, older things that are clearly not things we're trying to sell. they're just over the years still have... amber: but this was also 5 years -- in all fairness, this was five years ago, so styles have changed. were you thinking... lemonis: what did it have to do with collecting a bunch of crap in a room? mary: and add stains and chips on it. steve: it was a beautiful showroom. i wish i had most of that stuff today. lemonis: so, this is essentially a showroom that has furniture that you can't buy. they're a custom manufacturer, so this warehouse is not a showroom. it's just a bunch of unclaimed furniture. can you buy it? could you buy it? steve: yeah. mary: yeah.

stevie: unless it's screwed to the ground, steve grafton would sell. steve: absolutely. mary: he sold stuff right out of our house. lemonis: out of your house? steve: yeah. mary: everything is for sale. lemonis: that doesn't include your kids, does it? steve: well... no. lemonis: hit play. how long have you been in this building? steve: since 1964. lemonis: well, i mean... steve: 50 years. steve: my dad. lemonis: oh, your dad. okay. steve: he's here actually. lemonis: i would love to meet him. steve: i would love for you to meet him. papa. esteban: hey. lemonis: how are you doing, sir? esteban: so far, so good. lemonis: your name? esteban: esteban grafton. lemonis: nice to meet you, sir. esteban: nice to meet you. lemonis: wow. esteban: well, i've been here since 1953, and i'm an american. lemonis: pause. do you miss your dad? steve: yes. i do. lemonis: he had a presence, for sure. steve: oh, yeah. amber: for people that didn't watch our recap, we should say that your father passed away. steve: actually, the day after the show aired. mary: he watched it in the hospital.

steve: yeah, he watched it in the hospital. lemonis: he was happy with it, though. steve: oh, yes. he felt great where we were, and where we were going. lemonis: and so, you're the true american success story. steve: they call him "maestro" around here. lemonis: maestro. you come to work every day? esteban: most of the time. lemonis: you in your sixties? esteban: i'm 82. lemonis: 82. steve: this is steven. lemonis: how are you? i'm marcus. stevie: nice to meet you, marcus. lemonis: you're steven also? stevie: yeah, it's a terrible story really. steve: i'm steve. he's steven. he's esteban. lemonis: okay. so, three generations right here. generational businesses often struggle. we know that second generational business fail at about a 60% rate, and we know that it's even worse for third generational businesses that fail at almost 90%. how is it working for your dad? stevie: it's great and stressful. amber: so, multi-generational businesses don't ever last? lemonis: usually, what happens is, when the founder starts a business, they have a reason for starting the business, and it's more than just financial. they are trying to solve a problem. there's some interest that they have in it.

and i think that there's this misnomer that multi-generational businesses fail because the kids or the grandkids are bad, or they're not smart, but the reality of it is that, they don't necessarily do well because they're just not interested in it. amber: are you guys interested in it, or do you feel like you have to do it? stevie: yeah, definitely interested. melissa: very interested. i think because we grew up here, who the graftons are is grafton furniture. amber: that's nice to see. lemonis: grafton has a crew of 28 employees. they do everything from design, build, paint, and upholster. louis: what you need to do is do it multiple times, 'cause you can see the difference, how this is smoother, and this is still rough. lemonis: so, why doesn't that machine do it all in one? louis: 'cause it's not, like, one of the best planers. lemonis: do they make one that would do it all in one shot? louis: yes. lemonis: what does it cost to get a brand-new one that does it the right way? louis: a really good one, about, say, $3,000. lemonis: if it costs $3,000 to get a new one,

how much time extra did he have to take to do it three times, multiplied times the number of furniture that we make in a year? how long does it take me to get my money back? steve is looking at me like, "what?" steve: how the [bleep] am i gonna figure that out? ♪ this is the house in the hamptons, and here are the sales orders, here. lemonis: what kind of margin do we have on this, decent margin? steve: i think so. lemonis: you think so? steve: yes. because you don't know until you make it. lemonis: you don't know what your margins are on them. you kind of go into production with just a guess. steve: correct. an educated guess. [ laughter ] amber: pause. now, you watched every show. a lot of shows. steve: yes. amber: so you had to have known that he was gonna call you out on numbers and margins. steve: listen, in manufacturing, labor could have a bad day. yeah, i know how long it takes to make a dining chair, but sometimes, the guy might... amber: okay, you don't have to get so angry.

louis: this is what we call a "master list." this is everything that we have in-house. lemonis: why are all the wips zero? steve: 'cause they haven't -- they don't put the wips into here. lemonis: why wouldn't you update this? this is nothing, then. steve: correct. lemonis: why wouldn't i know the status of a job? steve: this is our bible. lemonis: well, you need to go to a different church. in any manufacturing business, the most important document is the work-in-process report. it tells you where jobs are in their life cycle. so, if you had 10 jobs happening at one time, you would know if a job was 7% done, 87% done, or 100% done. at grafton, i don't have anything filled out. they're all zeros, so i don't know what the hell is happening. it could be me, but tell me what you see when you look down the barrel. do you see a swell? steve: a swell right here. lemonis: you see a swell on one side? if this came to my house, i'd send it back. steve is like, "[bleep]. what did we sign up for?" amber: yeah, i know. lemonis: how are you doing? jorge: how are you doing, sir?

lemonis: i'm marcus. jorge: i'm jorge castellanos. lemonis: what is your job here? jorge: i do delivery and... steve: ah, here we go, payroll guy. lemonis: you do payroll, too? jorge: yeah. lemonis: which is very common, that the same person that does payroll does deliveries and installation. right? stevie: it's just too easy for you. lemonis: it's very common. steve: he doesn't do payroll. stevie: yeah, he does. lemonis: you say "no." he says "yes." he says "yes." you said he doesn't help with payroll? steve: no, he helps her. he prints out all the time sheets, and he goes to them, "what job were you working on?" which really should be his job. amber: yes. stevie: he made him so happy by saying that. lemonis: have you assigned him that job? steve: no. lemonis: so, then, why do you say it should be his job? steve: because that's one thing that he should be doing to help this... lemonis: but how is he supposed to know that? is he supposed to read your mind? stevie: yeah. here, yeah. steve: all of these products, these are orders to be done. lemonis: it's not very clear what the process is. it's not easy to follow. louis: it is for me 'cause i've been doing it for so long.

and that's why i have stevie to help me. stevie: i'm not comfortable because i'm not sure that this is the actual order, because something changes, and it's all these two when they talk to clients, and then it stays in their heads. it could have been changed. it could have been something they talked about. and they know. lemonis: there's not a change order process. steve: yes, there is. louis: there's no official... steve: there is. esteban: sometime, it doesn't happen. steve: right, because he's being jumped over all the time. lemonis: well, 'cause he doesn't have a clear role, and you're making changes, and you're not bringing him into the loop. would his role exist if he wasn't your son? steve: yes. assistant production manager. lemonis: if he's out, is he in charge? steve: he's in charge if he's out. lemonis: everybody knows that? steve: i would hope so. lemonis: louis, is that true? louis: it will be stevie to a point, but they're gonna go to steve. lemonis: and so, it's the worst position you could put him in is when you give somebody a title, but you don't actually give him the stick. who's in charge of quality here? stevie: i would be more in charge of quality. lemonis: 'cause what i think what happens is, when you know that you need to collect the money,

you start cutting corners to get it done faster. steve: right. stevie: i don't want to do that. and i think if we're not gonna get it checked 'cause we're late, you know, i understand the business. you got to get the money, but i know what a good product looks like. lemonis: well, at the end of the day, here is how you should think about this. this is -- your grandfather was here. now your father is here. and if you don't get the quality right, this business won't be here for you. stevie: exactly. that's my -- lemonis: it's got your name on it. stevie: exactly. lemonis: who's in charge of quality today? you are? and so, have you now been given the yellow dot t-shirt? amber: you can't just randomly put dots on people. you have to explain what the dots are. we all have a dot, and you're... lemonis: tell everybody what it is. steve: the yellow dot is when the final stage of production gives it the thumbs-up, and it's ready to ship. lemonis: do you still use them today? be honest. steve: no. lemonis: that's good to know. amber: oh, so we don't have to wear this? steve: no. amber: forget it. no yellow dots.

stevie: the spirit of the yellow dot lives on, so there's a different vehicle now. now, there's approval stamps, and things like that. but everybody... lemonis: you mean it's legit now? melissa: yeah. lemonis: there's $1 million in debt, not enough working capital. fixing up machinery in the building, that's $1.3 million. steve: correct. amber: you heard "$1 million in debt." why didn't you run?

lemonis: did you guys bring the application tape? (burke) we've seen almost everything, so we know how to cover almost anything. even a "gold medal grizzly." (sports announcer) what an unlikely field in this final heat. (burke) not exactly a skinny dipper, but we covered it. at farmers, we know a thing or two because we've seen a thing or two. so call 1-800 farmers to get a quote. ♪ we are farmers. bum-pa-dum, bum-bum-bum-bum ♪ t-mobile has the first and only, nationwide 5g network. and with it, you can shape the future. we've invested 30 billion dollars and built our new 5g network for businesses like yours. while some 5g signals only go a few blocks, t-mobile 5g goes for miles. no other 5g signal goes farther or is more reliable in business. tomorrow is in your hands. partner with t-mobile for business today.

we'the conference room.ore. tomorrow is in your hands. the speaker phone. the missing files. not in the room? then you're not in the know. well, this has been nice, but can we not? microsoft teams invites everyone you work with to work together. be seen, be heard, be there when you're not. share your files, and your opinion. and maybe even a happy little fruit guy. when you're ready to unleash the power of your team, open teams.

i wanted to show them the casting. amber: we did bring the tape. and i'm gonna embarrass them a little bit because as producers, we tell them that -- when we shoot their skype, we tell them that no one is ever gonna see it. mary: that's exactly what i remember hearing. lemonis: we're violating that rule tonight. amber: we are, because when i said that, we didn't have this show. so, it wasn't really a lie back then. steve: oh, my god. this is esteban grafton. esteban: esteban grafton. how do i look? old? lemonis: you look great, buddy. steve: my dad started it, and my son is, hopefully, gonna be the third generation. i'm always catching things that are being done wrong, and so, i'll say, "no, no, no, this is what i want." and then, he'll come in and say, "well, if you freaking write it on the order the right way, maybe we would know what we're doing, and dad, see..." it gets spicy here. don't you worry. mary: that's the problem. stevie: sometimes, we'll just be out there, and we'll look at one piece of information that we have, not knowing something that he might have kept

in the back of his mind during a conversation -- little things like that. matthew: i just want to make sure this company can be all it... oh, my god. that sounds so cheesy, but i want it to be all it can be. you know, i think we could be a lot better than we are. lemonis: when you see that, what do you think to yourself? matthew: i love my family. lemonis: what do you love about them? matthew: i love how real everybody is, and that we enjoy this life that we have together. amber: that's such a good answer. lemonis: he's the heart. amber: that's why we picked your family, too, by the way, because we loved your family. it's a real family, real stakes, real business. which one of you actually applied to "the profit"? mary: i did. lemonis: i didn't know that. amber: oh, i didn't know that. mary: well, he always watched it. and i would see him in the living room watching it, and i'd say, "oh, not this again." lemonis: thanks, mary. [ laughter ] mary: sorry. and i said, "i'm just going to apply. nothing is gonna happen from it." and i told them all. steve: i knew it was gonna happen. lemonis: why? steve: i don't know. i just felt it. and when i researched that you were from miami, i knew that you wanted to come back to miami. lemonis: the miami thing helped.

steve: mary is like, " oh, nothing is gonna happen." and by her doubting it, i knew even more it was happening. lemonis: total revenue last year -- $2,448,000. gross profit at $1,000,000, so less than 50%. steve: yeah. and that's -- lemonis: you said the margins were amazing. amazing at under 50%? is that considered amazing? steve: no. lemonis: the industry standard on custom furniture margins is around 70%. grafton furniture is operating at about 50%. we have a lot of work to do to figure out where the 20% is leaking out. the total liabilities that should be on my mind are $369,000 in third-party debt, $600,000 on the mortgage for the building, and $50,000 in a liability to the other shareholder of the property, which happens to be your brother. steve: correct. lemonis: and so, it's about $1,000,000. steve: correct. lemonis: it's a summary of all of it. lemonis: that would clean up every piece of debt. steve: every single one. lemonis: okay. so, i think about this business

in three distinct categories -- quick ship, mass market, fast production, turn it over and go, semi-custom, where there's a couple of styles, and you could pick your wood finish and your fabrics and then custom. mary: that's what we are. i just feel like we're custom and high end, and i kind of want to stay that. lemonis: alright. i'm gonna take some time to just kind of look at this. steve: okay. lemonis: i'll see you in a little bit. steve: okay. lemonis: thank you. steve: thanks, marcus. lemonis: steve is like, "what did i get myself into?" steve: "[bleep]" amber: look at you, marcus. lemonis: what's up with the beige suit? amber: all miami-ed out. lemonis: today, i'm meeting the graftons at one of my favorite restaurants in miami. it was a big deal for us to shoot there. remember, you and i were pretty jacked out. steve: i know. lemonis: do you feel like your business is run right today? esteban: no. lemonis: your dad said "no" pretty quick, didn't he? steve: well, no. there's always room for improvement. lemonis: i get the sense, based on a few things yesterday, that you feel like you're the only one with good ideas.

steve: you have to convince me of what you're asking, or doing, or saying. and if i think it's totally wrong, i'll tell you my opinion. lemonis: what happens if steven gives you his opinion? do you process that, or do you dismiss it early? steve: no, i process it. i do dismiss it often. lemonis: look how cute he is there. melissa: i know. adorable. amber: he looks like a baby. lemonis: are you confused, sometimes, when you come in, what your role is? stevie: yes. yeah. lemonis: so, when i think about your financials, there's $1 million in debt, not enough working capital to sustain any sort of downturn. fixing up machinery in the buildings, that's $1.3 million. steve: correct. lemonis: so... i'm willing to put up $1.5 million. that's a lot of money. mary: you didn't even blink. lemonis: right? stevie: absolutely. lemonis: and so for the $1.5 million,

i would want 45% of the business. stevie is like, "what?" full financial control. and i want to be able to have 100% say on his path without any question from you. ♪ amber: you heard "$1 million in debt." why didn't you run? lemonis: well, because i knew there were assets here that supported it. and if the business does $2.5 million a year, even if the margins are 40%, they weren't that far away from being able to solve it. amber: okay. lemonis: i knew this building was here, and i knew it was somewhere in the equation. and i didn't want to bring it up initially, but that was really the asset, here. right? i mean, we just cut to the chase about it. there is one more twist to it. you have to be able to retail it for under $500, and make a 50% margin. mary: never.

lemonis: if you're looking to take your business to the next level, log on to theprofitcasting.com.

amber:before we talk about tax-s-audrey's expecting... new? -twins! ♪ we'd be closer to the twins.

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and we'll talk about margins, and, you know, we all learn, and get a better sense of business in general. amber: that's great. ryan: yeah. matthew: i like to make sure that everybody is communicating. i like to facilitate communication -- a smiling face somebody will listen to. i just try and learn everything as i can. stevie: his answers are just... perfect. amber: what's the age difference between you two? stevie: 10 years. amber: that makes sense. stevie: but i guess my maturity level is on, you know, 21 year-old level. i don't know. lemonis: and so, for the $1.5 million, i would want 45% of the business and 100% say on his path without any question from you. mary: i think i'm gonna cry. lemonis: does that help, mary? mary: yeah. absolutely. when banks turn you down, and when people turn their heads on you, to know that somebody with your knowledge and experience believe in us, and my son. you're taking him under your wing.

i'm ecstatic. lemonis: we have a deal? mary: are we supposed to do a round of applause now? lemonis: thank you. steve: thank you. lemonis: i'm looking forward to it. steve: god bless you. lemonis: you alright? you got pit stains 'cause you're so nervous. stevie: yeah, a little a warm in here. lemonis: it's not that warm in here. i think you're just [bleep] your pants. stevie: yeah, i am. amber: how are you feeling right now when you see this, when you see this again? mary: it was horrible not being able to pay your bills, and having your cars repossessed, and, like, all that. it's awful and it was like a dream, though. it was like, you know, somebody coming in, and believing in us, and willing to, you know, help us out. lemonis: i told you that i wanted to figure out a way to build the line, and so, what i'd like to do is i'd like to start with creating a quick-ship product designed solely by you. my goal in driving grafton's revenue is to create a quick-ship line.

these are ready-to-buy lines with multiple designs, and they're offered up with a few wood choices and few fabric selections. and unlike custom furniture, these pieces can be in your home within 10 to 14 days. i'd like to start with four accent chairs. i want you to design all four chairs with a different look in mind. there is one more twist to it. you have to be able to retail it for under $500 and make a 50% margin. steve: that's doable. mary: never. lemonis: and i knew that. pause. i knew that it wasn't possible, but i needed you get you guys to stop thinking that every chair had to be $1,000, $2,000. what i was trying to prove in that model is where the efficiency breakdown was that exploited the fact that you couldn't get your cost there and whether you had gotten it to $500 cost, and retailed it for $995, that wasn't as important to me as you understanding the labor and the materials that it took to make something, and the steps that it took to do it, and have you almost think about it

like making a pot of soup. i need the base, i need the different ingredients, and what does it all cost? and there really was no process to know a chair has a specific amount of time with a specific amount of materials with a specific amount of labor. it didn't exist in this business at that point. steve: mm-hmm. that's true. lemonis: does it exist today? steve: it does. we have processes now. we have, you know, people looking at numbers. they're logging their hours. we're measuring all the labor and the materials that go into jobs. lemonis: steven! so, going forward, we want to be able to understand better how we represent our quality. and so -- stevie: yeah, i know. back when i started doing deliveries and i would see unhappy clients and see mistakes maybe they wouldn't notice, butwould notice... lemonis: so is this an example of something that would get delivered? steve: mm-hmm. lemonis: what would this chair retail for, brand-new? steve: brand-new, that's a $1,700 chair. mary: oh! [ fabric ripping ]

lemonis: what do you see that's interesting about that cushion? steve: this shouldn't be seamed here. lemonis: why is it seamed there? stevie: it was seamed 'cause sometimes we make things work. lemonis: so this customer that paid $1,700 just happened to get, "hey, sorry. we wanted to make it work, so we're gonna give you a half -- literally, a half-ass cushion." it covers half your ass. steve: right. this is not our best foot forward. lemonis: find a piece that you think is good. steve: this one we reupholstered recently. lemonis: how much would this chair retail for? steve: $1,000, or even a little bit more. lemonis: and what is it worth with this nick? steve: nothing. i had a customer tell me about this the other day. lemonis: what, he cut your chair? steve: no, they said, "are you guys -- you making quality?" it was like, "we saw on the show you had a problem with quality." you were pissed. lemonis: i was annoyed. i was. i was actually annoyed. amber: why were you annoyed? lemonis: in my opinion, he let his ego

drive the necessity of the show. and there was a little more to the story here. he had had a showroom in fort lauderdale, by the airport, and he was bruised when that showroom went away, and he tried to repair that by taking this warehouse and spending whatever amount of money it was to make it look prettier so he could make himself feel better. steve: it's true. no, there is truth to that. of course there is. lemonis: that's legitimately why i was a little fired up there, because i was thinking to myself, "this is a guy who i think is wildly talented. i mean, what an amazing opportunity." and you were, by the way, equally as frustrated in that room, as well. steve: absolutely. lemonis: from what i'm understanding from him, you're not changing. steve: i think it's getting better. lemonis: you can break my balls, but that's what i saw.

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'cause i'm really excited to buy furniture here in the showroom. steve: this one might pass muster. lemonis: oh, you have one that may pass muster? that's good. that arm is on straight. steve: right. lemonis: this arm is on crooked. steve: right. lemonis: you're rushing it. steven, is there anything in this showroom that you would deliver to a customer?

stevie: no, there's nothing in here that i would give 100%. lemonis: who is really pushing the furniture out before it's ready? steve: it's a good customer, and they call, and they say, "can you have it in less time?" stevie: you'll say yes, but then we have to do a rush. it messes up production. lemonis: does that frustrate you? stevie: everyone gets frustrated because they're expected to do perfect in less than, you know, a perfect amount of time. lemonis: the problem with the furniture and the quality isn't the people that are making it. it's the process that they're given to make it, or tlack of process. going forward, effective today, steven is 100% in charge of the quality. and i'm gonna get him yellow stickers, like a little dot, and if it doesn't have the dot, it doesn't go out. we'll just... you are now the yellow dot man. amber: pause. [ laughing ] are we giving out yellow dots again? lemonis: no, he is the yellow dot man. also known as the marlboro man.

[ laughter ] how much stuff in here is just not needed, dust all over it, and not efficient? the other major problem at grafton, well, it's production. there is no flow. i've got a great way to expand the production capacity without acquiring more land or more buildings. you can break my balls, but that's what i saw. steve: mm-hmm. lemonis: we have this space that makes no money. and so we're gonna clear it all out. steve: they're gonna take my showroom away from me. mary: i told you when you were doing it. steve: killing me. mary: i told you. i did tell you. lemonis: we're gonna improve the process by putting a flow in place, improving the number of mistakes that are made and making sure that when it goes out, it goes out right. amber: pause. you had a reaction, i feel like, just now like you were cleaning out again. [ laughs ] steve: 'cause i saw a lot of things that i still like that were in there. lemonis: that was your reaction? amber: that's your reaction? lemonis: it wasn't to all the crap and how the warehouse looked? steve: yeah, it looked terrible. amber: what did you miss that he made you get rid of?

steve: just... lemonis: everything? steve: yeah. lemonis: where did that end up going? charity, right? steve: habitat? yeah, charity. stevie: yeah. lemonis: so we did good for good people? okay. mary: yeah. amber: any behind-the-scenes stories you could tell us of stuff that went away? steve: yeah, mary grabbed the desk that we had in the front. she grabbed me and said, "you grab a couple things, and you put it in your car right now." and i was like, "are you kidding me?" mary: it was the desk. all i wanted was the desk. amber: where'd the desk go? mary: i'm not even gonna tell you where the desk is. stevie: it wouldn't be production space, so it's not important. lemonis: oh, okay. that was all you needed to say. amber: someone'll need a desk. lemonis: play. if we want our product to be the best, we have to upgrade our equipment. we bought over $50,000 of new equipment, including a new sander, a new wood planer, two new table saws, and a dust collection system. efficiency is labor. labor is money. money is margin. that's what's gonna take this company's margins from 50% to 70%. ♪ ♪

steve: what happened with that silver-leaf mirror? stevie: the paint came off. steve: well, this is the second time that mirror comes back. stevie: and it'll come back again if we give them another quick date. we need to spend time on it. we can't give them quick turnaround days, because these things will just keep happening. lemonis: pause. do they argue still today? steve: we'll argue sometimes, but very rarely. i'm really happy now that they're all here working harder than ever. we haven't made it, but we are fulfilling a dream, which my dad had, as well. lemonis: are you frustrated a little? stevie: yeah, yeah. at times, i'm still like, "come on, guys. come on. we're still -- we're doing the old-fashioned way," and i feel like sometimes they may think i'm just complaining to complain. lemonis: well, let's go talk to them. steve continues to promise unrealistic delivery dates, and it's affecting the business. so, we were just having this discussion about some issues that are bubbling up. from what i'm understanding from him, you're not changing.

steve: i think it's getting better. it's not going to get perfect right away. we have improved. lemonis: do you agree that that's happening? stevie: no. lemonis: the reason that i was pushing so hard was to force them to fix the process in the warehouse. this isn't this. steve: you don't like that? lemonis: i would've liked this, 'cause this is what i thought you were making.

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with credit toward your first month's payment at your local mercedes-benz dealer. steve: i think it's getting better. it's not going to get perfect right away. we have improved. lemonis: do you agree that that's happening? stevie: no. lemonis: this is my favorite episode, i think. amber: this is mine. lemonis: maybe top three. and we've done over 100. steve: wow. i am starting to change. yes, i am. that's crazy. it's not gonna happen over night.

lemonis: the biggest goal that i had was creating a succession plan. and having him feel like he doesn't have your support -- it's not gonna help. steve: right. i promise i'll try. lemonis: pause. steve, what were you anxious about there? stevie: that day, i don't know. i think it was just tension, of, you know, the show, wanting to be right. i was still kind of unsure of things, so... lemonis: mm-hmm. people get very frustrated in the first three or four days that i'm there because they're like, "why isn't stuff happening? why isn't, like, the whole place totally redone by now?" not literally, but figuratively. steve: mm-hmm. amber: and, to further that, they get frustrated when you leave and we don't know when you're coming back. lemonis: months. sometimes there was a month where we didn't see you, i didn't see you. steve: right. lemonis: okay. steve: this is the prototype. it's getting ready to go into paint for tomorrow. lemonis: steve's been working on the quick-ship furniture line,

and he's ready to show me the first of four chairs. steve: this is what i didn't like about it. the arm is too low. lemonis: yeah. feels like i'm struggling... steve: struggling to get down. lemonis: it also doesn't have the same pitch. this isn't this. steve: you don't like that? lemonis: i would've liked this, 'cause this is what i thought you were making. it's not exactly the way i want it. the number-one message that i want steve to understand is once we lock and load this design, i don't want him going back into the warehouse in the middle of the process and changing it. this seems off-center to me now. louis: yeah, we'll have to change the pitch of this. lemonis: so, can we print this on a blueprint? louis: absolutely. lemonis: okay, and then we'll take it out in the shop and start the process. amber: so, this is a quick-ship line? that's what that's supposed to be? steve: yes. amber: west elm does these models, and restoration hardware. every furniture business seems to have quick-ship. that's important, right? lemonis: yes, i mean, the quick-ship business that exists today is really a small line of chairs that you can get pretty easily. the reason that i was pushing quick-ship so hard

was to force them to buy new machinery, fix the process in the warehouse, put an inventory system in place. so, a lot of times, i'll lead people down a path largely so that they fix their process in anticipation of something else. and if the something else happens or doesn't happen, it's not as important as what you see here today, which is what i could consider a well-oiled machine. amber: yeah. it looks awesome. lemonis: i want to see some stuff get cut. we'll start the process by creating a template chair. the wood will get planed, then measured and cut to to size. so, we build a whole template for the whole chair? steve: correct. lemonis: okay. one time? steve: yes. lemonis: next, the parts and pieces will be assembled. once i give my final stamp of approval, this will be the master template for all great lakes chairs. we'll have a full line and be ready to sell them. target price point? steve: $495.

lemonis: cost? steve: $250. ♪ well, i don't see yellow stickers. i see them on this, but i don't see them on these pieces. stevie: when it's done, it has a sticker. yikes. this doesn't have a sticker. is it done? steve: no, it's not done. stevie: okay, so let me do my thing. lemonis: how are you? stevie: i'm good. how you doing? lemonis: what's going on? steve: i was just making sure he had, you know, his eye on the ball and everything that needs to go out is checked. lemonis: i think he knows that, though, right? stevie: yeah. lemonis: is this... are you now the yellow dot guy, as well? steve: no. [ laughter ] lemonis: okay. look how stressed he looks. you alright? stevie: yeah. lemonis: okay. i'm sorry. stevie: no, it's alright. lemonis: okay. steve: i'm sorry, too. lemonis: yeah, i'm sorry.

amber: yeah, i'm sorry, too. i know. lemonis: i think you got to remember to stick to your thing. and you're bumping into other people, and he's your son, too. steve: oh, i know. i know. lemonis: and if we say we're gonna give him authority and we say we're gonna let him do his job... steve: mm-hmm. lemonis: no? steve: yeah, no, you're right. lemonis: was it that way when you were growing up? was it the same? is your dad here? steve: yeah, my dad's over there. lemonis: let's go talk to him about it, 'cause i'm trying to understand where your habit comes from. how you doing, my man? esteban: i'm in my office. lemonis: you're in your office? esteban: yes. [ chuckles ] how are you? lemonis: you know, i'm watching how him and stevie interact, and it seems like steven is always...on stevie. esteban: yes. lemonis: were you the same way with him? esteban: no. when he was that age, i step aside, and i let him to learn the business. that's why he got to let steven learn to take charge for the next generation. lemonis: you just got to... fresh start.

steve: yes. esteban: that's progress. he can put... lemonis: it's progress. esteban: yes, it's progress. lemonis: okay, my man. steve: stevie. stevie: huh? steve: i know that there's a lot of pressure, and i know that i've been hard on you and i've been, you know, always riding you. and i want you to know that i am proud of you. stevie: no, no, i know. i know. it's cool. nah, it's... steve: you beat me here every morning, and you're hustling. stevie: yeah. yeah. steve: okay? stevie: i'm glad you see it. [ steve smooches ] steve: okay? lemonis: go ahead and turn around and take a look. man: oh, ohh! lemonis: you guys have helped me open up a lot of of stores all over the country, and i feel like it's time to go big or go home.

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lemonis: hey, buddy. how are you? this total renovation cost me about $700,000. i spent $150,000 putting on a new roof that will last us for 15 years. i spent $75,000 putting air conditioning. i built out the employee lunch room, and i spent $110,000 building out a design center. the build-out will allow us to entirely change the process. the warehouse is gonna run like clockwork. grafton had leakage of 20% of their profit margin because of inefficiencies. with the new equipment, that'll eliminate mistakes and do-overs, and that will save 10%. the new efficient work flow will cut down on manpower hours,

and that will save another 10%. put those savings against a million dollars of revenue, and we've just added $200,000 in gross profit. amber: $700,000? that's a lot of money. lemonis: maybe more, right? steve: yeah, i think there's $800,000 in building improvement and machineries. amber: wow. is this the most you've spent on a renovation, 800,000? lemonis: at that point in time, yeah. and steve and i had a bone of contention between the two of us because he wanted more of the money, and i think mary did too, to go into the business as opposed to into the facility, and i felt like the foundation of the business needed to be right and the systems needed to be right, and the layout needed to be right. amber: and so at this point, have you made that money back that you've put into the building? or how does that work? steve: well, the buildings have appreciated. at the time we did the deal there, i think they were worth $1.5 million, something like that. lemonis: let me give you the exact numbers, 'cause i had them appraised just so i knew i was good. steve: oh, okay. lemonis: $1,370,000 is what it appraised when we met, and the last appraisal was $2,820,000.

amber: wow. lemonis: just to be specific. amber: wow. steve: okay. lemonis: we're also in the final stages of looking for space for a new showroom in the miami design district. pause. okay, here is the deal. this is for real. amber: yes. lemonis: you know that you guys have helped me open up a lot of stores all over the country, and i feel like it's time to go big or go home. we have talked about having a showroom in south florida. you find a place, we'll do it. let's roll. let's go. melissa, you're on it. melissa: i'm ready. amber: season eight! another episode. find the location. lemonis: this, to me, is your business, your town, your family, because it started with you and it's gonna go long after you. so go ahead and turn around and take a look. steve: oh, my god. oh, my god. lemonis: there's your design center. steve: ohh! look at that. mary: oh, wow. look at that eagle.

oh, my god! ryan: look at these three guys. [ laughter ] stevie: they gave you a little more hair, huh? steve: oh, my god. nice. ♪ -[ sniffles ] steve: papa. esteban: yes? steve: congratulations. esteban: you did it. you did it. lemonis: i really feel like the moment in front of the mural was kind of a culmination of years and years of joy and frustration and sadness and fear. and in that moment, i think the grafton family realized that they were finally heading in the right direction. ♪ amber: stevie has a tattoo. you have the mural on your arm, don't you? stevie: the american dream. the eagle. lemonis: i've never seen it. ryan: oh, do it. stevie: there you go. mary: flex. stevie: which way's the beach, you know?

ryan: i'll say, with all sincerity, when i saw mural for the first time, i actually felt like i had a future at the business. it made me want to be a part of it. lemonis: that's really awesome. amber: that is nice. ryan: thank you. lemonis: i really think that having all six of them of them involved in the business in their own area and being responsible for it and them learning and being open to learning things, steve specifically, i think made a big difference. one of the most honest guys i've ever worked with, even when it's bad news, and the most creative person that i know. amber: wow. lemonis: those two things. amber: guess someone really believes in you guys. mary: and that's absolutely true. melissa: it's absolutely true. amber: steve, has marcus brought you, like, future business? has he brought stuff to you? steve: yeah, definitely. in 2017, we manufactured all the furniture for his house in montecito. lemonis: when i saw all this furniture in my house, it was one of the proudest moments i've had in the history of the show. it was like i had a baby.

steve: yeah. amber: yeah? lemonis: i felt like my business had a baby. and in all fairness, it wasn't that expensive for how much furniture i got. steve: right. lemonis: i still would have wanted a better deal. [ laughter ] ♪ lelemonis:h! tonight on "the profit"... bunch of cheese snobs in here. ...a family-run cheese shop has been a staple in the community for decades. michael: who wants first? let's go. lemonis: unfortunately, the ugly, aging storefront speaks to a lack of passion. look how your windows look. looks like you guys don't respect the business. and what once was a thriving business has now become a burden to both father and son. michael: it felt like i was an indentured servant. lemonis: dad's terrible money management has racked up debt. the company is essentially bankrupt. if you don't solve the debt, the business is closed. that debt has weighed on his son. michael: i said, "you own the business, too. you come and run it."