year, a $700,000-a-year increase that we could grow into. we could spend 20 years there and still have a great business. in business. we are well on our way to making $100 million business could be operating out of there. a lot of money, and these lemonis: but how do you know that? employees are gonna get a nice you don't have any numbers to support it. bonus check. you also could have $100 million business in this building right here. this is the coolesto say, i don't want you to think i'm saying, "no dreams and no growth." i'm just saying, "can we just sell a jacket first?" fricking thing i've ever seen. ...an avid fisherman has spent years ethan: [ laughs ] that's a great place to start. inventing his own cutting-edge gear... lemonis: because you got an order, and you had actually ethan: there's never been one in the world. to return somebody's money. ethan: right. like, this is the first one. lemonis: let's solve that problem. lemonis: ...garnering attention across the world... i need ethan to understand that designing new products, ethan: australia wants to do, like, 500 of 'em. lemonis: ...and generating almost half-a-million dollars selling products, finding new customers, in sales. these basic small problems, if they're solved, fricking awesome. and i think he can do 10 times as much. will lead you to become a big business. ethan: i think we can really sell the pants off of this. you don't do those things, you're out of business. marcos: i think it's going to be very interesting. lemonis: but only if he'd listen to feedback. its necessity to make smithfly successful is where you don't tend to hear the negatives. ethan: i get defensive. i'm having a hard time connecting that dot. lemonis: ethan smith is rightly proud of what he's created. ethan: i mean, i think you're right. ethan: we're doing it better than other people. i agree. lemonis: sound good? we've had 100 million views on facebook of this. jules: sounds great. lemonis: you feel okay? ethan: yeah. lemonis: but his products, well, they need refinement. bruce: nothing fits right now.

we need to tweak it. lemonis: his sales pitch definitely needs work. lemonis: ethan is concerned about needing more space i think you guys have done a [bleep] job explaining to them why they need to own it. as the business continues to grow, but in order to accommodate that growth, and his business plan needs a reality check. you don't have to actually just get bigger yourself, i think your numbers are obscenely wrong. you can find strategic partners you can get help from. if i can't get him to loosen up and work on collaborating... and so, i'm taking them to miami to rocket trailers, ethan: i think there were a lot of people that were saying the same thing about a car, a company that understands the marine space when henry ford came out with the car. and, quite frankly, can build any trailer they were happy with the horse-drawn carriages, for any size product. but i think that, you know, long-term, worked out in a different way. mario: whatever you want custom, you can get done. lemonis: ...this company may be up a creek without a paddle. ethan: uh, well, for me and what, you know, we've got a deal? i like to do, is just innovate and change things quickly ethan: uh... uh, well, i, the... and work on things, like, right there. um... mario: instead of doing things and messing up lemonis: my name is marcus lemonis, and doing 'em over again, we'll do the messing up and i risk my own money to save struggling businesses. and you'll get the product you want. mike: which allows you to work on your innovation. we're not gonna wake up every morning wondering if we have a job. we're gonna wake up every morning leave the trailer manufactures to the trailer people. wondering how many jobs we have to do. it's not always pretty. lemonis: how much did the trailer that you make everything's gonna change. everything. at home in ohio weigh, and what does it cost? but i do it to save jobs, and i do it to make money. ethan: it weighs about 400 pounds, and it costs us about 2,000 bucks. this... let's go to work. lemonis: to make. ethan: to make, yeah. ...is "the profit." lemonis: what does this weigh? frank: this one weighs

♪ around 4 1/4. lemonis: okay. so, pretty close. ethan: pretty close, yep. [ train whistle blows ] frank: and then the retail price in this one is $1,395. lemonis: the retail price? ethan: yeah. i'm heavily invested in the outdoor space lemonis: so, what would you sell this to a dealer for? frank: a dealer, we sell it at 10% off. with companies like camping world and gander outdoors. and so when the company reached out for help lemonis: it's half the price. ethan: yeah. and i went online and did a little research, lemonis: you can see that the quality of the rocket trailers i was intrigued because there were products is infinitely better than what ethan was doing. that i had never seen before. there's a level of technical ingenuity and that's no criticism of him. that you just don't find in most outdoor products. it's just not his core competency. if you think this is a good quality... and if i can figure out a way to strike a deal ethan: yeah, i think it matches, and it's what we're looking for. and get access to distribute these products, lemonis: it matches your brand. ethan: yeah, yeah, i think so. it could be a win-win for everybody. i think it's a good fit. ♪ ethan: hello. lemonis: hey, how are you? lemonis: pretty good. how are you? lemonis: i'm good. i'm marcus. ethan: yeah, welcome. nice to see you. lemonis: what is your name? ethan: i'm ethan. lemonis: hi, guys. nice to see you again, brother. lemonis: ethan, nice to meet you. this is cool. ethan: yeah. how are you? ethan: how you doing? lemonis: this is ethan and jules. lemonis: so, smithfly, tell me a little bit about the company. ethan and jules keep telling me that there's a lot are you a fly fisherman? ethan: oh, yeah. of international demand for this product. and i was just frustrated with what was on the market at the time. i started doing some of my own design work. and it's not that i don't believe them, but i want to validate that. so, this was the core product line, so, i'm taking them to cala marine. which is based on kind of the military concept it's a distributor that focuses on most of south america, of modular packs and bags. like, this is molle webbing, which stands for latin america, and the islands. modular lightweight, load-bearing equipment.

and i want to hear their feedback if jules and ethan you can mount multiple pouches, too. i sort of introduced it to the fly fishing side of things. are actually on the right path. jules: okay. so, like, i brought it to them. so, one of the things that has made this the raft lemonis: so, what is this bag used for? that everyone wants is the weight. ethan: uh, so, it holds tippets, spools, and like, fly boxes it's super-light. and kind of everything you need to be on the water to fish. the bottom has little holes so that the water self-bails. lemonis: this is for fly fishing. ethan: mm-hmm. yep. ethan: and it floats in next-to-no water, lemonis: and are these straps right here? so we're talking inches of water. ethan: those are for, like, a belt. ethan: we did a version of it but the cool part is, straps mount to here that we're calling the palapa raft. or a padded like waist belt mike: what's the weight capacity? ethan: we say about 1,200 pounds, that you can mount multiple patches to. but the hull design should float more like 4,000. so, the idea is people can build their own packs. lemonis: this is awesome. ethan: yeah. jules: it's the same class as the raft, lemonis: what's really cool about ethan's designs so it's super-durable. is that the user can actually customize mike: what's the weight on it? ethan: uh, it's about 75, 80 pounds right now. exactly how they're going to use his products, mike: that's heavy. kurt: if you could lighten and it's almost like legos for an outdoorsman, this up for emergency response market where they can bolt on different things or strap them on. by using a thinner fabric. ethan: thinner fabric, smaller tubes all the way around. it's kind of fascinating. that'd be cool. what did you do before this? lemonis: all-in-all, you guys think this is a decent idea? ethan: uh, i was in retail design. all: yeah. lemonis: the two of them we actually did the original gander mountain design, are doing an infinitely better job like, believe it or not, like... lemonis: the inside of the store? of presenting the company and its products ethan: yeah, the whole retail design was like, our package. than they did back at gander. lemonis: did you design all this, as well? ethan: yeah. and the interesting part about this is, i feel like jules feels more comfortable in her environment, these little laser-cut slits is a pretty unique feature that i designed. and ethan is allowing people to give feedback, lemonis: is it ventilation? and he's not defensive every time they say something. ethan: no, it's actually for my pouches.

ethan: this is our rain jacket that we developed lemonis: so, all these slats have a purpose. that has laser-cut panels up here ethan: right. and there's nobody else that makes this. that allow you to put whatever tools you're going to use. lemonis: this stuff is fricking awesome. i think we can really sell the pants off of those. it's more of a tool than it is a jacket. marcos: i was going to say, chile, i think it's going to be very interesting. but feels a little big. ethan: mm-hmm. marcos: you guys planning ethan: i've always said that like, to have a catalog with full line of products and everything else? i'm not really in the fashion business, i'm like an industrial designer. function comes first for me a lot of times, lemonis: when will we see that? so like, in the industry, jules: well, i would say that we -- i've gotten a lot of critiques from the soft goods side we haven't moved ahead on some of these things, just because of name, you know, looking at... that say my stuff's a little drab. but i'm like, "hey, you know, like, there's -- ethan: just finalizing things, final-final. the people who get it, get it." jules: ...you know, what that's going to be. lemonis: i thought it was odd that ethan got really defensive lemonis: did you guys just hear ethan and jules over something as simple as me tell the team at cala that the name hasn't been finalized, commenting that the product that i just put on was a little big. because, in my mind, it has. i wasn't criticizing the product. if jules and ethan aren't fully sold on this what's the name of the boat? ethan: the big shoals raft. umbrella name change idea, shoals means, you know, shallow water, and big means big. it probably would've been a good idea for them so, it's a big thing that you can put on really shallow water. to bring that up outside of this environment. we're doing it better than other people jules: we have been predominantly fly fishing, 'cause it weighs 125 pounds, so the name is smithfly. so two guys can pick it up and carry it to water. and we use materials that are really, really good. you think that would be, um, so, the competition's making stuff in china, a problem to keep as smithfly on products? and we're using really thick-walled aluminum, doing all the bending and welding in-house, would that be confusing? rob: as far as like, in the islands, solid one-piece welded frame. and that's what people love about it, is its stability, there's not much fly fishing going on. the lightweightness. lionel: fly fishing in the fishing market, lemonis: this. ethan: yeah. lemonis: and then, what's this?

it's a small, small market. ethan: that's the same boat, just different color. it fits in the back of a pickup truck. we talking maybe 3%. lemonis: what does this cost to make? ethan: 1,500 bucks. kurt: i don't think you should wrap yourself lemonis: and what are you selling it into one market segment. direct-to-consumer for? ethan: right now, we're at $3,848, is the msrp. lemonis: that's a pretty good margin. lemonis: if your business is in trouble and you and need ethan: it's okay. that includes 500 bucks for shipping. my help, log on to theprofitcasting.com. lemonis: mmm. ethan: 'cause then the people -- i know. and it's like, logistics on these things have been a fricking nightmare. lemonis: here's the problem, right. we have the same problem in the rv business. people are going to shop the price, and if you bury it in the price, your competitors are going to prey on that. in today's competitive e-commerce environment, consumers are going to start by shopping on price. ethan gives himself an immediate disadvantage by the way he presents the price to the consumer. because the competition is going to sell the product, then they're going to add shipping and whatever other costs are associated with that. right out of the gates on a comparative basis, he loses. i mean, honestly, i would buy one of these, and i don't -- in a highly capable lexus suv i don't even know what i would do with it. at the golden opportunity sales event. ethan: you'd have a lot of fun. lemonis: i'd probably put it in my pool or something. lease the 2020 nx 300 for $339 a month for 36 months. how did this come to be?

ethan: it's pretty cool, isn't it? experience amazing at your lexus dealer. i said, "how about we merge the raft and the tent?" it's a big thing that you can put on really shallow water. lemonis: i'm going to say, this is the coolest fricking thing i've ever seen. ethan: we've had 100 million views on facebook of this. there's never been one in the world. like, this is the first one. lemonis: i think there's things that you can still add to it. ethan: we just tell everybody like, when they buy this, did you know the existing chlorine in your home's water experience amazing [♪] you have to know and understand your safety regulations. so you've got to have life jackets, can cause your clothes to fade? you've got to have an anchor, you've got to have paddles, try new snuggle supercare®. you know, you've got to have backup paddles -- the supercare® technology helps neutralize the chlorine in your laundry cycle, lemonis: and you have all that? ethan: no, we don't sell that -- lemonis: you should sell all of it. helping to keep your clothes looking newer for longer. ethan: oh, i know. lemonis: how many have you try new snuggle supercare®. sold of these? ethan: 50. 50 or 60. i can't -- i've lost track right now. lemonis: and what does it cost to make this, fully set up? ethan: it's about 500 bucks and it sells for $1,499. in a highly-connected lexus vehicle at the golden opportunity sales event. lemonis: dude? that price needs to go... lease the 2020 es 350 for $359 a month ethan: up, you think? for 36 months. lemonis: yes! ethan: i'm -- i'm with you. experience amazing i'm just not that hard-ass, and i need to be more. at your lexus dealer. lemonis: i'll -- i'll be the hard ass. ethan: that's why you're here. lemonis: have you ever been to an event hers smell this... experience amazing where you go into this booth and there's wind and there's cash moving around? ethan: oh, yeah. (upbeat music) that's why febreze plug has two alternating scents lemonis: that's what this thing is. okay? this thing is a giant cash machine. and eliminate odors for 1200 hours.

ethan: oh. well, i'm glad you think so, too. ♪breathe happy febreze... ♪la la la la la. lemonis: how do i get from point a to point b? ethan: we build a trailer that'll hold this and the tent. they're going to be paying for this for a long time. lemonis: how do you sell today, direct-to-consumer? ethan: pretty much. yep. lemonis: online? they will, but with accident forgiveness ethan: yep. everything's ready to go. we just have to be caught up on production, allstate won't raise your rates just because of an accident, even if it's your fault. which we've never been able to get, 'cause i can't float all that money out there. cut! lemonis: are all of your inventory issues exclusively sonny. was that good? line! the desert never lies. related to working capital? isn't that what i said? ethan: almost entirely. no you were talking about allstate and insurance. lemonis: who's handling, like, the ordering overseas? raw materials, picking the colors, i just... when i... let's try again. everybody back to one. coming up with new ideas? so, there's no help? ethan: jules. like, it's me and jules. jules: hi. click or call for a quote today. lemonis: and, jules, what is your role here? jules: to do whatever ethan asks me to do. lemonis: you do the accounting? jules: i do. ethan: the office manager, admin kind of position. jules: and i really wanted to work here. so, i took guiding trips and learned to fly fish and -- lemonis: just for this job? jules: just for this job. but i totally believe in what he's got here, and there's so many opportunities that we miss. we have rafts that are back ordered right now. and we lost sales on the tent because we couldn't fulfill the orders. lemonis: and you didn't have them in stock because you didn't have the working capital

to actually put them in stock, right? jules: right. lemonis: if you don't have excess working capital, it could be just as detrimental to a business that has too much inventory. it's like everything just gets locked. ethan: oh, yeah, stuff gets pretty tight and scary. lemonis: and what about where they would all get stored? like, if you had half-a-million dollars in cash, you could buy inventory, where would it go? ethan: i've got a huge basement that i can store stuff in, and i do have like -- but like, we're working on buying the building across the street. lemonis: how big is it? ethan: it's 55,000-square-feet. lemonis: i'm not sure i understand what ethan's business logic is, of wanting to buy a 55,000-square-foot building to store inventory that he doesn't even have, and furthermore, in a highly capable lexus suv. he's got a building that has a basement. jules: when i started last year, at the golden opportunity sales event. it was ethan and his dad and his father-in-law. get zero percent financing on all 2020 lexus models. lemonis: oh, your dad works here, too? ethan: uh, he did for awhile, yeah. experience amazing at your lexus dealer. my mom kind of got sick again, and so he's been taking a break for a little while. lemonis: your mom okay? ethan: yeah. on all 2020 lexus models. yeah, yeah. it's a small, small market. well, actually, the day i quit my last job we talking maybe 3%. to start this, she got diagnosed with stage 4 lung cancer. kurt: i don't think you should wrap yourself lemonis: oh, man, i'm sorry. ethan: yeah. into one market segment.

and, um, yeah, so, sh-- lemonis: i don't want to alienate hunters um, it was the same day i left my job. or regular fishermen. but, like, they think there's lots of options, still. so, they went back to the drawing board, and they came up with different ways for his company to exist. she's still got a lot of life in -- lemonis: how's she doing now? ethan: actually, she's doing pretty well. so, anyway, he's -- he's kind of taking a little bit of a break. these are the name options. you'll see one of them is smithfly. but then we've got some new guys in from the welding school what we said is, "let's call the holding company something different," and you would that are absolutely top-notch, like, world-class welder. have these different -- rob: right, different brands. ♪ lemonis: you would have smithfly, smithgear, smithwater. rob: i saw smithtech, which i liked, because it's telling people that this is not only a technical, but an innovative company. lemonis: so, what, are these the frames? ethan: yeah, these are the frames that are raw lemonis: we'll come back to you with the catalog, before they go across the street for powder coat. hoping that you guys can rep us in that part of the world. lemonis: so, what does that frame cost? ethan: probably 750 bucks. lemonis: your boat costs about $1,500 to make today, well, guys, thank you so much. ralph: thank you, marc. lemonis: thanks, ralph. and the frame is half of it, at $750? thank you, sir. luckily, we were able ethan: right. lemonis: hey, ethan, i'm going to get everybody's head right about it. to spend a minute with jules, without you, but what i don't like is surprises like that, if that's all right? especially in front of a potential distributor. what do you ultimately want to do here? so, the part that i didn't think went well, jules: me? lemonis: yeah, you. jules: i personally think i would be awesome at the sales. was your comment about, "we're waiting to figure out the branding." lemonis: you do? jules: i'm passionate jules: okay. lemonis: okay. when i left last time, i thought, about the products. when people call and i get the call, not ethan, "hey, we're all in lockstep," but it sounds like i can sell the boat just like ethan can. the three of us are not in lockstep about it.

lemonis: any time i meet somebody that's raising their hand saying, jules: we've already made the name as smithfly, "i want to be part of the sales organization," so people know us for all of these things. tells me that they believe in the product and they want to be part of the future of it. lemonis: the business that brought you to the dance, thank you for chatting. jules: oh, no, of course. smithfly, is not going away. lemonis: see you in a little bit, okay? jules: yes. it's just inviting other people to the party. ethan: it's not necessarily a terrible idea. it's good. ethan: okay, so this is one of the trailers. lemonis: it's good that it's not terrible. lemonis: is it pretty sturdy? i set up a meeting for the end of this month. ethan: yeah, you can climb up there. lemonis: yeah. the trailer looks janky. and we're going to go the headquarters for realtree. ethan: janky? lemonis: see like, there's a lot of sharp edges on this. we want to create a licensing relationship with them, but you can tell it's -- it's homemade. 'cause you just need somebody that does mass welding. where we have the rights to use their very popular prints i give ethan a lot of credit that he's thinking outside the box, and fabrics across the boats, the tents, the apparel, looking for additional products to add to the company. and while that may happen in the future, and we're going to let jules take the lead. it's probably better for him to outsource some of those things and focus on making so, let's get prepared for that. jules: okay. ethan: sounds good. the core products that he has perfect. lemonis: all right. talk to you later. ethan: yep. lemonis: thanks, guys. where's our tent? blow that bad boy up. ♪ ethan: comes already set up. lemonis: hold on, i'm going to time this, 'cause that's important. okay. realtree is the company that specializes [ air pump whirring ] in camo prints for the outdoor lifestyle. it's almost like getting the good housekeeping [ whirring stops ]

ethan: what happened? jules: i don't know. seal of approval on one of your products. lemonis: fuse? ethan: blew a fuse. let's go! jules: oh, look what he's got on! lemonis: try again. lemonis: we're ready! ethan: hey, look at that! so, if i'm spending how many thousands? jules: hey, nice. lemonis: we're here on a pitch. ethan: $1,500. lemonis: $1,500. we've got to be dressed with our stuff, right? you've got to just remember that this changes if the camo print is part of or connected to that product the experience for somebody. they're like, "what the...?" ethan: yep. and it has realtree on it, retailers almost see that as a big check to put it in their stores. lemonis: if you we so, what do you guys have set up here? jules: yeah, so we brought a little bit of -- of everything. lemonis: so, what is this print? big problem to solve. jules: mm-hmm. jules: that is a realtree knock-off. lemonis: huge. ethan: no, it's -- that's the real deal. yeah. jules: oh, it is. ethan: i can go get the other pump, lemonis: this is recent, just made. and we can be pumping both at the same time. ethan: mm-hmm. pretty recently. lemonis: yes, please. jules: [ laughs ] lemonis: it looks good. ethan: yeah, so that's all the new features. where are we? lemonis: what size is this? lemonis: 22 minutes. jules: your size. ethan: i believe that's a large. ethan: it's coming alive. jules: it looks good. lemonis: hold on a second. lemonis: ready? ethan: yep. can you see me now? lemonis: turn sideways, ethan. so, how are you going to explain your appetite for realtree? what is your pitch? ethan: it's easier to paddle from the side. well, more importantly, what is yopitch? lemonis: this thing is awesome. ethan: thank you. jules: no, it's not my pitch, it's his pitch. there's an airbnb for nature in australia he did it. lemonis: well, i thought you were doing it. jules: well, ethan did it. ethan: we're a team. that wants to do, like, 500 of 'em.

lemonis: the fact that ethan has demand from a place she, you know, was talking to the customers and doing other stuff. as far away as australia tells me i didn't want to burden her with that or take her away. so we got to divide and conquer a little bit. that there's an international play here. that's the way i look at it. ethan: high-five. lemonis: i have zero doubt in your ability lemonis: what's to say that people in south america to be creative, but in order to move forward, right, if this business isn't going to be a one-man band, or in europe may not have the same interest? ethan: we wouldn't be able to do this with a real, you do have to lean on people a little bit more. you know, heavy jon boat so, let's divide and communicate, or something like that with a big motor on it. not divide and conquer. lemonis: i still think you could figure out ethan: sure. lemonis: do you want to head up? how to take weight out of it. ethan: sure. absolutely. ethan: uh, no, you can't. lemonis: couple comments on the seat. it is flimsy. ethan: don't lean back like that. lemonis: oh, my gosh. jules: wow. lemonis: and it's a little -- yeah, but you need to be -- lemonis: this place is awesome. you've got to think that somebody's going to want to. bill: bill jordan. jules: hi. hi, bill. ethan: pull it up, pull it up. lemonis: am i holding i'm jules. very nice to meet you. my hand right? ethan: yep. and then just throw the line back. lemonis: i'm annoyed at the fact that ethan put this entire it's really a stop at 10:00 and 2:00 is what they say, presentation together without involving jules. so it's 10:00 on the clock face. lemonis: stop. ethan: yep. a lot longer on that back half. she's the one that is going to lead the sales organization. lemonis: i feel like i fly fish very well. you didn't see my wrist, how about it? i don't know why he would do that. and candidly, if we don't secure the licensing deal, my outfit was right, i was good. i'm going to question whether my investment makes sense or not. ethan: so, we started pretty small, and we started in that niche market of fly fishing where do you think the business can get in the next five years? because it was something i could wrap my brain around. ethan: i've got a plan that i think we could do $20 million in revenue. so we basically took that military concept we're not there now. like, this year's break-even. and designed a set of pouches for fly fishermen

we lost money last two years in a row, so... so they could configure their own gear. brian: do you have any kind of design patent on that? lemonis: you did? how much did you lose? lemonis: and how are you funding that loss? ethan: patents in apparel are very difficult, 'cause they change one thing and it's different. ethan: with duct tape and bailing twine. no. lines of credit. so, that's kind of where we started in 2011, like, i've just not paid myself at all. and then we expanded. but yeah, i mean, i think with the right scale instead of picking up the normal inflatables that were out there, i designed my own, and the right partners, 'cause there just wasn't what i was happy with, out there. you know, we could get to $10 million, $20 million a year so, i found a good inflatable manufacturer. a friend of mine approached me about making a raft in revenue, i mean -- lemonis: okay. 'cause my inflatable supplier made rafts. well, why don't we go back, let's dig into the financials, so, he said, "could we make a raft?" and let's see if we can do something. and i said, "sure, we'll do that." brian: what is the target market there? ethan: okay. yeah, yeah, absolutely. you know, from a first glance, [ train whistle blows ] you think, what is a tent on water? ♪ bill: you almost need to break down each market. you know, fishing, hunting, and see how it fits. ethan: no, that's more like a party cove, kind of beer drinking platform. lemonis: any feedback that people gave, ethan was somewhat dismissive about it. lemonis: how are you, buddy? ethan: good. how are you? lemonis: everything good? i'm standing here watching the realtree folks, ethan: yeah, yeah, have a seat. and you could tell that they almost can't wait lemonis: yeah. ethan: it's great. for the meeting to be over. lemonis: so, did you bring your financial statements? ethan: uh-huh. i don't know what we want to ethan: we'd love to bring something back to you guys and not just be a licensee, if possible. start with or whatever, but... lemonis: let's start with the pnl. lemonis: before we jump into that, can we take a two-second time-out? ethan: okay. lemonis: what year is this? ethan: these are just vendors. this is this year. can you guys just give us a minute? let's huddle over here for a second. these are sales, raft sales here. lemonis: $238,000. ethan: and then there's ♪ shoal tent sales here, was $70,000.

lemonis: so, the business, you think you'll do $400,000 for the year? ethan: yeah. lemonis: $400,000 a year, plus or minus some revenue. what was your revenue last year? ethan: about $250,000. and about $150,000 the year before that. ♪ lemonis: $150,000 of revenue you lost. ethan: $48,000. lemonis: 2017. ethan: $68,000. lemonis: $68,000. and this year, you'll probably do around $400,000. ethan: we could be close to breaking even. lemonis: how much debt do you have today? ethan: $240,000. there's a sheet over here with that. lemonis: liabilities, $36,000 in payables, which are just your vendors. ethan: mm-hmm. lemonis: and $238,000 in loans. ethan: mm-hmm. lemonis: you own 100% of the business today? ethan: mm-hmm. lemonis: i like the product, i like the way it was made. i like the fact to visit all the places we didn't know meant so much.s to get out and go again. that a lot of the parts and pieces are made here. i like the fact that you think about the functionality of it. but we're all going at our own speed. and so, i'd like to make an offer to invest in you at enterprise, peace-of-mind starts with our complete clean pledge, curbside rentals and low-touch transactions. and invest in the business. my offer would be $1 million for 50% of the business. with so many vehicles of so many kinds, you can count on us to help you get everywhere you want to go... again. we've got a deal? whenever you're ready, we're ready for you.

ethan: uh... uh, well, i, the... enterprise. so, um... no matter what challenges life throws at you, we're always here to help baker: when i think party raft, with fast response and great service i think of, how do you put a cooler in it, and it doesn't stop there how do you put cup holders in it? ethan: and we got 100 million views of it, right? we're also here to help look ahead it's a unique product. that's why we're helping members catch up chris: it's a tough sell. bruce: yeah. by spreading any missed usaa insurance payments over the next twelve months lemonis: i think you guys have done a [bleep] job explaining to them why they need to own it. so you can keep more cash in your pockets for when it matters most and that's just one of the many ways we're here to help the military community find out more at usaa.com to help the military community cranky-pated: a bad mood related to a sluggish gut. miralax is different. it works naturally with the water in your body to unblock your gut. puts cash back in your wallet.

earn 5% cash back free your gut, and your mood will follow. on everything you buy at walmart.com... mom! paper towels! ...including things for the science fair. what's in your wallet?

t-now that sprint is a part ofd. t-mobile we have more towers, more engineers, and more coverage than ever before. this is not just a bigger network it's a better one. and now you can get an awesome network at an amazing price. welcome to t-mobile. america's largest 5g network. lemonis: here's the number-one tip when you go into a presentation. impressive. there is one more thing. know your audience, ah... jake from state farm. and go in there excited to talk about them, here's the deal-with the drive safe & save app get them engaged and get their feedback. you'll save up to 30% for being a safe driver. jules: we're really excited to be here, like a good neighbor, state farm is there.® 'cause i know a little bit of your story. when you were going to that first show. bill: mm-hmm. jules: and that you only had what you had in the booth that day and how walmart

and bass pro came in and really, uh, partnered and helped you and developed relationships and that type of thing. those are the things that we're looking at, working with marcus, and then also working with you, so we're excited to be here today. bill: we are, too. glad to have you guys down. lemonis: i love the fact that jules did her research and that she opened up with the founder of realtree, creating this relatability about realtree's history. i could watch his engagement elevate instantly. man: oh, dang. jules: you can even stand up inside. bill: it's stable. man: yeah, yeah. jules: yeah, it's a drop-stitch floor, so it's got that taut when it's inflated all the way. brian: when you show this on a presentation, we're all sitting there thinking, "what is the use of that?" bill: right. brian: when you actually physically see it, feel it, touch it, it changes your perspective. lemonis: and with jules taking over, you can tell that she set the tempo perfectly. jules: this is our wader jacket. brian: tell you, it's some good-looking stuff. man: yeah, i love this. lemonis: she's engaging with them, she's having them try the products. she's not over-talking them, and she's listening. brian: that's a high-end jacket. it's got welded seams. you know, the zippers are sealed zippers.

i mean, it's very well-made. it's a good product. you'll save up to 30% for being a safe driver. jules: so, bill, what do you think? bill: of course, that's a natural. uh, well, i, the... jules: right? bill: i think that right there has just, uh, got a lot of possibilities. so, um... jules: yeah, i think so, too. so, uh -- so, like, we can do some business? we've got a deal, yeah. lemonis: i'm excited. ethan: i am, too. bill: yes. for you. it'll -- it'll be good. jules: [ laughs ] lemonis: all right, my man. ethan: awesome, man. lemonis: glad we're going to do some business together. we had fun. lemonis: okay, my man. i'll see you soon. ethan: thanks. bill: i am, too. lemonis: thank you very much. lemonis: thank you. bill: i'm glad you come down. i'm really glad you came down. ♪ lemonis: thank you so much. bill: pleasure to meet you. bill: thank you for coming down. jules: yes. lemonis: i thought you guys did good today. and you were really good at warming them up. the two of you were talking, he was getting more comfortable. welcome to kenosha! in order to hit the ground running, and i like the fact that she went in for the ask. i brought ethan and jules to my gander outdoors store in wisconsin. and you went into the right person because he fell in love with the product. what i ultimately wanted to find out is, jules: yes. lemonis: so, they love this. do the people that work at the stores and the people that shop at the stores jules: yeah. ethan: it's fun. actually like the products? jules: well, who doesn't love it? what are the things they think could be better, yeah, once you're in -- lemonis: so, let's say and what do they think would sell right away? that you only sell 1,000 of these next year. ethan: the frame we make in-house. it's all one piece, so it's never going to creak okay, so how much is two a day? ethan: it's $1.9 million or squeak or get loose. chris: the seat would worry me a little bit. if we do -- lemonis: and then if you do ethan: but they are the lightest seat on the market. 1,000 of those, how much is that? ethan: yeah, that's $3.4 million. bruce: if the seat breaks, you kind of lose lemonis: so, how much is that in total revenue?

a little bit of credibility with the quality of the boat. ethan: it's like $5.5 million. lemonis: selling two products, you've got to get the seat right. being very focused and having really good partners. lemonis: chris, does it need to have a trailer? jules: amazing. ethan: yeah, it's tremendous. ethan: inflated, it fits in the back of a pickup truck. lemonis: okay. in order for this company to be successful, lemonis: okay. but not everybody has a -- ethan: oh, right, right. it doesn't have to hit a grand slam. it can hit singles and doubles. bruce: it'd have to be a pickup. lemonis: well, let's -- let's take it a step further. and ultimately selling 1,000 rafts a year, what's our primary business? it's not a stretch. so, how is this transporting in an rv? this company could easily do $5 million in the next year. and the margins are good enough that frame's not fitting in there. that this could be a very profitable business. ethan: no. chris: you'd still have to let's just take it slow and make good money. break it, side-to-side. lemonis: we're going to need a frame that is anything for me? jules: anything for you? a collapsible frame as an option. this is what i have for you. bruce: nothing fits right now, so you're really limiting yourself to only be a toy hauler owner lemonis: i think ethan learned that he's got to be a better listener, he has to incorporate jules. that can take the boat. we need to tweak it, we need to get it right. if he can match up his skills with other people's feedback, lemonis: what do you think of the brand name, smithfly? he's unstoppable. okay? jules: yeah. chris: in this, it makes me think about fly fishing. lemonis: all right, let's get cleaned up. i mean, you might pigeon hole. jules: awesome. lemonis: get out of here. would definitely, you know, see it as a fly fishing application. i notice everything's green, green and black. is there different colors? you've got... ethan: we don't do a ton of different colors right now. i mean, it's pretty drab. fly fisherman are pretty boring. ♪ chris: could you see it as a hunting application?

could you see it as camo? ethan: no. this is the jacket we've probably sold the most of, but it's, uh, for fly fishermen. lemonis: i understand that ethan cut his teeth on fly fishing, but in order for the company to truly grow, what is this batmobile? tonifeels like "tron.""... he has to change his thinking. ...two brash millennials use their social-media skills let's get away from singularly fly fishing, and let's think much broader. to build a booming online sock business... so, i thought it'd be a good idea taylor: be sure and like, subscribe, and comment below. to maybe let jules take this one. tell a friend to tell a friend to tell a friend lemonis: what did you say to me when we were together? to tell a friend. lemonis: ...racking up more than $2 million in sales. jules: i would like to sell this thing. then they pretty much blew it. sales? lemonis: there we go. well, how much money did you burn through? perfect. let's go. so, here's your audience. jules: okay. parker: $650,000. well, this is our shoal tent. lemonis: now taylor offer and parker burr -- uh, evolution of the shoal tent was really, um, well, they've come to me for help. parker: a big thing on our mind right now is q4 of this year. sort of very quick. we had to take such a bet to make that happen, so, what we have here is, uh, the initial, uh, model, all the purchasing, all the manufacturing. and it scares us. lemonis: and i think i have a very unique way but we'd like to improve it. to tap in to their talents um, i would ask you to step inside, 'cause i think that's one of the biggest selling points, is really seeing that hard-stitch floor. we can take sides off. if you're the owner, you're going to learn very quickly that one panel at a time

probably makes it a little bit easier. bruce: does it come with a pump? jules: it comes with a foot pump. bruce: a foot pump. okay. baker: for $1,500, it needs to come with a real pump. ethan: i mean, it's a piece of electronics that you're putting in a water boat that like, you know, it's a point of failure that, like, we might be introducing. chris: does it come with any type of anchors? ethan: it does not currently come with anchors. you know, anchors are pretty specific to what water type you're on. baker: the other thing i was thinking was, it's a party raft. so when i think party raft, i think of, how do you put a cooler in it, how do you put cup holders in it? it has speakers? yes or no? ethan: no. we got 100 million views of it, right? it's a unique product. chris: it's a tough sell. bruce: yeah. ethan: i think there were a lot of people that were saying the same thing about a car, when henry ford came out with the car. they were happy with the, you know, horse-drawn carriages, but i think that, you know, long-term, worked out in a different way. lemonis: i'm a little surprised how ethan's handling the feedback from people who potentially could sell his product. instead of him being open-minded and just taking it and processing it,

he gets a little snarky and sarcastic, which is a little embarrassing for me, to be honest. lemonis: i think you guys have done a [bleep] job explaining to them why they need to own it. tomorrow morning, we're going to work on some products, i want to work on some ideas, so i hope you have a sketch pad of some kind. ethan: i don't generally -- lemonis: you don't? jules: we do. we have a sketch pad. we'll get it. all right. lemonis: i didn't feel like ethan really accepted the criticism very well yesterday when we were at gander. so, in order to make sure that he truly understands where i want him to go, we're going to meet again today so that there's no confusion on what my expectations are. what did you guys hear? 'cause i know what i heard, and so, for me, i want to understand how well you processed the feedback. ethan: i think we got, you know, compliments on the size of it and the height of it. it's got a lot of room in it. so, i heard that a lot. i didn't hear a lot of the negatives, though, and i don't know what changes they really suggested. like, i don't know. um, as far as -- i do? lemonis: no, don't help him.

because this is why i think it's best that you and i found each other. because you hear the positives, as you should, 'cause you should get recognition for the solid work that you did. but you don't tend to hear the negatives... ethan: right. lemonis: ...either because you don't want to or because -- ethan: i get defensive. lemonis: or you don't agree. and typically when people get feedback and they don't agree with it... ethan: yeah. lemonis: so, we both heard things. what did -- you heard nothing? ethan: i mean, i -- i, yeah, i guess i just don't remember any of the negatives, so just like, like you said, just kind of... it's 55,000-square-feet. there were some epa issues. somebody poured some chemicals out back here. so, they just need to dig out some dirt. it's just, the bill was going to be, you know, $2 million. so, we've actually come to a -- well, yeah.

honey, did you hear about these new geico savings? mom? you'll get an extra 15% on top of what geico could already save you. can i call you back? your father's been researching our geneology. we're vikings! there's never been a better time to save with geico. switch by october seventh for an extra 15% on car and motorcycle insurance. hey, we lost the wifi password.

do you remember what that is? "ok, so, magnificent mile for me!" i thought i was managing... ...my moderate to severe crohn's disease. yes! until i realized something was missing... ...me. you ok, sis? my symptoms kept me- -from being there for my sisters. "...flight boarding for flight 2007 to chicago..." so i talked to my doctor and learned- ...humira is for people who still have symptoms of crohn's disease after trying other medications. and the majority of people on humira saw significant symptom relief... -and many achieved remission in as little as 4 weeks. humira can lower your ability to fight infections. serious and sometimes fatal infections, including tuberculosis, and cancers, including lymphoma, have happened,- -, as have blood, liver, and nervous system problems, serious allergic reactions, and new or worsening heart failure. tell your doctor... ...if you've been to areas where certain fungal infections are common and if you've had tb, hepatitis b, are prone to infections... ...or have flu-like symptoms or sores. don't start humira if you have an infection. be there for you, and them. ask your doctor about humira. with humira, remission is possible. if you can't afford your medicine, abbvie may be able to help.

if you can't afford your medicine, ♪ ♪all strength ♪we ain't stoppin' believe me♪ ♪go straight till the morning look like we♪ ♪won't wait♪ ♪we're taking everything we wanted♪ ♪we can do it ♪all strength, no sweat cranky-pated: a bad mood related to a sluggish gut. miralax is different. it works naturally with the water in your body to unblock your gut. free your gut, and your mood will follow. what did -- you heard nothing? ethan: yeah, i guess i just don't remember any of the negatives. lemonis: it's a bit bizarre to me that ethan literally has zero recollection about the feedback that he just received yesterday.

and it's either because he's basically tuning everybody out because he doesn't want to hear it, or he's not processing it because he doesn't agree with it. but in either case, not acceptable. can i just borrow this for a minute? jules: sure. lemonis: this has an interesting look to it. ethan: uh-huh. lemonis: these are a lot of feedback notes. this is listening. ethan: mm-hmm. lemonis: this is the difference. and so, ethan, i wanted to give you a little feedback last night of what i got from the team. two comments. one, everybody wanted a camo pattern. it has to exist. the other comment was, what accessories exist, and what accessories can be developed for different categories. and they said that they probably could double or triple the sales if the name was different. ethan: oh, i've actually gotten quite a few compliments from the industry just because smith has the whole, making things with your hands, sort of metal working background. like, that's, you know -- that's my family. lemonis: according to them, you could potentially lose somebody -- jules: the fly part. ethan: right. lemonis: what they want to do, is they want to order all of this for spring. they just want it to be smith.

i would be thinking about name alternatives. ideally, you would land on one thing that can be merged everywhere so you don't have to have multiple skews. ethan: yeah. lemonis: if ethan's company ever has a chance of being successful, he has to understand that he's going to have to accommodate the feedback that he's getting or they're not going to buy the product. and if they do buy it, they're not going to be excited about selling it. but don't think negative. ethan: yeah, yeah. lemonis: constructive criticism is constructive, meaning that it makes things... ...better. i'll see you guys in a couple weeks, okay? jules: yep. lemonis: i'll see you in a couple weeks. jules: thank you so much. lemonis: thanks, guys. ♪ ethan wanted to show me the building that he's contemplating purchasing, and so we're going to head over, and i'll take a look with him. is this the building? ethan: this is the building, yep. lemonis: wow. the building's huge. ethan: it's 55,000-square-feet. there were some epa issues. 40 or 50 years ago, we don't really know when, somebody poured some chemicals out back here. so they just need to dig out some dirt

and then put fresh dirt in it. it's just, the bill was going to be, you know, $2 million. so, we've actually come to a -- well, yeah. but if we do the work ourselves, it can cost a lot less. so, we can probably get it down by a factor of 10, to maybe $200,000 or $300,000. lemonis: i don't like the fact that ethan's like, "oh, it's only $200,000 or $300,000," as if there was just money flowing everywhere. and that's just for the outside of the building, which makes me wonder what the inside of the building's going to look like. holy moses. ethan: he rented this out to a guy who stores like, stuff to flip on craigslist and whatnot. lemonis: are you seeing what i'm seeing? jules: oh, yeah. there's some good stuff in here, too. ethan: yeah. this is just the tip of the iceberg. so, you have to kind of look beyond all this stuff. this is all junk, basically. like, all of this is what we'd clean out and occupy. and then all these windows replaced, everything cleaned up. like, this is kind of the admin space up here. and the sewing section would kind of either be out here on the... i knew you'd be overwhelmed, but we haven't seen upstairs yet. lemonis: okay. um...

ethan: so, this, you put a railing around it, and it's the patio lunchroom. like, there's third floor is right here -- lemonis: is he serious, or is he just messing with me? jules: oh, no, he's serious. ethan: i'm not messing with ya. come up here. so, when we're a $100 million business, the final build-out has that third floor on it, right. now, i mean, how much does it cost to build this out? another million dollars. but then we've got a $13 million building instead of a -- a $5 million of a $3 million. lemonis: why would i want to put $1 million or $2 million in a dilapidated building when i could put $1 million or $2 million in product innovation and inventory and actually sell it and make margin? this is a really simple lesson for most business owners called capital allocation. and capital allocation is a term that a business would use to determine where it is that they want to spend their money. if they have a finite amount of capital, they have to really prioritize where they think that capital is going to get the company the best return on investment. in the case of smithfly, it's product innovation and inventory that the market's going to sell, not warehousing and stockpiling stuff.

he's almost trying to be too big, too fast. baby steps here. i love the fact that it's here, though. that's awesome. ethan: yeah, it's right there. lemonis: it probably would only take six years to get all this stuff out of here. ethan: [ laughs ] lemonis: now that i've slammed on the brakes of building this massive corporate campus, ethan is buckling down and working on ways to upgrade the shoal tent. jules: so, the little shoals is a two-man, uh, raft, but the big shoals holds three, as well as the great big shoals. lemonis: meanwhile, jules is working on sales, focusing on the core products that they already carry... jules: thanks for calling, and we look forward to working with you. lemonis: ...so that ethan can focus on upgrading and developing new products, things that could bolt on to tents and improvements to the current apparel products. i'm looking forward to seeing how everything turns out. ♪

ethan told me that he finished the branding changes and the product modifications based on the feedback he got from gander. i would be lying if i wasn't telling you that i was nervous to see if he actually did it. this looks different. what did you do differently here? ethan: so, this is, like, the new frame, so it'll break down and go in the bottom of an rv. so, this is kind of the prototype of it, so it's not done-done. but basically, it's an erector set and everything comes apart. lemonis: this seat looks different. ethan: yes, the upgraded seat we've been doing. lemonis: ooh, the seat's a lot sturdier. honestly, the fact that you got it done that quick is a testament to how you move. ethan: so, the tent was one of the hot topics that we talked a lot about, right? lemonis: yeah. ethan: so, basically, you know, we talked a lot about color, so i think we can do some cool color toppers, right? we can make something work there. we've got the interior light kit kind of concept. lemonis: all led? ethan: mm-hmm. yep. this is our inflatable drink and cooler caddy that we talked about. lemonis: this is exactly why i took a chance on ethan. you can tell that his technical knowledge really, really got implemented here, and he also used the feedback. i feel like we're making real progress with him.

ethan: so, on the way back from kenosha, jules and i racked up a list of potential add-ons to the word smith. we kind of did some explorations around color and logos. i really like the camp thing. i think that turned out really well. we just came up with what symbolizes each thing. lemonis: love the fact that you put a lot of thought into it. and i think it's important that the customer understand every product they buy from this company has a lot of technical thought behind it. it's where technical thought meets adventure. ethan: i love it. lemonis: so, i would start to say let's build the 500 rafts, and i would say, give 'em to me as fast as you can. ethan: but then we need the building across the street. lemonis: enough with the building. i thought we had already dealt with this. i am concerned about the building. i told you how i felt about it. ethan: i mean, from an equity standpoint, if you can have a piece of property that could potentially be worth $5 million, people, banks, especially, they like to have collateral. lemonis: why do you need a bank to have -- ethan: well, we don't now 'cause you're here. that's -- well -- i mean, what i'm saying is,

i see it as this potential that we could grow into. we could spend 20 years there and still have a great business. $100 million business could be operating out of there. lemonis: but how do you know that? you don't have any numbers to support it. jules: we have been predominantly fly fishing, so the name is smithfly. do you think that would be a problem? kurt: i don't think you should wrap yourself into one market segment. ethan: i see it as this potential gillette proglide and proglide gel. five blades and a pivoting flexball designed to get virtually every hair on the first stroke, while washing away dirt and oil. so you're ready for the day with a clean shave and a clean face. sorry i'm late, everybody, and apologies for my appearance.

you look fine. we were just talking about -- yeah, right. i look like a wanted poster. i didn't have time to get my beard routine in this morning, so... what beard routine? ah. well, the key is maple nectar. gives it that sheen. is there something wrong with my screen? -mnh-mnh. -jamie, what are talking about? you're right, alan. we should be talking about bundling home and auto with progressive, not this luscious mane of mine. [ laughs ] jamie, do you know what a beard is? t-now that sprint is a part ofd. t-mobile we have more towers, more engineers, and more coverage than ever before. this is not just a bigger network it's a better one. and now you can get an awesome network at an amazing price. welcome to t-mobile. america's largest 5g network. the dealer gives you a trade-in offer lower than you expected.y.

will you take it? should you take it? it feels like you're in the middle of some weird gameshow. where did that music come from? wait, is that? what? no. really? next time, start with carmax... and get a custom offer good for 7 days. so you have plenty of time to compare your options. without any of the pressure. the way trade-ins, appraisals, and car selling should be. carmax. for bathroom odors that linger try febreze small spaces. just press firmly and it continuously eliminates odors in the air and on soft surfaces. for 45 days. wow. jim could you ipop the hood for us?? there she is. -turbocharged, right? yes it is. jim, could you uh kick the tires? oh yes. can you change the color inside the car? oh sure. how about blue? that's more cyan but. jump in the back seat, jim. act like my kids. how much longer? -exactly how they sound. it's got massaging seats too, right? oh yeahhhhh. -oh yeahhhhh.

visit the mercedes-benz summer event or shop online at participating dealers. get 0% apr financing up to 36 months on select new and certified pre-owned models.