♪♪ [ chuckles ] alright! [ laughter ] logan: we went with mark today because he shares the same vision as us. we wanted to maintain our stores, and he's just the right guy. he knows texas. he knows dallas. he knows the areas we really want to go to, and i really think he's the right guy. here in salt lake city and i'm going to a business that quite frapgly i never thought i would come to, called harvest lane honey, a multigenerational family that makes bee keeping kits they send to your home. but this is going to be anything but a sweet deal keep your feet stomping when we go over there. they do like to crawl up your legs. >> rhonda -- >> the business has lost $7

million. the business is insolvent. >> maybe i'm not the right person to run this. >> to run the company? >> yeah. i hate it. i hate being the ceo of this. >> you do? >> yeah. >> our deal doesn't look like it's possible. >> i'm marcus lemonis and i risk my own money to help businesses. i love investing in american businesses. >> i just don't want anything to really change. >> it's not always easy but i do it to create jobs, and i do it to make money. >> you have a deal >> let's rock and roll. >> this is "the profit." >> i am mindy waite, i am the ceo and one of the founders of harvest line honey we manufacture all the hives and wooden ware for backyard bee keeping and we sell everything they need from the bees to the equipment to the protective

clothing. >> like most businesses harvest lane honey's business was born out of necessity. >> my husband and my mom were like hey, looets be beekeepers. >> mike and i are the other half of the business. we wanted to pollinate the world. >> we have 34 middle east blue it started in our garage in 2008 it's brown rapidly we're in all 50 states and we're in six different countries throughout the world. >> but as the business grew. so did their debt. and now everyone is looking to mindy for guidance. >> dan and i have been working on price increases. >> glad you're on it then. >> she's the queen bee. >> no doubt about it. >> without a clear plan or a solution in place. they've now called me. >> you've got to not freak out you've got to not freak out. >> we know there's an environmental issue around the world with bees becoming extinct. what i worry about more than that is how generational businesses can also become extinct. >> hi. >> how are you

>> nice to meet you. >> i'm marcus. >> i'm mindy. >> nice to meet you. >> yeah, you too. >> jason. >> jason, nice to meet you. >> are you guys a couple. >> this is my husband. >> so who started this business? >> jason and my mom started it, just getting into bee keeping. we actually sell the bees and we sell all the equipment, everything that you need to be a beekeeper. >> isn't there enough bees in the environment? >> no. >> go ahead. >> the bees have been declining over the years. >> she gave you permission to talk. >> i felt so bad. >> who owns the business >> i do with my mom. so we're 50/50. >> your mom, does she also work here. >> do you want to meet her >> come on down. this is our beginnings, we were selling direct to the consumer there, and we pivoted in 2013 and began selling to retailers, farm and ranch stores across the nation true value is one of them, tractor supply. >> who runs the business >> it would be mindy, she's the ceo. >> you are the ceo, okay. >> yeah. >> and you took that from your

mom? >> she's bossy, that's why she's got it. >> i'm sorry, i heard somebody say something. >> she's bossy. >> who's that? is that the voice of god >> it is. >> you can come out. >> i said she's bossy. >> i'm marcus. >> i'm rhonda. >> nice to meet you. >> glad to meet you. >> so she's the boss, you're not the boss >> i've got more of the retail experience rhonda runs the finances. >> do you call heron da. >> yeah. >> we do in the business. >> i'm going to call you mom while i'm here. >> you can call me mom. >> my first impression of this family is they have a lot of energy and enthusiasm. i want to make sure all this excitement they have is translating into the excitement around the actual business. >> how are you, sir? >> nice to meet you, marcus, very good. >> what is your role here? >> good question. >> is this your husband? >> yeah, it is he does all the legal stuff. >> how long have you two been married? >> not long enough. >> good answer. >> 45 years.

>> 45. should we take a tour? >> love to. >> we'll go on out. >> apparently you're the leader. >> okay, okay. >> we bring our retailers in here when we're setting them up. the number one selling item is this, this is the kit. so it's everything you see here. >> where are they manufactured today? >> in the back. >> so nothing is manufactured overseas. >> our iron tools and our clothing come from overseas but 1 p 100% of the hives. >> margins. >> 50% last year. >> and how much revenue does this generate? >> 7,000. >> what prevents this from being $2 million. >> capacity. >> just capacity so i can clarify what is this thing doing >> this is where the comb happens at so this is underneath that plastic, there's the comb that gets built on there. the bees cue rate that -- >> it smells -- >> scrape it off and eat it. >> you could eat it.

>> your starter kit is your flower, you're trying to lure the customer into the lifestyle. once they see how easy it is they become addicted to it and then they bolt on all the other stuff. how much of your business is online. >> they equate to less than 10% of our sales it's an area we can go into. >> that sucks, we've got to fix that. >> there is no magic formula to how much business they should be doing online compared to what they wholesale, in order for this business to get more profitable i would expect them to do at least 30% of their total revenue direct to consumer that will change the profit profile of this business overnight. >> i want to see the warehouse. >> oh, yeah, yeah. >> wow, this is a lot bigger than i thought it was going to be. >> it's a big facility. >> how many square feet is the who he would billing >> 35,000. we'll go back to the back and show you where all the magic

happens. when the lumber comes in, they'll cut it down into planks. >> can i do one with you >> sure. >> step one. >> step one. >> so from this spot you have an operator that measures it, he comes over here and cuts it to length. >> he's servicing that so it's down. >> so you're stopped. >> correct. >> is this where the qc happens? >> why aren't they qc -- >> they have been good there. >> from right there to right here, something happens to it? >> it bothers me that in the first ten minutes of being in this fabrication shop that you're able to see the inefficiency without a lot of science or study. >> when you first got here you were like, i'd even want to see it piece one, two, three, four,

pop. how did i know which four to get? >> just by the length. >> they're not organized that way. how would i know >> here's our box assembly machine and it should be squared and nailed a couple misfires. >> that wasn't me. >> no, when this happens we'll manually shoot it in the spot. >> efficiency is about taking your time and understanding how to get more out of it. when we stood here and talked about how to crank it up, you can tell they hadn't really thought about it i really love what you guys are doing here. >> oh, good. >> you're providing a lot of jobs, you are kribting to the health of the environment and crops and farmers, and it seems like there's opportunity for enhancements. >> oh, yeah, we're able to put out about 400 boxes a day. >> what should it be >> probably need a thousand boxes a day. >> is there enough to support 2,000 boxes a day? >> the thing preventing you is in the process and equipment. >> absolutely. >> what's preventing you from

having more equipment and the right process? >> capital. >> in this particular case capital is a contributor but it's not the reason things are inefficient. they have to plan things out in a way that doesn't have the employee buzzing around here it's not as organized as it could be. >> can you run a second shift? >> oh, yeah, absolutely. second -- >> do you run a second shift >> not right now. >> it's hard to find employees. >> yeah, utah's labor market is 3%. >> zip recruiter or anything like that? we've had tremendous success with zip recruiter that's something we could look at i'd like to sit down and look at the financials. >> okay, cool. >> so let's just go through '19. $2.5 million of revenue, about $1 million of gross. >> yeah. >> and then your interest and finance charges are half a million dollars? >> that's our biggest problem

isseer servicing heavy debt. it's very expensive. >> the net income loss, after interest expense of $500,000, is just over a million dollars in 2019. >> yeah. >> and then 2020 came and everybody wanted bees. so sales go from 2,498,000 to 4.6 million, total operating profit in 2020 is a loss of 160,000. >> yes. >> $4.6 million, losing $160,000. >> we need to increase our margins. >> that's an option. what would your margins be if you sold more online directly to consumers. >> you'd have like 75, 65% margin but we do so much more with the foot traffic. we need that revenue stream as well. >> do you? >> yeah. for right now. >> if you're losing money doing it, why do it? >> it's just running a charity at that point if you are, right. >> let's jump to the balance sheet. the total assets is just over a million dollars. let's go through the liabilities.

current liabilities of 563. >> personal friends and people that we've borrowed money from. >> the bulk of that is me. >> how much of that is you >> probably closer to 4. >> is that separate from money you've put in in other areas. >> you're closer to 8. >> okay. >> $800,000? >> yeah. >> okay. accounts payable of 1.7. long-term liabilities, $5.7 million. >> our senior lender is -- he's at $2 million. our mezzanine is a balance of about -- >> 3.7 so the liabilities are $8,174,000 and the total assets are a million. so we have a short fall of $7.2 million the business is insolvent. i want to be an investor here,

but i can't invest into a capital structure that has no end. it's hard, isn't it? >> it is hard because i feel a lot of responsibility to that because it's like they listen to me so i made the wrong decisions. >> she can't take the full responsibility. >> tell her that. >> we all went into this thing with eyes wide open. >> i know. >> i genuinely want to be a partner here but we've got to figure out how this debt's going to get reworked. >> okay. >> i can invest if we can get it cleaned up we have three real problems. we have the past due payables of 1.4 with the overseas supplier, we have the $2 million of let's help out a neighborhood grant money, and then the third, is the subordinated lender. >> lenders keep putting in more money. they're trying to fill the bottomless hole, thinking if money is going to solve everything. >> and non-small business world i'm sitting down with the two lenders and i'm saying, okay, what do you want to do change the name to who gives a damn honey, what do you want to

do if something doesn't change, the business is closing. i think the lenders that are here already know whether they're telling you or not that they're in trouble. >> they have to be, they're smart people so they don't let on to me that way. >> why do you think they are that way >> they don't want me to bankrupt and walk. >> that's the issue. i'd like to coach you through the plan of action to solve the debt problem. >> okay. >> i don't know that i can solve $7 million worth of debt but i know it's worth a shot you havea good business with a lot of interest, with a lot of revenue being generated out of it and $7 million is a daunting number, but to walk away seems like the easy path and i love the challenge, to be honest. >> so we'll meet tomorrow, and we'll try to figure something out, okay? >> okay. ♪

>> here you are. any luck in gathering up the loan documents >> this is everything. >> yes. >> these folks >> these folks here. >> i'll go study this and see you in a little bit. ♪ you know i just might be a hero sometimes ♪ ♪ i'll be strong when you're weak ♪ ♪ i even might cry ♪ >> what i'm trying to do is map out what the liabilities are, the total is just over 7.# million, the business is 100%, no questions asked, insolvent. no question. >> so what i wanted to walk you through is how i want to approach this whole process. over here is loan number one this is senior lender, interest only, due in 2024. loan number two is solt lake city based, unsecured loan

number three is the current supplier, 1,290,667. past due payables, credit card 105. >> yes. >> related party debt, 563 i can't remember what that was. >> it's like rhonda -- >> so that total is 7.2 million. it's probably going to have to get converted to equity or something. >> because of the amount of debt there's a tremendous amount of cash that's leaving the business because it has to service the interest expense on it in order for this company to grow you have to limit the amount of crash leaving the business, and the only way to do that is to minimize the amount of debt it has i'd like to go back to the current lenders that make up the debt, and ask them to -- into equity, essentially turning them into shareholders of the business you turn in your note, and you receive shares back in exchange. >> you're so buried in all that behind you, that you can't see straight. >> it's sickening.

i don't like debt. we weren't in debt before we got into it. >> why did you allow it? >> because mike and rhonda are in it so deep. they have so much money invested got to keep moving forward can't stop because i don't want them to lose money, i feel responsible, you know, it wasn't my idea to get us down this road, we wouldn't be here. we wouldn't be $7 million in the hole. >> you don't go into business thinking you're going to go into debt we'll make money and make a great product but a lot of heads are counting on you, and families to make the right decisions. >> my signature is on every piece of paper i'm 50% to blame on it. >> noebs's fault but it's a reality. >> yeah. >> it's a matter of digging out of the hole. ultimately the buck stops with you with the inefficiency of the building. >> correct. >> what has changed in the warehouse. >> he took box production from 150 boxes up to -- they can push to 400 right now. >> who's in charge of production ultimately >> me. >> why are you answering >> i don't know.

>> because i probably just look to her and she just fills in the blanks. >> why are you looking to her? zblus habit. >> aren't you in charge? >> i'm wondering if that's part of the problem here. >> it is because i feel like i have to answer for everybody because they always look to me it's just -- they ask for my help. >> she's overwhelmed she's got too much. >> let's get to that the biggest problem i see here isn't that mindy wants to control everything, because that's what a leader, their instincts are to do that the biggest problem is that you guys allow her to. >> they make me. >> they made you do it >> well, that's how i feel. >> coming up, i'm literally taking my body and immersing myself into a giant beehive. >> you've got to not freak out you've got to not freak out. lord jesus, please -- -- if you're looking to take your business to the next level, log on to theprofitcasting.com

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the biggest problem that i see here isn't that mindy wants to control everything. the biggest problem is that you guys allow her to. >> they make me. >> they made you do it. >> that's how i feel. >> so speak up. >> so when you look at me for answers if you're not clear on what you need, then i have to do it because i feel like i have to keep it going and it's an immense amount of pressure for me. >> this is real. what's the problem, rhonda >> we each need to get back to taking our own pieces. >> bigger responsibility and let her do her job and we can do our job. >> jason's got to focus on the operation and we have to get more out in that square footage. >> what's the number one deadweight that's choking everybody right now in this building >> our debt. >> that's it. >> the debt is keeping us -- >> what's your job.

>> to get it off the books. >> there you go. >> the whole gateway is on that wall and i know you can do it. you've got this. >> okay. >> hey, guys, can i just grab you for like two minutes in order for me to understand how this debt is going to be handled i have to figure out how to improve the profitability of this business. if there's things that are missing that prevent the production from meeting demand, we have to fix those, or it doesn't matter what the debt gets down to the business won't be able to pay anything so the number of orders of retailers wanting the awesome product that you guys make is stupid part of the problem is, is that i'm hearing we can't produce enough to fulfill all the orders so i need you guys for ten minutes to show me how to make one box and i want to time it.

remember, we're trying to improve output okay so we've got to be really efficient. >> that one's done. >> it took 5:43, to make that box. if we had the right machinery and the right labor, how much time could we trim off of that >> at least 2:00. >> let's say a minute. let's be conservative. for every minute you pick up, how many more boxes should you be able to make? >> 150 more. >> 150 more. >> when you multiply what they'll pick up on a daily basis by the number of days they produce they would make an additional 36,000 boxes a year when you sell direct to consumer, they sell those boxes for about $25. that's close to $9 hur00,000 in

additional revenue that's $450,000 of gross profit, owl that's generated by just one minute. >> thank you >> you ready for this? >> sure. >> we're going to feed some bees. >> keep your feet stomping when we go over there. >> why's that? >> they do like to crawl up your legs. >> rhonda. why didn't you tell me this before we came >> this feels like there's got to be some sort of like line we're crossing here, and i am fearful because i don't know what the repercussions are of getting stung by a thousand bees at the same time. >> do you want to take your jacket off first >> okay. >> because it's one more layer the bee has to get through. >> but in order for me to ask the business to make certain changes that they have fear in, i have to prove to them, or at least fake it, that i'm going to

do it. >> this is as fun for you watching me do this as me talk about your balance sheet. >> we want to check every possible opening. >> they'll just get in and you'll be like is that bee on the inside with me >> who thought this was a good idea >> i'm literally taking my body and immersing myself into a giant beehive. so am i scared yeah, i am, to be honest. >> you got to not freak out. you've got to not freak out. you've got to not freak out. lord jesus, please. >> this is the bee yard. one of them. >> these are the boxes we make, right? >> yes. >> all right, that top's going to come off. oh, my gosh -- >> you good? breathe. >> am i good no, i'm not good. >> breathe. >> but i'm here. >> let me smoke them to calm them down. >> look at the honeycomb on that. >> they're really driving. >> i'm sorry to ask this

question and i'm probably the only person in america that doesn't know the answer. where does the honey come from >> nectar. >> so they flower and take out -- >> they get pollen and nectar as well. >> they swallow it. >> they'll bring it back and regurgitate it. >> honey is thrown up pollen. >> literally. >> and you guys thought it was a good business. well, i'm going to buzz off. mindy asked me to go over to a local retailer with her so i could see how the product lives in a retail environment. >> oh, wow, it's a good display. >> very nice display this is one of the 12 foot displays. >> a 12 foot display of any brand in america is a big deal in a retailer so you see brands like de-walt and honda and you look at harvest and they have 12 feet. i'm surprised how much space they've given you. >> yes. >> which means they're getting

good sell through. >> yes. >> check it out. >> aren't they cute? >> do you make boxes for this? >> could you. >> yeah. >> so you really could have a chicken division and a bee division. >> absolutely. with the same materials there's an opportunity to grow the business with the same retailer. to me, i'm thinking how do we make more money. the fact that you brought me here gets me more excited about the opportunity to grow the business having the distribution already set up with the retailer like this means the relationship is there. what's dawning on me right now is i don't think they're utilizing any form of commerce other than just selling and relying on retailers to sell it. >> we need to sell more goods online direct to consumer to realize higher margins. >> i'd like to turn this room into your online fulfillment center we're going to crank this website up, pull off the things that you want to sell online. >> that's fine. >> in today's day and age it's okay, even if you are a wholesaler, to other companies, to have a direct to consumer

distribution channel you have to say to yourself, you wait a second, how am i only doing $45,000 a year in business with all this product. i've hired a third party appraiser to give me some idea of the range of what the business is worth. it's an outside source that can give objective information based on data they collect from third parties. how are you, i'm marcus. >> ryan hutchings. >> harvest lane should want a valuation higher than the amount of debt that's on the books. >> did they give you everything you needed from a financial standpoint to come up with your assessment >> yeah, they did. >> let's head back. >> if the debt today is 7.2 million, you'd want a value that's higher than that so they can have comfort there's equity in their business. >> this is our shipping department and you'll see product all the way down. >> if the valuation comes in lower, that essentially means the lenders really own the business. >> all right, let's get to the punch line here. what number am i putting in

here i need this number to be -- i need that number to be big coming up -- >> maybe i'm not the right person to run this i hate being the ceo of this before we talk about tax-smart investing, what's new? -audrey's expecting... -twins! ♪♪

we'd be closer to the twins. change in plans. at fidelity, a change in plans is always part of the plan. ♪ ♪ ♪ ♪ ♪ ♪ hey google, turn up the heat. ♪ ♪ ♪

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which can lead to dehydration, and may worsen kidney problems. show your world what's truly inside. ask your doctor about one-weekly trulicity. let's get to the punch line here, what number am i putting in here? i need this number to be -- i need that number to be big. >> we're looking at a range of about $8 million to $10 million from enterprise perspective. >> 8 to 10 million. >> i almost fell on the ground it gives mem light at the end of the tunnel that says there's value in this business. >> i didn't know what to expect. >> is that a good number or a bad number. >> the 10 would be good.

>> obviously. >> well, obviously, more is better more's better. >> the way you ultimately would look at this is that you would take the enterprise value the evaluator provided, the $8 million to $10 million and you would subtract out the debt that's there in this particular case looks like it's anywhere between $1 million and $3 million approximately. that gives me hope i don't know what it's going to mean for the family. the debt holders are hurting their own equity value. >> absolutely. >> thank you so much for coming. >> see you marcus, see you mindy, see you jason. >> you've got to go into every one of these things now that you have that valuation. >> be technical. by you converting your debt it will take the burz off the company. >> what burden. >> of servicing. >> how much is it? >> $40,000 a month. >> i slow it down. make it simple if i didn't pay you $40,000, i

would invest that into inventory and we turn our inventory seven times a year and that's a wholesale number so 40,000 of inventory is 80,000 of wholesale revenue if i turn it seven times a year. >> 560. >> that's how much i'm able to generate additionalrevenue every time you relieve me of $40,000 of interest. following. >> yeah. >> have the answer to his question before he asks it. >> the more prepared. >> that we're investment. >> you guys have your stuff together >> so it's been about two and a half weeks since i was in salt lake, i'm excited to find out how we're going to move this business forward. >> hi. >> hey. >> how are you

>> good. how about you? >> you're cheery today. >> i am. >> do you know why we're here? to have dinner to meet, to chat. >> well, i came to get an update so lender number one has to extend their loan. >> yeah. >> have you not told them that yet? >> we've talked about -- i've told them that, yes, that we need to do something as far as extension. >> so what has to happen at this point, mindy is, as the ceo of the business, we're at a point where you have to be super definitive and very matter of fact with people lender number one, i need you to extend two more years, and do something with the rate for us to avoid bankruptcy. >> okay. >> have you had that to them >> no, i haven't had it that direct with them, no. >> okay. why didn't you have those conversations in the last two weeks? >> well, i mean, i guess i didn't -- i mean, i figured that we were waiting for lender number two to agree to, you know, what they were willing to

do. >> i'm not sure where we are today compared to like two weeks ago. this is uncomfortable for you, so you're staying away from it, or you're just going to hand them your business because you don't want to, what, have conflict >> what do you suggest >> i want to know what you think we should do you're the ceo. >> well -- >> i'm following -- you're our leader. >> and maybe i'm not the right person to run this. >> to run the company? >> yeah, you want my honest truth, i hate it, i hate being the ceo of this. >> you do? >> yeah. >> i don't know if you're qualified for this there's some things you need to step over and do i know you can do this. >> mindy, you're in charge because you're kind of an in charge person. >> make no mistake about that. >> i know you have it in you and i'm not sure what's holding you

back do you believe in the business >> oh, yeah, absolutely. >> tell me that. because remember one thing, like i have a checkbook too, and you haven't convinced me that i should invest. never once in our journey have told me that it would be a good investment for me. >> we believe in the company and we feel like with the additional working capital and the restructure that we're doing, that we can take this company to a $30 million company, what can you help us with >> good news is, i can write a check. >> okay. fair enough. >> ding. okay, my offer is $1 million for 33% of the business. contingent on you getting the debt down to a final balance of $4 million. >> okay. >> and no more than $300,000 can leave the company with interest expense. i expect the e-commerce room to be up and going. i'd like to see new products developed and i expect the process in the back to be up and going. >> you're valuing it at $3 million?

>> do you disagree >> i think it could be higher. >> what's your counteroffer. >> my counteroffer is a million for 25 because we'll build this brand it's not just going to be a bee keeping brand. we have a wood working shop that's barely being touched on what our potential cure. we have a lot of other products we can go into. >> she's doing better. >> much better. >> i'm listening. >> we're going to work with your debt and we're also going to continue to build the brand on our e-commerce, so we're doing a million dollars of sales in house to retain the higher margin if we can hit 30 million at 25% that's a pretty good return. >> i'm not accepting 25% i'll settle at 30. do we have a deal? yes or no. >> we have a deal. >> we have a deal. okay. >> this is the moment where you need to be the leader for your family, and i know you're capable of doing it. if i wasn't sure of it, i wouldn't do this. >> i will do that.

>> i feel really good, really confident. there's a pathway of being able to move forward so we're excited. >> okay. >> thanks, marcus. >> hey, how are you? good i feel like i've got a plan moving forward. >> wanted to talk to you about a few things. >> i've got difficult roads ahead with this. >> take care, thank you, bye. >> marching orders. >> in the back the one part of their business i didn't fully understand is that they actually sell bees and they bring them in from farms around the country. they come on the back of a tractor trailer and you can see them swarming around. >> that's 10,000 or 12,000 in each package 930 packages. >> remember that fear i had in the beginning, that fear still exists today.

>> how much total inventory is on here? >> 111,600. >> how much will you sell this for. putting in the labor and packaging. >> we don't make margin on this as far as good margin. >> do you make any margin? >> not great margin. >> why do you do this? >> this is our niche. >> this is your loss leader. >> you've got to make the right margin on everything else that you do. >> absolutely. >> pull me up. >> i think as i spent this whole time with this family i now realize that my temperament will determine my fate out here honestly, i'm relaxed. the calmer i am, the more relaxed i am, the less the likelihood is that i'm going to get stung. i guess it's no different than thinking about business. the more you slow down and you understand your numbers and you have a good grasp knowledge of them, the more you're going to be able to have control of your business it's kind of a pretty simple correlation. coming up, what we're really down to is the punchline for our

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i'm back at harvest lane honey today, i have a bit of excitement in one sense but i have a bit of nervousness. >> can we start in the warehouse? >> yes. >> let's go. >> the number one thing i wanted to do is get inside of that production facility and fix the production process and ultimately drive margin through efficiency is it done i don't know but i want to take a look. the last time we did the stopwatch, if you'll remember, it was 5:43. >> yeah. >> if we did it today, what would it be? >> 3:00. because of the two machines that we were constrained on these two machines became are the bottleneck, we talked to our good supplier, could you cut it for us, it comes in and skips these two machines which is really helpful these two machines can be used to build -- >> like this stuff. >> machines two and three were really slowing things down they went back to the raw lumbar per provider to ask them to cut the width and the length for the

boxes before the food even arrives. while it may have cost them 10% more they were able to save 30% of time by not having to touch those two other machines, going through the production area you can see and feel the energy of how different it is. they set up an e-commerce fulfillment room. >> new products. >> we've got the chicken nesting boxes, the bunny goes into this one. the female would nest down in here and lay their babies. so you do the chicken. >> the chicken. >> isn't that too small? >> every morning she'll go in there. >> she'll need a little nest to lay her eggs. >> chickens are a big business we've already sold 2,000 of these. i think this could be a million dollar business between the both of them. >> cost to make it >> around $3 we're selling it for $7.50 to retailers. >> we've got this in the retailer. >> from the last time i saw you.

>> yes. >> i'm super impressed with the changes they've made in their business but there's one big issue that needs to get resolved and that's getting the $7.2 down to 4 million and getting the interest expense down by several hundred thousand dollars as well if those two things can't be done, then the business isn't going to make it no matter how many processes they improve. >> one thing i did want to mention in walking through the warehouse is that i want to be sure that we don't have a labor problem. we know the job market's tight, right, and so rather than going fishing in the ocean which is a little how it feels like today, you're casting annette over salt lake city and the surrounding areas hoping somebody catches. i had talked to you about the tool that i use in my other businesses, which was zip recruiter. there's a science behind what they do. you'll get a lot of applicants, and that's the success rate we've experienced. i've experienced it in my other businesses. >> yeah, good. >> all right so let's jump in to the second

most important thing, after people. >> the debt. >> what we're down to is the punch line for our entire time together we started with $7.4 million. >> yeah. >> what did the debt have to get down to? read off what our deal with. so 3 million mouse convert from wherever, loans must be extended rates need to be reduced. >> first objective convert how much. >> 3 million. >> talk about. what happened with lender number one. >> he will reduce interest to 6%. >> that's high-five number one. >> lender number two. >> he'll convert a million dollars of debt into equity. >> you've got a million dollars. that's one of the three. >> okay. >> payable he'll convert 820,000. >> so now we're at a million, 820. >> between the family, it's 599,383. >> so the grand total now is -- >> 2,648,313.

>> you're at 2,648,000, 352,000 short. where -- >> number one will be at 120,000 and lender thunder storm two will be at 291. >> what do those two add up to. >> 411,000. >> you're 111,000 away on the interest and you're $351,000 away on the debt conversion. right now we're short. our deal doesn't look like it's possible. >> the profit is sponsored by zip recruiter, the smartest way to hire.

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so you're $111,000 away on the interest, and you're $351,000 away on the debt conversion right now we're short. our deal doesn't look like it's possible we had a deal. >> yes. >> and we didn't get there and i do think you've done a lot to get the business much

healthier. but if you shoot a free throw and you miss it, and you got pretty close you still didn't make it. i really likethis business i do. >> good. >> i think that the biggest thing that needs to be solved is the vendor overseas. i think clearing the deck of your payables is a huge accomplishment if you handed him $500,000 would he call it even? >> yeah, i'll call him in my office. >> sure. >> getting the import distributor and their payables off the books is a huge milestone for the company and it gets us much closer to the $3 million debt reduction i was looking for. but it also does something else. the better the relationship with the vendor, the more freely the product will flow and the more freely the product flows, the more opportunity there is to generate revenue. >> this business has a ton of potential, steve and you've been

a big part of that and i will tell you your product not being here is actually hurting the business so if you and i are going to be partners in this business together i want to make sure that we're buying product that you're getting paid on time, and that we don't ever have to have this discussion again. >> that was my hope as well. >> so here's what i'd like to propose. you'll convert 820,000 i'll write you a check for $550,000 i'll provide you a letter of credit of $400,000 and you'll give the company 90-day terms. does that sound fair to you? >> makes sense to me. >> deal? >> deal. >> okay, my man, thank you so much. >> i appreciate the line of credit we hadn't talked about. >> i didn't think about it until right now. >> i always knew throughout this process that there would be a moment in time where i would have to get involved but i wanted mindy to prove for herself that she could get us almost all the way there and it's okay to lean on somebody else, to punch you over the goal line. >> my investment now sounds like

a $650,000 of cash plus $400,000 no letter of credit so i'm expecting 25%. does that work >> yeah, that works. >> we're good. >> is this our third handshake >> my new deal is to invest $650,000 of cash, and $400,000 in a letter of credit. my total exposure is 1,050,000 the amount of cash actually leaving my pocket today is only $650,000. >> this feels to me like a better solution. >> it does to me too i mean, it -- >> i like this -- this has been an integral part. >> this was the answer you brought the answers, and that's -- >> you guys brought the answers, i just helped you go down path i think that's really -- the four of you did the work you made the changes. >> what i am happy to tell you is that the business today is on fire their revenue is up about 90% in

the last 30 days over the same time last year what that tells you is that with the right amount of working capital, debt being removed from the business, a process being installed on the manufacturing lane, and them having a clear focus on what their job is, well, the sky's the limit with this business. here's a look at next week's all new "the profit". >> can we take a couple out. >> absolutely. >> i'd like to see what they look like. >> try the salad pizza, it's so good. >> is this for real? >> yeah. >> okay. >> you don't eat a salad pizza on your first degenerative arthritis, fyi. >> did you >> no, it's really messy. >> that's a fork and knife experience. >> no, no, no. >> there you go, he's folding

it. >> it's not my speed but i can see why people would really like it what i like is the innovation, you've taken a commoditized product and you've put your own spin on it he's trying to separate himself from everybody else, whether it's putting salad on top or using a certain kind of crust and that may be the reason this business has lasted 20 years, she's set himself apart from everybody else. >> that's our made from scratch gluten free. >> travis actually pretty good. >> thank you. >> this is delicious. >> thank you. >> what does this slice sell for? >> $5. >> what does it cost you to make a slice? >> i'm not a numbers guy. >> if you want to answer accurately unit cost, i don't do portion control so i don't have that --

>> food costs are high. >> continue to be frustrated that year after year, business after business -- they know we're coming, but they don't know their numbers i would understand that if this was a complicated business with a thousand skus or some massive manufacturing process, this is pizza. seems kind of irresponsible. the profit, all new next tuesday, cnbc, get yours. >> if this is not going to work for you or for you, now is the time to know it. >> tonight, on the profit. >> my name is her plan goes haywire when her manufacturer backs her into a corner. florence: i'm not changing any of my price. lulu: ah! lemonis: if i can push her to unlock her creativity... is everything black? lulu: i don't love color. lemonis: ...stabilize her supply chain... suuchi: this is designed to be a high-efficiency production house. lemonis: ...and increase the perceived value of her product... woman: i don't think it looks expensive. lemonis: ...she won't be able to cover her hide.