and what jill should have said to me from the beginning is, "i'd be more than happy to have you invest in my business, but ultimately, i'm going to make 100% of the decisions and i'm going to listen to you, but i'm not actually going to execute it, even if i agree with it. do you want to still invest?" ♪♪ ♪ it doesn't matter where i've been ♪ ♪ it doesn't matter how i got this feeling ♪ ♪ i'll be alright ♪ lemonis: i'm here in salt lake city, and i'm going to a business that, quite frankly, i never thought i would come to. it's called harvest lane honey, and it's a multigenerational family that makes beekeeping kits that they send to your home. but this is going to be anything but a sweet deal. rhonda: keep your feet stomping when we go over there. they do like to crawl up your legs. lemonis: rhonda. [ laughter ] hol-- the business has lost $7 million. the business is insolvent. mindy: maybe i'm not the right person to run this.

lemonis: to run the company? mindy: yeah, i hate it. i hate being the c.e.o. of this. lemonis: you do? mindy: yeah. lemonis: 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. woman: these people are here because they care. lemonis: it's not always easy, but i do it to create jobs, and i do it to make money. do we have a deal? let's rock and roll. man: yeah! lemonis: this is "the profit." ♪♪ mindy: i am mindy waite, and i am the c.e.o. and one of the founders of harvest lane honey. we manufacture all the hives and woodenware for backyard beekeeping and we sell everything that they need from the bees to the equipment to the protective clothing. lemonis: like most businesses, harvest lane honey's business was born out of necessity.

mindy: my husband and my mom were like, "hey, let's be beekeepers." rhonda: mike and i are the other half of the business. jason and i just wanted to pollinate the world. mindy: we have 34 employees working for us, but it literally started in our garage in 2008. from there, it's just grown rapidly. and we're in all 50 states and we're in six different countries throughout the world. lemonis: but as the business grew, so did their debt. and now everyone is looking to mindy for guidance. mindy: dad and i have been working on price increases. jason: glad you're on it, then. she is a queen bee. there's no doubt about it. lemonis: but without a clear plan or solution in place, they've now called me. you got to not freak out. you got to not freak out. now, 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. mindy: hi. lemonis: how are you? mindy: nice to meet you. lemonis: i'm marcus. mindy: i'm mindy. lemonis: nice to meet you. mindy: yeah. jason: jason. nice to meet you. lemonis: jason, nice to meet you.

mindy: yeah. lemonis: are you guys a couple? mindy: yeah. this is my -- this is my husband. lemonis: so, who started this business? mindy: jason and my mom started it just getting into beekeeping. we actually sell the bees and we sell all the equipment, everything that you need to be a beekeeper. lemonis: i mean, isn't there enough bees in the environment? mindy: no. go ahead. jason: so the bees have been declining over the years. lemonis: she gave you permission to talk. clear that up, okay? mindy: i felt so bad. lemonis: so who owns the business? mindy: i do with my mom. so we're 50/50. lemonis: so your mom, does she also work here? mindy: yeah, she is here. do you want to meet her? lemonis: i would love to meet her. mindy: yeah. come on down. this is kind of 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. lemonis: who runs the business? jason: well, that'd be mindy. she's the c.e.o. lemonis: oh, you are the c.e.o., okay. and you took that from your mom, or your mom gave it to you? how did that work? rhonda: she's bossy. that's why she's got it. lemonis: i'm sorry. i heard somebody say something. rhonda: she's bossy.

lemonis: who's that? is that the voice of god? rhonda: it is. lemonis: you can come out. [ laughter ] rhonda: so i said she's bossy. lemonis: how are you? i'm marcus. rhonda: i'm rhonda. lemonis: nice to meet you. rhonda: glad to meet you. lemonis: so she's the boss? you're not the boss? rhonda: well... mindy: i've got more of the retail experience, so rhonda runs the finances. lemonis: do you call her rhonda? mindy: yeah. rhonda: we do in the business. lemonis: i'm gonna call you mom while i'm here. rhonda: you can call me mom. lemonis: my first impression of this family is that they have a lot of energy and a lot of enthusiasm. i want to make sure that all this excitement that they have is translating into the excitement around the actual business. how are you, sir? mike: good. nice to meet you. lemonis: how are you? nice to meet you. and what is your role here? mike: good question. lemonis: is this your husband? rhonda: it is. he does all the legal stuff. mindy: yes. lemonis: how long have you two been married? mike: not long enough. mindy: oh, good answer. lemonis: aww! [ laughter ] rhonda: 45 years. lemonis: 45. shall we take a tour? mindy: love to. alright, well, go on now out. lemonis: apparently you're the leader.

we'll follow you. mindy: 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. lemonis: where are they manufactured today? mindy: in the back. lemonis: so nothing is manufactured overseas. mindy: our iron tools and our clothing, they come from overseas, but 100% of the hives are made here. lemonis: what are the margins on this sku? mindy: were about 50% last year. lemonis: and how much revenue does this sku generate a year? mindy: like, i'd say $700,000, $800,000. lemonis: what prevents this from being a $2 million sku? mindy: capacity. lemonis: just capacity. mindy: capacity. lemonis: and just so i can clarify, what is this thing doing? this is where the action happens. mindy: so this is -- underneath that plastic, there's the comb that gets built on there. and so the bees create that comb. lemonis: oh, my gosh, it smells. mindy: i know. it's good, huh? mike: just scrape it off and eat it. mindy: you could eat it. lemonis: your starter kit is your flower. you're trying to lure the customer into the lifestyle. mindy: yes. lemonis: 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? mindy: they equate to, like, less than 10% of our sales. it's an area we can go into. lemonis: that sucks. we 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. mindy: oh, yeah. yeah. ♪♪ ♪♪ lemonis: wow. this is a lot bigger than i thought it was gonna be. mindy: it's a big facility, yeah. lemonis: how many square feet is the whole building? mindy: 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. lemonis: can i do one with you? man: sure.

♪♪ ♪♪ lemonis: step one. mindy: step one. jason: so from this spot, you have an operator that measures it, and then he comes over here and cuts it to length. mindy: he's actually servicing that, so it's down. lemonis: so you're stopped. jason: correct. lemonis: is this where the qc happens? why aren't they qc'ing it along the way? mindy: it may have been good there, but by the time they get here -- lemonis: you mean from right there... to right here, something happens to it? it bothers me that in the first 10 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, "um..." i'd even want to see it be piece 1, 2, 3, 4, pop. how did i know which four to get? jason: just size and length.

lemonis: but they're not organized that way. how would i know? jason: this is our box assembly machine. and it should be squared and nailed. and that's -- well, couple misfires. some of the nails -- lemonis: that wasn't me. jason: no, when this happens, we'll manually shoot it in the spot. lemonis: efficiency is about taking your time and understanding how to get more out of it. but when we stood here and started talking about how to crank it up, you can tell that they hadn't really thought about it. i really love what you guys are doing here. you're providing a lot of jobs. you are contributing to the health of the environment and crops and farmers. but it seems like there's opportunity for... enhancements. mindy: oh, yeah. we're able to put out about 400 boxes a day. lemonis: what should it be? mindy: probably need 1,000 boxes a day. lemonis: is there enough demand to support 2,000 boxes a day? mindy: yeah. lemonis: the thing preventing you from going from 100 to 2,000 is in the process and the equipment. mindy: yeah. absolutely. lemonis: and what's preventing you from having more equipment and the right process? mindy: capital. lemonis: in this particular case, i'd say capital's a contributor,

but it's not the reason that things are inefficient. they have to be able 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? mindy: oh, yeah, absolutely. lemonis: do you run a second shift? mindy: not right now. jason: no. it's hard to find employees. mindy: yeah, utah's labor market is 3% unemployment. lemonis: have you ever used a tool like ziprecruiter or anything like that? i've had tremendous success with ziprecruiter. i think that's something we can look at. i'd like to maybe just sit down and look at the financial. mindy: okay, cool. ♪♪ lemonis: so let's just go through '19. mindy: yeah. lemonis: $2.5 million of revenue, about a million dollars of gross. mindy: yeah. lemonis: and then your interest and finance charges are half a million dollars? mindy: that's where our biggest problem is, is we're servicing heavy debt. it's very expensive. lemonis: okay, the net income loss after interest expense of $500,000

is just over a million dollars in 2019. mindy: yeah. lemonis: and then 2020 came and everybody wanted bees. sales go from $2,498,000 in 2019 to $4.6 million. total operating profit in 2020 is a loss of $160,000. mindy: yes. lemonis: $4.6 million losing 160 grand. mindy: yeah, we need to increase our margins. lemonis: that's an option. what would your margins be if you sold more online directly to consumers? mindy: you'd have like 75%, 65% margin. but we do so much more with the foot traffic. we need that revenue stream, as well. lemonis: do you? mindy: yeah, for right now. lemonis: i mean, if you're losing money doing it, why do it? mindy: true. true. it's just running a charity at that point, if you are. lemonis: yeah. let's jump to the balance sheet. mindy: okay. lemonis: so the total assets is just over a million dollars. let's go through the liabilities. current liabilities of $563,000. mindy: personal friends and people that we've borrowed money from. lemonis: okay. rhonda: the bulk of that is me.

lemonis: how much of that is you? jason: $300,000. rhonda: probably closer to $400,000. lemonis: is that separate from money you've put in in other areas? mindy: you're closer to $800,000. rhonda: okay. lemonis: $800,000? mindy: yeah. lemonis: okay. accounts payable of $1.7 million. long-term liabilities -- $5.7 million. mindy: so our senior lender is -- he's at $2 million. and then our mezzanine is balance of about... lemonis: $3.7 million. so the total liabilities are $8,174,000. and the total assets are $1 million. so we have a shortfall of $7.2 million. all the things that we talked about today, it almost seems inconsequential. the businesses is insolvent. ♪♪

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so where did all the money go? mindy: into inventory and financing losses really is where it came in at, is growing the business. lemonis: you understand that what you are saying without realizing it is that the business has lost $7 million. mindy: yeah. lemonis: 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? mindy: it is hard 'cause i feel a lot of responsibility to that, 'cause it's like they listened to me. so i made the wrong decisions, you know. rhonda: she can't take the full responsibility. lemonis: tell her that. rhonda: we all went into this thing with eyes wide open. mindy: i know. lemonis: i genuinely want to be a partner here, but we got to figure out how this debt's gonna get reworked. mindy: okay. lemonis: i can invest if we can get it cleaned up. so we have three real problems. we have the past-due payables of $1.4 million 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 because they're almost trying to fill the bottomless hole, thinking that money's just gonna solve everything. in a non-small-business world, i'm sitting down with the two lenders and i'm saying, "okay, what do you want to do? i can throw you the keys. i can 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'd like to coach you through the plan of action to solve the debt problem. mindy: okay. lemonis: i don't know that i can solve $7 million worth of debt, but i know it's worth a shot. you have a 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 -- we'll try to figure something out, okay? mindy: okay. ♪♪

♪♪ lemonis: there you are. any luck in gathering up the loan documents? this is everything. mindy: yeah. lemonis: these folks. mindy: these folks here. lemonis: let me go study this and i'll see you in a little bit. ♪ you know i just might be ♪ ♪ a hero sometimes ♪ ♪ i'll be strong when you're weak ♪ ♪ and i even might fly ♪ what i'm trying to do here is map out what the liabilities are. the total is just over $7.2 million. the business is 100%, no questions asked, insolvent. no question. okay, so what i wanted to walk you through is how i want to approach this whole process. so over here is loan number one. it's a senior lender. it's interest only. it's due in 2024.

loan number two is salt lake city-based. unsecured loan number three is the current supplier, $1,290,667. past-due payables is about 300 grand outside of this one. mindy: yes. lemonis: okay. credit card -- $105,000. mindy: yes. lemonis: related-party debt -- $563,000. i can't remember what that was. mindy: it's like rhonda. lemonis: so that totals $7.2 million. it's probably gonna have to get converted to equity or something. something's gonna have to change. 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 cash leaving the business. and the only way to really 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 convert their debt 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. jason: it's sickening. i don't like debt. we weren't in debt before we got into it. lemonis: so why'd you allow it? jason: 'cause mike and rhonda are in it so deep. they have so much money invested. like, i got to keep moving forward. you can't stop 'cause i don't want them to lose their money. i feel responsible, you know? if 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 gonna go in debt, you know. you're gonna say, "oh, we're gonna make money. we're gonna make a great product." but a lot of heads are counting on you, a lot of families are counting on you to make the right decisions all the time, and you don't want to make the wrong choice. mindy: my signature's on every piece of paper, so i'm 50% to blame on it. lemonis: it's nobody's fault, but it's a reality. and now it's a matter of digging out of the hole. ultimately, the buck stops with you, with the inefficiency of the building. what has changed in the warehouse? mindy: so he took box production from 150 boxes up to they can push to 400 right now. lemonis: who's in charge of production, ultimately?

jason: me. lemonis: why are you answering? mindy: i don't know. i don't know. jason: no, no, 'cause i probably just look to her and she just fills in the blanks. lemonis: why are you looking to her? aren't you in charge? jason: yes, but it's just habit. lemonis: well, i'm wondering if that's part of the problem here. mindy: it is 'cause i feel like i have to answer for everybody 'cause they always look to me. it's just they ask for my help. lemonis: rhonda? rhonda: she's overwhelmed. she's got too much. lemonis: great. let's get to that. 'cause the biggest problem that i see here isn't that mindy wants to control everything, because that's what a leader has -- like, their instincts are to do that. the biggest problem is that you guys allow her to. mindy: they make me. lemonis: they made you do it? mindy: well, that's how i feel. lemonis: i'm literally taking my body and i'm immersing myself into a giant beehive. you got to not freak out. you got to not freak out. lord jesus, please. if you're looking to take your business to the next level, log on to...

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and new ways for them to reach you... is what business is all about. it's what the united states postal service has always been about. so as your business changes, we're changing with it. with e-commerce that runs at the speed of now. next day and two-day shipping nationwide. same day shipping across town. returns right from the doorstep, and deliveries seven days a week. it's a whole new world out there. let's not keep it waiting. lemonis: 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. mindy: they make me. lemonis: they made you do it? mindy: well, that's how i feel. lemonis: okay, so speak up. mindy: okay, so, like, when you look at me for answers and 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. lemonis: this is real. what's the problem, rhonda? rhonda: we each need to get back to taking our own pieces. jason: taking responsibility and let her do her job and we can do our job. mindy: jason's got to focus on the operation,

and we have to get more out in that square footage. lemonis: okay, what's the number-one dead weight that's choking everybody right now in this building? mindy: our debt. the debt's keeping us -- lemonis: what's your job? mindy: to get it off the books. lemonis: there you go. mindy: okay. lemonis: i leave here today optimistic. the whole gateway is on that wall. and i know you can do it. you got this. mindy: okay. lemonis: 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 that we can't produce enough to fulfill all the orders. so i need you guys just for 10 minutes

just to show me how to make one box. and i want to time it. ♪♪ ♪♪ remember, we're trying to improve output, okay, so we got to be really efficient. ♪♪ okay, so it took 5 minutes and 43 seconds to make that box. if we had the right machinery and the right labor, how much time could we trim off of that? man: at least two minutes, two, three minutes. lemonis: 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? man: 150 more. lemonis: 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. now, when you sell direct to consumer,

they sell those boxes for about $25 a box. that's close to $900,000 in additional revenue, and at a 50% margin, that's $450,000 of gross profit. all of that's generated by just one minute. alright. thank you. ♪♪ ♪♪ ♪♪ jason: ready for this? lemonis: uh, sure. jason: we're gonna feed some bees. rhonda: keep your feet stomping when we go over there. lemonis: why is that? rhonda: they do like to crawl up your legs. lemonis: rhonda. [ laughter ] why didn't you tell me this before we came? this feels like there's got to be some sort of, like, line that we're crossing here. and i am fearful because i don't know what the repercussions are of getting stung by 1,000 bees at the same time.

jason: you want to take your jacket off first? lemonis: no, 'cause it's one more layer that 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 gonna do it. this is as fun for you watching me do this as me talk about your balance sheet. well, we want to check every possible opening. mindy: they'll just get in, and you're gonna be like, "is that bee on the inside with me?" lemonis: who thought this was a good idea? i'm literally taking my body and i'm immersing myself into a giant beehive. so am i scared? yeah, i am, to be honest. you got to not freak out. you got to not freak out. you got to not freak out. lord jesus, please. jason: so this is the bee yard, one of them. lemonis: these are the boxes we make, right? jason: correct. lemonis: okay, alright. so that top's gonna come off. oh, my gosh. i think i saw one. jason: you good? breathe. lemonis: am i good? no, i'm not good. jason: [ laughs ]

lemonis: but i'm here. jason: let me smoke them, calm them down. lemonis: hol-- look at the honeycomb on that. mindy: mm-hmm. they're really driving, filling that out. lemonis: 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? jason: nectar. lemonis: so they go to a flower and they take out -- jason: they get pollen and they get nectar, as well. lemonis: they swallow it? jason: yes, they'll swallow it. lemonis: and then what do they do? jason: and they'll bring it back and they'll regurgitate it. lemonis: so they basically -- honey is thrown-up pollen. mindy: literally. lemonis: and you guys thought this was a good business. okay, well, i'm gonna buzz off. [ laughter ] ♪♪ mindy asked me to go over to a local retailer with her so i could see how the product actually lives in a retail environment. oh, wow. good display. mindy: yeah, it's a very nice display. this is one of the 12-foot displays.

lemonis: a 12-foot display of any brand in america is a big deal in retail. so you see brands like dewalt and honda, and you look at harvest, and they have 12 feet. i'm surprised how much space they've given you. mindy: yes. lemonis: which means they're getting good sell-through. mindy: yes. lemonis: check it out. mindy: aren't they cute? lemonis: do you make boxes for this? mindy: no. lemonis: could you? mindy: yeah. lemonis: okay. so you really could have a chicken division and a bee division. mindy: oh, yeah, absolutely. lemonis: with the same materials, there's an opportunity to actually 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 a retailer like this means the relationship is there. what's dawning on me right now is i don't feel like 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 be able to realize higher margins. what i'd like to do is turn this room into your online fulfillment center,

'cause we're gonna crank this website up. pull off the things that you want to sell online. mindy: yeah, that's fine. lemonis: 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, "now, wait a second. how am i only doing $45,000 a year in business with all this product?" mindy: yeah. lemonis: 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 that they collect from third parties. how are you? i'm like marcus. ryan: hey. hey, marcus. ryan hutchins. lemonis: ryan, nice to meet you. ryan: yeah. how you doing? lemonis: ultimately, what the owners of harvest lane should want is a valuation that's 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? ryan: yeah, they did. lemonis: let's head back in. if the debt today is $7.2 million, you'd want a value that is higher than that so they can have comfort that there's equity

in their business. mindy: this is our shipping department, and you'll see product all the way down. lemonis: if the valuation comes in lower, that essentially means the lenders really own the business. alright, 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. mindy: maybe i'm not the right person to run this. i hate being the c.e.o. of this.

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lemonis: alright, 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. ryan: we're looking at a range of about $8 million to $10 million from enterprise perspective. lemonis: $8 million to $10 million. i almost fell on the ground because it now gives them some light at the end of the tunnel that says there's value in this business. rhonda: i just didn't know what to expect. lemonis: is that a good number or a bad number? rhonda: the $10 million would be good. [ laughter ] ryan: obviously.

mindy: well, obviously more is better. more's better. lemonis: the way that you ultimately would look at this is that you would take the enterprise value that the evaluator provided, the $8 million to $10 million, and you would subtract out the amount of debt that's there, coming up with a net number. in this particular case, it looks like it's anywhere between $1 million and $3 million, approximately. that gives me hope. i don't know what it's gonna mean for the family. so what we have to convince the debt holders of is they're actually hurting their own equity value. rhonda: absolutely. lemonis: thank you so much for coming. ryan: yeah. see you, marcus. see you, mindy. see you, jason. lemonis: you got to go into every one of these things, now that you have that valuation, with your talking points. be technical. mindy: be technical. so by you converting your debt, it'll take the burden off the company. lemonis: what burden? mindy: servicing. lemonis: how much is it? mindy: $40,000 a month. lemonis: so i'd slow it down and i'd make it very simple. "if i didn't pay you $40,000, i would invest that $40,000 into inventory, and we turn our inventory seven times a year."

mindy: okay. lemonis: and that's the wholesale number. so $40,000 of inventory is really $80,000 of wholesale revenue. and if i turn it seven times a year, $80,000 times 7 is... mindy: $560,000. lemonis: okay, "$560,000 of revenue is how much i'm able to generate of additional revenue every time you relieve me of $40,000 of interest." following my logic? mindy: yeah. lemonis: you got to have the answer to his question before he asks it, 'cause the more prepared you are, what's he also gonna think? mindy: that we're investable. he's gonna be -- lemonis: you guys have your stuff together. mindy: yeah. ♪♪ lemonis: 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 gonna move this business forward. hi. mindy: hey. lemonis: how are you? rhonda: good. how about you? lemonis: well, you're cheery today. rhonda: i am. lemonis: do you know why we're here?

mindy: to have dinner, to meet, to chat. lemonis: well, i came to get an update. so lender number one has to extend their loan. mindy: yeah. lemonis: have you not told them that yet? mindy: no, we've talked about -- i've told him that, yes, that we need to do something as far as extension. lemonis: so what has to happen at this point, mindy, is, as the c.e.o. 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." mindy: okay. lemonis: have you said that to them? mindy: no, i haven't had it that direct with them, no. lemonis: okay, why didn't you have those conversations in the last two weeks? mindy: 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. ♪♪

lemonis: 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 are you just gonna hand them your business because you don't want to what, have conflict? mindy: so what do you suggest? lemonis: unh-unh. i want to know what you think we should do. you're the c.e.o. mindy: well -- lemonis: and i'm following you. like, you're our leader. mindy: and maybe i'm not the right person to run this. lemonis: to run the company? mindy: yeah. you want my honest truth, i hate it. i hate being the c.e.o. of this. lemonis: you do? mindy: yeah. mike: no, no, you're qualified for this. there are some things you just need to step over and do. i know you can do this. lemonis: mindy, you're in charge because you're kind of an in-charge person. [ laughter ] mike: make no mistake about that. lemonis: i know you have it in you, and i'm not sure what's holding you back. do you believe in the business? mindy: oh, yeah, absolutely. lemonis: tell me that, 'cause 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. mindy: 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 as part of that? lemonis: well, good news is, i can write a check. mindy: okay, fair enough. lemonis: 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. mindy: okay. lemonis: 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 some new products developed. and i expect the process in the back to be up and going. mindy: so you're valuing at $3 million. lemonis: you disagree? mindy: i mean, i think it could be a little higher. lemonis: what is your counter offer? mindy: my counter offer is $1 million for 25%

because we'll build this brand. it's not just gonna be a beekeeping brand. we have a woodworking shop that is barely being touched on what our potential can be. so we have a lot of other products that we can go into. lemonis: she's doing better, isn't she? mike: much better. lemonis: i'm listening. mindy: we're going to work with our debt. and we're also gonna just continue to build the brand on our e-commerce side so that we're doing $1 million of sales in-house and retain that higher margin. and if we can hit $30 million at 25%, that's a pretty good return. lemonis: i'm not accepting 25%. i'll settle at 30%. do we have a deal? yes or no? we have a deal? mindy: we have a deal. lemonis: okay. mindy: okay. lemonis: 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. mindy: i will do that. i feel really good, feel really confident. there's a pathway of being able to move forward.

so we're excited. lemonis: okay. mindy: thanks, marcus. ♪ i'm not giving up, i'm not giving up ♪ hey, how are you? good. i feel like i've got a plan moving forward. just wanted to talk to you about a few things. i think i've got some difficult roads ahead with this. you take care. thank you. bye-bye. jason: got my marching orders. ♪♪ ♪♪ lemonis: look at the back. the one part of the business that i didn't really 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. jason: that's 10,000 to 12,000 in each package, and there's 930 packages. lemonis: remember that fear that i had in the beginning? well, that fear still exists today. how much total inventory is on here? rhonda: $111,600. lemonis: okay, and how much will you sell this for

after you put in all the labor, packaging and everything? rhonda: we don't make margin on this as far as good margin. lemonis: do you make any margin? rhonda: we do make margin but not great margin. lemonis: why do you do this? rhonda: because this was our niche into the market. lemonis: this is your loss leader, which means that you got to make the right margin on everything else that you do. rhonda: that's right. absolutely. lemonis: 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. and the calmer i am, the more relaxed i am, the less the likelihood is i'm gonna get stung. and 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 gonna be able to have control of your business. it's kind of a pretty simple correlation. what we're really down to is the punch line

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yeah. stay restless with the rx. crafted by lexus. experience amazing at your lexus dealer. crafted by lexus. lemonis: so i'm back at harvest lane honey today. i'm not gonna lie to you, i have a bit of excitement in one sense, but i have a bit of nervousness. so can we start in the warehouse? mindy: yes. lemonis: let's go. the number-one thing that i wanted to do is to really 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 remember, it was 5 minutes and 43 seconds. brad: yeah. lemonis: if we did it today, what would it be? brad: three minutes, because of the two machines that we were constrained on. these two machines became the bottleneck. so we talked to our wood supplier and said, "hey, could you cut it for us?" now it comes in and skips these two machines, which is really helpful because these two machines can be used to build --

lemonis: like this stuff. brad: yeah. lemonis: machines two and three were really slowing things down. so they went back to the original raw lumber provider and they asked them if they could cut the width and the length for the boxes before the wood even arrives. and so 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. as you go through the actual production area, you can see and feel the energy and how different it is. they also set up an e-commerce fulfillment room that provides them more revenue and, most importantly, more margin. new products was the other thing. mindy: yeah, so we've got the chicken nesting boxes. we've got the rabbit nesting boxes. so the bunny goes into this one. the female would nest down in here and lay their babies. so you do the chicken. jason: so the chicken... oh, you go right there. lemonis: isn't that too small? jason: so every morning she'll go in there. mindy: she needs nest in it. jason: she'll need a little nest to lay her eggs. mindy: chickens are such a big business already. we've already sold 2,000 of these.

i think this could be a million-dollar business between the both of them. lemonis: cost to make it? jason: you're about, oh, around $3. and we're selling for $7.50 to the retailers. mindy: and we've already got these in a retailer. jason: yes, already have pos. lemonis: just from the last time i saw you? jason: yes. lemonis: look, i'm super impressed with all the changes they've made in their business, but there's one big issue that needs to get resolved, or none of it else matters, and that's getting $7.2 million 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 gonna make it, no matter how many processes they improve. what we're really down to is the punch line for our entire time together. we started with $7.4 million. mindy: yep. lemonis: what did the debt have to get down to? read off what our deal was. mindy: so, "$3 million must convert from wherever. loans must be extended. rates need to be reduced." lemonis: so the first objective was to convert how much? mindy: $3 million. lemonis: so let's talk about that. what happened with lender number one? mindy: he will reduce his interest to 6%.

lemonis: so that's high five number one. mindy: yeah. lemonis: lender number two. mindy: he'll convert $1 million of debt into equity. lemonis: so you got $1 million. that's one of the three. mindy: yep. lemonis: okay. mindy: payables, he'll convert $820,000. lemonis: okay, so now we're at $1,820,000. mindy: and then between the family, it's $599,383. lemonis: so the grand total now is... jason: $2,648,313. ♪♪ lemonis: you're at $2,648,000. mindy: yes. lemonis: $352,000 short. mindy: yes. lemonis: where are you at on the more than $300,000 interest annually? mindy: number one will be $120,000. and lender number two, he'll be at $291,000. lemonis: so what do those two add up to? mindy: $411,000. lemonis: so $411,000. so you're $111,000 away on the interest and you're $351,000 away on the debt conversion. right now, we're short.

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lemonis: so you're $111,000 away on the interest if you can't afford your medicine, 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. mindy: yes. lemonis: 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 like this business. i do. mike: good.

lemonis: 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 just call it even? jason: yeah, i'll call him. lemonis: alright. jason: i'll go in my office. lemonis: 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 that 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, stephen. you've been a big part of that. and i will tell you that your product not being here is actually hurting the business. and so if you and i are gonna 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. stephen: that was my hope, as well. lemonis: 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? stephen: that makes sense to me. lemonis: deal? stephen: deal. lemonis: okay, my man, thank you so much. mindy: i appreciate the line of credit. we hadn't talked about that. lemonis: well, i didn't think about it until right now. i always knew throughout this process that there'd 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 it's $650,000 cash plus $400,000 in a letter of credit. so i'm expecting 25%. does that work? mindy: yeah, that works. okay. we're good. i'll get a -- lemonis: is this our third handshake?

so my new deal is to invest $650,000 of cash and $400,000 in a letter of credit. my total exposure's $1,050,000. but i felt compelled to lower my percentage from 30% to 25% because the amount of cash actually leaving my pocket today is only $650,000. this feels to me like a better solution. rhonda: it does to me, too. i mean -- mike: well, i like this. this has been an integral part. rhonda: this was the answer. you brought the answers. lemonis: you guys brought the answers. i just helped you go down the path. and i think that's really -- the four of you did the work. and you made the changes. what i am happy to tell you is that the business today is on fire. their revenue's 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 line, and them having a clear focus on what their job is,

well, the sky's the limit with this business. ♪♪ ♪♪ man: ♪ we're gonna live forever ♪ ♪ gonna live forever ♪ lemonis: so, we're here in los angeles, california, in the furniture design district, and over the last several years, i've invested in a ton of furniture businesses, and i've really fallen in love with design. so, i had a family reach out to me looking to take their business to the next level. now, this particular business, mod barn, has a lot of potential, and it's run by a brother and sister. let's take a look, see what it looks like. this is the showroom? wendy: yes, this is our showroom. ryan: we do custom furniture. we specialize in murphy beds. lemonis: in the three-year period, the business made almost $700,000.