Marcus Lemonis had a fit shortly before the conclusion of the latest episode of “The Profit”. The CNBC series focused on a two-person business of a novel sort. Overtone Acoustics was 100% owned by Brad whose product was unique and ultimately meshed nicely with another company we got to know on “The Profit”.
The moments of anger came immediately prior to a meeting with an exec from the Hard Rock Hotel chain. A personal favor was cashed in by Lemonis and a presentation, weeks in the planning was less than one hour away. Brad and new partner Alex were nowhere to be found. Others were completing the work to set up the showroom for the exec, while the partners were getting haircuts and dressing up in their finest to be “presentable” for the meeting. Check out the video clip posted below to see an unusual sight – a flustered Lemonis.
Ultimately, all went well and there was a happy ending after he slammed the men when they showed up. It was a sign that he knew the meeting was a make or break for the company he had just invested in and nurtured. In line with Lemonis’ Three Ps philosophy, let’s go through what he saw and changed at Overtone Acoustics.
Product: acoustic sound panels used in audio recording studios and home theaters. They reduce echo and improve sound quality. The twist for Overtone was the ability to manufacture them in any shape or size, and embed graphic art in the product to make turn into an art piece. decorative and interesting, but keep the sound quality. Through a sublimation process the fabric used in the design stayed porous to allow for that.
People: Brad Turpin began the company in 2011 after college. He had one investor, a high-school friend named Alex, who despite a small investment had no equity. After a downturn in sales the company let all paid employees go and used college interns or volunteers, including Alex who commuted two hours each way on a daily basis.
Process: With a tiny facility in Florida the space was too small to timely fill orders. Without a paid staff of regulars, the coming-and-going of workers made matters worse. It also didn’t help that both Alex and Brad were homeless, coach-surfing with friends or sleeping at the office.
Marcus loved Brad and Alex’s passion. He knew the product would be a home rum in commercial contexts and had the contacts to prove it. He had Precise Graphix, a company he took over a couple of seasons ago on “The Profit” with a huge facility in Pennsylvania. All he needed was to move it all there. After investing $200,000 (the company had about $30,000 in debt) it got done. With sky-high margins on the material Lemonis salivated about, he went all-in.
He initially took 50% and insisted that Alex be part of ownership or else. Alex was thrilled and the two agreed to move from Florida, but had to decide their ownership split of the other 50%. Alex said he’d be happy with 10% but Marcus wouldn’t stand for it. The final equity split was 40% for Marcus and Brad with Alex taking 20%. The company packed up and moved into the Precise Graphix building and the fun began.
The men were rented an apartment nearby the facility that already had the machinery in place and employees who could help out. An acoustic panet that would have taken more more than one week for a person to complete in Florida was done in two hours. There was ramp up time for Brad and Alex to get along with crusty old Dean Lyden, but after a big blow up it settled down.
The final piece was getting the contact from the Hard Rock chain to love what he saw and agree to a deal. After what Marcus called the best sales presentation he’d ever seen, Overtone Acoustics was on its way. “The Profit” is nothing if not a master class in streamlining process and choosing the right roles for employees/owners. Of course there’s the check Lemonis writes, but the show thrives from the way it takes a complex problem and reduces it to smaller parts for solving.
“The Profit” airs Tuesdays on CNBC beginning at 10 p.m. ET/PT Image/video credit: CNBC used with permission