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00:00Across America, thousands of businesses grinding it out every single day because the ultimate
00:09American dream is owning something you build. Everything will be stationary for when Marcus
00:15comes in. Every episode, I'm meeting businesses at a crossroads. We've actually invested our
00:21entire life savings into this business. I'll pick one and go to work, but I'm not a consultant.
00:27I don't believe in handouts. I'm a capitalist. This is $15,000. Always looking for ways to make
00:34money. That's why we want you to work with us, because we're bad at math. That's a terrible
00:38reason. You should be good at math. I'll work on their people. I don't know why you're being such
00:44a dick about it. Leon, are you mad about something? No. Why the f*** are you singling me out?
00:48They're processed. The execution is just like, what is it? They're their product. We've heard
00:55from the clients that it's not so easy. That's f***. Marcus is an amazing investor, and hopefully
01:00we'll invest in our business. In the end, we'll negotiate. My offer is $500,000 for 10%
01:06to see if a deal can be made so we both can profit.
01:10How are you? Good, Marcus. I'm Marcus. I'm Melanie O'Neill. So nice to meet you.
01:24Brian O'Neill. Brian O'Neill. Our business is called Rustic Marlin. We're a home decor lifestyle
01:29company. Beautiful. We've done $25 million in sales since we started our business. Wow.
01:34We were founded in 2012. Rustic Marlin was actually founded when the two of us were getting
01:40married, and we made a few signs for our wedding. We shipped a million dollars of product out
01:45of our two-car garage. This was really kind of the time where we felt like we made it.
01:49Everything's made right here in the USA. We have a team. We have a team. We make everything
01:52in the USA. So everything over here. Yes. Made in America means a lot to us. We sell to about
01:581,000 boutiques throughout the U.S. What was the revenue last year?
02:01Last year, we had a little curveball. That's okay. What was it?
02:062,500. It was one of our lowest years in a while.
02:09At the moment, we're probably less about somewhere about $500,000 down. It is very,
02:14very hard to scale a business, especially one that's handcrafted like us.
02:18Is the business in really thin working capital territory right now?
02:22Yes. How thin?
02:24Maybe a couple months left. How much cash is left? A couple hundred thousand?
02:29Less than $100,000.
02:35How much do you have invested personally?
02:37Our entire life savings, which was a very scary move.
02:40Probably about a half a million dollars.
02:42Sounds like you need just some pure, flat-out wholesale orders just to get things moving.
02:49Look, you have a great business, but unfortunately today, I don't see an opportunity.
02:54But I can help you find new business through the brands that I'm involved in, which is Bed Bath,
03:01Overstock, Kirkland's, and we'd like to give you a $100,000 order, and I will advance you the money.
03:08Wow. That's unbelievable.
03:09But it's just for flag stuff.
03:10All right.
03:11So the flag is a super big deal to me.
03:16Yes.
03:17I have problems with the law.
03:18I heard about this.
03:19The local municipalities don't like that I put up a giant flag.
03:23It's 130 feet tall in the fall.
03:25But it's something that matters to me.
03:27Yes.
03:28And as an immigrant to this country, like, I can't be any more grateful.
03:31Yes.
03:32That's awesome.
03:33But as a condition of that order, you're going to need to go back and make some tough decisions on your cost structure.
03:40Okay.
03:40Because it is time to really get the business to make money.
03:44Yep.
03:44We're ready.
03:45It was wonderful meeting you.
03:47Wonderful meeting you, too.
03:48All right.
03:49Thanks so much.
03:49You got it.
03:50Bye.
03:50Appreciate it.
03:54Hey, hey.
03:55Hello.
03:56How are you guys doing?
03:57Good.
03:57Good.
03:57How are you?
03:58Alex Tbalik.
03:59I'm Marcus.
04:00Nice to meet you.
04:01Nice to meet you.
04:01Ashley, nice to meet you.
04:02Ashley, nice to meet you.
04:03Alexis, nice to meet you.
04:04Alexis, so let's hear it.
04:06So we are Anybag, and our bags are trash.
04:09New York City's finest trash.
04:11Each bag uses about 95 single-use plastic bags that we divert from reaching Lantzell, and we do it all right here in Manhattan.
04:17Our factory is one of the last, oldest, largest remaining leather good factories in New York City.
04:22Are you guys all family?
04:23Yes, we are.
04:23Can't you tell?
04:24My dad started in 1982.
04:26He immigrated here in the late 70s.
04:28From?
04:28From Beirut, Lebanon.
04:29That's where I'm from.
04:30Yes, I know.
04:31Okay.
04:32And the primary function of that factory is leather goods?
04:35Yes.
04:36Belts, bags, trims, components.
04:38So one night, just taking out the trash, I was like, wait, if we could do this with leather, why can't we do this with plastic?
04:44Is it broken out as a separate business?
04:46Yes, it is.
04:47It's its own corporation, I'll say.
04:48We basically contract the factory to make the product.
04:51How much revenue has Anybag done?
04:53So the first year, when we launched in 2021, we did about 40k.
04:58Second year, we did 135k.
05:00Excellent.
05:01Then what happened?
05:0288, 88.
05:03And currently, we're probably going to hit about the same thing, around 80, 88.
05:06So I want to see how this thing works.
05:08Show me the machine.
05:09It's just like playing the piano.
05:11You press the pedals, and it creates a shuttle, and you just pass it through.
05:15This feels so old school and awesome.
05:17This is almost ancient machine.
05:18No, but it's awesome.
05:19Yeah.
05:19I mean, currently, we could only make about six to seven yards in a single day.
05:23The new way, we just sit and watch, and it does it.
05:26And it generates 340 bags in a single day.
05:30Where's the new way?
05:31I've been building a new automated look for the last two years.
05:34And how much is that?
05:35120k.
05:36And that's going to allow us to really scale this.
05:38Did you design the machine?
05:40Yeah, it's a patent-pending machine.
05:41How many bags did you sell last year?
05:43Last year, we probably did about 2,500 bags.
05:46Which means that if this machine can crank out 20 times more in a day?
05:50About 30, yeah.
05:51Okay.
05:51Then the number of days in a year that this machine's going to be being used,
05:55based on your current demand, is going to drop dramatically.
05:58Do you agree with that?
05:59What's the machine going to do the rest of the time?
06:03Here's my advice to you.
06:05Your family's business is the most important business.
06:08Yeah, 100%.
06:09And it would break your dad's heart if what he worked for for 40 years,
06:13the three of you screwed up.
06:14Absolutely.
06:14And now it's probably doing less than a million.
06:17And you have capacity to do more?
06:19Yeah.
06:19And will the loom that's coming allow you to do trim faster?
06:22Yeah.
06:22So it'll expand your margins?
06:24It should, yeah.
06:24Which will make you more competitive?
06:26Which will allow you to get back in the trim game and undercut other people?
06:29Yeah.
06:29Stop around with the bags.
06:32But to go out and get an automated loom, very brilliant of you.
06:36Because now what you're doing is you're unleveling the playing field
06:39against foreign imports and doing it right here in the U.S.
06:43But I don't see an opportunity here on the bags
06:46until your core business is doing this.
06:55Hello.
06:55Hi.
06:56Good morning.
06:58Katie, nice to meet you.
06:59Katie, nice to meet you.
06:59Hi, Jason.
07:00How's it going?
07:00Jason, nice to meet you.
07:02I'm digging your hair, by the way.
07:03I'm bringing the faux hawk back.
07:05That's what I'm doing.
07:06Ha, ha, ha.
07:08But we're at Perspirology.
07:10We own a dance-based and trampoline-based fitness studio.
07:14So she's a professional dancer, professional actor.
07:16Yeah, like that's what our training is.
07:19After we were married, we created a really kick-ass workout,
07:23bounce dance sculpt.
07:24Our workouts are in a warm room.
07:27It's highly programmed workout routines that are all musically driven.
07:31We just opened our second studio in Middletown, New Jersey.
07:34From the get-go, the goal was always to expand.
07:37But the question is how.
07:38Yeah.
07:38I want to see it in motion.
07:40Can we get to it?
07:41Yeah, I would love to see it.
07:42Okay, let's do it.
07:43So on a trampoline, the one thing we want to remember
07:44is that you want to think down
07:46versus when you're a kid and you're jumping on a trampoline.
07:49It's like, yay, yay!
07:50Our goal is down, down, down, down.
07:52So we're going to cap that beat.
07:54Down, down.
07:54Yes!
07:55There we go.
07:55Good.
07:56Here we go.
07:57Two and two.
07:57Let's go.
07:58Two, in, two.
08:01Now let's add an arm.
08:03Uh-oh.
08:03Oh!
08:04Oh!
08:05Oh!
08:06Let's go.
08:06Squat.
08:08Squat.
08:09Good.
08:09Back in the heels.
08:10Good.
08:11Yeah, weight in the heels.
08:12Fast feet.
08:13Let's go!
08:17Wait.
08:18Wait.
08:18He got off.
08:19He got off.
08:20He got off.
08:24How do the two of you assign business responsibilities?
08:28So, for me, I do a lot of the training of trainers, creating the workouts.
08:32I do a lot of the social media, and Jason does a lot of the back-end work.
08:36Who does the accounting?
08:38Oh, yeah.
08:39What's your retention rate?
08:41I think our retention rate is pretty good.
08:43Our retention rate is pretty good.
08:45Retention, I...
08:46I mean...
08:47What is it?
08:47Is it a formula that I'm supposed to like...
08:49No, no, no, no, you just...
08:50No, no, no, no, hold on, don't help him.
08:51Don't help him.
08:52Okay, okay, I won't, I won't, I won't.
08:53The whole thing is just a math equation.
08:56That's why we want you to work with us, because we're bad at math.
08:58That's a terrible reason.
09:00You should be good at math.
09:02Oh.
09:02You're in business, you better like math.
09:05Or don't be in business.
09:13You're in business, you better like math.
09:16Or don't be in business.
09:17How much revenue did you do last year?
09:24$438,000.
09:25It was primarily Seabright.
09:26Oh, that was all Seabright.
09:27Yeah, that was probably all Seabright.
09:29How much money in the bank today?
09:31There's $155,000, maybe?
09:36That's a lot of money.
09:37Is it?
09:38Do you owe money to banks?
09:40No.
09:40No.
09:40Do you owe money to creditors of any kind?
09:42No.
09:43That's awesome.
09:43So then why are you not as excited as me?
09:45That is my gripe with him, and this is another fight that we have.
09:48And I say, look, how do we expect to reach a new clientele if we're not putting ourselves out there?
09:53It does take money to grow a business.
09:55You just have to find the balance.
09:58Here's the deal.
09:58I'm going to come spend some time with you guys.
10:00I see an opportunity here.
10:02I want to say something, though.
10:03I'm telling you...
10:04Don't talk past the sale.
10:06I'm telling you straight up.
10:07Don't do it.
10:07Don't do it.
10:08The number one rule in business, once somebody says yes...
10:11Don't talk.
10:12Don't give them a reason to change their mind.
10:14Ever.
10:15Zip it.
10:17Okay?
10:18I'll see you guys.
10:19Awesome.
10:21The biggest and brightest thing that got me to yes was Jason's tightness around money.
10:26But sometimes that's not a good thing.
10:29You could be strangling the growth of the business.
10:32That's really going to be the challenge with him.
10:34We'll see you soon.
10:34Awesome.
10:35Thank you so much.
10:36Before I run my mouth off anymore.
10:38I'm here in the seaside town of Seabright, New Jersey, which is the home of the original
10:48Perspirology location.
10:50I want to spend some time with Jason and Katie to really understand, is this a concept or is
10:56this just kind of like a one and done?
10:59Woo!
11:00Big jump.
11:01Here we go.
11:02I'm going to show them where to put their stuff.
11:04Amazing.
11:04All right, let's psych ourselves up.
11:07Here we go.
11:08Hi, buddy.
11:10Let's take a tour of the facility.
11:11Okay.
11:12Where do you want to start?
11:13What about the laundry room?
11:14Sure.
11:14All right.
11:15So we do all our own laundry.
11:17This eats up a big chunk of time of the day.
11:19Why don't you use the towel service?
11:22Too expensive.
11:23And it's by the pound.
11:25I don't know.
11:25Off the top of my head.
11:26So when you make a statement that has conviction behind it, you should expect that my next question
11:31is going to be...
11:31How much is it?
11:32Right.
11:33Okay.
11:34Okay.
11:35Last floor.
11:35Here we go.
11:36Now, so this would be...
11:38This is our dance cardio studio.
11:41That's it.
11:43All right.
11:43So what is your ultimate goal with this business?
11:46The goal is to franchise the bounce studio, specifically the trampoline studio, to hopefully
11:51expand to other cities.
11:53So you just want to franchise the trampoline classes only?
11:57Yeah.
11:58Yes.
11:59Got it.
11:59If Jason and Katie ultimately only want to franchise the trampoline portion of their business,
12:09then the best way for me to really study that is to visit their Middletown location that
12:14only has trampolines.
12:15I've asked Sari, one of their instructors, to meet me there, so I can better understand
12:20the concept they're looking to grow.
12:24Hey.
12:24Hi.
12:25This is where the showroom is?
12:26This is where the bounce studio is.
12:28One, two, three, four.
12:31There's one person in the class.
12:34Add the arm.
12:35I don't know how this place stays open.
12:38I don't know either.
12:39Right.
12:40Left.
12:40Yes.
12:41It almost feels a little bit more like a concept.
12:46When I come here, I feel like I'm going to check in and I'm going to work out and I'm
12:49going to go.
12:50I like that it's compact.
12:52It's got less fixed costs.
12:53If you were offered an opportunity to own one of these, would you do it?
13:00No.
13:01I don't know if their concept is cool enough to be branded.
13:05But if I was doing this for the money, I would have been gone a long time ago.
13:11Why?
13:12They're the lowest paying studio in the area.
13:15What do they pay?
13:17I'm getting $40 an hour on the books.
13:19And what do other studios pay?
13:21They start at $65.
13:24Interesting.
13:25Okay, let's go somewhere else just because I don't want to interrupt that class.
13:29Yeah.
13:30Okay.
13:30What would you do to make it feel more cool?
13:37I would change the colors.
13:40Of the whole brand?
13:41Of the whole brands.
13:42There's nothing boutique-y about it.
13:45There's nothing cool about it.
13:47Whatever they're offering is sinking next to studios that stole their crap and are doing
13:52it horribly and still have sold out classes and are making an absolute killing.
13:59It's the aesthetics and the vibe and the merch is cool, and who doesn't want a cool sweatshirt?
14:05There's no way this place survives if something doesn't change.
14:09Let's go see if this class is over.
14:10It is.
14:15I'll see you later.
14:16Thanks.
14:16Bye.
14:18Oh, hey.
14:19Is it normally this dead here?
14:21We're new here.
14:22How long you been here?
14:23This location, 10 months.
14:26Seabright, 10 years.
14:29How much money does this lose a month?
14:31$4,160.
14:32You're on pace to lose $50,000 a year here.
14:35How much is the rent here?
14:36$4,500.
14:37How long is your lease?
14:3810 years.
14:39And are you on the hook for it, the lease?
14:42Yeah.
14:42So if you close it, you still have to pay?
14:45I don't know what the out clause is.
14:48We're not going to use the out clause.
14:49We're going to make it work.
14:51But what if you keep losing $50,000 a year?
14:56We're not going to.
14:56We're going to make it work.
14:59We just need more people in here.
15:02If the business is on pace to lose $50,000, I have one job.
15:06Okay.
15:06And that's to prevent a disaster.
15:08Okay.
15:09Here's what I'd like to do.
15:10I think we need a focus group.
15:12Okay.
15:12To understand what people really think, specifically about the trampoline classes.
15:18Because there's something here that's not clicking.
15:21Okay.
15:22I am right off the bat extremely frustrated.
15:25Because first thing he says to me is, it's completely empty.
15:29You're going to lose $50,000 a year.
15:32Okay.
15:32Not what I would maybe call helpful.
15:34And now to get a focus group.
15:36I'm, of course, nervous about it.
15:38Getting different people's opinions.
15:39That's not my forte.
15:40Look, I wanted to set up a focus group because I love hearing people's feedback about specifically the trampoline classes.
15:53But I have a hidden agenda.
15:54I also want to see how Katie and Jason take that feedback.
15:58Because if they can't take constructive feedback from these folks, how are they ever going to sell one of these franchises?
16:05Hi.
16:05Hi.
16:07Jason.
16:08He's holding towels.
16:09He's in the laundry room?
16:11Yes.
16:12Hey, Jason.
16:13Yo.
16:13Here, come here.
16:14So, the purpose of today is to get a very pure and clean view on the experience.
16:22During this process, ignore me the whole time.
16:25Oh, yeah.
16:25Just do your thing.
16:25Don't worry.
16:26Don't worry.
16:26I will.
16:28Thank you so much for coming.
16:30Okay.
16:31Everybody grab one weight.
16:33We will only be using one weight in this class today.
16:36Halfway through, I'm going to switch and Jason is going to come in and take over.
16:40And he's going to kick your ass, too.
16:41Okay.
16:41Let's have some fun.
16:44All right, guys.
16:46Out.
16:46In.
16:47Back feet.
16:47Let's go.
16:49Shoulders down.
16:50Come on.
16:50You're doing great.
16:51Come on.
16:52Time for a quick floor series.
16:54Five more, please.
16:55Five.
16:57Four.
16:58Three.
16:59Two.
17:00Step it back.
17:01Pull it in.
17:02Woo!
17:03All right, I'm taking over.
17:04I'm taking over.
17:06All right.
17:06Let's bring it down.
17:08Blank jack.
17:09Come on.
17:10Four.
17:10One.
17:11And left.
17:12Bring it to the middle.
17:15Don't drop.
17:16Yeah.
17:17Great job.
17:18Everybody, very good.
17:20Okay.
17:21Everybody take a minute to just collect yourself.
17:27Does that look okay?
17:28Yeah.
17:28First of all, thank you guys for coming.
17:31Your goal is to give them honest feedback, and honest feedback makes people better.
17:35How many people have never been here before?
17:39Did you enjoy it?
17:39It's great.
17:40I like it a lot.
17:41I'm just beat.
17:43This is really interesting, actually.
17:45This was just a portion of the class.
17:47If you had to go through the full class, would you see yourself coming back?
17:53Full class, no.
17:56Sir in the back.
17:57Obviously, the moves are new.
17:58I've never been on a trampoline.
17:59I couldn't have felt more awkward, you know, if I had set out to try and feel more awkward.
18:06I don't like the intensity.
18:08I would like it if it was funner.
18:11Like what I thought a trampoline would be.
18:13Like, hey, fun.
18:15Oh, my God.
18:15We basically did three moves, and I thought the double jumping jack was, like, the most,
18:21like, woo-hoo, here we go, two moves.
18:23Oh, my God.
18:23Oh.
18:30We basically did three moves, and I thought the double jumping jack was, like, the most,
18:35like, woo-hoo, here we go, two moves.
18:37Oh, my God.
18:38Oh.
18:38There's also a dance class up on the third floor.
18:43Would you try something?
18:45Totally.
18:45You would totally try something.
18:46That would totally be more up my alley.
18:48Thank you so much, guys.
18:50I appreciate it.
18:54I'm most defensive at this gal here.
18:57I don't like the intensity.
18:59But what if she turns out to be the highest recurring, longest staying dance person?
19:05Exactly.
19:05Retention.
19:06Retention.
19:07Retention.
19:08That's the only thing that matters in business.
19:10The biggest learning for me in this whole process of the focus group is that the trampoline
19:15classes aren't going to be enough to drive revenue and increase retention.
19:20As you can tell, not everybody was really into it.
19:22But if they can add their dance classes and sculpt classes, they'll have multiple opportunities
19:27to capture revenue and increase retention.
19:30So I think part of it is packaging what you do and figuring out what else you do other than
19:36this, because retention is a function of diversity.
19:40Thank you so much.
19:40Great job today, by the way.
19:41The last time I saw you, we had the focus group.
19:50Yeah.
19:51And it was a lot to take in, I would assume.
19:54Totally.
19:55I really thought that entire group kicked ass.
19:57But I wanted them to feel successful, not feel beaten down afterwards.
20:01So I think that's partially why I felt bad about it, because the clients felt bad.
20:05And sometimes when you feel so beat down about things, you can either throw in the towel
20:11and give up, or you can dig in and say what needs to be fixed, and that's where I am right
20:15now.
20:18Jason, would it be possible for me to spend a few minutes with Katie?
20:22Sure.
20:23If that's okay with you.
20:25Mm-hmm.
20:26You want to sit?
20:27Yeah.
20:27Um, I feel, like, so freaking tired.
20:33I am.
20:35I push and push and push because I believe in what we're doing.
20:40You feel like it's all falling on you?
20:41Oh, yeah.
20:42Yeah, absolutely.
20:44For instance, I said, Jason, put a reminder in your phone at 8 a.m.
20:47You need this to happen and remind you to do this and this today.
20:50Write it down.
20:52He goes, eh, all up here.
20:53I go, it's not up there.
20:54I just want stuff to get done.
20:59This location feels like it's on the verge of not being open anymore.
21:06I believe that we should be investing, like, serious money into, like, a marketing campaign.
21:11The problem is Jason is less likely to want to spend money, but I do see this being a viable
21:18thing that could be so cool.
21:20I think that singularly, the bounce concept will struggle to build enough repetitive visits.
21:31I think that in order for this to work, you're going to have to include bounce, dance, and
21:36sculpt.
21:37I would actually split the room.
21:39Okay.
21:39And I would have the ability not to have two classes at the same time, but to have a mat
21:46offering, a dance offering, and then figure out how to make the heat factor really what
21:52the concept is.
21:53Right.
21:53Bounce, dance, sculpt.
21:56Mm-hmm.
21:57You could take a long class of one discipline.
22:00You could take a combination of two disciplines, or you could take a combination of all three
22:05disciplines.
22:05I like it a lot, actually, and I like the fact that someone could do something different
22:11every day.
22:12You know what?
22:12Why is that important?
22:13Because it keeps them coming back.
22:15I feel a little bit more hopeful with the ideas that we spoke about and the scalability
22:20of it.
22:21Jason?
22:22Yeah?
22:24Your wife and I have had a great conversation.
22:27If you have interest in franchising, you have to only use this one.
22:32Middletown.
22:32Mm-hmm.
22:34We're going to sit out, just you and I.
22:36Uh-huh.
22:36We're going to open up your QuickBooks account, and you're going to start to record every expense
22:41and every bit of revenue, because in order to sell a franchise, the number one thing
22:45you have to hand somebody is the financials.
22:48Can I request Katie be there, too?
22:50No.
22:51Well, here's the reason why.
22:52Because everything can't fall on her.
22:53Okay.
22:53You don't know what this location did versus the other location.
23:03Right.
23:03So we want to definitely break those two out into separate locations.
23:07Can you run the payroll for two different locations?
23:09You can.
23:09You can.
23:11Okay.
23:11I've not been doing that.
23:13And if you do them separately, you can make better decisions about what's working and not
23:17working.
23:18The QuickBooks platform makes it really easy.
23:21Oh, cool.
23:22Okay.
23:22Do you have it on your phone now?
23:24Oh, you should.
23:25Okay.
23:26Okay.
23:26I will do that.
23:28We're home, and Jason is the tough job of being on a home site.
23:35Yeah.
23:35While I have an even tougher job with our daughter building forts.
23:42Yeah.
23:42Serious work.
23:44Serious work.
23:45Look, I'm encouraged that we're making progress as it relates to their process, and we're
23:54expanding their product.
23:56But for me to invest, there's going to have to be real development around the people side
24:00of things, specifically Jason.
24:03This is a partnership 50-50 in the business.
24:05I understand what she brings to the table.
24:08It's not clear to me what you bring on a daily basis to the table that's moving the business
24:13forward.
24:14I'm a company facilitator.
24:15What does that mean?
24:17It means I do everything.
24:18Like, let's name it.
24:19Okay.
24:20You want me to name it?
24:20I'll name it.
24:21I do the payroll.
24:22Okay.
24:22That's awesome.
24:23Okay.
24:23I do all the laundry.
24:25I do all the cleaning.
24:27I want you to think about what that sounds like.
24:29I'm trying to create a concept to build generational wealth for my family.
24:34Mm-hmm.
24:35But I'm still going to put laundry at the second most important thing that I do.
24:41Let's keep going, okay?
24:42I can't keep going.
24:44You're marginalizing your value.
24:47Is the guilt come from the fact that you recognize the value that your wife and partner brings
24:52to the organization and you want to make sure that you're doing your part?
24:56Yeah, sure.
24:57Do something that's going to change the repetitious nature of which you function today.
25:03Okay, so let's pretend I give the laundry and the cleaning to other people.
25:11What should I be doing?
25:14Then you would work on developing the business and your knowledge of the core concept to grow
25:20the company, not to keep the towels washed.
25:25Okay.
25:26I don't really have any education in growing a business.
25:29Sure you do.
25:30You just did it for 10 years.
25:32So you know what kind of education you have?
25:34Real life experience.
25:36I'm heading over to meet with Jason and Katie at a studio that isn't theirs in New York City.
25:55I wanted to take them out of their own environment, but I've asked them to bring along their trainers
26:00as well.
26:00I want Katie to walk them through all the changes we're working on.
26:04And what are some other issues that need to be resolved at the exact same time?
26:11Good morning.
26:12All right, so part of the reason why I wanted to bring you into the city and thank you for
26:17making the journey is that I felt like for us to have some open dialogue, we needed to be
26:21in a neutral place.
26:23The challenge that I have with the current construct is that Middletown is empty and loses $50,000 a year.
26:33Guys, right now Middletown only offers bounce classes, and it's just, it's just not enough.
26:39So the right side of the room will turn into a dance floor.
26:43Nice.
26:44So that literally you now have bounce, dance, sculpt underneath the overarching theme of heat.
26:52Cool.
26:53Which would, in the end, hopefully get more people in the door.
26:57All right.
26:58So now, Sari, you said to me that you believe that the instructor fee is below market.
27:04Yes.
27:05Great.
27:05Okay.
27:06So currently, how are you all being paid for your time?
27:08If we teach, we get paid for the class.
27:12If we don't teach...
27:12And whether there's 10 people or two people?
27:14It doesn't matter how many people.
27:15So what's your motivation to bring people to your class?
27:19There's none.
27:19There's none?
27:20Yeah.
27:21Should there be?
27:23We have talked about this.
27:25I don't love to be at competition with, like, other instructors, because as it is,
27:30there is already some competition that exists.
27:33Like, no, you should go take my class.
27:35Like, don't take that person's class.
27:36You feel like that's happening a lot?
27:38Yes.
27:39Like me?
27:39You think I'm saying that?
27:40Sometimes.
27:41There's definitely times, let's just say that, like...
27:44But I...
27:46Spit it out.
27:47We don't have time.
27:47Yeah, just say it.
27:48So we've heard from the clients that it's not so easy to sway from their routines because
27:53they feel uncomfortable.
27:54That's...
27:55That's...
27:56So we've heard from the clients that it's not so easy to sway from their routines because
28:10they feel uncomfortable.
28:11That's...
28:12That's...
28:12You should always come to me to talk.
28:16And you'll be less defensive going forward.
28:17I will, but I will be.
28:18I'm not defensive in person, I promise.
28:21Right?
28:21Am I?
28:22My point is, is that they need to make more money and you need to make more money.
28:26That's why the compensation plan has to change.
28:29Semi-fixed pay plans, which is they get a base rate for coming and then they get an incremental
28:36rate for building.
28:38We would love that for them.
28:40It helps me.
28:41It helps you.
28:41We all grow together and the base of the tree gets bigger and stronger and grows bigger.
28:45I love it.
28:47So I asked somebody to come here today that I think could be really, really helpful
28:52in helping you guys develop.
28:55Really?
28:56Who is this person?
28:58Come on in.
28:59Hello!
29:01Hi!
29:04Hi!
29:05Hi, I'm Katie.
29:06Nice to meet you.
29:07I love Amanda Klutz.
29:08I was so excited to see her.
29:10Amanda Klutz is a fitness entrepreneur.
29:13She's a celebrity host, and she also created the AK Rope and Proper Supplements.
29:21Listen, I've been on both sides of this table.
29:24I've been an instructor at a studio, and then I've also been you, where I have a studio and
29:30no one's coming unless I'm teaching.
29:33And it's hard.
29:34You can be the face, but then you're the face and everyone's willing to come to your
29:39class.
29:39If you truly don't want to do every single class and not have anyone else come through
29:45your door, you have to take a step back.
29:48Oh, I don't think I physically, physically, I need the workout.
29:51It's tough.
29:52Yeah.
29:53Business is tough.
29:54Yeah, yeah, yeah.
29:54Welcome to business.
29:55Yeah, yeah, yeah.
29:56You can do this.
29:57I know you can.
29:58Letting go of the reins is definitely something that I need to work on.
30:02But I recognize that, and I'm up for the challenge, and I'm hoping that it'll help me free up some
30:07time to work on the business, build things, and create a better situation for all of us.
30:11All right, we got work to do.
30:12Thank you, guys.
30:13Now that Katie and Jason understand that internal changes that are necessary, I think they need
30:22to also go through the process of changing the way they present perspirology to the consumer.
30:27So I'm taking them to JLL, a design firm that I use for all of my businesses.
30:32My biggest fear is that Jason and Katie aren't really ready to change.
30:36But if they're not ready to change, I'm not sure why any of us are wasting our time.
30:40Well, hello.
30:43Hi.
30:43How's it going again?
30:44Don't you love coming to places where you have no idea what's about to happen?
30:47Yes.
30:48Getting more used to it, I guess, as we keep going along.
30:50So the reason I brought you here today, this company that you're at is called JLL.
30:55They take retail and experiential concepts, and they reimagine the look, reimagine everything
31:02about it.
31:03Okay.
31:04Okay.
31:06You want to meet these wonderful folks?
31:08How are you?
31:09Hi, guys.
31:10You guys remember Amanda?
31:11I'm worried.
31:12Okay.
31:13So we're going to take you back a minute to what is today.
31:16Okay.
31:17Okay.
31:18I think you look clean.
31:19You look organized.
31:21You look professional.
31:22Professional.
31:23Yeah.
31:24But if you want to take this to the next level, then we have to get something that's memorable
31:28and it's thoughtful.
31:29We're going to take you in a different direction here.
31:31Okay.
31:31Here is the new perspirology.
31:34Oh, I love that.
31:37We took your tag to just bounce, dance, sculpt.
31:40Bounce, dance, sculpt.
31:41Three rings.
31:42Absolutely.
31:42Three disciplines.
31:43The trampolina circle.
31:44Yep.
31:44Yep.
31:45Yeah.
31:45That's right.
31:46So let's go inside.
31:49So walking in, we'd like to reinforce who you are and tell your story.
31:54This feels warm, inviting, but like not clinical.
31:58It feels like a workout.
31:59As soon as you walk in here, you know, I'm going to get a workout.
32:02I'm going to sweat.
32:03And we want to bring that energy to the space itself.
32:08We've cut your new logo into it.
32:11I love that.
32:12I got to be honest.
32:13I thought I was going to hate it.
32:14I think it's fantastic.
32:16Hold on a second.
32:18As a business owner, why is it that you enter situations with the expectation that you're
32:23not going to like something?
32:24Sometimes it's hard to wrap your mind around it.
32:27That's all.
32:27It's not on you guys.
32:28The current concept in that location isn't quite hitting the mark.
32:34Yes.
32:34Yes.
32:35She's frustrated.
32:36She is up to here.
32:39So you got to stop it already.
32:46She's frustrated.
32:48She is up to here.
32:50So you got to stop it already.
32:52If you're going to be in business, you have to take chances.
32:55I would rather you be more fearful of not changing.
33:00I completely agree with everything you guys are saying.
33:02I want in.
33:04I'm just nervous.
33:05Okay.
33:08I will tell you that you guys crushed it.
33:12I love it.
33:13It's beautiful.
33:14Thank you so much.
33:15Thank you so much.
33:17I feel like a wave of relief flooded me.
33:21I'm very excited about what they put together and it was beautiful.
33:25It was beautiful.
33:26Something that we could never do ourselves.
33:28Did you like the concept?
33:29I think it's fantastic.
33:32It just seems like a huge task put in front of us.
33:38We're flipping something that we've been growing and building.
33:42We're giving it a complete 180.
33:44That's an intimidating thing.
33:45We've put 11 years of blood, sweat, and tears into this.
33:49You don't have to tell me that.
33:50I know that.
33:51I'm just nervous that maybe it gets bigger than what we can handle.
33:56But I am all in.
33:57Or else I wouldn't be here.
33:59I'm ready to take the risk because I certainly don't want to keep doing it the way we're doing it.
34:03Now that Katie and Jason have seen the refresh and new concept of the Middletown location,
34:16I want to sit down and find out if there's a deal to be done here.
34:19How they behave in this particular meeting is going to determine, am I putting money in or are they going to be on their own?
34:30I took a big step this past week in a training sense.
34:33I switched our schedule around, taking myself off the main primetime spots to give trainers those primetime spots.
34:41It has gone fantastically well.
34:43And the trainers were so excited.
34:46You've empowered them.
34:47Yes.
34:48So where are you at in terms of revamping Middletown?
34:51We did bring our quotes that we've gotten and things like that.
34:55And we actually itemized kind of everything.
34:58What we're listing out is a business in a box.
35:00Mm-hmm.
35:0193,000.
35:02Of those things, you already have 19,000 of them done.
35:07The mirror's already there.
35:09The rubber floor's already there.
35:10We'll say 75 grand.
35:12So what do you guys, how can I help?
35:14What do you want from me?
35:15If you were open to it, we would really love to partner with you on getting this beta testing going in Middletown.
35:23I'm curious about something, though.
35:24As a businessman, why would you be interested in partnering with us?
35:32Is this your pitch?
35:34No.
35:34You asked him to talk.
35:35Did you really want him to talk?
35:36I'm literally just curious.
35:38Like, what do you see in us?
35:40I don't know.
35:42Now, I have zero interest in investing in somebody who doesn't have confidence.
35:50I want somebody who believes that they are the right man or woman for the job.
35:56Okay.
35:57I want him to try it again.
35:58I would love him to try it again.
36:00I want to hear it again.
36:00Because that sucked.
36:02Like, that sucked.
36:04Your wife just told you that your presentation sucked.
36:07I'm putting the ball in your court, Jason.
36:13I want you to invest in us.
36:14Why?
36:15Because we work our asses off.
36:16I want to know about it from you.
36:17I know about her.
36:18I work my ass off.
36:20I will not stop.
36:22I won't rest.
36:23This workout, this business has changed my life.
36:26And I want to bring that to other people.
36:28And I think if you join us, we could do that.
36:31That is what I better see.
36:35And she better see every single day.
36:39There's $75,000 of cash that's needed.
36:42And there's 100% of the concept of the equity on the table.
36:46What do you want to do?
36:47If we could have your help with the build out of the additional $75,000 for this.
36:52To see where it can go.
36:54Get the full scope of what we do.
36:55What do I get?
36:56You get.
36:57That's a great question.
36:58Three classes?
36:59Oh, Jason.
37:01I believe that the main concept should still remain in our controlling power at 51%.
37:06And you controlling it at 49%.
37:08Is that your offer?
37:09Well, hold on a second.
37:11No, please.
37:12Just go.
37:12Just please stop.
37:13I think we should round it up a little bit.
37:14I think we should round it to 80.
37:16Nice round number.
37:17Is that your offer?
37:28Well, hold on a second.
37:31No, please.
37:32Just go.
37:32Just please stop.
37:33I think we should round it up a little bit.
37:34I think we should round it to 80.
37:36Nice round number.
37:37No.
37:45I'll do $50,000 for 25%.
37:48Really?
37:50$75,000 for 49% is a better deal on paper, but I have a very specific reason for doing
37:57it this way.
37:58Okay.
37:58I want you to write a check, too.
38:01I want you to invest, because I know it pains you to do it.
38:05We can absolutely invest that $25,000 easily.
38:08Okay.
38:09Why is there sweat dripping on your forehead?
38:10No, there's no sweat.
38:10There's no sweat.
38:12I will do it.
38:13I will do it.
38:14I'm going to get you some, we'll call it continuing education and training at Salesforce, to understand
38:19every single customer, who they are, how to communicate with them.
38:23Okay?
38:23I love that.
38:26It's a wonderful deal.
38:32We're super excited that Marcus is choosing to work with us and figure out how to make this
38:38beta testing model in Middletown work, and hopefully expand from there.
38:43Okay, guys.
38:43We'll see you.
38:44Bye, Marcus.
38:45Bye.
38:46Marcus talked a lot about me being more open-minded and taking more risks.
38:51Well, I think me writing that check is a great example of taking a risk, being more open-minded,
38:56and being confident in the business, because I know what it can do.
39:01I know what it can do.
39:02How do you think I log this?
39:03All right, guys.
39:12Well, I'm currently in Middletown right now, and there is a lot going on.
39:16We've got spackle everywhere.
39:18We've got boxes.
39:19It's starting to feel like it's all coming together.
39:22Middletown is in the middle of a rebranding.
39:24I'm really excited for everyone to see it.
39:26I'm headed to Salesforce, Howard, because Marcus thinks they can help me evolve and
39:32take a step towards the future.
39:34Jason Patrick.
39:35Patrick.
39:36Pleasure to meet you.
39:36My commitment to Jason and Katie was to not only help them with their business, but also
39:41help them develop as business entrepreneurs.
39:43And one of the keys to that is getting one-on-one training.
39:46So I've called in a special favor to my friends at Salesforce.
39:49What Salesforce is going to show him is how to stand out in a crowd, particularly in the
39:55very competitive fitness space.
39:58Right now, the main goal is to get new customers to our second location.
40:02Okay.
40:03Product like Salesforce, what that's going to do is when you're pushing those ads out,
40:06you're going to start to see which ones are performing better.
40:08So what are you going to do?
40:09Put more money in the channel that works.
40:11That works, yeah.
40:11Right?
40:12The fundamental thing to understand about Salesforce is you have a customer record.
40:16You can type in your customer, Tiffany Morgan, and here we can see this record of everything
40:20about Tiffany.
40:20All of her classes kind of come in here as well.
40:23I definitely think even just those two things will be light years ahead of what I'm doing
40:29right now, which is, hey, tell your friends about the promo.
40:34I think Marcus will be impressed with what I learned here today to show him, hey, look,
40:39you can have confidence in me.
40:40Yes, I may have started down here, but this, you know, there's nowhere to go but up.
40:45I actually feel like this is, these are some attainable goals.
40:48Amazing.
40:54I'm back in New Jersey at Perspirology's Middletown location.
40:58Now, this is the one that was struggling, and we developed a whole new concept to reboot
41:03and relaunch the business.
41:05We're going to see if they actually listened and what the results are.
41:11Holy cow.
41:12I mean, really, you changed everything.
41:14It was a big deal for the lobby to feel inviting.
41:18Color palette came out great.
41:21I like what you did with the merch.
41:22The merch came out great.
41:24Sold the shirt today.
41:25I get a lot of compliments on the hoodie, actually.
41:27Can I look in here?
41:29Can I open it?
41:29You want to go first?
41:30Wow.
41:30Now, these lights can be changed.
41:38So you could change the colors?
41:41Yeah.
41:41I mean, who's doing all the laundry?
41:45Not me.
41:47We do have a receptionist, so that person will do it.
41:50I couldn't be more proud of Jason.
41:52He did everything he said he was going to do and then some.
41:56And as I look around, I can see the pride in his face.
41:59He's actually even got somebody else to do the laundry now.
42:04Hi.
42:05How are you?
42:05Good.
42:06How are you?
42:06When you see this today, what has changed the most in your mind?
42:11There's a few things that have happened.
42:12The growth of our instructors.
42:14As soon as I kind of let go of the reins, their confidence level has skyrocketed.
42:18The other thing is, Jason is taking more initiative and doing a lot more on his own.
42:24Now that Katie and Jason have totally transformed their business and themselves, I feel like
42:30the table has been set for a very bright future, including getting to profitability.
42:36And once that happens, the opportunity to franchise this concept across the country,
42:41well, the sky's the limit.
42:43Congratulations.
42:44Thanks for coming on this journey with us.
42:47First Verology!
42:48First Verology!
42:54Okay.
42:56Our parents are immigrants, so we're first generation Americans.
42:59We own a company called Escape Room New Jersey.
43:02So what are we doing?
43:03Make you out, Liam.
43:04He's down!
43:05Wow!
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