- 6 months ago
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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 built. 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
00:34make money. 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
00:44such a dick about it. Leon, are you mad about something? No. Why the f*** are you singling
00:48me out? Their process, the execution, is just like, what is it in 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.
01:09Well, hello. Hi. How are you? Good. I'm great. How are you? I'm Brianna. Nice to meet you.
01:24Eric Cannon, and we're the owners and founders of Brianna Cannon. Our women's lifestyle brand.
01:29We started going on seven years ago. We've distributed our product to close to 3,000 stores
01:34at this point. We also have our own boutique that we operate. Whose idea was the business? I was
01:39trying to get dressed for a football game, and I said, I have this idea. I think we should have
01:43better jewelry, because I didn't like what was on the market, and Eric said, you should do it. I was
01:48the jewelry manager for Neiman Marcus, and I left Neiman's to be a stay-at-home mom. We have three
01:52boys, and this is a baby girl. Amazing. On the way. We started with game day jewelry, and then we
01:58expanded into hair accessories. Here's a Buckeye to go with your Buckeye. We recently became licensed with
02:03the NFL, which we're super proud of. All the stadiums bought it except for, like, four.
02:07Retail price? This one retails for $85. And the rough cost? $12.5. So good margins. Yeah. Better
02:14on the apparel. Apparel is what I think is the future of our brand, and this is Laura Ashley
02:19Kentucky Derby. This is a t-shirt that we're launching for all schools. I would describe Brianna
02:24and Eric as a well-oiled machine. They have growth in their revenue and really explosive margins,
02:30and they understand how to capture licensing, which is a very hard thing to do. The process
02:35is six, eight, nine, 12 months of applying for the license, showing what the model is,
02:40making prototypes, showing them your financials, and proving out that you know how to capture
02:45that market. And then they say, okay, we believe you're a good partner. How much business happens
02:50online? Direct-to-consumer is almost half. Last year, about 55%. And how much is that in dollars?
02:55About 1.8. So the business does about 4 million? About 3. Break down the 3 million across online,
03:03the retail shop, and wholesale. Online, it's going to be about 1.6. Half your business is online?
03:08Direct-to-consumer. Wholesale is going to be 1.2, and then the store makes up the remainder.
03:14I am really blown away. The way that you have put together your brand, the way you've thought about
03:21it, the way you present it, you guys have an amazing business. I think so. Thank you. I don't
03:26see an opportunity for me to invest. I don't think you need me. I think you guys have it figured out.
03:31It was great meeting you guys. It's so nice to meet you. What a pleasure. And congratulations on the baby.
03:34Thank you. We're so excited. Thank you, sir. Thank you so much. Great to meet you. Appreciate it. Such a pleasure.
03:37Really nice meeting you guys. I love it. Take care.
03:42Good morning. Hi, Marcus. How are you? Great. I'm Sheena. Marcus, nice to meet you. I'm Victoria,
03:47director of operations. Victoria, nice to meet you. Nice to meet you. I founded a company called
03:51Banter & Bliss Candle Company about 10 years ago. We are an experiential retail company based in Los
03:56Angeles, California, and our focus is candle making and perfume making. Banter & Bliss has been around
04:02for a while, and I'm not happy with it being stagnant. I want to grow. We need to figure out
04:07what that way is to grow. Can we make it bigger than it is right now? And I think we can. Okay,
04:12take me through the math. I want to understand the financials. In-store experiences account for about
04:1780% of our business. When you come in and make a candle, we keep your formula, and you have the
04:22ability to reorder it. How do you keep it? We have these little cards, and we fill them out after the
04:26appointment, and then we data entry them in. What I would love to see you do going forward is to build
04:32like a Salesforce CRM. Okay. It builds a persona and a profile for each individual person. Right.
04:38And then you can communicate with them for re-engagement. I love that idea. Total revenue of the
04:45business. Last 12 months, we've done about $600,000. Okay. How much of that comes from
04:49experiential? $480,000. Margin profile on the $480,000 experiential? Oh, I don't know. I know.
04:57This is where I need help. Numbers are not. I do my best. You don't know your gross profit
05:03percentage? You know how much you make? It's about 12% on $600,000. You're making $72,000 a year?
05:11Yeah. Okay. The business makes money. Let's see what the experience is like.
05:15Sure. Okay. So when somebody comes into our store, we start with our workshop pamphlet. And when you
05:21open up the pamphlet, you'll see that we have a lot of different options. I assume that this is
05:26my guide? Yes. But not only that, we have an instructor. We don't just sit you down and say,
05:31hey, read this. Go pick your fragrances. I got it. Yeah. This is really well done.
05:35Thank you. I love the idea that you guys have put together. Sure. Data collection needs to be
05:41at the top of the priority list. Right. I would rather you upgraded my jar if I became a member
05:49of the Banter and Bliss Candle Club. Right. What does a member get? A member gets special offers.
05:57It gets invitations. It finds out when there's a new fragrance. It gets everything else. Now I feel
06:02engaged. And it's just a function of understanding how to capture people for retention. So today
06:11isn't the day, but I believe that if you take a couple of months, you start to think about your
06:19margins. You need to know all of those numbers. Okay. And if you start to think about data differently,
06:25then there would be an opportunity. Okay. If you do those things, I want you to reach out again.
06:30Okay. Thank you very much. Thank you so much.
06:35Well, hello. I'm Nicole. Nicole. Nicole. Nicole.
06:38Nicole. Nishan. Nishan. Nice to meet you guys. Nice to meet you too. We just want to know if you
06:44think you're a good quality human. I try to be, but I fail a lot. So that's actually perfect.
06:50That's why we started this. What is the business?
06:53Hats and garments. So it's a clothing line.
06:58We're baseball caps. We're beanies. We're bucket hats. We have a huge variety of hoodies. But when
07:04you go deeper into the brand, we're about spreading kindness and positivity. And that's what the name
07:09Good Quality Human stands for. Especially going through COVID in 2021 when we started, we wanted
07:15to bring people together somehow in a cool way. So we have a pop-up truck. We bought that truck last year.
07:20That's where we found success.
07:24So, what we're looking for is the strategic partner to help us expand the brand. Tie down
07:31better manufacturing, which needs to have larger quantities. Definitely cost us you. People are
07:37reaching out to us for the festivals to be a part of bigger things that need volume.
07:43What's the relationship between the two of you?
07:45So we used to date.
07:46Okay.
07:46We were together for a long time. And we're soulmates. We were together for...
07:50Almost seven years.
07:51Yeah.
07:52If you're soulmates, why aren't you together?
07:53It's more me.
07:55You ended the relationship?
07:56Yeah.
07:57Okay.
07:57And how did you guys meet?
07:59At the gym.
08:00Oh.
08:01Okay.
08:02It was my trainer.
08:03But I own gyms.
08:04The story just gets better.
08:06So I own gyms. And so I would travel to find out other gyms, what they do, what their expertise
08:11was.
08:12Who designs everything?
08:14I do.
08:14All of it?
08:15Yeah.
08:16And what is your role in the business?
08:17The back end.
08:18Okay.
08:18Systems, accounting, all the unsexy things.
08:21Is this making good money?
08:22We did 1.1 last year.
08:241.1 million?
08:26Yeah.
08:26From the year before, it was 280,000.
08:29That's awesome.
08:30Yeah.
08:30It was the truck.
08:31Can we look at the product?
08:33Yeah, sure.
08:35What's the pricing on something like this?
08:37So these are 200.
08:39The hats range from 49 or 59.
08:41I like the stitching.
08:43I like the fabrication.
08:45I do feel like they've sourced good quality materials.
08:48There's no shortcuts in their finished products.
08:51And I do think his designs are good.
08:53I want to just look at this over here real quick.
08:55Is that a Marlboro?
08:57It's a play on Marlboro.
08:59So it's not a play on it.
09:00It's not your mark.
09:01So that's your Von Dutch lookalike.
09:06Is that an L.A. Dodgers logo?
09:08So it's a play on that.
09:09Anytime anybody sees an interlocked L.A. or an interlocked New York, it's streetwear, it's lifestyle.
09:15You kind of operate in the gray.
09:16Yeah, but this belongs to somebody else.
09:19That's not okay.
09:26This belongs to somebody else.
09:28That's not okay.
09:29Their brand is violating other people's trademarks.
09:33Is it a different shape?
09:34No, but it doesn't say Marlboro.
09:36I understand that, but so here's the thing.
09:38When you're a small brand, and as you try to expand, the edges of grayness start to become black and white.
09:44I think you should be marketing your own original designs.
09:48Many new upstart businesses try to draft off of other people's success.
09:53What I don't want this business doing is trying to grow their revenue by using knockoffs, and most importantly, cutting corners.
10:00The cool thing about it is, like, we have a lot of designs in the bank.
10:03This man has a lot of designs in the bank.
10:06That's amazing.
10:07You're an artist, right?
10:09I don't like to quote myself as an artist, but yeah, it's...
10:11He doesn't own it.
10:15Why are you getting emotional?
10:16Because I know how good he is.
10:19No, he just puts his heart into everything, and he's very passionate.
10:23Like, it may be just a hoodie, but he wants that to be the best hoodie you ever had.
10:27I appreciate the love that you have for him, and the love that you have for his passion.
10:34It says a lot about who you are as a person.
10:38I'm fascinated by the garment business in L.A. because I don't need to rely on China to make stuff.
10:44So I think there's an opportunity here for me.
10:48The next time I see you, hopefully I'll see you in Avikini.
10:51Thank you so much.
10:52Nice to meet you.
10:53What I like about this business is their dedication to quality.
10:57But what I don't like is they're using other people's intellectual property to generate revenue.
11:03If they're cutting corners on the design side, what else are they cutting corners in that I don't know about?
11:10Buckle up.
11:10All the way from New York.
11:20Hi, Marcus.
11:21How are you?
11:22Hey.
11:22How are you doing?
11:23Teddy.
11:24Teddy, nice to meet you.
11:24I'm Marcus.
11:25I'm a huge fan of mobile businesses like theirs because they don't come with all the fixed costs associated with big brick and mortar.
11:32But if they want to grow their revenue, we're going to want to see the business being built on a solid foundation so that it can be scaled.
11:39So can you guys walk me through how this works?
11:43So we operate like a food truck.
11:45We got a street vendor permits.
11:46And how much is it?
11:47I think 200 bucks.
11:48And it lasts for one year.
11:50So it's negligible.
11:51The similarities between you and a food truck are they're selling something you eat, you're selling something you wear.
11:56If you think about a food truck, where do you base camp it?
11:59Commercial kitchen.
12:01What are you doing?
12:01Her garage and her house.
12:04As you get two, three, four, five, six, seven trucks, that becomes impossible.
12:09So the way the food truck model works is that it requires a commissary.
12:14It requires a center hub where all the vans come in and they get replenished and they go out.
12:20But operationally, we need to figure that part out.
12:23The logistics can be figured out.
12:24That's your stumbling block.
12:26It's how do you make it work, right?
12:27Yeah.
12:28As I feared, I'm seeing them cut corners again, using McColl's Garage as a warehouse in a distribution center.
12:35I'd rather them subcontract out their third-party logistics foundation so that distribution, manufacturing, warehousing, and inventory management can be solid and stable while they work on design and sales.
12:48I love this business, but I don't love the way they're operating today.
12:52So walk me through the supply chain.
12:54Start with the first thing.
12:55So first thing is we get the fabric.
12:57You're sourcing the fabric?
12:58Yeah.
12:59You're not using the same fabric every time?
13:01We are, but some of them are different because some are heavier weight and some are lighter weight.
13:05Got it.
13:06And then they're dyeing it to the color that you're giving them.
13:09Yeah.
13:09Which means you can come up with any color anytime you want.
13:11You just give them Pantone.
13:12Great.
13:13Their current product sells for about $200 because the production costs are high.
13:17And the quality of the product is outstanding.
13:20It's cut and sewn.
13:21It's hand dyed, which increases the labor cost and is what results in a high production cost.
13:27But in order for this business to grow, it's going to have to do volume.
13:31What we're looking for is to tie down better manufacturing, which needs to have larger quantities, but definitely a cost issue.
13:39In order to mass produce a product, you're going to have to find a more efficient and affordable garment to be able to do that with.
13:47When I look at a business like this, I'm looking for a good, better, and a best model.
13:51In the current product lineup that they have, it's clearly best.
13:55But I would love to see a $125 product and maybe even a $60 to $70 product.
14:01That doesn't mean you have to buy an inferior quality garment.
14:05But you can't sit here and work with hand-dyed, hand-cut and sew products in order to hit those price points.
14:11All right, the product.
14:12And I do have a beef with you.
14:14I work really hard to protect my whole business.
14:21And if people want to put my stuff on things, which they pay us to, I let them have fun with it.
14:26I give them a license.
14:27When I find people are using my information or my trademarks or anything that belongs to me, I do the opposite of what I just said.
14:35So I have to remove this.
14:37Okay.
14:38I have to remove this.
14:40I have to remove this.
14:42So now, all of a sudden, the business gets less items to sell.
14:48But it's like music where you remix other people's stuff, right?
14:51It plays a lot of nostalgia because in streetwear, you want to wear the same but a little bit different.
14:56This is not something that's like a copy.
14:58Let me stop somebody.
14:59Folks, would you help us with something?
15:01Sure.
15:01Anytime you get yourself into a trademark infringement question, or if a judge looks at it, they're going to use a litmus test called the likelihood of confusion.
15:11Does the person see the object, the item, the silhouette, and think it's actually something else?
15:17And if the answer is yes, there's a strong possibility that you could lose that suit, ultimately costing your business money.
15:24I'm going to show you something.
15:25You tell me the first thing you think of.
15:27Okay.
15:29I know this brand.
15:30What is it?
15:31Marble?
15:31Marble?
15:31Marlboro cigarettes?
15:32Yes.
15:33No.
15:34I have no idea.
15:35Same.
15:36It looks like a bone.
15:38A bone?
15:38Yeah.
15:39Beverly Hills Hotel?
15:40Hotel?
15:41Hotel?
15:41Beverly Hills Hotel.
15:42Okay.
15:43Oh, Marlboro.
15:46Dodgers?
15:48Marlboro.
15:48Marlboro.
15:50Yeah, Marlboro.
15:51Miller.
15:52The Millerite.
15:54Goodyear.
15:55Gulf.
15:57Miller.
15:59Marlboro.
16:00Marlboro.
16:01Dodgers.
16:01Dodgers.
16:03Sure.
16:04There's not much confusion here.
16:06Nicole and Ashan are playing with fire, and this is not a flame that I'm willing to
16:10get burnt by.
16:11The reason that I want to put a stop to it now is because the brand's only going to get
16:15bigger, and the bigger the brand gets and the more they get sold, the worse the exposure
16:20is.
16:20And when you cut corners like this, you're risking everything you've built.
16:24So let's take everything that we think is risky and just put it aside.
16:31Nicole.
16:32Yes?
16:32Can you come clear this whole area out?
16:34This too?
16:35So, everything, Nicole.
16:36I felt like we were robbing something, or we didn't, like...
16:40Well, we're taking away, like, 80% of product in the truck.
16:44It did feel weird, and it was surprising how bare our shelves were without all those products.
16:51How much inventory is in here right now in terms of dollars?
16:54Oh, you need a full number of...
16:55Yeah, what's in here?
16:55How much inventory is in there?
16:56Nicole, where's Nicole?
16:57Where's the smarty man?
16:57No, no, no, no.
16:58She's not going to save you on this one.
16:59I don't know that number.
17:01So who does do the inventory management?
17:02Um, Nicole.
17:04I'm a little concerned that Eshaan may not be involved in all the parts of the business
17:08that it takes to run a business.
17:10We have very clear positions in the business, and we kind of know what the other person does,
17:17but we also know what our lanes are.
17:20Okay.
17:20So we're not overstepping.
17:22Want to give me the things you're responsible for?
17:25What is it when you buy bags and...
17:27Supplies.
17:28Supplies.
17:28Oh.
17:29And packaging.
17:30In understanding their relationship and the fact that they're ex-lovers,
17:34it's important for me to see how they see themselves in the business
17:38and their contribution to the business.
17:40Write the things that you're responsible for.
17:43What I'm ultimately trying to see here is how much of their past relationship
17:47and all the things that didn't go right are still sitting and boiling around in their business,
17:52because that's where the real risk is.
17:55Um.
17:57All right.
17:58We're good.
17:58That's it.
17:59You're going to go this way.
18:00You're going to go this way.
18:01Are you surprised by how many are on his list?
18:04No.
18:05She could do the wholesale accounts, the website, the inventory, the payroll,
18:08the sales tax, the business tax, customer service, the shipping, the supplies, the insurance,
18:12the banking, the accounts payable.
18:14You're cool with her doing those things.
18:16Sure.
18:16Because you don't want to do those things.
18:20McCall is doing the bulk of the lifting.
18:22And any time that happens, resentment starts to build up.
18:26And I want to sit down with her because it's a red flag for me and understand her perspective.
18:31You know that I'm a people, process, product guy.
18:35So from a product standpoint, the quality is excellent, but there's work to do on the product design.
18:42From a process standpoint, it's really understanding what's the supply chain look like.
18:46And from a people standpoint, there's just the two of you.
18:50Any time I'm going to invest in a business, I have my own secret chart.
18:54It's called my risk relationship chart.
18:57And on that chart, I rank out all the different types of relationships between the owners
19:01and where the risk is the highest.
19:04At the top of that list is ex-lovers.
19:07And any time that exists, there could be resentment.
19:10And that resentment starts to brew and boil over.
19:13And I don't want to be in the pot of that boiling water.
19:16I think you pick up the that he leaves behind.
19:19And I think he's got amazing ideas.
19:22I don't feel like I'm cleaning up his mess.
19:24I clear out the noise.
19:26Because he focused more on the negative and what ifs.
19:29Is that why he ended the relationship?
19:31He ended it because he realized that it was dimming my light.
19:36He's like, you're so bright.
19:37The one thing he pointed out is like, I have this board.
19:40A blessing.
19:43One of them was, please let Jayshon not be so negative.
19:48And when he read that, he said it broke his heart.
19:52Because he knew that he was bringing me down.
19:56And he didn't want that.
19:57He said, I will never do that to you.
20:00Do you think time will fix that for him?
20:03Do you think he'll mature over time in that regard?
20:06I think he can.
20:07I think, um...
20:08Are you hopeful that happens?
20:10I'm not hopeful for it because I think his journey is very long.
20:13I do think of his feelings like if I were to date.
20:16I think my biggest fear is that he's just going to have a hard time.
20:20He's not going to find somebody.
20:22So when I find my person, he's just left.
20:24Does he know you're still in love with him?
20:30I don't...
20:31Does he know that you are still in love with him?
20:38Well...
20:39Does he know you're still in love with him?
20:46I don't...
20:48Yes, he knows I love him.
20:53It's my hope we can move the business forward and move you guys forward.
20:57That would be unbelievable.
20:58Right now, I wonder, because you are still in love with him, are you going along with things?
21:03And are you doing things because of that feeling?
22:06I don't trust your design process because I don't know what it is.
22:10I don't trust that you see her as an equal.
22:14So today is either our goodbye or it's our hello.
22:20But for it to be a hello for me, everything has to change.
22:25So is it goodbye or is it hello?
22:30We have been saying, hey, we need to get our together.
22:34And also with the festivals like this one we just booked, the cost is high.
22:39So we're willing to make the changes.
22:44Yes.
22:44You are?
22:45Yeah.
22:45Okay.
22:46Okay, you're ready to actually start today?
22:48Yeah.
22:49Okay.
22:50I like the fact that they're finding new avenues of revenue streams.
22:53But if it's going to be things like music festivals, they're going to have to start to get very focused on different price points
23:00and multiple manufacturing processes.
23:03That's it.
23:04What's happening, brother?
23:07Great to see you.
23:08Good to see you, my man.
23:09Hi.
23:10These are my new friends.
23:11Hi.
23:11Hey, I'm John.
23:12I'm Nicole.
23:13I'm taking them to meet Mike and John Anderson.
23:16They own Anderson Brothers.
23:17It's a design firm that also specializes in manufacturing and supply chain.
23:22They bring expertise and expertise that Nicole and Ashan don't have.
23:26Let me give you guys a little back story.
23:28I invested in their business.
23:29I've gotten all my money back and then a bunch more.
23:32But I just want to be clear.
23:33I'm not invested here anymore.
23:35Describe what you do today.
23:37A lot of design firms, they just do design, right?
23:41We do the design and the sourcing and the manufacturing.
23:44It's a 360-degree solution.
23:47And you can plug into some of those pieces or you can plug into all of those pieces.
23:53So why don't we get in and we'll start looking at stuff in here.
23:56So these are the things that they do as a service.
24:03Rank them in terms of where you think you need the most help to the least help.
24:07Yeah, we need help with all of it.
24:09Any apparel business has to do five things as cornerstones to building their company.
24:14They have to know how to design the product.
24:16They have to know how to source the garment.
24:18They have to know how to manufacture and distribute it.
24:20They have to understand the supply chain.
24:23And they have to understand direct-to-consumer e-commerce fulfillment.
24:26So you shouldn't have them go first because...
24:28You guys can have the same opinion.
24:30We love that about you guys as a couple.
24:31This is what I think you need.
24:37I think you need the most help with design.
24:40I think you need the most help with e-commerce.
24:43And then I go to distribution and supply chain.
24:46Then I go to sourcing and manufacturing.
24:48So why do you think that we need so much help with design?
24:52As we try to attract more people and sell more,
24:55I want you to explore expanding your original design catalog.
24:58The biggest challenge that good quality human has
25:02is that I feel like it's lost its focus on its core foundation.
25:06We're taking away like 80% of product in the truck.
25:09If they want to interest me or any other investor,
25:12they're going to have to prove that they're the best at what they say they are,
25:15which is being creative.
25:16So here's what I want to do.
25:18I want you to get your laptop.
25:19I want to start with variations.
25:21What is good quality human?
25:23What are different ways you can present it?
25:25I'm going to design?
25:27Yeah.
25:27I can't, I love your design.
25:28If I got to do numbers, you got to design.
25:31The big deal for me is I want you to have more fingerprints on this.
25:35And I feel like you're a little too much in the shadow and I don't like it.
25:38Maybe you have something to say.
25:40I've had something to say, but then when you have ideas and then it's like,
25:45oh, that's corny.
25:47You mean if your ideas are dismissed?
25:48Yes.
25:49Then you just say, okay, I don't really want to think about that.
25:53I'll just worry about other stuff.
25:54Okay.
25:55So I asked her to design as well.
25:58And she was just mentioning that in the past,
26:00if she had an idea that she just sort of gave up.
26:04Have you dismissed her ideas?
26:06Yes.
26:06Why?
26:08Because I'm trying to learn how to design myself.
26:11Why do you have to like turn her light down to turn yours up?
26:14Uh, insecurity, I guess.
26:18Why do I have to have my light turned off because you're insecure?
26:23I don't think I ever asked her to turn off her light.
26:26When did you feel like you presented to me an idea and I dismissed it?
26:29I mean, just at different times when we talk about something and I say,
26:32oh, what about this?
26:33Or what about this saying?
26:34You always say, that's cool.
26:35Do it for my gyms.
26:37Do it for those other things.
26:39What's become clear to me is that Ashan wants to only do the things
26:43that he thinks are fun and without any input for her.
26:47The problem is, it's not, she's not putting up any resistance to that.
26:50And whatever type of relationship that is,
26:53I don't want to find myself in the middle of it.
26:55Is there a design that you want to see like come to life?
26:58Well, we always say please and thank you.
27:00Let's pick a font that you think would be good.
27:02More flowy, more flowy, but open.
27:06It is exciting to design.
27:08When I see clothing, the colors, what it says, give me a feeling.
27:13Can we make it green?
27:14Of course.
27:15I like that.
27:16Good teamwork.
27:17Here we go.
27:17See?
27:18But that's the design process that we bring to the table.
27:20It's one of those things that I haven't flexed.
27:22I haven't flexed my design ideas.
27:25I actually like it right around the dark.
27:27I love that.
27:28This feels like you.
27:30It felt good because I couldn't wait to show Ashan what I had done with my design.
27:35Come here.
27:36Look at what she did.
27:40Don't like it?
27:41Thumbs up or down?
27:42For me, it's a down.
27:44What?
27:46Would it sell, was the question.
27:48To my audience?
27:49To the female audience.
27:50Would it sell?
27:51Oh, 100%.
27:52That's all that matters.
27:54100%.
27:54That's all that matters.
27:56It needs tweaking.
27:57Why?
27:57Because you didn't do it?
27:59No, because I don't like the font.
28:00Out of 50 fonts, your friend picked this font.
28:03She also knows your customer.
28:05And you're saying it's going to sell 100% of the time.
28:07So, something to think about.
28:08It's frustrating for me that Ashan walks in and just starts criticizing her designs.
28:14Where's your design?
28:17I have none.
28:18You have nothing?
28:19If you're going to criticize something or you have feedback, then at least come with a solution or an idea.
28:25How are you doing?
28:35Good.
28:36You got a good spot.
28:36I'm visiting McColl and Ashan at a retail pop-up in downtown L.A.
28:40It's where those small businesses can show all their wares and sell them to retail customers.
28:45So, what does it cost to come to a show like this?
28:48It was for two days.
28:49So, it's usually about $6.50 for two days.
28:51And how much business did you do yesterday?
28:53Yesterday, we did over here, $2,700.
28:56$2,700.
28:57And your margins were how much?
28:59Oh, that's...
29:00So, you would take your revenue minus your cost of goods minus your cost to be here.
29:09So, let's do the math.
29:11How much were the cost of goods yesterday?
29:13Is it fair to use 50%?
29:15Yeah.
29:15Okay.
29:15So, $2,700 at 50% margin is how much?
29:19Um, $15,000, like $16,000-something.
29:23How much?
29:25$1,350.
29:26Okay.
29:26How much did it cost to be here?
29:28Uh, $325.
29:29So, start at $1,350 in gross profit, minus $325.
29:34Uh...
29:36McColl's dying inside.
29:37I just want you to know that.
29:38It's okay.
29:40So, that's, what, $1,025?
29:42Okay, $1,025.
29:43How much inventory is here today?
29:46Um, a lot.
29:50I'm trying to be respectful of the ideas that they have, and I'm trying to give them 100% of my effort, but I can't seem to connect the dots.
29:58Any new designs here?
30:00Not from when you came at the truck, no.
30:02Ever since I've taken away their ability to sell the things that violate people's trademarks, I haven't seen any original designs.
30:09I thought they were going to come with a whole, like, presentation of ideas.
30:14I don't know what I'm doing here.
30:16Their lack of urgency around paying attention to numbers and understanding how to manage their inventory.
30:21It's almost like they would rather just make a couple grand on a weekend, and that's it.
30:27Here's what my problem is.
30:29From a process standpoint, it's the worst process I've ever seen in recent times in almost any business that I visited.
30:37So, I want you to tell me, where do we want to get to, and how are we going to work our way backwards?
30:42And if the last cup is the final destination, I want you to write it down.
30:49We're going to put it on the floor, and we're going to work backwards.
30:52For next year, all California music festivals.
30:54So, you want to participate in all California music festivals.
30:58Yeah.
30:58That's the end goal.
30:59How do we reverse engineer?
31:01One of the techniques that I've developed over the years is understanding how to reverse engineer getting to the outcome that I'm looking for.
31:09I think, what is the perfect outcome, and what are all the steps that need to happen along the way, starting from the outcome, working backwards to the first step?
31:19Where's the inventory coming from?
31:21That ball falls under over here.
31:22No, it does not.
31:24Okay.
31:24Every step has to be specifically identified.
31:27I'm starting to get frustrated because they tend to want to either skip a step or mush a few together.
31:33That's not going to work.
31:34We need to come up with all the product, merch, design all the stuff for the festival, manufacturing, then we do all inventory, a payment solution, put together a street team.
31:46I want you to start to put these in order.
31:49Okay.
31:53Can I make a picture of all of this?
31:55This is helpful.
31:56What's, that's good to know.
31:57Glad I'm not wasting all of my time.
31:59Nicole, how do you do your accounting today?
32:06QuickBooks.
32:07And then we have a bookkeeper.
32:08And what is your, like, what is your involvement in that?
32:11I glance over the numbers at the end of the month, so I don't really log in.
32:16Can you log in?
32:17Mm-hmm.
32:18There's no accounts payable here.
32:20There's no accounts receivable here.
32:22Look at all the tools that are available for you.
32:26Every kind of transaction.
32:27Sales, invoices, estimates, sales orders, recurring payments.
32:32You get down to the reports thing.
32:33You can build custom reports.
32:35QuickBooks is a good tool.
32:37But we're not using it.
32:38Once you understand how much inventory exists in the company, we can upload all of that into QuickBooks.
32:44And then we can clean up the balance sheet.
32:47Oh, really?
32:47Yeah.
32:48That would be good.
32:49It's important for me that you become a wizard around the numbers.
32:55So that when Ishan says things to you, you could say to him, we're not doing that.
32:59Or, that's not true.
33:04Marcus.
33:06So we're in there and you're doing the math.
33:07Inside?
33:08Yes.
33:08And we're, you're doing the math with him.
33:10It made me feel some kind of way because I don't feel everyone has to be good at doing math in their head to be able to understand numbers.
33:17Let's do the math.
33:17How much were the cost of goods yesterday?
33:20Um, how much?
33:22Uh.
33:24It might upset you.
33:25Yes.
33:27What I've learned with him is that when he's uncomfortable or he gets lazy or he gets frustrated, he can lean on you and you let him off the hook.
33:35Currently, business is booming at Good Quality Human.
33:47But to continue growing, they need to hire more people to take on some of the work.
33:52That's why they need ZipRecruiter.
33:54ZipRecruiter is the number one rated hiring site because it works.
33:58They find engaged, qualified candidates fast.
34:02Nicole and Eshan don't have time to waste.
34:04ZipRecruiter helps them grow their team fast.
34:07If hiring's holding you back, try ZipRecruiter for free.
34:11And fix it today.
34:12ZipRecruiter.
34:13ZipRecruiter.
34:13ZipRecruiter.
34:13ZipRecruiter.
34:13What I've learned with Deshawn is that when he's uncomfortable or he gets lazy or he gets frustrated,
34:23he can lean on you and you let him off the hook.
34:28I'm not going to let him off the hook because I know he's capable of it.
34:32And what I don't want him to do is look at me as somebody that will just solve it for him.
34:37No, it's just that I just, I don't want people to feel like less than, but I see what you're saying.
34:45Because he is capable, whether he knows it or not.
34:48Do you want to have him join our conversation?
34:51Yeah.
34:51Is that okay?
34:52Yeah.
34:53Deshawn.
34:58She was mad at me because she didn't like the way I was pushing you upstairs.
35:04Were your feelings hurt when I was grinding you on the meth?
35:07Um, no.
35:11Because you want me to be the best version of myself and you know that I can do it.
35:15Dude, I know I can do it.
35:17You're the one that's crying.
35:18Did I hurt your feelings up there?
35:20Well, it may have been me feeling that way for him and thinking he's agonizing because he's not getting it right.
35:27Three things just became very clear to me.
35:30One, he has a high level of self-awareness.
35:33Two, he knows that I know he's capable.
35:37Lastly, your codependency between each other and her defending you while it's charming, it's unnecessary.
35:44The relationship between McColl and Eshawn is very complicated.
35:49It's all driven by emotion, not business, not process, and that complication is putting a ton of risk on the possibility of investing here.
36:02Nice to see you guys again.
36:04I wanted to get the ball rolling here, trying to think about different ways to source, different ways to expand margin, and how to expand the collection.
36:12I want you to see the factory, see their process.
36:13I'm going to leave it up to you guys.
36:20The cool thing is we can do it all here.
36:22Printed, sewn, you name it.
36:24So is it mostly blanks that you guys do, or do you do any cut and sew?
36:28No, we can do everything.
36:28You can get the best stuff, you can get stuff that's right in the middle, that's just really great, and it works for a lot of college kids, and I think where you guys are at, it's all specialty items, and that's what we can do.
36:39When you think about the price points of Good Quality Humans' current offering, it's in that $200 range.
36:45Their current process and the quality of their product is outstanding, but there are alternatives that are much less expensive.
36:51They can source blanks, which are pre-sewn and pre-dyed, and give you the ability to print or embroider right on it.
36:57That would give them the ability to lower their final production costs by as much as 50% to 60%, giving them the ability to make a nice margin, lower the retail price point, and address a wider part of the market.
37:11Is the brand only able to have custom products?
37:16Yeah, yeah.
37:17So our goal is to not use any blanks for garments.
37:21It has to be elevated.
37:23But the cost is high.
37:25What if we did a music festival?
37:29So I believe what we sell at our pub is being different than what we sell for a festival of volume.
37:37Great point.
37:38At a music festival, I feel it's more about the experience at that festival, and as long as the hoodie is soft and comfortable to wear, when you make a cool design, people will love it.
37:49Do you disagree with her?
37:50Um, before we even get to that, I think a conversation that we would have to have is, because the quality is different.
37:59She believes that she could have a more relatable music festival price, but in the stores or in the van, you want to have the elevated version.
38:08Um, for music festivals?
38:13I wouldn't like to, but it's okay, because we have to generate revenue.
38:38I'm willing to try it.
38:41It does make sense to have a portion of your lineup be manufactured blanks, because in order to attract a buyer, a younger buyer at a music festival, you're going to need to hit a price point that people can actually afford.
38:53You've been to our design center, Seal Beach.
38:55Right across the street is our print shop, but here's where we keep all our finished goods.
39:00Inventory, e-commerce from A to Z.
39:03Long story short, product comes in, palletized, ready to ship out, out this door, ready to go.
39:073PL, dialed in.
39:09It's something you don't have to worry about.
39:10You're no longer holding your house hostage.
39:12Marcus had asked to bring some original designs, which is what Cup experiment was.
39:19If this is your North store, how are you getting there?
39:21You can't go to the music festival unless you do these 24 steps.
39:24This is helpful.
39:26So one of the steps in there was design, which was my duty.
39:29These are some of the ideas to play with at, we're about to do a music festival.
39:33Sunflower is something that we're leaning into as a little bit of a brand identity.
39:37I love it.
39:37I actually, I think that's great that you're incorporating an image with the word.
39:42Yeah, it's fun.
39:43My greatest flaw is, which was revealed working with Marcus, that I need to be more open-minded.
39:49I think a lot of people see great potential in me.
39:54This is just a hat.
39:55I like it.
39:56It's cool.
39:57Yeah, I like that.
39:58That's fun.
39:58Yeah, it's cool.
39:59It's strong.
39:59After going through this journey with McColl and Ashan, I've been able to influence many
40:06parts of their business.
40:08But what it ultimately comes down to is the risk that I believe is associated with the
40:13people side of things and their relationship.
40:16In order for me to put any money on the table, I'm going to want to ensure that there is structure
40:21and discipline about how my money is used.
40:25In order for a business to grow, I believe that it has to have belt and suspenders, where
40:31everything has to be properly secured and properly retained to keep things up, to keep
40:37things stable.
40:38What were you hoping that I would do with you?
40:41I think I would like to work with a design firm that we can do everything that you've
40:46stated.
40:47How much working capital do you think you need to be able to activate everything you want
40:51to do?
40:51I'd say like $75, but we really needed a strategic partner more than we needed money.
40:57So the way that I would like to handle the money is that I will give you the $75,000 line
41:03of credit at Anderson Brothers.
41:06I don't want equity in the business because I don't want to get in the middle of you two
41:10lovebirds.
41:11The hook for me is that I want a 7% interest rate on it, but I would like to receive a dollar
41:18an item forever.
41:20And you can stop it at any time.
41:23The $75,000 line will go away.
41:26You can do whatever you want, but we won't have any hard feelings between us.
41:31I decided not to take equity in this particular business.
41:34The $75,000 that I put on the table through Anderson Brothers is a little unorthodox, but
41:41it sits inside of an infrastructure that I know works, that I trust.
41:46Does that seem fair?
41:46I think it does.
41:48I think it does.
41:50What do you think?
41:51A dollar a garment.
41:53A dollar an item.
41:57Um...
41:58You can stop it at any time.
42:01So why do it to begin with?
42:03Because I know you're a man of your word.
42:06So you have to make a commitment, which is what I think is the hardest thing for you.
42:10I'm asking you to make a commitment to me.
42:16Let's do it.
42:17You want to do it?
42:20Yes.
42:21Okay.
42:22Let's go to work.
42:23Let's do it.
42:24Do you need these?
42:26No.
42:27Nicole and Ashan are excellent entrepreneurs who understand the hustle and the grind that
42:34it takes to get there.
42:35If I need them to do anything, it's to stop feeling like you have to control every single
42:41part of your company.
42:42If they choose to work with the Anderson Brothers, I believe their ability to hit 5 million is
42:48within 12 to 24 months.
42:50In the end, the ball's in their court.
42:55So Sauce Bay is a health-focused food brand.
42:58Your rental is more than your revenue.
43:01That's not going to work.
43:03It's in Italian market and cooking school.
43:05I'm struggling because you're all over the place.
43:07That's the basement.
43:08What the f***?
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