The Profit In 10 Minutes: Ashtae Products | CNBC Prime

Summary

In this episode of *The Profit*, Marcus Lemonis visits a family-run multicultural hair care business in North Carolina. While the company generates $1.5 million annually, poor focus and distractions, particularly from co-owner Michael's side projects, are threatening profitability. His wife Ramona shoulders most of the business responsibilities, and their daughter Taylor struggles to find her place. Marcus offers $300,000 for 25% of the business, guiding them to rebrand, streamline operations, and delegate tasks. With renewed focus and a successful product launch, the family business is poised for a profitable future.

Takeaways

• 💇 A family-run hair care business in North Carolina is struggling, despite making $1.5 million annually.
• 💸 The business profits are declining due to the owner's involvement in expensive side projects, such as weddings and television stations.
• 😓 Ramona, one of the owners, handles most of the day-to-day operations, including payroll, payables, and trade shows, with little help from her husband Michael.
• 👔 Michael spends too much time focusing on unrelated projects, like property management, which diverts his attention from the core business.
• 📦 Marcus, the business expert, critiques their product packaging, stating that it looks like a wholesale line rather than an upscale consumer brand.
• 💲 Marcus offers $300,000 for 25% equity in the company, with plans to focus on product development and help reduce debt.
• 👩‍💼 Taylor, the owners' daughter, steps up to take responsibility for organizing seminars and trade shows, showing her willingness to contribute more to the business.
• 🔄 Marcus stresses the importance of Michael learning how to delegate tasks and focus on core business priorities.
• 🎉 The team successfully organizes a product launch event in Charlotte, North Carolina, which impresses both clients and Marcus.
• 🚀 With a revamped product line and a clearer focus, the family is poised for greater success, and Marcus is confident the business will become wildly profitable.

Q & A

What is the main issue faced by the family-run hair care business in North Carolina?

The business is struggling due to a lack of focus, with one of the owners, Michael, pursuing expensive side projects, which is causing strain on both the profits and the overall operation.

What role does Ramona, Michael’s wife, play in the business?

Ramona handles most of the business operations, including payroll, payables, receivables, and trade show organization. She essentially manages the day-to-day tasks while Michael is often distracted by side projects.

Why is door-to-door selling considered inefficient by Marcus?

Marcus believes that door-to-door selling is inefficient because it limits the business’s reach to only local salons in the Carolinas, preventing them from expanding beyond that region.

What did Marcus criticize about the product packaging of Ashtay’s hair care line?

Marcus criticized the product packaging, stating that it looked like a wholesale line rather than an upscale, consumer-facing product. He emphasized that packaging plays a key role in attracting salon owners and consumers.

What was Marcus's offer to help the business financially?

Marcus offered $300,000 for a 25% stake in the business. His goal was to help the business become debt-free, invest in product development, and find additional cash wherever possible.

What role does Taylor, the daughter, have in the business, and what challenge does she face?

Taylor struggles to find her place in the company, as she has many ideas but faces challenges in implementing them. Marcus suggested that she take on the role of Director of Seminars and Trade Shows to develop her leadership skills.

What positive change did Michael demonstrate by the end of the episode?

Michael showed growth by delegating tasks that were not profitable for the company, such as salon maintenance, to other employees. This shift in focus allowed him to prioritize business operations more effectively.

How did the product launch party in Charlotte, North Carolina, contribute to the business?

The product launch party allowed Ashtay to introduce its rebranded products to salon owners from the East Coast. It was an important event to showcase their new look and generate interest in the company’s offerings.

What was the outcome of the rebranding for Ashtay’s hair care products?

The rebranding, including new packaging and a fresh look, was well received. Marcus praised the event’s success, noting that it presented the company as more professional and upscale.

What is the key takeaway Marcus shared with Ramona regarding her role in the company?

Marcus encouraged Ramona to continue delegating tasks and reduce her stress by sharing responsibilities. He emphasized that the company’s success depends on her being able to manage without being overburdened.