The Profit Recap: Bad Hair Day

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Michael Woods of Ashtae Products. Photo: CNBC
The Profit

The Profit

Ashtae Products Season 4 Episode 14
Editor's Rating 4 stars

Ashtae Products is a family-run, multicultural hair-care business out of Greensboro, South Carolina. They sell their line of products, a total of 29 distinct SKUs (pro tip: saying “SKUs” is a great way to sound like you are extremely good at business), to beauty salons in the region.

Husband and wife Ramona and Michael Woods and their daughter Taylore are doing an impressive $1.5 million in revenue a year — at least, that would be impressive, if Michael didn’t immediately blow their profits on his expensive, half-baked side projects. Marcus Lemonis to the rescue!

Let’s break down the issues, one by one.

1) To call Ashtae disorganized is a vast understatement. Marcus can hardly find the entrance to their office in the unnecessarily large business complex they own. The tenants include an accounting office, three beauty salons (where Marcus gets a shampoo and takes one of the old-school hooded hair-dryer chairs for a ride, naturally), a space for corporate events and weddings, and — why not? — an actual church. That’s to say nothing of the bail-bonds company, dance studio, and photography. For some reason, Michael has taken it upon himself to outfit all of these business with furniture. “Which is not a distraction at all,” deadpans Marcus.

2) Michael. Michael, Michael, Michael, Michael. He is an unfocused, never-ending well of expensive and bizarre ideas, including a failed television station that cost $200,000. Just kidding, that was a lie. It was actually $1 million, his wife and daughter are quick to clarify. Ramona — who handles payroll, payables, receivables, and trade shows all on her own — is at her wit’s end. “I love this man to death,” she tells Marcus. “But there were some moments that I would just cry.” Meanwhile, Taylore doesn’t have a job title, per se. She’s “in limbo” about whether she even wants to work for the family business.

3) Ashtae’s branding isn’t great. The dated white bottles, printed with the company’s red-and-black logo, look like some kind of industrial chemical compound that Walter White would use to make meth, or maybe one of those barium sulfate “smoothies” you have to drink before a CT scan.

4) The products are made by a co-packer in Chicago, but oddly, they aren’t actually finished there. Instead, they’re shipped over in barrels, then Ashtae fills their bottles on site. Marcus realizes with dawning horror that Michael envisions building a full-fledged factory on the premises. They are only slightly more prepared for this than I would be to construct a factory in my apartment.

5) Ashtae is missing out on a huge market by not selling directly to consumers — and by focusing only on local buyers, because Michael prefers to go door-to-door making sales. (Michael.)

All of that said, Ashtae’s margins are amazing: They can sell a shampoo that cost them $7 to make for $35. They’ve also got a special proprietary formula that Ramona (you’re killing it, Ramona!) developed by sending products to stylists for feedback over a two-year period.

Marcus sits down with the couple to go over their finances. Their net profit last year was $204,000, but they’re $90,000 in debt … and now they’ve only got $60,000 in cash to work with. Marcus offers $200,000 for 25 percent of the business, which will go toward paying off their debts and future product development. But Michael wants $500,000. Yikes. “If I am just a checkbook, I’m the wrong guy,” Marcus tells him. Ramona asks for a more reasonable $300,000.  On the condition that Marcus has their permission to “find extra cash wherever [he] can,” they’ve got a deal. He hands the check to Ramona. “You give it to the right person,” she says, and, uh, yeah. (Viewers may note that this is the third consecutive episode of The Profit in which a major theme is men getting called on their misbehavior and women finally getting their due. Love you, Marcus.)

As usual, Marcus wastes no time in Henry Higgins-ing this business. Effective immediately, Ashtae will no longer do any bottling in the building, so they’re getting a new, better-equipped co-packer who’ll take care of it all for them. Next, they’ll need to expand their customer base and revamp their branding. Plus, Bronner Bros., the largest African-American trade show in the hair industry, is coming up in Atlanta. And Marcus never met a trade show that he didn’t like.

But first, a nervous Taylore asks her parents if she can be Ashtae’s chief operations officer. They don’t say no, exactly … but it’s not a yes. Mom looks down at the table. Taylore starts crying. She’s worried about her parents because they work too hard. Marcus suggests Taylore become director of seminars and trade shows instead. Bronner Bros. will be the perfect opportunity for her to get her feet wet.

It’s time to play garage sale at Ashtae HQ. Marcus equips the staff with green and red stickers to affix to anything unnecessary they see — green meaning sell for cash, red meaning trash. There’s a lot to work with here: If I could only use two words to describe the overall design aesthetic of their office complex, those two words would be “haunted attic.” In what feels like an accidental crossover episode with Hoarders, Michael finds it very difficult to throw anything away, peeling other people’s red stickers off various pieces of unequivocal garbage as he sees them. “That’s a good speaker system,” he says of a speaker whose metal bones are plainly visible.

Michael finally comes around and they raise a total of $23,000 by clearing out the building. This money gets reinvested back into the company, in the form of a renovation: Two junk rooms and the old warehouse are converted into an office for Ramona (who deserves all the offices she wants, thank you very much) and space for their events business. The end product looks, mercifully, much more organized and professional.

The whole gang heads to Chicago to meet with branding experts at VSA Partners. These people have the Woods family stare at Post-its on a wall and rifle through dozens of photos to find images that remind them of Ashtae. (Is this a real job? I feel like this could be my job. Anyone want to pay me to do this job?) The branding they come up with looks great: A geometric “A” logo printed on sleek bottles, in white for the salon line and in “dark graphite” for the consumer line.

With three weeks left before Bronner Bros., Taylore is plugging away at their booth — her “first real test,” per Marcus. In the meantime, Marcus could not be clearer with Michael: For the trade show, they must stick with the new branding.

Hey, guess who didn’t stick with the new branding? Marcus arrives at Bronner Bros. to find Ashtae’s drab old bottles on display. Michael, you see, took it upon himself to fiddle with the designs, slowing down production so much that the new products weren’t ready in time for the trade show. Marcus is “pissed.” Not only that, but the Ashtae booth does not look good. For context, Bronner Bros. is an all-around spectacle with lots of splashy, well-lit booths that could easily double as TV sets. All the Woods have is a small stage and a crooked banner. Their setup is totally devoid of personality. “I know you’re capable of more, but the booth looks terrible,” Marcus tells Taylore. This is not the story line I expected! Look at you, The Profit!

There is a notable silver lining to what is otherwise a Bronner Bros. debacle: Michael is an incredible salesman. He dances onstage with the hair models and delivers a level of energy and enthusiasm that makes the ShamWow guy sound like a half-asleep NPR host. Marcus suggests they get him on the Home Shopping Network, and I’m not sure if he’s actually serious, but that strikes me as an extremely good idea (or get him on QVC, cc: Lori Greiner from Shark Tank).

Don’t give up hope yet on Ashtae nor on Taylore. Marcus sets forth a new challenge for her: Organize a red-carpet production launch in Charlotte in one week. She’ll have a $10,000 budget and she’ll need to put on one hell of a show.

While Taylore coordinates logistics for the launch, Michael reaches out to new clients. Ashtae originally made its sales in a 300-mile radius of Greensboro, but now Marcus has Michael connecting with folks from Virginia all the way down to Florida.

As Michael and Marcus are packing up for the big launch — time is of the essence, after all — a salon owner who rents space in the building comes up to Michael and asks him to help her fix her dryer. Michael hesitates, and the pause is milked, let me tell you. A dryer has never been the subject of such drama. To Marcus’s considerable relief, Michael eventually sends another employee to look instead of going himself. That he can delegate at all is a meaningful step forward.

Fortunately, the product launch looks great. The club is filled with a big, jumping crowd, and the nifty new bottles (finally!) are beautifully arrayed for all to admire. Models do a runway walk demonstrating the many hairstyles that can be achieved with the specially formulated magic of Ashtae. There’s even a photo booth! Who doesn’t love a photo booth? No one, that’s who.

Marcus is “really impressed.” Well done, Taylore! Now he’s confident she can take on more responsibility. So long as Ramona doesn’t continue to take on more work than any three human beings could handle, and so long as Michael stops being all over the place for 30 seconds, “this thing is going to be wildly profitable,” Marcus says.

The Profit Recap: Bad Hair Day