Wisconsin based Handi Products has been owned and operated by Thom Disch since 1995. Expanding from 3 full-time employees to nearly 50 across two locations, Handi Products has found their business is becoming cash restricted and therefore limited in their growth. In need of help, they solicited the advice of Marcus Lemonis.
Handi Products splits their business evenly between three main product lines: accessibility products, slip and fall prevention, and material handling. Upon reviewing their company and products Marcus recognizes that there are several issues could be damaging Handi Products’ sales and revenue:
- They need to identify and enter new markets
- Their packaging and on-product branding does not match each other or the company’s brand as a whole
- They run their business out of two names: Handi Products and Stop the Spill which can cause market confusion
- Their slip and fall line of products does not do very well because they do not have a clear distributor into this market
Why does the Slip and Fall business struggle? #TheProfit pic.twitter.com/bGsEjr5hma
— CNBC's The Profit (@TheProfitCNBC) March 20, 2019
Another complicating factor for Handi Products is that Thom’s son, Alex, works for the company too. Thom and Alex struggle with communication, and Thom often overlooks Alex’s ideas, which creates tension and stress at work. Thom tends to avoid conflict, not just with his son but with the entire team. This avoidance has resulted in keeping two locations open when one would be enough for the company’s needs. By maintaining both locations to accommodate a few employees’ commutes, the company is losing money on the second site. Handi Products is financially restricted by this extra location, making it hard to purchase more raw materials, explore new markets, or attend trade shows.
Thom’s tendency to avoid conflict creates problems for the whole company. He not only ignores his son and allows a second location to stay open, but he also fails to hold any employees responsible for their work and behavior. This frustrates Eva, the VP of Operations. The leaders, being friends with their teams, do not enforce accountability among the staff, which is a significant issue across the company. Without consequences for anyone, and with no company handbook, employees make their own rules. The staff needs clear structure and guidelines. Marcus urges Thom, as the business owner, to tackle this problem.
Although the company needs significant improvements, Marcus is investing in Handi Products because he feels there is a much bigger market then where they are playing right now. He believes that they have barely scratched the surface of the company’s capabilities. He also likes that they are a socially responsible company and their mission is to make things safer and more accessible for people. After some discussion, Marcus agrees to invest $2 million in Handi Products for 30% ownership of the business.
Let’s say it all together now: BRAND CONTINUITY #TheProfit pic.twitter.com/iu4NYlISd2
— CNBC's The Profit (@TheProfitCNBC) March 20, 2019
Because one of their major issues are their cash restrictions, Marcus proposes that they close the second location as soon as possible to free up cash. He also tasks Thom with figuring out how the company is going to be branded and marketed. In order to increase brand recognition and therefore sales, they need to have a more consistent brand and brand message. Marcus also wants them to look into new markets and product lines while simultaneously improving current product lines.
Handi Products took most of these suggestions to heart and worked on improving communication, making product and packaging upgrades as well as finalizing an employee handbook. Thom struggled with creating a cohesive brand that was adequately represented in their product, packaging, and marketing. Marcus grows frustrated with Thom and forces the efforts to be taken to an outside firm to ensure that the rebranding is handled appropriately. Marcus feels that Handi Products made a lot of progress in their product modifications and to the proposed changes in the businesses. He is very pleased with how far they have come and their future potential.
What do you think about how Thom and Alex were interacting with each other? What tips do you have for running a successful family-owned business? Start the conversation in the comments!
“The Profit” airs Tuesday at 10 p.m. on CNBC.