The tiny house movement has made a big impact on the United States over just a few years, with over 10,000 tiny houses and counting located across the country. But as the lifestyle becomes more popular, even the top mobile tiny house maker has found itself struggling.
When Tumbleweed Tiny House owner and CEO Steve Weissman approached serial entrepreneur Marcus Lemonis to help save his company from collapsing, Weissman did not realize he was the main culprit behind its failure.
Weissman, a former restaurateur, began running the country's largest manufacturer of tiny house RVs in 2012, but had zero prior manufacturing experience.
"I think any business owner's lack of research will ultimately lead to bad decision making. You can't run a business that way," Lemonis said on the latest episode of CNBC's "The Profit."
Despite bringing in $6 million in revenue this year, Weissman's lack of technical abilities and leadership skills put the company at risk of bankruptcy with over $1.6 million dollars of debt. Lemonis stepped in to address Weissman's shortcomings and offer his advice on how to keep the company from failing.
"You're reckless about [the business] because you didn't save any acorns for the future," Lemonis told Weissman. "The fact that you're not scared of debt in one breath, but you've taken on debt like it doesn't even faze you — that freaks me out."
As the owner of recreational retail store Camping World, Lemonis has been in the RV space for over a decade. He noted that although Weissman had little experience building homes, he still managed to grow Tumbleweed Tiny House from a five-person team working out of a garage to a 70-person company working out of a 20,000 square foot facility.
"The idea of being in the tiny home business excites me," Lemonis said, adding that after speaking with employees and "seeing the folks on the factory floor, there's a good recipe there. It just needs some major tweaking."
With faith in both the product and the people in Weissman's business, Lemonis offered a deal: In exchange for a $3 million loan to clean up the payables and return peace of mind to the employees and 75 percent equity, Weissman had to follow a few pieces of advice from Lemonis.
Here are the two pieces of advice Lemonis used to improve Weissman's leadership mindset.