Monday, June 24, 2024

Overtone Acoustics Update -What Happened after The Profit

Overtone Acoustics Before The Profit

Overtone Acoustics in Orlando, Florida is a business that, like many others, tried to take an existing product and make a better version of it. In this case, that product is acoustic paneling. Acoustic paneling is used in studios and theaters, both public and at home, to modify the sound of a room. Panels made of acoustic materials prevent echo and reduce bass feedback, among other advantages. It is also notoriously dull-looking, usually featuring a monochrome appearance with some sort of bumps, ridges, or projections to trap ambient noise bouncing around the room. For all its practical purpose, it isn’t much to look at.

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Founded in 2011 by Brad Turpin, Overtone Acoustics is a business built around fixing the latter issue by providing artistic or just aesthetically pleasing acoustic treatment. People who record or just enjoy audio would no longer have to choose between having a better-looking room or a better-sounding room. However, by the end of 2016, the business was in trouble. Product wasn’t moving, and the company had resorted to letting paid employees go and taking volunteer work in order to make ends meet. Hoping to save his business, Brad Turpin turned to The Profit.

Overtone Acoustics On The Profit

Marcus entered the office and greeted Brad, the owner, and Hussein, a volunteer. Marcus approached an art piece on the wall and asked if it was a panel, which it was. Brad spent a moment explaining what acoustic paneling was, the sublimation process used to print on the canvas, and the uses the paneling have. When Marcus asked who he sold to, he mentioned audiophiles, home theaters, and recording studios were his target market. Marcus immediately reacted to the fact that he wasn’t pushing these pieces for commercial use.

Next, Marcus was introduced to Alex, Brad’s childhood friend and volunteer in the business. Alex was a reservist, and he commented that he was making money to pay bills through the reserve while they built the business. This comment prompted Marcus to ask about equity, to which Brad replied he had 100%. Marcus found this unusual and asked Alex how much he had put into the business. Alex said he had invested $5,000. Brad commented that he probably wouldn’t be here today if it weren’t for Alex.

When they arrived at the shop, Marcus took note of how little space is available. At only 1,000 square feet, there was limited room to work and no ventilation. Safety was a concern, and there wasn’t much space for storage. The space was limiting the business’s efficiency and growth potential. While in the shop, Marcus met Joel, Brad’s younger brother, who was also a volunteer. Marcus asked if anyone worked full time and if anyone was paid; the answer to both questions was no.

Brad explained that sales were solid through the first two quarters, but in the summer business tanked and he couldn’t afford to pay three employees for 40 hours when there were only 20 total hours of work to do. Marcus was taken aback, wondering how a company was going to provide for customers when the unpaid staff doesn’t even have a set schedule.

Marcus asked for some financial breakdowns on the expenses of building the panels, revealing a comfortable profit margin after labor. He then asked Brad to explain why he should buy the product and got confused and incomplete answers. Brad wanted to make the business work but couldn’t explain to his potential investor the core benefit of his product in a convincing way. This business had a long way to go.

Convinced that Brad was just uncomfortable with sales, Marcus pulled Alex to the side to figure out what he wanted from the business. Alex explained that he wanted to worth there with the company being successful. He worked in the reserve specifically to earn capital to invest in the business, even though he didn’t own any equity in the company. He then turned focus to Brad and discovered he was couch surfing, even sleeping at the office sometimes. Everyone was making huge sacrifices trying to keep the business afloat.

Finally, it was time to look at financials. Marcus went over the business revenue and saw a growth in revenue from 2012 with $120,000 to a projected $300,000 in 2016. AFter analyzing expenses, Brad exposed that he also hadn’t paid himself in six months. Just like everyone else, Brad had completely given everything to keeping the company alive. Marcus came away from the experience concerned about the system behind the business but deeply impressed with the level of commitment everyone involved had to it.

Finally, it was time to strike a deal. He met Brad and Alex at a restaurant to talk about the business and where it was headed. He offered a deal of $200,000, which would be used to pay for materials to create inventory as well as pay the two of them a wage of $1000 per week. Noting the high risk, though, he asked for 50% of the business. And finally, he asked for Brad and Alex to share the remaining 50%, rather than have Alex continue to have no equity in the business he had sacrificed so much for. Alex and Brad agreed to split their half with 10% going to Alex and 40% going to Brad. Marcus said he respected the decision but disagreed, and reduced his own portion to 40%, giving Alex another 20%.

Marcus started grooming the duo by taking them to NAMM, an annual music showcase, to see how they did marketing their product. Things started out rough; their display poster didn’t feature their product, and the only material they had to pass out was a post-purchase thank-you letter. Marcus left the duo to sell, and their issues were clearly exposed. Alex was too enthusiastic but disjointed, and Brad was invisible. No matter how good the product is, it doesn’t matter if you can’t sell it, and neither of them could.

After returning to Orlando, Marcus found a half dozen people working there he hadn’t met. They were also volunteers, working on an order that was two weeks late. Given that they were untrained and unskilled, Marcus was concerned about quality, and he saw quality issues immediately when looking at the results of their work. Convinced things couldn’t work the way they were, Marcus offered Brad and Alex the chance to move to Pennsylvania to work with his manufacturing company and get a fresh start.

The company, Precise Graphix, was disjointed and inefficient when Marcus got involved but has since multiplied its revenue over seven times. Hoping for similar results with Overtone, Marcus gave them a spot in the Precise facility to operate from, then he rented them a town house to stabilize their home lives. The new facility reduced the production time on their products as much as 25 times, so it was time to work on sales.

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Marcus had Alex and Brad pitch a drum room, and in spite of a lot of tough questions, they showed great improvement in sales ability and eventually got the gig. Ater that, Marcus gave them the ultimate massive challenge: pitch Hard Rock Cafe on a deal to produce sonic paneling for their use nationwide. Despite conflicts in production and setup, the duo made a compelling presentation of the impressive pieces they created and scored the deal.

Overtone Acoustics Now in 2018- The After ‘The Profit’ Update

Since their episode was filmed from December 2016 to April 2017 and aired on June 23, there hasn’t been a lot of time for new developments from Overtone Acoustics. Since their appearance on the show, they’ve gotten more glowing reviews on their Facebook page. Turpin, now living in Allentown, PA, was interviewed by the Orlando Sentinel and stated they’ll always have a presence in Orlando. The biggest difference made so far is a drastic revamp of the company website that launched with the episode. The site features a full lineup of available products, a notable clients list, a custom design page, and a video showing both their production process and a level of confidence in their product that was never seen before Marcus Lemonis came into their lives.

Ronnie Gordon
Ronnie Gordon
A tech-savvy freelance writer who enjoys music, personal finance, and competitive gaming.
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