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THE TURNAROUND

Aspiring Interior Decorator

Aired July 16, 2005 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BETTY NGUYEN, CNN ANCHOR: Well, good morning from the CNN Center in Atlanta, I'm Betty Nguyen. "THE TURNAROUND" with Ali Velshi starts in just 60 seconds, but first, here's a check of the headlines right now in the news.
The number of people killed in the London terrorist bombings rose to 55 when another victim died overnight in the hospital. And the investigation into the attacks is spilling over into the U.S. FBI agents want to question a New York City man who pleaded guilty last year to providing material support for terrorism and reportedly had information about the train bombings in Madrid.

The U.S. military is charging 11 soldiers in Baghdad with violating the Uniform Code of Military Justice, four allegedly assaulting suspected insurgents. A fellow task force Baghdad member reported the incident.

And two children are among the dead after a suicide bombing targeted a police station in Baghdad or at least a police convoy there. Now, the blast also killed a civilian and a police commando and wounded 11 others.

UNIDENTIFIED MALE: CNN, your hurricane headquarters.

NGUYEN: Well, Jamaica is getting ready for the arrival of Hurricane Emily. The Category 4 storm is barreling toward the Caribbean Island with top winds of 140 miles per hour. Forecasters say Emily could pose a threat to the Texas Gulf Coast by late Tuesday. For the latest on the storm, you'll want to stay tuned to CNN, your hurricane headquarters.

And it wasn't a hurricane, but a water spout, look at this, that came ashore twice as a tornado in Punta Gorda, Florida. The slow- moving water spout swirled through the area for about 20 minutes last night before heading back out to sea. Despite the impressive pictures, no serious damage is reported. That's the good news.

We have more news coming up in 30 minutes. "THE TURNAROUND" with Ali Velshi begins right now.

(BEGIN VIDEOTAPE)

ALI VELSHI, HOST (voice-over): Next on THE TURNAROUND, she's a working mom, struggling to secure her family's future. She's a former super model turned millionaire CEO.

SUSAN OWENS, INTERIOR DECORATOR: Oh, my God, Kathy Ireland! VELSHI: Can this celebrity mentor help an aspiring interior decorator find success without sacrificing her husband and kids?

KATHY IRELAND, CHIEF DESIGNER/CEO, KATHY IRELAND WORLDWIDE: I'm concerned that working 60 hours a week that you're just going to burn out.

VELSHI: One challenge, two women, just three days.

OWENS: I've always really wanted security.

VELSHI: THE TURNAROUND begins now.

VELSHI: From traditional tastes to modern touches, in the world of interior design, the choices are limitless. That's why many homeowners look to interior designers for help. Some get paid thousands of dollars a day to make people's decorating dreams come true, but even the interior decorators need help and they look to the top design houses for furnishings and accessories. It's all part of the multibillion-dollar home improvement industry that shows no signs of slowing.

Last year alone, Americans spent more than $200 billion improving their homes.

(on camera): I'm Ali Velshi in Moorpark, California, where Susan Owens seems to have it all. She's got a beautiful home, a husband and two great kids and a thriving home-based design business. What Susan doesn't have is enough time, enough time to spend with her family, enough time to grow her business and enough time for herself.

So, we're going to introduce her to a super model, a super model who is also a mother and who runs her own hugely successful brand. Over the next three days, we're going to watch one model of success help Susan Owens fashion a turnaround.

IRELAND: I love this business because I get to meet so many incredible people. I love being of service.

VELSHI (voice-over): She has one of the most recognizable faces in the world. In the 1980s, Kathy Ireland made her mark as one of the top models of the time. And when Kathy decided to step off the cover of magazines and into the world of design, she proved to everyone that she isn't just a pretty face. Today, Kathy is chief designer and CEO of Kathy Ireland Worldwide, a billion-dollar product design house.

IRELAND: We started our brand back in 1993 and we started with socks and last November, we sold our 100 millionth pair.

VELSHI: Her brand now encompasses apparel, jewelry and a home collection that includes furniture, lighting, decorative accessories, bedding, window treatments and more, all designed to make home decorating simple, fun and affordable. Kathy Ireland also has a guiding philosophy. She believes in balancing work and family life.

OWENS: I didn't realize how hard it is to run your own business. Everyone always tells you, oh, my God, it's so much work. And it is.

VELSHI: Susan Owens is the owner of an Interiors by Decorating Den franchise. Decorating Den is an international shop at home interior decorating service.

OWENS: The company provides us with this network of about 200 preferred suppliers. I can get access to all these manufacturers and get the prices that I need.

VELSHI: She works alone from her home in the bedroom community of Moorpark, California, near Los Angeles. She's handling 25 clients. Susan makes her money by selling products at a markup without charging her clients an additional design fee.

OWENS: I probably can also sell them at retail and my profit is in the mix there. My average sales are about $7,000 to 10.

VELSHI: The money side of her business is going well. She started her company in June of 2004. Between then and January 2005, Susan has earned $60,000 in profits. The money is coming in, but Susan has to work 60-hour weeks to earn it. It's tough for her to make time to see her husband, Jeff, or her two young kids. The small business is crowding her family life and she needs help.

OWENS: It's tough being a working mom. I've really been like the super mom; try to do everything, volunteer at the kids' school, cook healthy meals and everything else. It's overwhelming.

VELSHI: As head of a nationally recognized company and a working mother of three kids, it's something Kathy Ireland understands.

IRELAND: Our mission statement is finding solutions for families, especially busy moms. I know what it's like being a busy mom out there. It's hard. It is really hard.

VELSHI (on camera): And you're happy to have somebody come in and say, hey, knowing what we want to change, we can help?

OWENS: Yes. I like keeping myself open to ideas and help. And if it's the right person with the right advice, I'll listen.

VELSHI (voice-over): It's Day 1 of the turnaround. Susan knows help is on the way but she has no idea who is about to walk into her home.

OWENS: Oh, my God. Kathy Ireland. I can't believe that my mentor is Kathy Ireland. I think it's great. I have heard her slogan about helping busy moms. So, I think she can really relate to me and my situation.

VELSHI: Being the head of a big business, Kathy knows time is money. She doesn't waste any time spelling out the No. 1 priority for Susan and her husband.

IRELAND: I want to work with you on giving you back more time for your family. And I know, Jeff, you're going to love that one. JEFF OWENS, SUSAN OWENS' HUSBAND: That'd be nice.

VELSHI (on camera): How do you infuse into someone the ability to prioritize their time and make themselves more efficient?

IRELAND: She's up at 3:00 in the morning doing work and how can she escape when it's right there? We're going to work to really set some boundaries.

VELSHI (voice-over): Kathy has brought in a team of her own experts. Their plan is to teach Susan how to run her business efficiently and to create more time for her family.

IRELAND: Matthew is our IT expert. Miriam is our financial planner. Nicholas Walker is our outdoor living and gardening expert and my friend chef Andre Cartin (ph), our cooking and entertainment expert.

VELSHI: Susan has a meeting with a client, Nancy Gray. For Susan, it's a big opportunity. For Kathy, it's her first chance to see this interior decorator in action.

OWENS: Her house burnt down. We're really rebuilding and we want it to be even better than it was.

VELSHI: Susan is nervous enough about pitching her ideas, but now she's got the added pressure of having Kathy and Nicholas Walker, Kathy's landscape designer, observing her every move.

NANCY GRAY, POTENTIAL CLIENT: So this is the view from the family room and kitchen area?

OWENS: Right, I think that's what we talked about here.

VELSHI: While Kathy is impressed so far, the mentor sees room for improvement in Susan's presentation style.

IRELAND: Yes, Susan is very bright. She's a thinker. But at the construction site, she really internalized a lot of her process.

GRAY: And then the bar area in the corner...

OWENS: Right.

IRELAND: I felt like I wanted her to share her thought process, her enthusiasm with Nancy.

VELSHI: Susan moves the meeting back to her home office. A lot rides on the next few minutes. A bad presentation could cost Susan a job. Coming up, Kathy and the client weigh in on Susan's sales pitch.

IRELAND: I wanted to hear her ask more questions.

VELSHI: And later, the pressure gets to Susan.

OWENS: Just give me one second. VELSHI: Next on THE TURNAROUND.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

VELSHI (voice-over): Moorpark, California. It's been a busy day for interior decorator Susan Owens. Just hours ago, Kathy Ireland arrived to help Susan take control of her small business and her family life. As the head of a successful company, Kathy has had to learn to juggle work and family.

(on camera): Tell me a bit about your busy life.

IRELAND: Being a mom is one of the most challenging, difficult and rewarding things there is. Business is meant to serve the family rather than the family serve the business.

VELSHI (voice-over): Susan's perspective client, Nancy, is rebuilding her 3,700 square foot home. If Nancy hires Susan to decorate it, it will be Susan's biggest job yet. While Susan tries to win over the client, Kathy is trying to assess her presentation.

OWENS: I love this (UNINTELLIGIBLE). And then these colors are just gorgeous, aren't they?

GRAY: We're not going to have a lot of the greens in the tiles, but we can use it sparingly around the house.

OWENS: Yes.

VELSHI: Kathy and Nicholas, her outdoor living and gardening expert, watch Susan carefully. They meet alone to discuss Susan's skills and talent.

IRELAND: I wanted to hear her ask more questions about how the family would be utilizing each room. I wanted to hear about the lifestyle, about the needs.

NICHOLAS WALKER, OUTDOOR LIVING AND GARDENING EXPERT: In the office presentation, she was so confident, enthusiastic and I wish she would have brought that zeal, that enthusiasm to every minute that she was on site. So, should we go get her?

IRELAND: Let's get her.

WALKER: OK.

VELSHI: Susan is curious to see if she passed her first test. Do Kathy and Nicholas think she's got what it takes to be a successful interior decorator?

IRELAND: It was like night and day from when we were on the hill to when we were in your office presenting. I could see the wheels turning the minute we got on the hill, but I would recommend to share that with your client, because the minute you get in front of her, you're on. Also, I want to know how the family is going to live in each room.

VELSHI: While Susan may not yet have mastered the art of understanding her clients' needs, she has earned some praise from her mentors.

WALKER: Your listening is really accurate, which I think is such a strong point for a designer.

IRELAND: And you've got a wonderful personality, too, that's very soothing and very calming.

VELSHI: Kathy and Nicholas feel that this job presents a unique sales opportunity that Susan shouldn't let escape.

WALKER: I mean, did you hear her? She said...

GRAY: We just want to bring the outdoors in.

WALKER: Let's bring the outdoors in.

VELSHI: Being asked to bring the outdoors in means that Susan can generate more income from this same customer. Kathy and Nicholas have recognized the potential for Susan to generate incremental sales.

IRELAND: Incremental income is additional income that you're getting from the existing job. It's not like she has to go out and find another client. These can really bring Susan more revenue and save her some time as well.

WALKER: Arbors, sconces, furniture, tables, wrought irons, all of a sudden; your scope is not only interior.

OWENS. Right, it's almost twice as large.

IRELAND: It is.

WALKER: Exactly.

IRELAND: Should we go back on up?

OWENS: All right.

VELSHI: Susan still needs to hear one more very important opinion, Nancy's.

GRAY: It's good when somebody sees what you want and they're able to do it. She got the point real quick and so I thought, OK. I have the right person.

VELSHI: Susan has won Nancy's confidence and she got the job. It's 8:07 p.m., but Susan's day isn't over. It's time to sit down with her mentor and make a plan for her turnaround. IRELAND: I know how important your family is to you and I'm concerned that working 60 hours a week that you're just going to burn out. I don't know how you're doing it. I'm going to give you some tangible things that hopefully will be helpful.

VELSHI: Kathy targets three key areas she promises will help Susan make more money while allowing her more time to spend with her family. First, Susan must fine tune all areas of her presentation to clients. Second, Kathy wants her to redesign her Web site.

IRELAND: I would like to see it more reflective of your talents and your personality.

VELSHI: Third, Susan must work harder to generate those incremental sales. She needs to get more out of each and every client. Improving these three areas is Susan's ticket to building a bigger, better, efficient and ultimately more successful company.

IRELAND: Well, I'll let you get back to your family.

VELSHI: Susan wishes she could get back to her family, but she doesn't have the time. Her clients are usually homeowners, but tomorrow she is pitching to a restaurant chain with over 100 locations.

OWENS: I'm really excited about presenting my ideas, but I'm also kind of nervous.

VELSHI: Coming up, Susan pitches a new client, but can she deliver? Then, a sobering fact from Miriam.

MIRIAM WIZMAN, FINANCIAL PLANNER: Eighty percent of the businesses fail within the first five years.

VELSHI: Next on THE TURNAROUND.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

VELSHI (voice-over): It's just after 9:00 a.m. on Day 2 and Susan is already running around. She had a busy day yesterday with her mentor Kathy Ireland and she's got another one ahead.

OWENS: It's just non-stop, you know, working, talking about work, talking about the business and dealing with the kids and everything else in between.

VELSHI: She hopes this turnaround will free up some of her time while helping her make more money. She stayed up late the night before working on Kathy Ireland's assignment to improve her client presentation. Susan came up with an idea to refine her presentation to clients, a gift to give all of her new customers, one that reflects her business philosophy. OWENS: The candle says let's create the home of your dreams. This is something that's, you know, easy for me to buy and give to every client that I go into their home.

VELSHI: With some of her homework done, Susan is ready to face one of the day's big challenges, tackling her finances.

(on camera): While a lot of small business owners are really good at what they do, they don't want to spend a lot of time on the account. Now Susan Owens accounts are not very complicated, so instead of bringing in an accountant or a financial officer, Kathy Ireland brought in a financial planner.

(voice-over): Her name is Miriam Wizman. She's the expert Kathy trusts to analyze her money matters.

(on camera): Tell me the relationship between people's own finances matters and how they run their small business.

WIZMAN: Your business is you. The key person who's there is you. There's nobody else that you can delegate anything.

VELSHI: So, it's important that you have a look at personal financing, your financial planning in addition to just the accounts of the business?

WIZMAN: Absolutely. You need to know everything. Have you worked ever before with a financial planner?

OWENS: No, I haven't, really. I've kind of waived it.

WIZMAN: It's scary?

OWENS: Yes.

VELSHI (voice-over): Miriam coaxes Susan to lay out her real financial priorities, saving for her retirement and her kids' education. To accomplish those important goals, Susan will have to make changes. She and her husband, Jeff, who run his own small business, have a lot of spread out debt, including a large mortgage, a home equity loan and thousands of dollars in credit card bills. Since Susan is new to business, she'd doesn't have credit with her vendors, so she's got to use her credit cards to make business purchases.

OWENS: I'm having to pay for things up front. I'm using credit cards to sort of float, you know, some of the expenses. I'm trying to pay off as much as I can each month.

VELSHI: Another red flag for Kathy and her team, Susan doesn't have a personal relationship with her neighborhood loan officer. Having one would be a real safety net if her business suddenly needed an infusion of cash.

WIZMAN: It's really good for them to know you. So as you grow and as you move forward, they're right there beside you, supporting you.

VELSHI (on camera): That was the friendliest money conversation I've ever heard.

(voice-over): As the meeting wraps up, Miriam throws out one more suggestion, a way for Susan to get her business name out there without spending a lot of money.

WIZMAN: There are networking groups of people, businesses get together and they do business and actually they don't cost very much to belong.

OWENS: I've thought about that and I was so busy.

VELSHI: Miriam promises to give Susan strategies to tackle those challenges at their meeting tomorrow. But right now, it's time for a big turnaround test, a second client presentation in front of Kathy Ireland. This time, she's meeting with the owner of Tacone, a gourmet fast food chain. The company is considering a design makeover for its U.S. stores which number more than 100. Susan has an in with this client. As a regional director of Tacone, her husband, Jeff, has helped her get her foot in the door. But from here on in, it's all up to Susan and the quality of her work.

IRELAND: Not only is this a restaurant chain that has many stores, but this is something that she can then have on her Web site. She can show to other restaurants what she can do.

VELSHI: Kathy Ireland has brought along her cooking and entertaining expert, Chef Andre.

OWENS: What I am going to pull together here is some fun, some color. You've got some bright colors already here, but I think if you tone them down, just make it a little more natural colors that really say food and whet the appetite.

VELSHI: Following Kathy's Day 1 suggestion to push incremental sales, Susan goes beyond interior decorating ideas.

OWENS: And we need to talk a little bit about this outside area as well. And we can put some umbrellas with your logo, maybe some fresh flowers. That can be done inside and out.

CRAIG ALBERT, OWNER/PRESIDENT, TACONE INC.: Sure. That's a great idea.

VELSHI: Susan's client seems impressed and Kathy is happy that Susan seems to be taking her advice to heart.

(on camera): You seem to be putting a lot of emphasis on getting her to understand what she's so good at.

IRELAND: Watching her, she was strong to start with, but to see the information that she took in from our team and to see her implement that is exciting.

VELSHI (voice-over): The presentation wraps up and Kathy calls Susan over. IRELAND: I wanted to hear you talk with him a little bit more about budget. There might be concern about, well, we could do this here, but we have many restaurants across the country. I would like to see you take it a step further with those incremental sales and talk with them about the bathroom. Bathrooms are important for women especially. I mean, we spend more time in there, don't we?

VELSHI: As she says goodbye Susan makes an appointment for a second meeting in the coming weeks. That could be where she clinches the deal. Back at home, Susan is overwhelmed with the new possibilities that lie ahead.

OWENS: There's nothing secure in life, but I'm really thinking that this business is a good way for me to enjoy what I'm doing and be happy, balanced and also secure my future.

VELSHI: Coming up, Kathy's team shows Susan a new high-tech way to save time.

UNIDENTIFIED MALE: Let's talk about some showroom.

OWENS: What do you mean by showroom?

VELSHI: Plus, our final test ahead for Day 3.

IRELAND: She's on her own.

VELSHI: Next on THE TURNAROUND.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

NGUYEN: Well, good morning, I'm Betty Nguyen at the CNN Center here in Atlanta. "THE TURNAROUND" with Ali Velshi continues in just 60 seconds, but first, here's a check of headlines right now in the news.

The death toll in the London terror attacks is up to 55 today. Egyptian police are questioning a chemist about the attacks, but that man's brother tells CNN Magdy el-Nashar is not a radical and even expressed sorrow about the bombings. However, a source tells CNN investigators found explosives inside el-Nashar's flat in Leeds, England.

UNIDENTIFIED MALE: CNN, your hurricane headquarters.

NGUYEN: Hurricane Emily is brushing by Jamaica today. Top winds are holding steady at 140 miles an hour, but the eye is well off shore. Early forecasts take Emily across Mexico's Yucatan Peninsula and perhaps to the Corpus Christi, Texas, area by mid-week. But remember, it is still early. You'll want to stay tuned to CNN, your hurricane headquarters.

And copies of "Harry Potter and The Half-Blood Prince" are flying off book shelves today. Ten million copies are expected to be sold by midnight. Boy, that's a lot! Interest in the sixth book is intense with word, get this, a major character dies. You got to read to find out, though.

We will have a complete wrap of the news in just 30 minutes with Gerri Willis. Now it's back to "THE TURNAROUND" with Ali Velshi.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): Day two, 2:45 p.m., in just the past few hours, Susan Owens has pitched her business to the head of a California-based restaurant chain. She's gone over her finances with a money pro, and she's been brought to tears by her money concerns.

Now, Kathy Ireland says, it's time for this aspiring interior decorator to tackle her next assignment, improving her Web site.

OWENS: I've got a very small Web site, and I'm not using it to its potential.

VELSHI (on camera): You're giving her some tools to work on the web on her own.

IRELAND: Right. Being a busy mom, and working that many hours, that's tough. Not only will it enhance her business, but it'll help save her time.

VELSHI (voice-over): Save her time, by allowing her to communicate with clients effectively without having to meet in person.

That's where Matthew Larson comes in. He's Kathy's corporate Internet expert.

IRELAND: I've always had my challenges with the Internet, and Matthew's has made it really easy. He has been phenomenal.

MATTHEW LARSON, INTERNET EXPERT: Thank you. I can't wait. Are you ready to talk Web?

OWENS: Sure.

LARSEN: All right. We're going to have a good time.

VELSHI: The action switches to Susan's desk. Matthew explains why staking out cyberspace is so important to her small business.

LARSEN: It's a 24 hours a day, seven days a week, 365 days a year captive channel for you to communicate whatever it is you want.

VELSHI: What Susan needs to communicate is her work experience and her sense of style. Matthew suggests that she create a much more sophisticated Web site than she has now.

LARSEN: So, the first thing that we want to do when we look at your Web site is, let's open up PhotoShop and DreamWeaver.

VELSHI: The PhotoShop program especially will be key to redesigning Susan's Web site.

LARSEN: When we look on Internet, for the most part, when we look at imagery and visuals, actual photographs, we want to use .jpegs. When we're using line drawings or logos, really we want to use .gifs. You know the difference?

OWENS: Yes.

LARSEN: Yes.

VELSHI: Susan's basic computer know-how can take her far. While she doesn't have the space or money to build a real bricks-and-mortar showroom, Matthew says she can create the equivalent in cyberspace right now.

LARSEN: Let's talk a little bit, really quickly, about the showroom outline.

OWENS: What do you mean?

LARSEN: We could put a video on your Web site and people can have a virtual tour of this whole room, for instance. And you can do that really simply by taking your own video camera, doing your own pan of what you want and then having it compressed into an .mpeg.

OWENS: Right.

LARSEN: If you have a before shot of, you know, an image of a room that you've done before, I can show you how to make images in PhotoShop. It's several images layered on top of each other. But then when you scroll over it, then the window will highlight. You click on the next link and there's the after picture. So that's kind of cool, that interactivity.

IRELAND: I'm going to leave you guys to get to work. I know you've got a lot of work to do.

VELSHI: Susan and Matthew spend the rest of the afternoon working on the new Web site. Susan's well-aware of how this can help her business.

OWENS: I didn't really think this programming end -- I didn't think it was going to be as simple as it looked. I think it can be a good marketing tool, to put some tips on there, some decorating ideas. And it's just a way to let my clients to learn more about me.

IRELAND: Today is an exciting day. Susan seems really open to working on the web. She's working with Matthew. Not only will it enhance her business, but it will help save her time.

VELSHI: Matthew also suggests put her client questionnaire on her Web site. The more information Susan can glean from her clients, the better she can plan her pitches and her ideas for those all important incremental sales. It will all save time.

LARSEN: People can come and fill out a form and e-mail it to you.

OWENS: It is a good point that if they're prepared, we can get down to business a little bit faster.

VELSHI (on camera): Her problems seem somewhat universal, the idea of working long hours, trying to do the right thing.

IRELAND: It's about working more efficiently. Many people think, if I just work harder, if I put in more hours, I'll have that financial benefit and I'll have all my needs met, but in reality, you might just burn out. And you're not going to be much good to anybody.

VELSHI (voice-over): Four p.m., Kathy returns to Susan's home. The meeting with Matthew is over.

IRELAND: You have been busy.

OWENS: Yes. This is just a typical day, you know.

VELSHI: Kathy begins by reiterating one of her most important pieces of advice in this turnaround, finding more time for family.

IRELAND: I want you to look at your calendar and every week, find two hours that are time for you and Jeff, that are not business- related. It's a really important goal to have. You can have the most successful business in the world. You can have wonderful financial success, but if you don't get to spend the time with the people you love...

OWENS: What's the point?

IRELAND: ...it's not worth it.

VELSHI: Susan is starting to focus on tomorrow. She's making a presentation to a client. It's an opportunity for a very big sale.

IRELAND: You're on your own and you're going to do magnificent.

VELSHI: But Kathy warns Susan to be ready for anything, including rejection. She speaks from experience: her transition from supermodel to CEO wasn't always smooth.

IRELAND: Today and yesterday, you worked with wonderful clients who were very enthusiastic, and, there will be days when you have clients who are not so wonderful.

OWENS: Yes.

IRELAND: You already know.

OWENS: Yes.

IRELAND: I can't tell you how many times people have told me you're not good enough, you're not smart enough. You're not qualified. It's never been done. Don't even think about it. I refer to that as noise. And I would encourage you to just tune out that noise. OWENS: I was really kind of surprised to hear that Kathy had gotten a lot of rejections. You really wouldn't think -- you'd think that because of her positive energy and her beauty and her experience and background, that people would not give her any discouragement. IRELAND: I look forward to seeing you again tomorrow. You're going to be fantastic.

OWENS: Thanks, Kathy. I'll do my homework.

IRELAND: All right.

OWENS: Good-bye.

VELSHI: A last hug for good luck and Susan is left alone with her assignments, and a slight case of nerves.

OWENS: It's kind of, you know, scary in some ways and it's surreal.

VELSHI: Surreal, perhaps -- but very promising.

OWENS: Every once in a while, you need to be perked up, and inspired by something, and this has really done it for me.

VELSHI: But will that new inspiration translate into real dollars and cents?

IRELAND: Tomorrow's a very big day. She's on her own.

VELSHI: Coming up, Susan's final test, next, on THE TURNAROUND.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

VELSHI (on camera): These are some of the tools that Susan Owens has depended on to make her client's homes look and feel better.

Over the last two days, Kathy Ireland and her team have given Susan some new tools to make her business run better. Well, today, she's going to use those tools in a presentation to a key client. We will know then whether she's on the road to a turnaround.

(voice-over): It's 9:00 a.m. on Day 3 of the turnaround. This will be Susan's biggest day yet. Today, Susan has an important meeting with a client. This is her chance to implement everything she has learned over the past two days.

OWENS: This is more of an immediate thing. I'm hoping to make a sale today.

VELSHI: Susan's first sit-down of the day is with Miriam Wizman, Kathy's personal financial planner. After yesterday's fact finding mission, Miriam lays out the plan of action for two key financial areas.

WIZMAN: You already use your house, and you've tapped into your house to get cash flow. But after analyzing that you have a first mortgage, home equity line and credit card debt, we should consolidate everything into one single loan, a 30-year loan. And with the current interest rates, that are very low, you can save approximately $500 a month.

You have numbers, like you have some of expenses and some of goals, money goals, but a financial institution will require from you a business plan. They want a lot more than that. Like, you know -- to find business...

OWENS: Who's your market...

WIZMAN: Who's your market, are we going to target that market and end up improving your business, and to find inexpensive ways to grow your business. A bank, or a financial institution, will write you a note.

OWENS: Right.

VELSHI: It's a positive meeting, but it ends with a sobering observation from Miriam.

WIZMAN: Unfortunately, 80 percent of the businesses fail in the first five years, or they go out of business, because lack of capital and lack of planning.

OWENS: Pretty hard-hitting.

VELSHI (on camera): What do you think of Susan's reaction to that? That was -- you're giving her a lot of stuff.

WIZMAN: You know it's just not about running a business. It's about running your business in a smart way. And then she understands that if she follows this advice, she can really keep more of her money and that makes sense to her.

VELSHI: The tips that you've needed today give her and the observations you've made on her time management, on the ways that she can handle how she spends on advertising, will those things work into this somehow? Will that stick with her?

IRELAND: It will take an ongoing commitment on Susan's part. It will take ongoing effort, but I believe if she commits to it, it will work and there's no limits to what she can accomplish.

VELSHI (voice-over): That includes expanding her small business into a larger operation, something Kathy believes can be achieved with the help of a successful Web site. The Web site will expose Susan's business to more potential clients and fewer, but bigger, clients could maximize the value of Susan's time.

Noon, Susan has a follow-up meeting with Matthew Larson. Yesterday, Matthew and Susan collaborated on elements for her new web design. He's about to reveal the result of their joint efforts.

LARSEN: I think we addressed a lot of the challenges that you were having with your Web site.

VELSHI: Susan's new and improved Web site now includes an online showroom where she can showcase her talents and a questionnaire which will help Susan prepare for client meetings.

LARSEN: It'll allow your clients to interface with you a head of time, do a little pre-work. We have a place for people to e-mail you directly, so that they can fill it out. And the great thing about this is you can expand or contract it for however your business grows.

IRELAND: I just really feel that this Web site really reflects your style.

OWENS: Yes.

IRELAND: You deserve a site that really tells who you are...

OWENS: Right.

IRELAND: ...and makes that clear to people.

VELSHI: While building a better Web site will help her business, the big challenge is always to land new clients. More clients means business on a scale where Susan can find new efficiencies and that precious time she needs. It's the toughest part of the job for her, face-to-face meetings with people judging her every idea.

Today, Susan has a chance to land a big client and Kathy gives her some words of advice before she heads into her meeting.

IRELAND: You're doing an amazing job. I would just encourage you to follow your instincts and all the great things that you're doing. You're an incredible listener. I would encourage you to really ask those open-ended questions, and I encourage you to have fun. Have fun and let them see your great personality. And -- so, I'm really excited about today.

OWENS: Oh, good. I was thinking about bringing her one of those -- my candle prototype. What do you think?

IRELAND: I think that's a wonderful idea. I love that.

OWENS: We'll see how she reacts.

IRELAND: People love to get gifts, something special. And a candle is a wonderful gift.

OWENS: OK. I'll try it out on her today.

IRELAND: I'm looking for Susan to just be ultra-aware of all the possibilities, to not set any limits, to be open, whether it's the restaurant and, yes, but what about the bathroom? It's looking at everything, because she's got the talent. She can do it, and there really needn't be any limits to what she can do.

OWENS: I think it'll be evident that the things so far in the last couple of days have affected me, and you'll see some evidence of that in the things that I ask and the things that we do walking around the house today.

IRELAND: We'll be applauding for you. We're rooting for you.

OWENS: Thanks.

IRELAND: Go get them.

OWENS: Thanks. Better get ready.

VELSHI: Coming up on THE TURNAROUND, there's a lot of money at stake, but can Susan close the deal?

OWENS: Yes, I could have probably been a little smoother with this or that.

VELSHI: And then, Susan evaluates her TURNAROUND experience.

OWENS: I hope that I can inspire people like myself to go out and try to live their dreams.

VELSHI: Next, on THE TURNAROUND.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

VELSHI (voice-over): Moorpark, California, the third and final day of this turnaround.

Just two days ago, Susan Owens' decorating business was changed when her TURNAROUND mentor, Kathy Ireland, arrived at her front door.

IRELAND: I really applaud Susan for having the courage to let us observe her in her work process. VELSHI: Kathy and her team of experts came in with a mission: to make Susan's business more efficient, and to create more free time for Susan to spend with her family.

Kathy's gone through Susan's business from top to bottom, and she's pointed out problems big and small, teaching Susan that every detail matters.

Susan has learned how to sharpen her presentation skills, her finances have been reviewed and Susan's Web site has been redesigned to showcase her creative talents. Scented candles have been created for her clients.

OWENS: And I've been really listening to what Kathy and her crew have talked to me about. VELSHI: It's 1:45 in the afternoon. In just a few minutes, Susan will make her most involved presentation yet. She'll be meeting with a client who is looking to redecorate her dining room, living room and kitchen in order to close the deal. The stakes are high; drawing on the advice she's received over the past two days could launch Susan's business to a new level, but how much of Kathy's advice will she remember?

IRELAND: I want her to really dig deeper and find out more about her clients.

OWENS: It's challenging to go into someone's home and want to walk out of there with a check in your hands. It's down to really, actually, making a sale today.

VELSHI: 2:10 p.m. Kathy and her team will be looking at Susan's presentation to see if she generates those incremental sales and remembers to bring the outside in.

Susan and her team of mentors have arrived at the home of Teri Williams.

TERI WILLIAMS, POTENTIAL CLIENT: Hi, Susan.

OWENS: Hi. How are you?

WILLIAMS: Good to see you. I'm fine.

OWENS: I brought you a little gift, by the way,

WILLIAMS: Oh, thank you. Something to start my decoration.

OWENS: It's a symbol of the beauty that we're creating here.

VELSHI: Susan is off to a good start. With Kathy, Andre and Nicholas observing from the wings, Susan begins her presentation.

OWENS: You know I was looking for just the perfect red fabric to line this with.

WILLIAMS: That's good.

OWENS: I was thinking about getting you some pillows. I figure some little pattern would be fun. What do you think about that?

WILLIAMS: Yes. That's pretty.

OWENS: Well, I'm glad we made some good decisions today.

WILLIAMS: It's all coming together.

OWENS: It will take me a few minutes to write this up.

VELSHI: The TURNAROUND team is listening for Susan to incorporate their all-important advice to increase incremental sales.

OWENS: While I'm here, do you mind if we just take a quick look outside?

You know this bench over here, I love the idea of having a nice bench in here, but maybe something with cushions -- a hammock could hang from there?

VELSHI: The meeting couldn't be going better. Susan has effectively worked in Kathy's major points, and it pays off. Susan makes $16,000 in sales, instant success. But it doesn't end there. By remembering Kathy's key point to bring the outside in, Susan makes another appointment with Teri to discuss furnishing her outdoor patio. She told us later that an incremental sale of $15,000, doubling her expected earnings from this client, is in the works.

3:45 p.m. Back at Susan's house, Kathy and her team compare notes.

OWENS: Are they thinking is she organized enough? Does she have all her information? I could have probably been a little smoother with this or that.

VELSHI (on camera): Susan is really excited by this whole thing, but I think it's kind of like writing an exam. You think you did really well until the final grade appears. Why don't you guys go in and give her grades?

OWENS: Hi, guys.

IRELAND: Congratulations. You made a great sale. Miriam is going to be thrilled.

MATTHEWS: Slam dunk about incremental sales on the outside. Very, very good.

IRELAND: Loved it when you took her outside. We were just -- oh, we were just so proud. We were just beaming. We were so proud when you did that.

OWENS: Hi, guys.

WIZMAN: Hey.

OWENS: They were so positive, all of them, with me, and so supportive and generous. I'm really grateful for that.

VELSHI: She's not always got the benefit of a full team like yours.

IRELAND: Right.

VELSHI: But this enthusiasm and energy all the time -- is she going to be able to draw on that?

IRELAND: It's going to be important that she works closely with the guidelines that Miriam's given her for her finances. It will be important that she implement the information that she learned about incremental income, and it will be important that she sticks to those boundaries that she committed to.

VELSHI (voice-over): For Susan, it's time to say goodbye to her mentors and to enter a new phase. She has re-prioritized her life, business and family.

OWENS: I want to be around while my kids are growing up, and know who their friends are and have them at the house and you know, just be there, be that kind of mom.

This experience, I feel, it's really helped me think about setting up boundaries, having a better sense of how to manage my time, and I can see how it's going to make a difference in my life. I feel really just grateful, for everything that I have. I hope that I can inspire people like myself to go out and try to live their dream.

VELSHI (on camera): Like so many small business owners, Susan Owens still has to work on managing her time better for her family and for her business, but after three days of hard work and scrutiny, it's probably fair to say that Susan Owens now has a design for a turnaround.

(COMMERCIAL BREAK)

GERRI WILLIS, CNN ANCHOR: The unfolding investigation in London, pulling together the pieces of the puzzle. Who is responsible? We're live on where the investigation goes next.

Also, all eyes on Hurricane Emily...

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