tv Your Business MSNBC March 5, 2017 4:30am-5:01am PST
good morning. coming up on msnbc's "your business," 30 days, 60 days, 120 days. small and medium businesses struggle with getting paid late from big clients. we'll tell you how to get them to pay up. the ceo of edible arrangements with four things you need to know to grow your franchise. and the owners of a nail salon franchise grow their business using a starbucks-like business plan. those stories and more to help you be profitable, coming up next on "your business." will your business will ready when growth presents itself. american express helps you take on a new job.
or fill a big order. or expand your office and take on whatever comes next. for those who always find new ways to grow their business, american express open proudly presents "your business" on msnbc. hi, everyone. i'm j.j. ramberg. welcome to "your business," the show dedicated to helping your growing business. whether you are a big business or small one, cash is king. how quickly you get paid for your service is important. if you are a small business vendor with big business clients, you should know many of the largest corporations are changing the rules about how fast they change the bills. a lot of businesses are afraid
to speak out out of fear they are going to offend their customers. this week, we speak with two who have had it with strong arm tactics. >> purchasing agents are bullies. yes, absolutely. >> they are the heavyweight on the block. it's their way or the highway. >> he said, my job is to pay you as late as i can and with hold as much money as i can from you. >> they are both small business vendors to fortune 500s. today, they are going public with a widespread concern that many of the biggest and richest clients are pushing back payment schedules. >> our industry hasn't established payment term of 50% down, typically 40% prior to shipment and 10% net 30 days. >> today, companies are asking for 120 days or 180 days or the last friday of the month that
the account is in. it makes it very challenging. >> many big businesses are changing the rules about how fast they pay their bills. instead of the usual 30 days, many now are holding back for three or four months or even longer. >> instead of having the money in my bank account, the money is in my customer's bank account, okay? it means they can use the money in turn for whatever they want to, but i don't have access to that money. >> we have payroll to pay every two weeks. we have health insurance to pay every 30 days. >> so, what happens? if i need money, i have to get a credit line. or i have to go see a bank. >> both emanuel and kate are speaking out at a time when many of their peers are reluctant to go public because they say they are scared. >> most do not want to come forward because they are afraid to lose that business. >> kate is the second generation owner of a california based business, adco manufacturing,
which builds factory machinery. >> yeah, that's good. >> across the country, in tampa, florida, emanuel is a second generation owner of a similar, family run, custom designed business, polypack. while small business owners like these must meet monthly payroll, tax and supply erbils, many of the biggest customers refuse to pay. >> i can't say sorry, you are not going to get a paycheck because i'm not going to get paid for 90 days so you're not. it doesn't work like that. >> the largest corporations increasingly say it does work like that. these two are saying, they've had it. as much as i hate the word unfair, it seems very unfair. >> it's completely unfair. there's nothing fair about it. >> sometimes small to medium companies feel like the changes that are being imposed on them are from bullies.
these companies have the power, they are willing to exert the power and that it's unfair. in some circumstances, maybe it is. >> sheryl is a business services and bankruptcy lawyer. she's heard this complaint. she says she's sorry, but with big business clients, it's simply sink or swim. >> it may not be fair. it may not seem right but that's the ballpark they are playing in. they are not necessarily going to be able to change the practices of a fortune 500 company to meet their business model. >> emanuel and kate say it's not that simple. >> they need us and we need them. this isn't just a one-way street. >> eventually, purchasing is going to give a little. we are going to give a little. it's a game. >> if you squeeze us out, you are going to be buying everything from a foreign
country. there isn't going to be somebody that answers the phone at 2:00 in the morning and can walk your personnel through fixing whatever problem it might be. >> with letters like these extending the terms to 60 days, 90 days, even 120 days, small vendors are now facing big problems. although the relationship may be unequal, emanuel and kate say there are effective ways to fight these harsh changes. sheryl agrees. the battlefield is the contract. >> the first answer is don't let it change or don't enter into agreements that have longer terms. >> i'm always the one to pick up the phone and call and say, look, love your contract, it's great, but, i have a few issues with this. can we discuss it and here is what i would like. >> you need to go to the customer, when you are negotiating your contract and be forthright. >> clarification is the first step.
trouble starts when a business needs the contract and ignores the terms. they simply hope the changes won't impact profits. >> you have to also realize what the reality is and denial is not a business plan. >> you have to decide if this is worth it or isn't. we are not here because of our good looks, we are here because we produce goode equipment and we need to produce it at a profit. >> if i lose the job because of terms, frankly, we are willing to do that because it's not worth it. you have to set your limits. >> the second key factor is diversification. avoid being dependent on a single client. >> your eggs in one basket is not a business plan. >> diversify your customer base. you have to come up with a thought process. >> large customers aren't that big of a percentage of our business. granted, they are a valuable customer and we appreciate them very much.
>> the final factor is communication. it's your job to make the client understand why you need prompt payment terms. >> the lack of communication often is the reason behind crises in my experience. >> i want that open line of communication. i want that relationship. >> as soon as you see them, call them. send an e-mail and call them. look, we all want the same thing. what a great partnership. this is how we are going to get there. communication is everything. >> while they haven't always prevailed, they have been most successful when they communicated the quality of their goods. the benefits of a long-term relationship and reliability of their service. >> it isn't about they win or i win, it's us both winning. >> they have managed the hold the line with many clients, but they say it has not been easy. >> we want to build machines for customers they can use forever. we don't want to talk about
financial terms and how you buy this equipment. it's a waste of time. it's a waste of time. >> i don't want to look at my life every day as a tug of war with a bohemith company telling me what to do or what they will or won't do. i want a cooperative relationship. that's the moral temperature at this point in time in america. i don't like it. >> if you have hit upon a successful business model and thinking of franchising, stop, take a second and think about what that really entails. it is going to completely change the nature of what your job is. now, not only are you going to be marketing and trying to acquire new customers, you are going to have to move potential franchises as well. tarik farid is here from edible arrange. s. good to be here.
you were one of the early people here and you had 400 franchises. now you have 1300. >> thank you. >> all because of me. >> it was. >> all because of being on the show. >> it was. >> you understand more than anyone, what it takes to acquire this double customer, the end user and the franchisee. >> it's a wonderful relationship. if you manage it properly, it could help you grow your brand. it eegs a passion of a store you start. you get somebody that walks in and wants to build a franchise. it's exciting. there's a lot of work involved and if you do it right, the growth could be amazing. >> right. if you do it right. >> let's talk about who your customer is. now you have two customers. >> that's right. >> when talking about all of your customers how do you do that? >> order of importance. in the beginning it's about the franchisee. they are going to do the
marketing. you engage with with them and don't stop. as you grow, you go back to that where you engage with the franchisee, get feedback and they are not only marketing. we do direct marketing to the consumer. the franchisee plays a critical role. you don't want to promote something and get a different experience. it always has to go with that. start with the corporate office, market to everyone about what we are about to do. then go to the franchisees, make sure it's understood, then third, go to the consumer or let the franchisee go to the consumer and build a successful brand. you will wow yourself because you took care of your customer. i like what you told me. to the end user, you are marketing your product. to the franchisee, you are marketing your marketing. >> that's right. >> you have to get them excited about what you have to sell to the end user. >> there's a great story. we launched this cupcake
bouquet. it was very, very successful. the reason is because our franchisees loved that. they would sell it to the customers. it's the job you do with your franchisee that is in return going to be done with the consumers. it's really that execution at the store level that makes you successful. you can scream all you want on the air waves, but it's the experience they have when you go into the store. if you haven't done a good job with the franchisee, the execution is going to be off. >> do you think about the end use zer, i'm going to try this channel, then this channel and see what works and what resinates with the franchisee? >> i have a thing called pulse. every day they can set how they are feeling about the business. according to that, we are going to that franchisee and finding out what we are doing wrong and what we are doing right. as they log into the app every day, they are setting their feeling about the brand that day. >> that is so interesting. so someone comes in and says,
you know, a frowny face. someone from your team calls them up? >> the grow team calls them and gets them on the phone. i learned this the hard way. we did feedbacks, but too late. by then, 30 days had gone by or they weren't excited about the product. we are about fresh, edible arrangements. we want to change something we may have done that is not underor not the right thing. to me, the most important person in my transaction from the beginning to now is my franchisee. they represent my brand and i want them to take care of my customer. >> i love this. this is applicable to the consumer, too. people can use it. it's the same thing. they are the front line. >> it's not about late feedback. we can't do polling. we want to know in realtime what's happening. we are connected to the customer six ways, cell phone, text message, the app, whatever it is. there's no reason you should not
know exactly what the situation is in realtime. >> all right. so nice to talk to you. so nice to see your success. congratulations on everything. back when i was in business school, a number of people i met had the exact idea for a company, a nationwide brand of nail salons. the industry was, and frankly still is, fractured and seemed right for a brand name to come in and stand for something. the few people i know who tried to execute failed. we met a company doing it successfully. it's run by boston entrepreneurs and investors who looked at starbucks and said if it can work for coffee, it can work for nails. what did they do right? it started with a challenge. >> cappuccino. >> what's out there that is star buckable? that's damn cool. he took an industry that is mundane, cup of joe on every
corner and changed what it meant. >> when tony chan issued the starbucks challenge to colleagues at cueball, his partners didn't have to look for for the answer. >> one day, i was walking down the street of my hometown, actually. i noticed a nail salon to the right and one to the left. the lightbulb went off. i said nail salons. >> the nail industry was the type of business they were looking for. >> we are doing to the nail industry what starbucks did to coffee 30 years ago. taking a huge fragmented market and convincing customers to trade up for a better experience. >> if these mostly harvard educated men look like an unlikely bunch to start it, they would be the first to agree. >> i never thought i would be working at a nail salon. when i left harvard business school to join this company, i remember my mother asking me, you are dropping out of harvard to go to a nail salon?
in 2007, they set out to build a better nail salon. they called it miniluxe, testing and fine tuning the idea in a worst case scenario, their hometown, boston where the pedicure season is short. we asked them to share their stra strart gis for starbucking a business. where to open the first store. >> i remember the first location, sitting out there with a clicker, counting the number of people walking by the store. that's data. >> following their starbucks manifesto, they wanted to be located where there was a ton of density and traffic. another tip for finding a prime location? find another store with the same kind of customers you want. in the case of miniluxe, they search first-degr search for, you guessed it,
starbucks and whole foods. another priority, improving conditions for the customers and employees tackling lax hygiene standards a widespread problem in the nail care industry. they took another page from the starbucks rule book. themt they wanted to elevate the experience. at miniluxe, that mean as bunch of things like utilizing technology 24/7 and reading customers differently when they walk in the store. >> walking by the store, you get a notification there's an appointment, would you like to come in. that same technology is use zed on the technicians side that allows them to remember what nail polish this customer used the last time or how they liked their nails done. >> equally important to treating the customer right is treating the employee right. just like at starbucks. career development, a healthy wage and benefits are part of it. >> i became full time. i expressed myself to them i'm
interested in moving up. i want to make a career out of this. they listened. now, i'm a senior. >> our full-time employees partake in health benefits, 401(k), paid time off. we try to encourage profit sharing, one of the things you want to do is help people understand that they are a critical part of the overall profitability. >> i think this is a business that's long overdue. others have tried it but we are the ones that nailed it. becoming a go-to person in your industry can go a long way in building your customer base and increasing brand awareness. how do you go from nobody to a leader in the field? one, tell your origin story. sharing where you and your business come from, it reveals your motivations and gives potential customer a look into
why you do what you do. two, generosity works better than sales pitches. you'll find that when you give away high quality content without asking for anything in return, your audience will generally be more receptive when it comes time to promote your service or product. three, share where you learned your information. people are more willing to trust someone when they connect their advice to trusted origins. in your blog, include relative links and references. four, take your expertise offline. offer to speak at events to build your status as a credible expert. five, join established authorities. associations and governing bodies carry influence. be active and advertise your connection to them on your site. i'm michael lyon. i'm brendan mckee. >> how are you? >> we are the founders of pedestal footwear.
what if we told you we could give you a competitive advantage? you are ditching your current sneakers and slipping into pedestals. >> we did over are currently seeking a $600,000 investment in return for a 10% revenue share over the next eight years. >> our products have everything you're looking for in a training sneaker at a fraction of the price. they are durable, silver lined to kill all odor and bacteria and a patent-pending grip design for traction. we're also proudly made in the usa. >> we've been sold in 40 countries, all 50 states, won the men's health gear award were featured in "huffington post" as a brand to look out for in 2016. we retail for $29.99 and have a gender-neutral customer base who train at gyms, yoga facilities and pilates studios and physical therapy studios around the world. >> order yours today at pedestalfootwear.com. >> nice job! thanks, guys. i'll give you both these, two numbers, one through ten.
>> i'm going to hold on to this. >> the first one, what do you think of the product, the second what do you think of the pitch? i think you did a great job and we need to be honest with the audience how funny it is that eric happened to hear about you last night. >> yeah, it was pretty cool. >> a great story. >> not related to the show and e-mailed them and said send me some samples. so, i'm starting with you. this guy's too slow. >> i'm going to erase it again. >> are you ready? i say an eight and an eight, okay? i think the product was really interesting. as i think you noticed, i literally, as you were saying, the inside of the sock has these certain properties to it. i was flipping it in and seeing how durable it was and looking at the grips and things like that. and so, i think that the product is actually really well done. i like both the design and what i think will be its functionality in real life. and i think that you were really concise with the pitch, the both of you. and it's always hard when you have a team of two to kind of not talk over each other and it seems that you have a good rhythm in terms of the ability to give the pitch and back each other up. >> awesome, thank you. >> all right, eric, did you
finish crossing in out? >> i did. i did. >> let's see how you ended. >> there you go. shameless plug for retrofit is at the bottom. so, product is really cool. the innovation's cool. and what i saw in the video on instagram, which again, you've got to love social media for this stuff. i was able to free educate myself on the product now by rewatching the video and seeing what happens. the only reason it's not a ten is my concern would be if you're working with these in like an area where there's kettle bells or something, god forbid something drops on someone's foot. does that become a problem, even in the controlled environment like the gym? that's the one area that's a little off. presentation was awesome. you've got the gift of gab, my man, so. >> thank you. >> well, look, i think it's neat. i don't know the industry nearly as well as you do, but it doesn't feel like i've heard as a layperson a lot of innovation in this area. so immediately, at least for me, that gets me interested in trying it. so, you clearly have one new customer here, hopefully, throughout gyms. >> and i work out all the time, so i will try them. >> two new customers.
all right, well, thanks so much. >> thank you. >> congratulations on everything. >> appreciate it. >> we hope to see your socks -- are we calling them socks? >> absolutely. >> it feels like souped-up socks. we hope to see them everywhere. thank you very much. >> thank you. >> and you two are not done yet, so stick around. and if any of you would like to come around pitch your produ or service here on "your business," send us a video of your one-minute elevator pitch. make it either an mp4 or wmv or post it to youtube, on your page and send us the link to us at email@example.com. please include a short summary of what your company does, how much money you're trying to raise and then what you intend to do with that money. when we come back, wanting to expand is great, but it can be perilous if you do it too soon. how do you know when it's time? and why it may be a good idea to turn inward and re-evaluate your goals and missions.
will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com. i'm always thinking of either a new product we can offer our customers or a way we can expand our business, but sometimes i'm thinking of too many ideas. so, when do you know if you should keep it on the back burner? >> that's a great question. as an entrepreneur, you are an
idea engine. what you do is come up with ideas, but you have to be careful. if you lose focus, you will start to create a lot of wear and tear on your organization. people will listen to each of your ideas and they'll try to pivot and move with it, and then you come up with another idea and that one becomes an old idea. you can drive people absolutely crazy. so, my suggestion, if you have a good idea, create gates for it, as you would if you were an investor. if you get to the first gate, then you can go to the second gate or the third gate. if you don't get through that gate, though, cut the idea off right there. be ruthless in how you look at your ideas and how you judge them. in that way, you can keep your organization focused and committed and you can be consistent in the messages that you give to your people. >> we now have the top two tips you need to know to help your growing business. lauren mylan is founder and ceo of lmb group, a strategic marketing and advisory firm. and serial entrepreneur eric kasaberi is founder and ceo of retrofitness. thank you so much for the elevator advice. now i'm opening the floor to you for anything you think can help
a business and our audience. lauren, let's start with you. >> thank you, jj, for having me on. you know, i think that something's really important for entrepreneurs is to make sure that they are hiring competing counterweights. and oftentimes when an entrepreneur is starting their company or growing their team, they tend to hire who they know, right? you go first to your inner circle, and you end up with a lot of duplicative skill sets. and so, make sure that you're hiring, you know, diverse perspective, experience, skills that can actually be really meaningful and competing counterweights to your business and to things that you need to evolve and grow into success. >> right. and you don't just want a lot of people saying, yes, i agree with that, too, yes, i agree with that, too, which is tempting at the beginning when you're building it because it's exciting to be around people who believe in what you do. >> people tend to start and grow within their support system, and sometimes we have to reach outside of our comfort zone to make sure we're making the right hires, especially in the early stages, right, where you have people that are so vital to the growth of your business to make sure everyone's bringing
different perspective and skill sets to the table. >> okay, eric, you're up. >> so, when i deal with my entrepreneurs, especially my franchisees, one thing i tell them is check up from the neck up. what that means is they're being able to on a daily basis, not just goal-setting once a year on january 1st. i tell them to do it nightly, weekly. you set your goals for the week, then nightly you go through those goals and in the morning you look at your book and say what do i have to accomplish today? because when you're an entrepreneur, a million miles an hour stuff is coming at you. you can be overwhelmed quickly and lose sight of where you have to be and the balance goes out of your business and your life. so, with the check up from the neck up, you say here's my map for that day, let alone the week or the month or the year. forget about the pro forma or the budget, for you, check up from the neck up. you have to have your mind in business, otherwise you become a disaster and become a choke hold on the business. >> i think what also happens is if you're overwhelmed, you end up focusing just on the easy stuff, right? >> 100%. >> because oh, i can get this off, i can get this done, i can get this done, and you keep
pushing away the hard stuff. >> zig zigler calls it swallow the frog in his book. you don't want to look at that sucker all day long. do that stuff right away. most entrepreneurs, as spirited as we are, have a tend say sometimes to lean toward let me just get done what i get done because i'll feel good about it. >> because at least i can do that. thank you both so much. >> thank you. >> thanks, jj. this week's "your biz selfie" comes from b elegant menswear. they make custom suits. it looks like he's wearing one right there. and carrying some shoes, boots and belts on their website. and you can see the catalog, too. that is a perfect selfie of your business. thank you for sending that in. we love featuring your businesses here on the show, so let us highlight what you do. pick up your cell phone, take a selfie of you and your business and send them to firstname.lastname@example.org or tweet it to @msnbcyourbiz. include your name, the name of your business and location, and don't forget to use #yourbizselfie.
thanks so much for joining us today. we love hearing from you, so if you want to get in touch with us, just e-mail us at email@example.com. we read every single e-mail that comes in to us. you can also go to our website, it's openforum.com/yourbusiness. we posted all of the segments from today's show, plus a whole lot more. and, please, don't forget to connect with us on all of our digital and social media platforms as well. we look forward to seeing you next time. until then, i'm jj ramberg. and remember, we make "your business" our business. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order
or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com. education is the civil rights issue of our time. i am calling upon members of both parties to pass an education bill that funds school choice for disadvantaged youth, including millions of african-american and latino children. >> good morning, and welcome to "politicsnation." president trump has consistently presented himself as a friend to the african-american community. and earlier this week, he met with the heads of many