tv Your Business MSNBC February 21, 2016 4:30am-5:01am PST
good morning, coming up on "your business" when partnerships go bad. the owner of a sticker company regroups when his partner decides he wants out. a founder's worst nightmare, her partner turned on her and she lost her business and her name. how to make sure you don't set up partnership that ends up in disaster. that's next on "your business."
hi, everyone. i'm j.j. ramberg. welcome to "your business." partnerships in a business are like a marriage, truly. you go in hoping for the best, but it doesn't always turn out that. partners are individuals with different plans, values, and goals. as much as you talk that through, it's hard to think of everything. the own er of a soouf ner stickr
company learned this the hard way when his partner wanted out. we'll see how he is moving forward and making sure his next partnership sticks. >> i feel like i just got divorced in a lot of ways. >> when they launched teambo ee stickers in 2012, he never envisioned being alone. >> after my partner announced he wanted to leave the business. >> at the gunning, is seemed like they were a perfect match. chris brought the design background, and his partner had the needed capital to far the the piz. >> thing were really gottclotte.
>> they were flying off of the shelf. >> i like this one, look at this. >> we had the first rack, and boy, we started seeing them like crazy. and he got us a bigger rack and we sold them even better. it seems that everybody needs a sticker. >> but the pressure cooker of growing a new business was really for hem them to evaluate what they want out of the country. >> we did not discuss how do we see the business serving our futures. that's where we started to diverge a little. i think i was more long-term focused. >> it is a situation that nina says is more common than you
would expect. >> you want to begin with the end in mind. it's a vital part of being a business owner and understanding what your exit strategies may need to be. things come up you may not anticipate. >> if you're going into business with a partner, there are things you need to know. know each other's goals and values. what do you think about vacat n vacation, how quickly do e-mails need answered? >> some people start a business because this is what we want to do for the rest of our lives. for millennials that don't see the rest of their lives in one place, they may want to build to sell in five years or ten years. >> two, understand your partner's communication style. and three, make sure good advice is only a call away.
>> have an outside advisory team to move forward and help you accountant. but reality rarely goes as planned. >> you can write whatever bilas you want, but nets there is the ability to serve that in -- his former partner wants his money back and to get that the company needs to succeed. so they both have the same goal of seeing the company make money. chris was able to concentrate on restructuring to ensure the restructuring of steamboat stickers. he distributed the work and brought on a new partner. since her designs have been a driving force, and they always had a great working synergy, it
was a move that felt natural. >> when the partner decided it wasn't a good put it and he was ready to leave, it was a of course decision for me. >> that don't want to leave any room for history to repeat itself. >> where do we see ourselves going if this happens. running scenarios. we have a really open line of communication on every level and we always have. as we have moved forward, i was more like i want to protect us both and make sure everything is so neatly tied up so we don't hit this point. >> it may be the first of the conversations, but they will certainly not be the last. >> when you see how many
loopholes there can actual i will be, it is something that you have to talk at great lengths about. >> these partners are unified to take over the joouf near worsoue sticker at a time. >> his ability to hustle and get new clients and understand the markets and my understand of markets, the possibilities are endless. >> her current company's product is on storeshelv shelves around country. she lost her previous company and her brand to her business partners. we want today revisit this cautionary tale of a partnership gone bad.
tate's bake shop is known for these thin crisp chocolate chip cookies. they churn out more than two million cookies a week distributed nationwide. sales amount to more than $10 million a year. >> it has to be crisp. because if it's not, it's not tate's. >> her first company, kathleen's bake shop was an institution in new york for 18 years until she made a bad business decision to form a partnership with a former employee and his brother. that mistake cost her her name, brand, and her first thriving business. >> they destroyed everything i had from kathleen's bake shop. >> baking since she was a child, kathleen started selling cookies at her family's roadside farm stand. >> i started when i was 11 years
old, and my dad told me i was old enough to buy my own clothes for school now. >> her bake shop was a success right from the start with a slew of celebrity regulars, great press, and a business that was growing steadily in the new york metropolitan area. she bought a house, and was taking care of finances and marketing. she had generous offers on the table. he jumped at the opportunity, but insisted that his brother joined the deal. that set her up for a devastating fall. >> the business deal that i made was crazy naive. i didn't have the best lawyer.
it was one-third, one-third, one-third. once the deal was done, the brothers started making major changes, changing the quality of the ingredients, moving it to virginia, and hurting her reputation. >> they just continue today kill the quality of the brand and it was heartbreaking and embarassi embarassing. after about six months they fired me. >> a legal battle ensued, and she was left with $200,000 in debt, as well as legal fees from the fight. she also lost the kathleen's brand name. the only thing she had was her bakery store front in south hampton. >> i had zero money left in the
bank, and i opened tate's in two weeks. >> she was introduced to a business mentor. >> i said do you have a bake shop, do you a building, and a recipe, i said you're not selling anything. roll up your sleeves and we'll make the happen. >> how does an entrepreneur form a successful partnership and avoid a misstep. keep 51% of the company so you have voting control, and make sure you have veto power on important decisions written into your contract. >> you're the founder, you're the visionary, you don't need them, they need you. a lot of times it's a great vision, beautiful placement, and
they come in and totally destroy it. and you lose your brand. >> with michael's guidance and the emotional chapter behind him, date's tate's is a bigger that kathleen's ever was. now she says the whole or deal was worth it and in many ways it's the best thing that could have happened. >> when you go through something very challenging that tests your limits, it becomes very easy. you don't have fear to take chances. what's the worst that could happen? i already lost everything before. >> having good communication skills is a must when running a business. it has a huge impact on whether or not your team can get something done or go in circles. ink.com put together five habits that improve your ability to
communicate well. customize your communication. don't attack to everyone the same way. some people like details, others just want the bottom line. know your audience and act accordably. two, actively listen. maintain eyecontact and respond with small gestures that now you care about what that person has to say. three, be polite. don't look at your phone or watch when someone else is speaking. >> ask es that are evenle and unsbupting. five, let people finish. if you're anxious, you're probably -- last year, concerns about
predatory practices that lead to troubles. they came up with the small borrowers bill of rights. joining us now to talk more about these best practices among lenders in order to help small businesses gain access is jared heck. it is so great to see you. >> thank you for having me today. >> you're in this world working with all of these online lenders, right, and consumers reaching them. >> that's right. >> why did you feel the need? you're working with great people i assume. why did you feel the need to create this bill of rights? >> so small business lending has historically been a seller's market. it's one of the few industries
throughout where the internet has done nothing to transform the way it operates. that means there has generally been a lack of information for small business owners to come out on top. you're a small business owner, i'm a small business owner, you're bombarded by people trying to sell you things that you don't need. what happen social security a lot of business owners are taken advantage of. they're put into high price products. they don't know what they're getting into, and really when you look at the borrower bill of rights, and the precedent that we have set, it's about empowering business owners with information to they can come out on top. >> so what are some of the tenants on the bill. >> there is a broker section on the bill of rights. they put a business owner into a
product. and not a lend near will provide the lowest cost capital or the best product for the business owner. so brokers must provide a business owner with all of the information about all of the products for which they're eligible? >> is this actionable at all. what does the bill of rights actually do? >> in my mind is lays a foundation for best practices for lenders and owners to abide by. so if i were a small business owner that wanted to go borrow money. would you take a checklist -- >> yes, you should know exactly what you're getting into and that you're being treated fairly. the last thing you want to have is being taken advantage of. >> ask the people you're working
with if they're fall lollowing . >> exactly. we had a bill of rights on our sight almost ever since we launched. and it is a way to demonstrate that we're in the corner of the business owner every step of the way. >> you're steeped in a world of online lending, how quickly do you see this growing? >> the industry is roughly doubling every year, and we don't see that slowing down any time soon. i think the nice thing about the growth is that it is not a zero sub gain here. there is bank lending and they're very complimentary and coexist. >> jared, thank you for coming on the program and for putting together this bill of rights. it's so important for people that don't understand this that well and are going out there to get money. >> thank you for having me. >> the booming service economy
continues to offer opportunities for forward thinking entrepreneurs. two brothers created a successful business doing what most of us hate. haggling overbills for cable to phone. >> nancy and mike montgomery had dreams of traveling the world, but they don't have the extra cash to splurge. they started with their cell phone bill. that cost $180 a month. >> we're paying more than we thought we should be paying. >> then they discovered the bill fixers. two brothers in nashville who work the phones negotiating bills, tracking the latest deals in their basement war room. >> we kind of got it down to a science where we can get it done in probably less than an hour. >> they started their business in college. >> i would negotiate for my
college roommates. >> they claim to be them. >> i was mostly interested in the price change. >> they charge 50% of what they save customers for the first year. they say it is an average of about $300. >> their number one piece of advice? >> just be nice and they will take care of you. >> other tricks, call in the morning. ask for customer service, not billing, and start by saying you want to cancel your service. >> the brothers threatened the montgomery phone company by switching to the competitor's cheaper plan. they were shocked how much they cut it from $180 to $60. >> paying money to save money, well worth it. >> nbc news, nashville. when we come back, the pros and cons of trying to diy your
seo. and more of our viewers favorite online tools and apps. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials. amex helped me buy the inventory i needed. our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at open.com right now, we're having trouble getting traffic to tour retail site, and i'm also having trouble being able to afford
paying for an expert so i'd like to know if there are any ways that i can diy my seo while we're working towards hiring someone full time. >> yes. you can certainly diy your seo. lots of good tools out there in the modern world. if you go on youtube there are a ton of tutorials that will show you how to do seo on your own. a lot of times it's just about band width, because you have to be consistent with seo. it's not so much about just setting it up once, and letting it ride. so you're going to need to do searches for key words, and make sure that all of your pages are technically set up properly. so, a lot of it is about consistency, it's not so much about hey, i did seo correctly and now i'm good to go. eventually your band width may get stretched in and you need to hire someone but you can absolutely set it up so that you're done properly from the beginning, on your own. we now have the top two tips you need to know to help your small business grow.
let's introduce our board of directors and get their advice. entrepreneur james reinhart is the co-founder and ceo of largest online consignment and thrift store and serial entrepreneur larry broughton is the founder and ceo of broughton hotels operating locations throughout california and also in chicago. it's so good to see you both. >> great to be here. >> you have such a great story, james. you started your company from nothing. you just got $80 million from goldman. i, i use your company. >> thank you. >> so you've taken it from nothing to how many employees did you say? >> about 700 now. >> okay, what's something you learned along the way? >> well, we've learned a lot. i mean i think -- >> to one thing. >> i think probably the biggest thing we've learned is to really focus on the culture as a company. i think easy as you grow really quickly to think about the top line and the bottom line but it's ultimately about the people. and i think great companies always get back to culture and about why employees want to work there and what they're trying to accomplish. and i think the biggest thing we've learned is that you can never forget that it's all about
the people in your company. they ultimately help you become successful over the long term. >> do you feel like you've had your culture right from the get-go, or have you had to tweak it along the way? >> i think you are always tweaking it, because what works for five people in a coffee shop is different than what works for 700 across four locations. but i think the key is to be really reliant and talking about it and always thinking about ways you can do things better. but yeah, inevitably, it changes along the way. >> have you had to get rid of people because they didn't fit the culture? >> sure. people that help you go from your first zero to a million, the people who help you get to 100 million are different people, different responsibilities. so i think the job of the ceo is to keep figuring out who the right people would be on the bus? >> all right, larry? >> i am really going to recommend that people ditch the pitch. once and for all, pitch the pitch. you know, i think the elevator pitches have their place. >> mm-hmm. >> but too often i see we go to networking events and people are immediately going into their elevator pitch. and so a couple of years ago i
started asking venture capitalists investors and ceos, how many of you actually bought something right off of the first pitch you ever heard? and nobody ever has. the truth is we want to do business with those that we know, like and trust. so i'm going to recommend that people do this, instead of doing the canned elevator pitch start your conversations with this, when somebody says hey, what do you do? use these three sentences. i hate it when, fill in the blank. i love it when, fill in the blank. so i, fill in the blank. so for instance, you know i've got this mentor and coach entrepreneurs, so i say, i hate it when i see entrepreneurs out there floundering, they're struggling, they have no idea what to do, they don't have the tools, tips or resources to get the job done. i love it when they can change these multigenerational, you know, strain of poverty that they're in, and i would love to see them get to their fullest potential so i coach and mentor them, give them the resources and the tools to do a great job. so i say ditch the pitch. >> you know what?
i love that. i love it because pitching, after you've said it so many times, starts to feel canned. right? >> it is canned. >> and just having a normal conversation with someone, i mean, i, find myself even when i start to talk i'm like oh, here i go again, right? >> right, right. >> and so if you and that makes it much more personal. >> so just remember, i hate it when, i love it when, and so i. then you fill in the blanks as you're talking. >> i use a version of that all the time. i think it's great because it lets people connect with another shared way that they're thinking about a problem or your problem -- >> what do you do? >> i hate it when you look into your closet and you've got a closet full of clothes you aren't going to wear, right? and i love that feeling once you've purged. you walk in there and you can find the things you want, right? >> right. >> so we're relentless about helping people kind of have that magic moment, and i think everybody can relate to that. >> bing. >> there we go. >> this was great advice. both of them. thank you both. >> thank you. >> it is hard to sift through
all the apps and websites that can help you run your company so we periodically go out and ask our viewers which ones they find most useful. here are some of their suggestions in this small biz tools. >> elevate biz training is a site specifically for women entrepreneurs, and it's this wonderful community that you can go and be a part of they have lots of great content and then they have an an yule membership site that you can join. it's quality women from all over the world that are growing and launching businesses, and that are highly successful in their businesses. >> an app that i love to use is blue vine. they do invoice factoring, and you're able to get money up front for purchase orders that you have received. and you've already invoiced out. so it allows you to kind of keep your business going, take care of payroll and other issues that you might face as a small business if you are bootstrapped and looking at ways to finance. they're very simple tools and you're able to use them at the click of a button. >> our business has been greatly helped by the manufacturing
extension program. it can be found at a federally funded program that allows manufacturers access to industrial engineers and small businesses we can't afford a industrial engineer of our own. they allow them to work for us under a contract at a discounted price as you get bigger you pay the full price, but you have a great well-trained, experienced industrial engineer available to you just for the project you need. >> prolo allows our customers to enter their zip code and track where they're can find their product realtime. it's really helped grow our business. >> this week's your business selfie is from robby turner owner of citizen ciao in los angeles. he's also a social entrepreneur who donates part of his sales to help homeless children with shelter and education. good for you robby. i love seeing photos of you and your companies so e-mail us your
selfie to your email@example.com. or tweet it to @msnbcyourbiz and use the #yourbizselfie. thanks everyone so much for joining us today. here's one thing i learned from today's show. it is never too late to create a partnership agreement. so if you don't have one, sit down with your partner and create one. and you have to talk about things like your vision for the future, and your values, and you need to sit down with an adviser or a lawyer who can go through potential scenarios with you that you may not have thought of. and remember, it's a lot easier to do this when things are going well, than when you start to have disagreements. so if you don't have one, it's never too late. now we'd love to hear what you learned from the show, or if you have any questions or comments about the show, just e-mail us at firstname.lastname@example.org. or you can head over to our website, it's open forum.com/your business. we've posted all of the segments from today, plus a lot more. and please don't forget to
connect with us on all of our digital and social media platforms, as well. next week, if you thought starting a business was tough, just wait till you see what comes next. >> i have to work on branding and marketing, managing people, managing money, managing strategy. which has been a big maturation process for me personally. >> find out how entrepreneurs like this one get the help they need to deal with everything. till then, i'm j.j. ramberg. and remember, we make your business, our business. our cosmetics line was a hit. the orders were rushing in. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials. amex helped me buy the inventory i needed.
our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at open.com when you win, it's beautiful. and we're going to start, we are going to start winning for our country. >> friends, once again, we have made history. you, the good people of south carolina, and our incredible volunteers, all over the country, continue to defy the pundits, and to produce extraordinary results. >> many thought it was over. somehow doubts about whether we would wind up here even now. >> there's nothing easy about running for president, i can tell you. it's tough. it's nasty. it's mean. it's vicious. it's beautiful. >> we are