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tv   Your Business  MSNBC  November 13, 2010 5:30am-6:00am EST

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three very independent and very competitive whitewater rafting companies merge into one. who's in charge and is it working? that's coming up next on "your business."
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hi, everyone. i'm j.j. ramberg. welcome to "your business." where we give you tips and advice to help your business grow. a friendly rivalry can sometimes be good for business, but imagine going head-to-head with the same competitors year after year and one day, you're co-workers. that was the case for the employees at three whitewater rafting companies that merged in west virginia. while the decision to join forces was good for business, the owners never realized it would become a lesson in conflict management. once upon a time, in the wild
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and wonderful mountains of west virginia, there were three river rafting companies. class six river runners, mountain river tours and rivermen. they had all started in the 1970s and each had their very own personality. >> class six are wine drinkers, rivermen are beer drinkers. >> they were friendly competitors and all loved running the business they were running. >> we often disagree. the class six guys are often wrong, but that's okay, i'm wrong also. >> we were fueled by passion. we weren't fueled by cash, we weren't fueled by anything other than we were doing what we loved. >> so you can only imagine what it was like hen the owners of these companies were approached about merging their operations into one. >> when paul first called me, i really wasn't interested. i said no. we had a good gig going. we were growing. we were making money. not a lot, but we were paying our bills. >> that's brian campbell, the founder of rivermen. the paul he's referring to paul bucklehrer a former financial guy who spent his weekends as a
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river guide for class six. a few years ago paul saw an opportunity to change his job, lifestyle and become the ceo of a new or sort of new company. >> first thing i realized in this industry, they were very profitable at one time and because of overcapacity, price cutting and decline in revenue due to users, that they weren't nearly as profitable and that to make this work, i was going to have to do, merge at least two, if not three, together. >> and that's how the idea for the lancing, west virginia, based adventures on the gorge was born. paul approached all three company owners, everyone involved sensed that the deal wouldn't be a simple one. >> i did see some challenges because we were competitors, for sure. and you know, that relationship, we had to work on. >> but soon enough paul was able to convince them that the key to their collective survival was joining forces. >> there's a point in a family business where the family is necessary for its survival.
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there's a point in a business where the business outgrows the family. and the rivermen were at that point. >> though they came to an agreement, got a team of investors, and each founding owner maintained partial ownership in the new company with paul serving as the ceo. while the founding companies all fall under the adventures of the gorge umbrella, the brands themselves live on independently. when i walk around this campus here, i still see low goes for all three companies. why do that? it seems for expensive and confusing for your company? >> the loyalty is to the brand. lots of cases these companies have been around 30-plus years. when you say the rivermen or class six, they automatically become emotional and tied to that brand. >> but adventures on the gorge means nothing to them? >> adventures on the gorge means nothing to them. that's the tricky part. >> and that's not just the customers. while some departments were easy to merge, others were not. >> rivermen are very passionate,
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class six was very passionate, adventure mountain river tours was passionate. guess what, there was a fair amount of culture clash. >> many employees who lived through the merger are still quite loyal to the individual brands. >> i found a lot of the back room operations, housekeeping, accounting, maintenance, even reservation staff, the office staff, were easy to merge. the most difficult has been the guides. >> they were the personalities and competitors, really. >> competitors and anybody that is in charge of eight people for a day, getting them down a river safely, has got to have an ego. and some of them have very large egos. >> there's a section of river where one of the companies puts in at one place and another one puts in about two miles down river. and one of the companies feels like where they put in is the best experience for the customer and the other one feels where they put in is the best experience for their customers, and i can't seem to get them to
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agree on putting in at one place. >> and there are other disagreements to an outsider that may seem small, but have taken on a life of their own. >> the rivermen, they put ice in the bottom of their coolers to keep the lunch meats cooled during the day and class six, used ice packs. and i got into this big 30-minute debate between the guides of what was better, ice or ice packs. i remember saying, guys, the customer doesn't care how we keep this lunch meat cold today. >> paul had another challenge besides merging the personalities of the companies. with the investment money he raised to form adventures on the gorge he wanted to do something none of the three original companies had done before. and that meant looking beyond the whitewater. >> our strategy is simple. we need people to stay longer and do more things. you can run two or three different rivers, you can participate in a kayak school, you can take a climbing and repelling class, you can do mountain bike tours, you can do
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horseback tours, you can do atv tours. the zip lines have been the biggest product we've expanded into. we now have two zip line courses. >> reporter: with all the new activities and a bunch of new accommodations, the adventures on the gorge was turned into a true all-inclusive destination. >> the future was a resort. the future was, you know, more lodging, restaurants, and a variety of scenarios. >> sometimes radical change needs to happen. it has made us much more profitable, it has made us a much stronger company. we've been able to reinvest in things. >> after three years, paul says he's incredibly proud of what they've been able to accomplish in merging cultures and building out the company. he says they're nowhere near done yet. one day, he hopes that these three companies will truly be one. >> as time goes on it will take more prominence and you'll see it being on top of the main brands and as time goes on,
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you'll see the flip-flop go on and some day, it's our goal that adventures on the gorge will be primary brand that is associated with the ad have beenture resort. joining forces and merging is one way for some companies to survive rough economic waters. but it can be hard as we just saw. let's turn to week's board of directors to talk to them about it. norm bratzky is a cereal entrepreneur and ink magazine columnist and jerry is the founder and ceo of corporate turnaround. great to see both of you guys. >> good morning, j.j. >> i love this story and not just because i got to go river rafting and zip shrining, which was so much fun. so interesting to see how they had to deal with this culture clash. and that, i think, i mean norm, you've been in this world for so
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long in business, merging companies, you just went through it. >> yeah. >> how do you deal with the culture clash? >> in this particular case i would normally say you need one culture. sometimes you take your weaknesses and you make it your strength. the employees who i believe are the most important part of any company, having a difference in culture, it creates a culture of its own. so i'm not so sure they should change it to one culture. i like the part they land here or land here. it doesn't interfere with the customers' experience at all. probably the customer doesn't realize there's a number of cultures going on there. >> i guess the problem, though, is that then these brands live on, as i was talking to paul about and that's expensive. you're marketing three separate brands when you could be marketing just one. >> i love, j.j., i love their marketing. i think they're doing so many good things. they weren't very profitable before they got together. then when they got together they were more profitable. there's one big problem that i see. there's too many chefs in the kitchen. there's too many cooks in the kitchen. even though the company itself is more profitable, you have 15 partners now, try divvying that up to 15 people. it may not be as good for them. >> i think from what they said,
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the management, it worked. you know, they said in the beginning they would sit around the table and look at each other and now they all get along famously and everything's working. it's the employees, that are still really loyal to the brand. >> exactly. and i don't think it's that much more expensive. i think it will hurt them if they want to create one brand. i think that three brands, it does two things. one, it keeps the employees happy and you want happy employees. two, it gives the people a choice of what they want to go to. they don't feel like there's only one company. and not only that, if there was only one company, you might create additional competition. new people come into the market. >> i don't see why in their marketing plan, why they have to come into one brand. they're having success with three brands right now. i love that about what they're doing. no reason to do that. why create a new brand when the three brands are already working. >> the other thought was a challenge that they seem to overcome, they came in, paul
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came in and merged these three companies, merged all these people that used to be sort of competitors, and not only did that but grew it. they would take people whitewater rafting and now they have zip lining and horseback riding and rock climbing. they turned these family run, relatively small businesses into kind of an outdoor empire. how do you come in and do that and not totally rock the boat? >> what i love about it is they have all these different things in the same space. they're selling more things to the same customers. we have people coming in, instead of spending $100, they may spend 200. >> people don't just come in and out for the day anymore. there are a week full of activities there. thanks so much. this week we celebrate veterans day. as we reported a while back, many small business owners have had to put their ventures aside to serve in the military. some of these vets as well as some of those who want to start businesses upon returning from duty, often find it a challenge to get support.
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>> hi, this is dave. >> in the fall of 2004, entrepreneur and national guardsman dave got a phone call that knocked his business plan way off track. the news of his impending deployment to iraq. >> at that point, i started calling around to each of our clients and letting them know, hey, this is what's going on, i don't have anybody to manage the business while i'm gone. >> he spent nine months building a computer service and consulting company, funding it with savings and his pay from night and weeks of work as a firefighter. he closed down the franchise, intending to reopen when he returned. when he came home ten months later after suffering a heart attack he had to change his plans. he found that his credit rating had been damaged by several late payments, caused by a sharp drop in family income. >> we went from the mid-600s to a 470. going to a 470, pretty much anybody that's out there right now will tell you, you can't do anything with a 470. that's the biggest problem soldiers have right now. credit. you go from a certain salary to
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a certain salary and usually that salary is four or five times below what you were making before you got called up. >> he applies for a military economic injury loan from the small business administration, but because of his low credit score his application was denied. >> i think that the government should understand that the needs of the small business owner, being deployed, coming back with possible credit issues and there should be some way you can explain the situation. >> financial problems during deployment aren't atypical among the 55,000 reservists self-employed. mark aldridge returned after a 15-month deployment to find that his company had accumulated thousands of dollars in debt while being run by a partner. >> when you come back and you see that decisions were made that you might not have made, and that the company is not in the position you thought it would be in or you think it should be in and you were left out completely on those decisions.
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>> he eventually decided to leave the company he had built. >> i have a wife and two children and sometimes it comes down to making the right decisions so that everybody's comfortable and we can, you know, make ends meet. >> veteran and business counselor luis has heard many stories like these. he said the best protection is to take action before their deployment. >> veterans who are alerted it's possible they could become deployed need to have a plan to keep their businesses viable. could we call it an emergency plan? i suppose we could. but if we plan for it, it becomes much less of an emergency. >> celli runs the northeast veterans business resource center. a non-profit group in florence, massachusetts, that works with veterans who want to start and successfully maintain small businesses. >> we have to talk about bank accounts, we have to talk about letters of credit, we have to talk about bonding, we have to talk about the legal aspects of being able to turn your business over to someone to take care of it. >> reporter: self-employed
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reservists like all drimg and crasser have difficulty to find the help they need in a bur ok kracy. bureaucracy. >> we as americans have a responsibility to support the men and women who have dedicated their time and lives to supporting and defending the constitution of the united states. >> it's people like us that will help each other. you're going to have to reach out to other business owners. >> have things gotten better for our small business owning veterans? ken knight is a veteran and korea of night solutions, a contracting company. ann marie johns, deputy administrator and chair of the interagency task force on veteran small business development, established this year by president obama. great to see both of you. >> thanks, j.j. >> thank you so much. >> this is such an important topic. hearing those stories that we just heard in the beginning, just break my heart. maria, i'm sure you must hear these every day. tell me what this task force is aiming to do?
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>> j.j., we are so excited about the veterans business task force. it's an interagency task force, so we have a number of federal agencies at the table, but even more importantly, we have representatives from veteran serving groups like the american legion, vets force, student veterans of american, and we also have the secretary of veterans affairs from the state of new mexico, who's on the task force with us. >> so -- >> our mission, i'm sorry. >> your mission, go ahead? >> our mission is clear, we want to make sure we're connecting the dots in the most effective way, to make sure veterans have access to cap stall, expanding business opportunities through federal contracting and we're reducing the paperwork in the federal government to make all of our programs more accessible. >> the thing that struck me, maria, in the story is the credit issue. we talk on the show every week, everyone is talking about how hard it is to get -- the average person working on their business every day. if you're a veteran you get called up to the reserve, say, on the reservist you get called up, your credit is shot. the normal person can't get it. is your task force going to do something to help these people
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where the banks probably won't? >> we have a loan product, the patriot express loan, our lowest interest rate and also our most streamlined process for helping veteran owned businesses get access to capital. in addition, i can't emphasize more strongly the benefit of our counseling services. we have a veterans business specialist in each one of our 68 field offices. we also have double the number of our veterans business outreach centers around the country. and we have a network of small business development centers nearly 900 of them around the country and most of them have a veteran specialist as well. as the tape recorded, the report said, the time for a veteran to come in and get counseling about how to maintain the business through deployment is before he or she leaves. our centers are available to provide that kind of counseling. >> kevin, what kind of obstacles did you face with your company? >> starting out i would have to say capital was a big issue.
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i will echo what miss johns stated. there is a patriot express loan for veterans which i took full advantage of. it gave me the seed money i needed to start my business. it really prepared me to the next level. the other obstacle one may have when starting a business is just setting your strategy. i think that goes back to you have to have a sounding board and i would like to say that these small business development centers that miss johns talked about, they are here, there are local ptacks for veterans. my s.p.a. office here in washington, d.c., has been very instrumental in setting me up in a position to secure contracts with the federal government. >> it sounds, kevin, that you've taken advantage of a lot of the things we were talking about. do you feel like in some ways, maybe you had an advantage then, that you were a veteran starting a small business, versus somebody else? >> i would just say that we all have our advantages, we all have the opportunity. it's what the individual chooses
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to do. and i reached out to small business administration. they were very supportive of me. in fact, there is a -- within the s.p.a. washington, d.c., office there is a liaison i can call on at any time, billy jenkins, he's a veteran himself so he understands my issues, he's support of the whole veteran community. >> if you are a veteran and watching this, you don't remember all the details, where is one place you can go to find out what resources are out there for you? >> the one thing i would say, go to our website, but i would also say a veteran would be smart to call kevin knight and learn from his experience. he's a perfect experience of how you can take the sba's tools, put them together and lead to your business success. i applaud him for doing that. >> thank you. >> i'm assuming you are not going to put your phone number out on national television, but we appreciate getting to hear your story and learning by
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example. thank you so much, both of you. >> you're welcome. >> thank you. when we come back -- the best new tablet pcs for small businesses. how do you know when you need to pursue more funding for your company? >> we're looking for your help in making your business an even better resource. log on to seven years ago, i had this idea. to make baby food the way moms would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with the farmers that grow our sweet potatoes and merchants that sell our product. we've gone from being in 5 stores to 7,500. booming is using points to make connections
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that grow your business. sales of tablet devices are growing fast. here are five of the hottest tablet pcs courtesy of the dangeral marketing street e the seven-inch screen is comfortably enough to browse the internet. if you are looking for a device for multi-media, check out the archos 10 internet tablet. it offers quality hd playback. versatilecy versatility is the
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name of the game. dell inspiron duo is scheduled to be released in 2001. and blackberry playbook will come out in 2010. a powerful machine designed with business users in mind. it is time now to answer some of your business questions. norm and jerry are back with us once again. the first one is about the right time to expand. >> what formula would you use to determine when to start a company like myself needs to go for that next round of funding to get to the next level? >> we get this question a lot. i think there are a lot of people who are either on the brink of going big or just anxious to get to the next level. >> right. well, my opinion here is i think what he's saying is when should i go for this funding, when should i get this funding? it is not a three-course meal here. funding is not an automatic thing, especially in this day
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and age it is difficult to get money. i don't know if there's a specific formula or principle that tells you these things. he was probably undercapitalized to begin with. does he have investors? how is he taking care of these people? is he going to offer collateral to these people? we don't know these things, but as an investor, it is very risky. i don't know what his product is either. >> first of all, i agree. there's no formula of when and what, but my question is before you think about that, why, why do you want to grow bigger? i always say, you have to have a plan, a life plan. what do you want to take your life to? then build your business plan around that life plan. >> and looking at your business, are you at a standstill, at a place where you need funding to get to the next point, or keep growing organically as you have? >> what's the plan for? >> the most important thing in business is to get the critical mass. i define critical mass as
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breaking even on your crash flow. if you run out of cash if you are profitable you are out of business. >> right, we talk about that. let's move on to the next one about how to approach a potential business partner. >> as a small company we've got some very large people that are in the same space we are in that we compete with that would also by ideal partners with us. how do you approach them and convince them to be a distribution partner for our offering in the market? >> that's a good question. >> yes, well, legally you can try to have them sign non-competes, but the truth in the matter is check their references. see the people they have done business with before. are they honest people? you know, you really want to be in business with people who are honest and care about you and your product. and that's really the key and trick to it. >> i would approach them, yes, how do you approach them? very carefully because you don't
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know who you are dealing with. you have to check out their references. but i would say, also get a non-compete, nondisclosure, whatever you can do to possibly protect yourself. get everything in writing. and also have an exit strategy if things don't work out, how are you going to part ways? >> it is interesting, if i were a big company and you were coming to me, we are in the same space and you handed me a non-compete, i would never sign it. >> that's right. that's what i'm saying, if you can get it. a quick story, my father was in the vitamin business and did business with a huge department store, montgomery ward, he did so well with them what did they do, private labeled their own vitamins and cut him out of the deal. that's what this person is worried about, very understandably. >> you have to trust people some of the time or you won't -- >> you won't get anything done. >> you have to take risks, no question about it. the next question is about marketing. >> i need to get uncle earl's into the public eye for as low cost as possible. what's the most effective way to do that and what other suggestions do you have? >> i would say congratulations
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to this business owner. you just promoted uncle earl's for free on national television. tell me what you get from it because you may not get what you think. i don't know that you necessarily need the kind of exposure that you are looking for. i don't know if that's a well-thought out marketing plan. >> couponing is always an idea. >> well, i'm not big for couponing. i think that to get your name out before people in an inexpensive way is there are lots of shows that you go to that get lots of exposure from people with free samples, whether they are typical boardwalk shows or bigger types of shows around the country. so if you can get your reps to go to the shows and give away your product -- >> i think that's a good point. more than to advertise where you spend a lot of money and don't know if people pay attention to it. if you believe in your product you get it in people's hands. >> if the product is good and they like it -- >> they'll come back. >> exactly. >> if any of you have a question
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for our experts, just go to our website. the address is there hit the ask the show link to submit a question to our panel. the website is or e-mail us your questions at we just heard from norm and jerry. we'll get tips from entrepreneurs just like you. >> the buzz off your business is the most important thing. creating that nowadays is through social media. but it is also vital than ever to pick up the phone call and talking to friends and family and going to your current business people and asking them to put you in touch with their colleagues to help you out. >> i've met a lot of people who like myself have left large companies to strike out on their own. and i think that people have to be very careful about the cultural shift. in the corporate world it is all about your title and your office.
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in the entrepreneurial world it is about your mood and character and what you can do for your clients. >> there's obviously a lot of small businesses focusing on the negative, the customers don't have as much money as they used to have, but there's a positive side. if you have a good product customers want it and are willing to help you get that product to them. >> do you have multiple lists for your office? check out rememberthebigging is a website that can argue all your tasks in one place. create to-do lists and integrate them to a blackberry or to google calendar. these applications are available for a free 15-day trial. to learn more about today's show, click on our website. it is you'll find all of today's segments plus a web exclusive
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content to help your business grow. don't forget to become a fan of the show on facebook. we look forward to getting your feedback. if you would like, follow us on twitter@msn twitter@msnbc.yourbuz. i never look at the restaurant website because obviously all their reviews are going to be positive, right? if you want the truth, go to the people who have something negative to say. >> find out what you need to know to take charge of your company's reputation online. until then, i'm j.j. ramburg. remember, we make your business our business. at we like to say we deliver everything but the baby. my name is marc lore and in 2005 we launched a business out of our garage. back then nobody was selling diapers


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