tv Your Business MSNBC November 14, 2010 7:30am-8:00am EST
hi there, everyone, i'm j.j. ramberg, and welcome to "your business" where we give you tips and advice to help your business grow. no matter how hard you work to provide the best service, chances are there's going to be unhappy customers from time to time. and in this era of instant information, those customers can easily go on line to post a negative review for all to see. today we meet two business owners who found a way to deal with this. ♪ what's the buzz
tell me what's happening ♪ >> it's the lifeblood of many small businesses. >> word-of-mouth is everything. >> if we can get somebody to come through the front doors and experience us, it stands to reason we're going to get them not only to come back, but they'll tell other people. >> we live and die by it. >> but in this digital age, james lindsey, owner of hawkins hall, and herb goldberg, owner of little shop of crafts, have found that word-of-mouth has changed dramatically. >> all of a sudden the online phenomenon started to take place. >> reviews start to come out, and i started to take notice. oh, my god. >> these manhattan-based entrepreneurs are talking about consumer review web sites such as angie's list, citysearch, menupages and yelp. they're playing an increasingly important role in people's purchasing decisions. >> i never look at the restaurant web site. obviously all reviews will be positive. if you want the truth, you want to go to the people who have
something negative to say. >> it's hard when you open, it's shaky. we received some of our bad reviews just the first week until we opened. a domino effect, it can be a disaster for you. >> every now and then you'd get this really bad review and didn't even sound like the store. to the point when i read it, i viscerally reacted, and i knew just by my gut, this is no way reflective of our store. >> instead of throwing their hands up in frustration, james and his son and herb are fighting back. they scour review sites, responding to almost every comment good and bad. >> i don't want to use the word challenge because i don't want to seem confrontational. but if you have a bad time here, i challenge you to come back. >> the things i've always known from a gut standpoint is you don't defend the store and tell the customer they're wrong because i believe in the old adage the customer is always right, even when they are wrong. so the idea was to really soften their complaint and turn it around to try and make it as positive in terms of my reaction as possible.
>> sometimes i give a bottle of wine, beers and burger. one person had a very bad time. the review was legitimate. i picked up their dinner. ♪ it's a bad review what are we going to do ♪ >> in addition to inviting people back and offering special coupons and deals, they also used the constructive criticism to tweak their services. >> i had a crouton that was too big for the soup. they said the crouton's too big for the soup spoon, so i changed it. >> this young lady liked the store and experience, but she thought we had very poor select of crafts. what we did is we all sat down together. can we improve the selection? even though we know we have a wonderful selection, but you know, is there more that we could do to bring in some more interesting items. since that review, we did. >> you've got to be engaged. you can't bury your head in the sand. >> luther lowe is in charge of yelp's review site.
it's highly influential. ♪ >> yelp has been the focal point of criticism from business owners who have taken issue with the reviews process. the site uses complex algorithms to weed out reviews that may be illegitimate or excessively nasty, but concerns persist about competitors posting negative comments. >> it goes on in the restaurant business all the time. it's very unprofessional. i can't see why somebody would want to put somebody else out of business. >> we've done some studies that have found in certain instances business listings that have only perfect, glowing reviews will actually receive less eyeball traffic than businesses that have a couple of negative reviews. >> ultimately, these business owners know that this new form of word-of-mouth is here to stay. >> so it's something either you can embrace or you can kind of sink or swim. >> i think it's all an opportunity, even though maybe when you read it, when you find
that person and say, what are you doing, how could you do this? the bottom line is if you use it to try and make it better, i think it's all good. i really do. ♪ one bad review can certainly put a dent in your customer base, and it's how you react to those comments, though, that can make a big difference. let's turn to this week's board of directors to talk to them about this. angie hicks is the co-founder and chief marketing officer at angie's list, a web site where you can find reviews about service companies. jennifer hill is an attorney and chair of the new york city advisory board for a group dedicated to helping female entrepreneurs grow their businesses. and mark suser is a partner with grp partners, a geocapital firm. and you you have experience in companies, as well. great to see all of you guys. angie, it's so nice to you because i've seen your commercials so much over the past few years. thanks for joining us. you must get complaints from people all of the time saying somebody said something bad
about my company and it's on your site and that's not fair, and it wasn't a fair review, and what are you going do about it. how do you respond to those? >> i really -- you have to keep it in perspective. no matter what company you are, at some point or another you're going to get a complaint. nobody is perfect. i think the two profiles that you just went through are great examples of companies that are really making the most of online reviews. they're thoughtfully responding to customer comments just as they would in the offline world. and they're also using the criticism that they're getting to make improvements to their business. it'sa great when companies can remove the emotion and see what the consumer is really saying to make their business better. over the last 15 years, we've seen tons of this, and it's really important for consumers and customers -- and companies to engage in that interaction because i think that leads to the best outcome, which, in the end, can mean more business for the businesses. >> you know, that's true if you have a rational customer. but lots of times a customer comes in and they're angry about
something else and say something terrible about your company when it really is their own mood, not anything having to do with your company. that seems unfair to the business. so how do they deal with that? >> i think in those scenarios, i think you need to respond calmly and appropriately. but i also think you need to keep -- rest assured that consumers are seeing these reviews are going to be able to weigh the actual stance of the consumer is giving. so if it sounds like the consumer is truly ranting, that's likely the way it'sa going to come across to consumers looking at that review. keep in mind, they're oftentimes not looking at it in ice las vegas. that's one of the -- isolation. that's one of the things at angie's list we don't allow anonymous reviews. if the company can respond because they're aware of it, they can go back and look at their records. >> mark, what do you do as a company? of course all of these things make sense, respond nicely. you know, you're not looking at it in isolation. but you have spent your life building this company and somebody comes on and says something that you think is unfair. what do you do?
he steined jewelry instead. little did he know that being a single guy in the city would provide the connect that would raise his business out of obscurity. >> it was literally our first date. she said, oh, you're a jewelry designer, this is so cool. i've got to introduce you to my friend. >> the listing created a lot of buzz and exposure for his work. if got him thinking -- >> a light kind of went on in my head, all right, you know, it's actually not that hard to get your work into a magazine or even on a tv show because there's a constant demand for new things. >> in order to get his actual work seen by the right people, he needed to make a more direction approach. >> a good friend of mine from years ago was working for the union square hospitality group, and it was his job to basically oversee the opening of terrace 5
cafe. >> that's where we wanted to feature some innovative designs. >> his friend will gedara. >> and there is the perfect venue to work with someone like this where artistry is truly appreciated and almost demanded. >> pandolfi knew he had to grab the opportunity sell himself. >> i said, there is an amazing chance for me. you know, i am dying to design something for your cafe. i will tell you right now, i don't care if you pay me or not. >> he's now general manager of new york's 11 madison park restaurant where they've commissioned designs by pandolfi. >> they turn around some of the pieces we have and see that it's custom made by a designer, then that's, i think, very impressive. >> pandolfi's work is featured in several new york dining venues. he's even cracked the national chain store market by yet again jumping on a tip from a casual conversation. >> i was at the dinner table one
night, and a friend of mine said you're not going to believe it. i asked her to get me the name of thor e er iceramics buyer. i started making contacts. >> his persistence inevitably paid off. >> it had to be a full two years after i initially sent my samples that they finally said, yeah, we're going to definitely do it. and so that was huge news for me. >> but that doesn't mean pandolfi plans on taking it easy any time soon. he's always got another target in mind. >> just because i'm in crate and barrel doesn't mean that williams-sonoma is banging down my door, wanting me to design for them, too. you have to take an opportunity whenever it comes. you have to be ready to find an opportunity when there's not one there. it goes back to knowing what you're good at. and not being afraid to show it to people. .
with 2007 fast approaching, you may already be thinking about your budget for the new year. here are five tips courtesy of ink.com. number one, budget for three scenarios. consider optimistic, neutral, and conservative projections. two, pay close attention to cash flows rather than accruals. consider your most certain in-flows and out-flows as a starting point. third, be mindful of the position of your vendors. the cost of inputs is likely to have a dramatic effect on your bottom line. fourth, make sure you're keeping detailed accounting records so you know exactly where the money is being earned and spent. and number five, always be adjusting. no budget is set in stone, especially in this volatile economy. in today's "where's the money" segment, we're going to address how to get your wholesalers and distributors to help finance your operations. steve strauss is the small business columnist at "usa today" and he's here to tell us how to do it.
you can also read his blog at mrallbiz.com. great to you, steve. you're in essence getting money from the people who you pay money to. >> right. there's all sorts of ways to get money for your business. and you have to be creative when you do it. this is a different way. say you open a retail store, you're going to need inventory. >> right. >> you might need $50,000 worth of inventory. that's money. now how are you going to get the money? you're going to buy $50,000 worth of inventory, or what i'm suggesting, is you find vendors who will put it in there on a secured basis so you don't put money up-front to get the inventory. you find -- be creative and have to talk to more than one vendor. you have to talk to lots of vendors and get somebody to do 5,000, someone to do 10,000. they'll give you merchandise to put in your store. once you sell it, you'll pay them back. they're going to do that because they're creating a new customer. that's what they want. if you're creative you can get the shelves in your store stocked without a huge up-front capital, or you get great credit
terms down the road instead of cash up front. maybe you get net 60 or something like that. >> then what happens if you don't -- as you're writing the contract with someone? if you don't sell, say you're putting soap on the shelves, do you send it back to them? >> yes, that's how it works. you make a deal, give me six months, we sell the soap. if we don't sell the soap, we give it back to you. the worst thing you can do is open your store because -- with not enough money, then you don't have enough on the shelves and you look empty. that's a recipe for disaster. that's not going to work. people are going to come and the store's going to look empty. you have to have full shelves stocked. >> and when you're looking to do this, do you have to look at maybe somebody who's got a new you product to come to market? they need some incentive to work with you in this -- >> right. that would be one way. or people need business right now. and if you can show a good business plan, you have a great location, you have a good team behind you, something like that, you you have all the necessary elements, you look like you're legitimate and will be around for a while, they think, hey, this guy is going to make me
$10,000, $50,000 a year in profit because there are going to be a lot of profits. i'll give them a chance in the beginning, see if it works. if it doesn't, i can take the product back. that's how the wholesaler thinks about it. >> right. okay. wholesalers, distributors, you deal with them the same way when it comes to this? >> exactly. may be that you're getting, as i said, get great terms. maybe it's net 60 or maybe you get a six-month deal or you, you know, they have a security interest. so if things do fall apart and it goes belly up, they get their inventory back before everybody. >> right. i mean, this is abouting because when we -- is interesting because when we talk about finding money we often talk about finding money. here is actually -- you're finding money by not spending money. >> that's right. you know what, it costs something to get the product. so you're not spending money and you're getting valuable product instead. that's pretty good. >> one good creative way. keep your business, keep the doors open. >> right. >> thanks, steve. >> thank you. still to come, we answer your business questions including one about leveraging partnerships. and this week's elevator
picture hopes to get glowing reviews for his light-up tables. 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 that grow your business.
this week's elevator pitcher saw the light when he came up with this idea. hecht let's see what the panel thinks. >> hi. my name is andy, and i have a company that makes items for bars an chips. the name of the company is barchefs.com. as you can see here, we've got some of our cubes and displays and they operate with these cool remote controls so you can make them flash, glow, change colors, do pretty much anything you can think of. a lot of our items have been used in sushi bars, cocktail clubs, weddings, all kinds of parties, even in your house. we're seeking to get $500,000 so we can buy some of the large machinery we need to help further produce our equipment, buy our warehouse and increase sales and we would love to have your help. >> andy, it's so funny. it's like the party elevator.
thank you so much for your pitch. let's hear what the panel thinks. >> i like that you told me so much about the product but i want to hear more about your business. specifically tell me some of the customers you have, tell me what your sales are like. you threw out a number you want me to invest in your company so i need a perspective. >> mark. >> i would react similarly. what are the competition, what are the price points, who are your customers, reference ability, how long you've been around, those are the things to decide whether or not you you'd be a good investment. >> what you've seen, what you heard, would you take another meeting? >> i would, especially since drinks are involved. >> what about you. >> as a venture capitalism, no. i think this would be a grit idea for a local banks or someone who's able to do debt-based financing. >> thank you so much for coming
on and sharing it with us. if any of you have a product or service and you want feedback from our elevator pitch panel, just sent us an e-mail. the address is firstname.lastname@example.org. pleel tell us what your company does, what kind of money you want to raise and what you intebld to do with your money. you never know. somebody might be interesteded in helping you. it's time to answer some of your business questions. the first one is about the role of partnerships and expansion. >> our organization has been successful growing in scale and scope of services by leveraging partnership and joint ventures. our question pertains to how we are able to leverage those experiences to grow our individual capacity as a general contractor. >> i'm going to let you start with that, mark. >> well, the first rule that i tell people and oftentimes people call it channel
relationships because it's helping you as a channel to get to your customers. people sign channel deals but then they don't manage the deal. if you sign and you don't manage that and put resources against it, it's never going to deliver for you. but it is a very cost-effective way to grow your business. you have to create training materials for them, have a regular sales meeting for them, market to your end customer to help create demand for the channel. you have to demand channels. >> i think channels can be a great way to grow your business but one of the things he's doing, he needs to capitalize on them a lot more. has he looked at a halo effect. >> has he mark itted that. what is he doing to market that to the general public. >> next up, a question about tacks. >> we're liking to start a importing. we're looking to import ribbon to go into our product but i told there's new taxation on certain products coming in from
different countries. i was curious what products that applies to and how you find out what those tax levels are? >> obviously i don't expect you to answer what taxes on ribbon are, but in general how would you take the first step because it's so specific. >> they public a website, usitc.gov and they list a tariff schedule. there the person can find out the different categorization of imports. freight forwarder will be able to provide that information for her. >> my thought was is there a lo lawyer out there? how would you find that info. >> first of all there's google. all that information is online. twitter, for example, i often publish questions on twitter and i will ask does anyone who knows
a, b, and c. often you don't get to first person but someone sees it and forwards it. it's interesting that you can leverage community in the social world. >> this is a question from david. he writes, is there a template to use as a guideline when approaching an investor? as an investor, is there a template? >> yes. when you come to see a venture capital venturer, here's what they're looking for. do you have competence? do you have demand experience, do you have existing revenue and clients that can provide prove that you're doing interesting things, do you understand the economics of your business, how you're going to make money, and ultimately they're looking for is there a big enough market there? it starts with a customer problem, find the problem, figure out the economics and talk about how big it can become and if i could do a small plug
rn, i keep a plug called "bold sides of the table." >> i will add to your plug. it's a great wblog. >> you have to be able to know your business and create the opportunity for your business, not only why you're asking for money but where it is going and how this is going to be a good deal for your customers, and investors. but they have to understand all the ways in which they can take in capital. if you don't understand, get online, do the research, figure out all the different options that are out there and based on all the money you're looking to raise, look at the best match. >> any investor i have spoken to, they say, in the end we're looking to match up with people. that was great advice, thank you so much, both of you, for all of that. and if any of you have a question for our experts all you have do is go to our website.
the address is openforum.com/yourbusiness. or if you'd like you can e-mail us your questions or comments. the address is email@example.com. harnessing the power of social media can be good for your bottom line. if you want to brush up on your networking skill, check out our website of the week. it provides video tutorials for online video towerses. you can test your knowledge of ecommerce. the site currently works on a referral model. the more you refer the more free access you have to the video. for more unfoe about today's show click on our website. it's openforum.com/yourbusiness. you'll find more information to help your business grow and don't forget to become a fan of the show on facebook. we look forward to getting some
of your feedback. you can also follow us on twitter if you'd like. it's at m s n b snbmsnbcyourbiz >> okay, to be honest with you, i'd never written a business plan. what do you think miss jenny did? she went to the library and checked out 13 books on how to right a business. so technically i have a business plan right now. what happened, we took off. >> find out how she became a successful career one year after losing her job as a stockbroker. until then i'm j.j. ramberg and remember, we make your business our business. at diapers.com 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.