tv Your Business MSNBC October 25, 2014 2:30am-3:01am PDT
battling big brands. how a small apple cider brewing company, and an independent coconut water business were able to compete against the major food corporations. and we continue to celebrate national women's small business month. with a look at two women who found second acts in their lives by becoming successful entrepreneurs. time to get down to business, coming up next on "your business." small businesses are revitalizing the economy.
and american express open is here to help. that's why we are proud to present "your business" on msnbc. hi there, everyone. i'm j.j. ramberg and welcome to "your business." the ancient story about david and goliath doesn't feel very ancient if you talk to a small business owner. whether it's a big box store for a fortune 500 supplier or a national chain, a lot of small business owners face the same kind of daunting fight when they're in direct competition with one of those giants. this week we meet two very different small businesses who have faced corporate challengers and found that their small size was an asset. >> these look great. >> we've got john's, we've got
macs, goldens. >> greg hall of fenville, michigan is very picky about which apples go into his hard cider. this morning, he and peter kleins, owner of nearby seasoning orchard, are testing. >> you can see how they clustered which is an unusual feature. >> and tasting. >> as a cidermaker, we're looking for aroma, and flavor. acid and tannin from the apple. >> as an independent brewer, greg is part of a small but rapidly growing beverage category, hard cider. where his virtue cider label has been thriving. >> three years ago, nobody even knew what it was. now it's all over tv, all over the supermarkets. we are going to be in our third year of triple digit growth. >> no surprise. all this rapid growth has not gone unnoticed by big players in the beer category.
greg's now getting stiff competition from big beer brands who recently acquired cider brands to market along with their other products. >> sam adams with their angry orchard. you've got millercoors with a couple grands. and then you've got anheuser-busch with a couple brands. they've got the stella and the johnny appleseed. >> these behemoths have vast production facilities, marketing budgets, and distribution channels. this puts all the smaller producers in a bind. how can an independent like greg compete against all that? >> what we've seen time and time again is that the larger brands that take on young, entrepreneurial brands, don't know how to run them properly. >> that's veteran beverage strategist arthur hulego of independently owned vita cocoa. >> it would be like asking the hulk to do needle point. >> vita cocoa faced stiff competition when coca-cola acquired their primary rival. >> we were noticed when we heard that coca-cola had invested in zica.
but we also remained focused on doing what we do well. >> vita cocoa found its key advantage was its knowledge of the market place. >> we knew which retailers to hit up and which were going to sell product for us. we knew where our core customer was going to be. >> looking for about $5 million to help in a sales and marketing campaign. >> that's vita coco's founder in 2006 when he first appeared on our show to pitch his start-up. today, his company, and the category, have grown substantially. >> would you take another meeting yes or know? >> yeah, definitely take another meeting. >> greg hall has a different strategy. he's not competing with the big brewers for the mass market. >> we'll never be able to compete with those guys on price, or efficiency, or marketing, or distribution execution. so we done do six packs. >> super bright apple. >> instead he's concentrating on the high end, or premium market.
his strategy starts with feature placement at upscale restaurants like nearby salt of the earth and partnerships with celebrity chefs like portland oregon's jason french. >> the acidity i think is right there. it's awesome. i think oyster shell. >> greg has found that creating exclusive blends like this one, for influential chefs like jason, has a ripple effect. it gives him access to many other key entry points to the premium market. places not interested in featuring siders from the big brewers. >> that opens doors. to the retail trade. bars restaurants, even the liquor stores. they know him. they know his restaurant. and if it's good enough for him. it's certainly going to be good enough for them. >> he also says he puts very little money into advertising. and instead relies on others to build the buzz around his product. he says receiving awards and reviews appearing in influential
media, like this one, have much more impact. >> when we get a magazine like saveur say virtue's cider's unfold like fine wines, that's fantastic. we could never say something that good about ourselves that anyone would believe. but one of the best food magazines in the country says that, we're golden. >> this kind of press not only reaches the consumers, but also registers with retailers and distributors. >> and we started getting calls from distributors all over the country saying hey, when are you coming to california, texas, washington, pennsylvania, because we want to add your cider. >> arthur agrees that this approach is very effective for an independent start-up brand seeking to make a name and build distribution. >> i have no doubt that if he was partnered with a larger bottler, even if he took an investment from one that they might ask to cut costs and quality.
and that, at this stage in a young brand, i think is very dangerous. you could end up losing your way. >> as a long-term strategy, arthur warns that greg's focus on the premium niche can be a two-edged sword. on the one hand it gives the brand a big lead among premium cider. but at the same time, it limits the potential for growth. >> if his strategy is to be the best of a premium category, then it will be a smaller footprint for him. but if he wants to compete with mass brands, then he needs to figure out how to massify his brand. >> so far vita coco has survived by massifying his brand. greg's says his brand survival depends on staying out of the mass market. >> what we're doing now, they can't do. they'll never do this. so we have a sustainable production advantage that they'll never be able to recreate. >> but there's one marketing point where they both agree.
>> things are going to change. the market changes. so we look at those market changes, and we adapt as quickly as possible. >> essentially what they're saying is be nimble. be aware. be nimble. be smart. don't be afraid to change up your game to win. and i think that's a very powerful message for any entrepreneur to send to anybody who wants to start doing business. >> cheers. >> we've shown on this program many times how a small business brand can effectively compete against the major names. let's get our board of directors in for a little bit. adam rich is the co-founder and editor in chief of the thrill list media group. he's responsible for overseeing the growth of editorial content for the men's digital media company. and dean marks is head of the marks group, a technology and consulting service for small and medium businesses and also a small business columnist for "the new york times." it's not just media. >> nope. >> also retail, jack threads. >> which is a big part of your business. >> competing against the big
guys. >> exactly. and you -- >> we're doing great. >> so you experience exactly what we're talking about. >> absolutely. and i think there's something that ricks very familiar from this segment and it's this idea of doing something that they don't want to do or they don't have the appetite to do or they don't have the insight to do. i know that for our audience we understand the guys that we market to, better than anybody who isn't really dialled in to that demographic is able to. just as he's able to really look and develop a superlative cider that he knows as a cider drinker, clearly, is really what the market is looking for. >> but tell me this, so jack threads must have a competitor, i don't know who it is but if your competitor was suddenly bought by a big brand -- >> you would for sure be concerned. >> right. >> i think a big question is when they're bought by that big brand what are the expectations that that money comes with? so is that big brand then going to be calling the shots? that would be the best possible news that we could see. >> right.
>> if our competitor were to get that kind of infusion of capital. >> don't you agree anybody that's walking around saying that they're not afraid of that happening they're lying. >> yes. >> right. >> so i was thinking it's interesting especially with the cider right so the big beer companies are going in to this, and it could be helpful in another way, too. which is they are making it mass market. >> they're legitimizing the space. >> they're legit mazing -- >> they're creating demand and now people are going to say oh, i've heard about cider but i don't want to drink that kind i want some premium cider. >> first of all cider in england is a very, very popular drink. and it's only being discovered here in the u.s. big companies kind of like tread the ground and they provide that education that a small company like that would never have the marketing dollars to do that. the big question is where do those guys want to be five years from now? do they ultimately want to be bought out by the big company or partner with that company or do they really want to stay independent? if you want to stay independent with your business you can. you just have to make sure that you are providing that unique
product, you're involved with your community. you are just doing that extra special type of service that a big company could never do. >> well, and that you're doing something that only independence could allow you to. >> right. >> and there is such a large population of people that really would refuse to buy from a big company, into the independent thing. you've got to reach out to those people because those are the ones that are your best customers. >> i literally had a glass of that very cider last weekend at one of the pubs down here in the west village and they wouldn't have any of the mass competitors on tap. >> and presumably that is part of the reason why you were at that pub. >> right. it's powerful stuff, isn't it? one glass -- >> literally a glass. >> so -- >> thanks, guys. as we've been telling you during this national women's small business month, increasing numbers of women are becoming entrepreneurs. and as nbc's anne thompson reports, many are doing so in the second acts of their life. >> linda's career has gone to the dogs. by design. >> i wasn't ready to completely retire. but yet i needed the change.
>> the general manager of a bloomingdale's in virginia, she left to combine her 30 years in retail with what she loves. >> we're going to let you jump. thank you so much. >> she bought a pet store. that today employs six people and turns a profit. >> when people ask me about it, i do get all smiley, because it's my store. and i'll say it's my store. >> malik greenwood figured out her recipe for success 13 years ago. then editor in chief of essence magazine she came home to the brooklyn bed and breakfast that she ran on the side to realize she was jealous of her guests. >> because what they were doing for themselves, i wasn't doing for me. and you cannot give, if you have an empty cup. >> greenwood chose inn keeping. >> these hands are making breakfast. these hands may be making beds. these hands are writing bills. >> today there are more than 9 million women-owned businesses,
a number that's tripled in 30 years. >> it is a longer, more financially responsible life. and if you're not in charge of it, it's going to be pretty rough. >> what's the toughest thing about going out on your own? >> getting over the fear of failure. >> it hasn't all been success. but today greenwood and her husband own four inns. >> how's your tummy. >> and she's thinking about what's next. >> every day when i make a decision, there's a little bit of something i learned in the past. all to secure her future. anne thompson, nbc news, brooklyn. addressing the needs of your customers through your products or services is just the first step. promoting the overall brand and story of your business is important for bringing in repeat customers. so here now are five ways you can share your company's story online, courtesy of entrepreneur.com. one, create an engaging about us page.
inform your website visitors about who you are and what you do. try using a photo story to present the information. two, manage an interesting company blog. regularly update your audience on upcoming events and promotions. also, posting often will keep your website relevant from the point of view of search engines. three, produce a short video. present how-tos or tours of your facilities to give your customers an inside look at your company. four, introduce your team. make your company more personal by giving visitors a chance to see the faces behind your business. and five, let your customers speak for you. consumers put a lot of trust in peer reviews. when we come back, gene and adam answer your questions including one about how to find a potential business partner. our viewers will also tell us about their favorite small business online tools and apps,
and this elevator pitcher realized college students never change their sheets. ew. and so he came up with a solution to that disgusting problem. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does.
>> the advantage play space retail still has over even the best online retail is that you have a personal contact with your customer. so the things that we're trying to do in an online environment is replicate the experience we have with our customers in our retail environment. whether it's in a retail shop, or it's on your website, you're trying to establish a relationship with your customers. you're trying to get to know them as well as you can to get them to know you. become connected with them. i have a friend who told me when he got to college the first day he made his bed and then those sheets never came off the bed until the day he left for the summer. disgusting. so i always thought that was an exaggeration but our elevator pitcher says it's more common than any of us would like to believe and he's come up with a product to deal with it. maxwell cohen is the son of frequent "your business" panelist brian cohen, and he's here to see what our panelists think of his idea. >> hey, guys, my name is maxwell
the inventor and founder of a fresh sheet. a fresh sheet is the world's first and only patent pending bed sheet with seven peel away disposal top layers. you make your bed once, and once it gets soiled you peel that layer off to instantly reveal a brand-new layer beneath. i started this company in college because i saw the firsthand consequences of students rarely changing their bed sheets. the fresh sheet is ideal for so many markets, from toddlers to elderly. from hospitals to hostiles. on scaleability the product is endless. the bedding market is projected to be a $15 billion next year. a fresh sheet is sold on afreshsheet.com. amazon and other college dorm room supply stores. i started this business with friends and family backing me and i'm looking for $1.5 million in order to continue on r&d, manufacturing and shipping, strategic hires and marketing. we believe we can disrupt the entire bedding industry and give our investors 30 times their original investment. so just peel off the ew and sleep on the new.
>> all right, max. nice job. okay you guys. here it is. >> thank you. >> one to ten. how do you feel like he did with the pitch? so my friend was not exaggerating. indeed, this happens, that people put their sheets on and then never take them off. >> let's just say boys, girls, men, women, it's a universal problem. >> with my son i want you to know we wait until his sheets get hard and stiff and break them off with a hammer and throw them all away. >> we peel them away. >> this really solves that problem. >> okay. >> they're waterproof, too? >> 100% waterproof. 100 recyclable. >> gene, clearly you think there's a market. >> there's no doubt a market. >> how did he do with the pitch? >> first of all, i think he did a great job. you know, on the plus side, the idea that you have i think is a fantastic idea. and saying what the market is. that's really good. i like to hear more numbers. if you're going to come to an investor and say i'm looking for $1.5 million that's a lot of money. i need to hear actual facts for you. you're selling on amazon. what have you been selling?
what have your profits been? and if i'm going to invest in your business what exactly am i getting 30% of the company, 20% of the company? >> come on give us the number. you're making us wait. >> give you a 7. >> okay. very good. >> all right, adam. >> look i actually have pretty much the exact same feedback. you know, $1.5 million is a big nut and if you're going to ask for that much it's incumbent on you to really get into where that's going, what that means in terms of your cost basis. how long is that going to float you. this was a good pitch but i would have expected a much smaller number given the amount of nitty-gritty that we got into. >> perfect. >> if i could just say really quickly. we get the idea right away, so you can spend more time on the numbers. >> i'm scared that everybody gets the idea right away. >> i know. >> wait until you see. >> all right. good luck with everything. >> thanks so much. >> thanks for coming on the program. >> thank you for evaluating this pitch. and if any of you out there have a product or a service and you want feedback from our elevator pitch panel on your chances of getting interested investors, just send us an e-mail.
the address is yourbusiness @msnbc.com. in that e-mail please include a short summary of what your company does, how much money you're trying to raise and what you intend to do with that money. you never know, somebody out there watching the show may be interested in helping you. it's time now to answer some of your business questions, adam and gene are back with us. the first one is about having a business partner. >> i've been in business for a little over four years now and i'm considering taking on a partner. i'd like to know if you have any suggestions for me as to what to look for in a potential partner. and also where i might begin looking for one. >> i think that's a good question. it's not only what to look for but how do you know that you have identified the right things? >> it's kind of hard to answer a question that hard. how i do start a company? what kind of company should i start. as varied as the industry you're in or your own skill set.
why are you bringing this person in. >> there's no match.com for finding partners. the one advice i can give if you're looking for somebody. i do not have a partner. my wife would not want me to have a partner. and for all sorts of various reasons, you have to clear that. if you're going to have a partnership and sharing your business and financials, pretty deep stuff, you better make sure your significant other is going to approve that or any other people who are personally involved. >> and from what i've seen, maybe if you find a partner, maybe you found somebody who is a competitor and they want to merge with you or somebody who used to be in this industry and wants to join you or a vendor or someone you work with, once you determine they have the right skill set or you think they do and you had a million lunches and dinners and you think you get along, it happens too often that six months down the road you're kicking yourself. >> right. >> how do you get through that part? how do you not make that mistake? >> i think it's impossible to know up front how you're actually going to live.
you do your research, you figure out what this person is bringing to the table. maybe they have some kind of competitive ability that you need to augment what you're doing with ultimately until you're in it, you're not going to know. >> in the end, how much of us know as a judger of people, how many times do we meet, this guy is going it work out and six months later, it's always going to be a leap of faith. you always have to prepare for that. >> and once you get into position where you're having the consensus built with this person and delineate the calls of responsibility and this and that and no way to figure that out over lunch. >> i have, i went through this and brought in a partner and what i found is you have to understand that your values are the same, right? we have aligned values. while we might disagree on particular points of business as everyone does. all right. moving on to the next one. a question about getting money fast. >> when i go to a big trade show and i need between $10,000 or $30,000 and i need an infusion
of quick cash, but i made it for six weeks and i may need it for 90 days. what is your suggestion? line of credit, mortgage? what do you suggest? >> first of all, very scary to go to a trade show and spend 10,000 to 30,000, this is like a marketing exercise, and i really hope the lady that asked that question has a specific return on investment. that scares me. assuming that she does, personal funds is, obviously, the best place to go to. if you really want to get financing there are some very good micro financiers out there where they'll do short-term loans. you'll pay a little fee for that. it is expensive. >> you get the money. >> you get the money and you think you have the return on investment, that's what you do. >> that sounds like a perfect situation for a revolving line of credit. >> if the bank will give you one. >> that's true. >> if you're coming at the last
minute, i fear that the bank may not be so quick to give you the line of credit. >> which is where the micro financiers may be the place to get the cash from. >> but, again, like you mentioned, you're going to pay for that. >> that brings up a good point, adam, if you think you have to use this in the future, it may be worth going to get a line of credit now. >> absolutely. if you thought this thing through and it is actually a business strategy, then financing it correctly is part of that strategy. >> but, please, don't go into $10,000 to $30,000 of debt for a marketing activity. you really want to make sure -- >> you get something out of it. >> absolutely. >> finally, a question about hyper local marketing. >> i would like to know tips on how to market and advertise small business in a small town. >> this is a great question as we head into the holidays, right? everybody wants you to come shop on main street now. any ideas? >> look, we started things as a hyper local media property, and that's still a huge part of what
we do and the way we turn that into a strength is making our familiarity with the market and with the audience that is in that market a part of the product and doing it in a way that someone coming from, coming from out of state or coming from the big city wouldn't be able to know and, really, it's about that kind of familiarity and the connection that people you are serving the. >> what the hell does hyper local even mean? i'm trying to figure out that whole term. i always thought it was for local marketing. again, if you're running a shop and retail place and you're here in the holiday season and hopefully just not thinking about this now. this is an ongoing thing you've been working on for a while. the shops and the retailers and the small businesses in my area, the ones that do the best, they nurture relationship with my community. they offer free services, they partner with other shops and retailers in the area and give stuff away for free and all sorts of events and things that bring people in, and they get involved in rotaries, in charities and people are thinking about them when the holiday season comes around.
>> and i love the idea you just brought up with co-marketing with other businesses in the area. thanks, guys. so good to see both of you. >> thanks for having us. >> if you have a question for our experts, you can ask us. go to our website, openforum.com/yourbusiness. once you get there, you hit the app, the show link to submit the question. openforu openforum/yourbusiness. we get some of the best entrepreneurial ideas from small business viewers. let's find out what some of their favorite online tools and apps are to make their businesses efficient and profitable. >> i have a small company, but we are in a lot of different locations, so, i love drop box because it allows us to share files across all the different locations of my company. and also to share files with our overseas manufacturers that are big and don't transfer easily and with members of the press, too. large files, as well.
>> i love profit story. profit story is an app that allows you to check very quickly the unit economics of a product that you're selling. so you can quickly check the profit margin if you're offering a discount. it's very affordable and available on the app store. >> with the age of apps and social media, aiding and running the generation that we're in today, hoot suite organizes in a timely fashion. >> the app i go to every day is yelp. i know it has been around for a while, but, honest lee, that is the first place people get to connect with my business. i'm looking at the comments and get the constructive criticism to enhance my business and i put pictures up, constantly changing because most people who are calling in for information are not going to my site, they will look at yelp first and go from there. >> one of the tools i love using is you can book me.
it's an online appointment scheduler. it allows me to quickly send a link over to my customers or whomever i'm having a meeting with and it syncs up to my google calendar. >> the one app that i consistently use is mint. it manages day-to-day expenses. as a small business, we have a million things to do and very little time and administrative things are the one thing that are easy to slip. mint is one thing that manages my day-to-day expenses and allows me to create my budget and track budget and i love it because it saves me time. thank you so much for joining us today. if you missed anything, just head on over to our website. it is openforum.com/yourbusiness. you'll find all of the segments we have on today plus a lot more web exclusive content to help your business grow. follow us on twitter @msnbcyourbiz.
>> next week, uber, task rabbit, we've heard all the names, but do we really know what they're doing? >> we're living through a really, really interesting, fundamental shift in which access to talent, goods and services will trump ownership. >> we take a look at the phenomenon called the collaborative economy where sharing is the new owning. until then, i'm j.j. ramberg, and, remember, we make your business our business. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner.
we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. we have a big show ahead, and lots of news, and we have a shaky new experiment we will do at the end of the show that i have little confidence is going to work, but we are going to try it anyway. we begin tonight in south america. will you put up a map on south america. on the continent of south america, there's a country called ghana, and french tkpwae ana, just two borders over, and they are on the eastern coast of the south america. what neither of those