Hi there, everyone. Im j. J. Ramberg. Welcome to your business, the show dedicated to give you tips and advice to helping your Small Business grow. Make that growth possible, every entrepreneur has to decide how to their product or service. Make things too sxepsive, youll lose customers. Make them too chep and youll lose money. So how do you figure it out . You have to know your customers, think about their needs and understand the competition. Everybody in the industry really, the underlying theme for most consumers is really pricing. No matter what anyone says, he believes your Small Company must always keep on price. If the pricing is not there, it could be i like the store. I like what you have but i would rather go down the treat. His staff knows it, too. Ive had customers come to the register and say, really, thats what youre going to charge for that . The owner of north meridian hardware in minneapolis says understanding your pricing is a reality of Small Business. People are watching dollars because five dollars saved here, ten dollars saved here, 20, that adds up. With so many clients doing their research, keith and his staff have made it their mission to get the best prices for popular items like paint and hammers. Its nothing unique im doing. Its the structure and foundation. Keep its pricing competitive. Im not trying to be the cheapest or the most expensive. We want to have fair pricing thats relative to the industry. Keith has learned that pricing is more fluid than people may think. A roller coaster. Thats about the best way to almost describe it. Things are erratic, because pricing fluctuates daily, weekly. And thats why keith knows where his supply is coming from and why. Fortunately, weve been tied in with very good distributors have been helpful. Before we started, which has helped to set the foundation for us to have competitive pricing. He does some comparative pricing of his own. We may actually say, wait a minute, we see such and such is selling this here and so thats how we kind of are able to keep things in check. Unlike big box locations affiliated with bigger brands theres no coop here. This is 100 ownership by myself. Theres no guidelines i have to go by if were moving outside the scope of where the suggested price is with coops, we would have to go through certain approvals. We dont have to do that. That freedom also means theres room for negotiation. We could say, hey, can you look at this and see if maybe we increase our quantity of what were ordering for this specific person, can we get a better price on it . Being small presents keith with a unique challenge. He cant stock his shelves with too much stuff. He must know what products could be a waste of time and money. Even though we have a 10,000 square foot store with 65 items in here, the big boks have 300,000 items. You cant carry it all. We found mainstream what people tend to buy the most. That mainstream is where we put the most concentration on being most competitive. North meridian has a smaller staff, which helpss customers a the cash register. Even after products hit the shelves, keth says he has to be flexible. His Pricing Strategy isnt perfect. Sometimes shoppers say the prices are too good to be true. Theyve said, do you know that such and such is carrying this for 2 more . How can you sell it for this price . Otherwise, clients are wary to make a purchase. Some customers have said, hey, your caulk is a little high here. Well look at what competitors are doing and if we have the room well bring it down a little bit. The key is to know who locally is charging what for some items. The stores competitors were under the microscope. Within about a three to five money geographic area, we studied all the competition, small, and other big boxes. That trend continues today. Staffer also walk through their competitors doors to check out the numbers. We have went to neighboring stores and kind of wandered through and said, you know, what are they pricing it at . One major advantage for north meridian is its location r the only Hardware Store in downtown minneapolis. Theres probably our busiest time tends to be roughly about almost 11 00 to about 2 00, 3 00. A lot of people who are already downtown tend to want to pick up stuff before they go home. While many customers are willing to pay for the convenience, keith doesnt want to be greedy. You want to leave things on the table, but not too much. Hes just happy customers are taking notice and spreading the word. When i have my shirt on, people will ask, ive seen that store. Thats a very cool store. You guys got good pricing gl and keith knows the only way to keep those clients coming in is to keep doing what hes doing. Stay competitive. Ooh. I think people on average will look at that price difference and judge for themselves, time, value and then convenience. Thats where they make an internal decision. These are all quiet things that people dont really talk about. In this digital age, consumers are doing more homework before buying, making competitive pricing more important than ever. Its not easy for a Small Business when they have to go up against competitors who deal in volume. Carey smith makes fans for residential, commercial spaces. Entrepreneur. Com. Great to see both of you. You said people always smile when they say the name. I noticed as i was reading it i couldnt help but smiling. But you are in the business of selling things that people can sell cheaper. I found this piece, or idea of this piece fascinating. We always talk about pricing. You cant ignore price. You cant ignore price if youre selling something that everybody else sells. If its a commodity, you have to know your price. At a Hardware Store, most of that stuff i do agree with that. In terms of the Hardware Store theres all sorts of interesting tool that is the Big Box Stores simply will not carry. And he can be cheapish but cannot be the cheapest. No, and i dont know why you would want to be. Its a mall business. Its very hard to compete on price. And i would worry the general rule with pricing is you either have to be cheaper or better that happen your competition. Small businesses opt to be better. Especially a Hardware Store that can give you knowledgeable service. You can have he is in a perfect spot. An enjoyable experience. I love going to a local Hardware Store as opposed to a big box. I guess his point, also, is that hes not trying to be the cheapest but needs to be within the range. He does. Again, on those things, if youre selling if im going to buy 10 pounds of mini nails im going to go to a place, look at a price at a big box as well as his store. But i think that the key to this is, again, what is it that these fellows dont sell . They dont sell it because theres not that much of demand. Thats, i think, what you have to concentrate on here. For example, instead of going to a big box store, you have gloves they always have jersey gloves, brown gloves that cost 1. 99 Something Like that. Dont sell those gloves. Theres an infinite number of gloves, gardening, construction work, for manufacturing. Theres all sorts of gloves. Theres all sorts of niches. As a Small Business owner, you should find the niche and exploit the ni che. He also talked about how pricing was a roller coaster, a science not even a science but just going up and down and sxhanlt che constantly checking things and changing prices gl he said he pays attention to what his competitors are doing. Thats smart to do. At the same time you can go a little crazy if youre constantly focused on what your competitors are doing. That can be the roller coaster. I think in a lot of situations Business Owners can better benefit themselves by keeping the focus on themselves, what they can control this giving the best quality, the best product, the best service possible. The piece didnt cover this so much but it does sound like he concentrates on service and quality. As we talked about before, he is in a very voen spot. Yes. Please stick around. Were going to bring you become to the el rart later on. All right. Thank you. Are you getting all the marketing benefits of twitter or just doi inin ining the bare mi . Twitter bios, optimizing your followers list. Geographic distribution of followers and the hours your specific followers are most active so that you can be strategic of when and what you are tweeting out. Every penny counts when it comes to your Small Business. Here now are five of the worst offenders when it comes to typical Small Business ripoffs courtesy of all business. Com. One, leasing a credit card payment terminal. But youre better off buying your own hardware. Two, buying an extended warranty. If a product is going to break, its often more likely to break right away when its still covered by the manufactures warranty or after the extended warranty expires. Three, overusing an inkjet printer. Necessary when printing photos or graphics but for plain old text files its a waste. Four, employee expense account abuse. Online mapth system to keep better track of employee spending on the company tab. And, five, overpaying for your mobile service. Check out services that can analyze your companys mobile bills and recommend the least expensive service option. If youre looking for mopey it seems like any money is good money and the more you can get, the better. Finding investors and the injection of capital comes with issues as well. Best to go through the process with your eyes wide open. Joshua coates is the founder of two companies that he later sold, now the ceo of in structure, 80 million for these businesses. How are you doing, j. J. . We talk so much about how do i get money . How do i raise money . Youre saying hold off a second. Think about the strings that come with it before you go and ask for it. Its understanding who youre getting money from, what theyre receiving in exchange for that money. Typically as we see corporation exchanges, but once you raise that money a lot of times you think, hey, we made it. Right. But its just the beginning. A lot of things you say is money can clog your judgment. Its owe true. People had so much money, throwing lavish parties, big ad campaigns when they had no business doing that. If they were bootstrapping it, they might have made smarter decisions . The first money i raised was in 1999. Ive raised a lot of money over the last 15 years from a lot of different Venture Capital firms for a handful of businesses. I can tell you, when you raise a lot of money, you tend to spend a lot of money. Its just a natural process. If you have your business figured out, thats great. If you dont, danger. Very dangerous gl it ousdangero its almost better to think how could i do this without any money . Youll be more creative. Uhhuh. Unrealistic expectations . When they give you money sometimes they expect you to grow your business really fast. If you havent figured out your customers, your product about your market and gotten your fundamentals understood, its hard to put that money to work in a smart way. And your investors hey they wrote a big check to you. They want to know what youre doing with their investment. Theres a lot of pressure. You have this pressure to grow even though maybe you need time to figure out still where to grow. You sort of hesitate about. Do we run this experiment to see what happens . Those experiments can become more expensive. When they fail, they fail bigger. Right. Lot of pressure from investors to be successful. When you raise mopey, make sure your raising the appropriate amount at the appropriate time. With Tech Companies theres a series round, a, b, c, d, about then you go public. Each one of those stages has different expectations attached to them. Make youre youre appropriate with the amount of you rage and what stage why your business is in. You want to tell investors, were going to take on the world. Were prepared and know exactly what were doing. Be honest. You need to be honest with your investors. It creates the illusion of success. I think this is interesting. A lot of times we hear about companies and say theyre so successful. They just raised 40 million. In actuality, it simply means they just raised 40 million. Exactly. We just closed a 30 million round of funding but we have 90 million in contracts. So, ask yourself, im raising a bunch of money, but what dough do i have backing it up . A great idea and neat technology, you probably dont want to raise 30 million. You were successful in raising money. It doesnt yet mean that your company is successful. You might want to rethink why yo your. Absolutely. You talk about leeches. As soon as you do a funding announcement, raise money from a top firm, e mails come out of the woodwork with everybody with their handout saying i think you need my service. Suddenly you have money to pay for it. Exactly. People come to look to take that money from you. Some of them, it can give you an opportunity to connect with really sophisticated, highvalue people. Most of them are looking to make a quick buck. They know you have deep pockets and are under pressure to perform and look bigger than you really are. Watch out for that. It goes back to what we talked about before. For every decision, think about what you would do if you didnt have this money. Exactly. So great to see you. Thank you so much. When we come back, how do you say no to a client . And our elevator pitcher is on a roll with his freedom cycle. Im a hard, hard worker every day. Im a hard, hard worker and im working every day. Im a hard, hard worker and im saving all my pay. Small businesses get up earlier and stay later. And to help all that hard work pay off, membership brings out millions of us on Small Business saturday and every day to make shopping small huge. This is what membership is. This is what membership does. Todays elevator pitcher was an avid bike rider when he suffered a back injury. So he created something to allow him to pursue his sport. Im gary webster. Im lisa la cocca. It allows adults of all fitness levels to get moving and explore the world, designed for people who can no longer ryder a traditional bicycle due to age or injury. We have several more in the concept stage. American eagle is cycles was formed in 2011. And we started selling in 2012. We completed our first round investment and now industry is changing. We are in perfect position to take full advantage of that change and we are looking forward to becoming very successful in the marketplace. Well, its a very neat idea, guys. It is changing. I feel this summer ive seen so many different kinds of bikes or contraptions on the roads. Thank you so much. Lets get to the panel and see what they think. I was curious if there was a bell. Nice, i like that. Perfect. Do you think they got everything in that pitch . Yeah, yeah. When you first rolled in, my biggest question was, who are you marketing this bike towards because its not a hipster bike but then you said this is for people because of age or injury can no longer ride a traditional bike. That spoke to me. I think the fact youve got the boomers coming on and the fact there is an awful lot or ive seen an awful lot more try cycles, recumbent bikes that youre addressing something thats interesting. The moment of truth. Would you take another meeting . I personally, i think that i think its interesting. I think theres some things that need to be worked out. The distribution because this looks like its rather bulky. It would be difficult to sell this directly, to go directly to the consumer, so i think youll have to have a number of distributors selling it. So, theres a couple things more they need to address in the pitch . I think. Probably in order to get i think, indeed. I think, indeed. Colleen . Im always the optimist. I would definitely take a meeting. All right. You guys, thank you so much for coming on the program. Congratulations with all of your success so far. Good luck. You can roll out of here now. Flinstones. If any of you out there have a product or service and you want feedback from our elevator pitch panel on getting interested investors, send us an email. The address is yourbusiness msnbc. Com. You never know, somebody out there watching the show may be interested in helping you. Its time now to answer some of your business question. The first one is about giving someone a piece of your business. What percentage would an individual be given in the business if they brought nontangible items to the table other than financial. Its interesting. Its not an easy question to answer but how do you figure out ownership . Its always relative, maybe reputation so they might get a big stake in the business. If youre trying to figure out whether to give someone a big stake in your business based on reputation instead of cold, hard cash. I think, too, they need to value that. They need to get a valuation of the business. When you make that decision, you need a good contract because thats a kettle of fish you dont want to get into. The worst is give someone a piece of your business, have them contribute nothing and then youre kicking yourself forever. Oh, yeah. I think the vesting part is incredible. Lets move on to the next one. This question is about turning down a customer. How do you know when to say no to a client . And what is a nice way to say that . I find people take things very personal. If its not a good fit for your business, how do you know when to say, sorry, youre not a good fit . I love she added that second part to the question. Its as important, your exit to somebody is as important. They may recommend you. I dont know how you know when to say no but theres situations when its just not a fit. I think people appreciate you telling them that right up front. Theres nothing worse than to be dragged along with something, i dont know, i dont know, and its not a good fit. These guys, i know these guys, theyre very interesting, the whole concept, kidnjer, its very interesting in what theyre doing, teaching children to become engineers. Les who comes on this show quite often, he talks a lot about firing customers. He said, tell them nicely and refer them to somebody else so youre not leaving them in the lurch. Like you said, tell them nicely. This is why manners were invested. Maybe this is something people overlook in these times but use your manners, your tact, diplomacy. Its a company with kids involved so probably people she has to say no to are parents. You be gracious about it. You say, your child is remarkably talented but right now we dont have space in our program for you or your child. How do you know . Its scary to turn down business. You dont think its scary . Thats a nice position to be in. I think you know because you can see that its going to take an inordinate amount of time to solve their problem. And youre not going to give it your best because you cant give it that much time. As i say, from my perspective, its better to say, sorry, we just we arent able to work with you, but i do i think its important to do as much as you can to find the solution for that customer. Thank you, guys, so much. Great to see both of you. Appreciate everything for today. We got a lot of great advice early on, so if you have a question for our experts, go to our website. The address is openforum. Com yourbusiness. You can hit the ask the show link to ask a question for our panel. Openforum. Com yourbusiness or email us your questions, comments, too, the address is yourbusiness msnbc. Com. Besides questions we also ask our viewers what theyve done to help their companies succeed. Lets hear these great ideas from Small Business owners like you. Taking advantage of outsource scenarios. We outsource customer, fulfillment, social media. Allows us to stay focused on grow our business like product protection, Brand Recognition and product development. My tip for entrepreneurs is, you are not your customers. Please stop trying to entice what you would want to buy or services you would like to provide. Instead, focus on your customer and that will lead to your success. So, one tip that i have for Small Business is to hire bright, energetic, Young College graduates. Theyre smart. Theyre excited. Theyre enthusiastic. Most importantly, theyre eager to learn and willing to take on any task. For us, thats been something thats been very beneficial as we grow, learning from them as well as us teaching or giving back. To learn more about todays show all you have to do is click on our website, openforum. Com yourbusiness. Youll find all of todays segments and more information to help your business grow. You can follow us on twitter msnbcyourbiz. Dont forget to become a fan of the show on facebook. Next week with the population of 2,000, the town may be small but nothing small about the entrepreneurs struggling to make it. Survival of the fittest. If we dont adapt and change, we aint going to make it. Margins are very thin, very thin, but ive got to do it. We take you to alabama to find out how Small Businesses are surviving on main street usa. Till then, im j. J. Ramberg. Remember, we make your business our business. Is like hammering. Riding against the wind. Uphill. Every day. We make money on saddles and tubes. But not on bikes. My margins are thinner than these tires. Anything that gives me some breathing room makes a difference. Membership helps make the most of your cashflow. Im Nelson Gutierrez of strictly bicycles and my money works as hard as i do. This is what membership is. This is what membership does. The deal is holding but for how long . There are two ways at looking at the sudden blitz of activity that played out in the senate this week. One is optimistic. In the span of three days republicled filibuster against four of president obamas nominees for executive key positions was killed off, then confirmed. The Protection Bureau created under the dodd frank act that finally has for the first