Hi, everyone. Im j. J. Ramberg and welcome to your business. A little cash confusion can gee long way when starting your Small Business. Be honest. Investors want to make sure theyre going to get they are money back and then some. So what do you do when potential investors are not even living to your pitch because they think your business could be a bust . As the other than ofwner of a c bootstrap your business, manage it kraectticreatively and you ge to pay attention. All right. The first time around pitching the idea was not easy. Everybody thought it was nuts. Reporter when gabriel started his Small Business in philadelphia, he knew right away that getting funding was going to be tough. Some people are like, thats the coolest thing ever. Other people are like, thats one way to pay your bills while you find Something Else. Reporter his bike laundry pick up and delivery service, had a bit of an image issue. How could you possibly service a large account on a bike . What sdo you do when it rains . What about the snow . Reporter at first gay bree be considered going at it alone whrchlts i started the business i saturday of thought that the savings in my bank account would be enough and i was going to do it all myself and then, voss, the savings in my bank account ran out. Reporter he realized as he grew he would actually need some money, so he started out by bootstrapping it to show everyone, including invest. What the company was capable of. People have been initially skeptical about whether this is a gimmick or a real business. Reporter step one was to stick to the most important part of his plan. The bikes. Even though people had their doubts about them. I dont think a lot of people just understand stood the scale of what you can accomplish with bikes. I think a lot of people thought i was going to carry laundry in my backpack or on my bike many handle bars. Reporter the bike saved the company in a lot of ways. First of aural advertising. Word of mouth marketing and the obvious, transportation. Bike delivery is about three times cheaper than truck delivery in downtown areas. You dont have to pay for the truck itself. You dont have to paper for the gas. You dont have to pay for the truck insurance. We dont get parking tickets. Reporter the bikes are also better equipped to handle timesensitive pickups and deliveries to places likant private residency, gyms and the Philadelphia Convention center. Theres a lot of bike lanes where we can bypass traffic and actually move quicker than traffic in most places downtown. Finding a place to unload is a lot easier for us. Reporter wash cycle laundries help streamline operationing. It does everything from allow customers to schedule their appointments for pickup online to routes and tells cyclists where to go and be at in particular time. All of our carriers carry cell phones to track where they are and what stop theyre at. Reporter all orders are tracked when theyre in transit. The laundry teams use it, too. This is how we start the machines t. Alerts the staff in the laundry as to what they have to do that day, as soon as an account is whats done, it generates and feeds to see whats going on. Reporter another area, real estate. Weve actually found underutilized laundries and rent from them during down times. Reporter gabriel didnt want to deal way mortgage or machines that need to be repaired. Its turned, initial capital expense into an operating cost. It means when we get more business we pay more. Less business, pay less. Reporter its the flexibility of not owning real set that gabriel noticed the most. Developing relationships with Community Partners has helped cut costs. They know what were looking nor a laundry team member and soon as a position comes up, hey, we know smub perfect for the job. The goal, help under served population out of work a while but eager to get back into the work force. Reporter location manager tracy mart sn one of the employees gabriel hired. She remembers telling him how hard it was to find a job. You know, this is like my 200 in the room, which a lot of people dont believe me because i was out there for so song. So he taught me. He trained me. I dont look at it as just working in a laundry plat. I look at it as working for a company. Reporter the benefit here some of the costs for onboarding new employees is already covered. They will actually cover up to 50 of the trainees wages for three to six months while people are getting up to speed and going through a preapproved training curriculum. Thats huge. Reporter employee, also crosstrained so that they can understand every aspect of the company. We do everything on a 24hour turnaround. If somethings not going right on the cycling end it impacts laundry quickly. If laundrys running late, it impacts the cyclists quickly. Reporter investors have taken notice of all that the company accomplished. Now the questions are more like, can you service a 200bed hospital . Can you build your sales quickly enough to provide us a return . Reporter wash cycle laundry suction in philadelphia resulted in expansions in washington, d. C. And austin, texas. The bootstrapping principles have followed. If you launch in washington, d. C. With less than 25,000 in investment, and one of our investors put it to us this way. I was giving a presentation. She comes up to me and says, our other Portfolio Companies dont even have this for 25,000, much less a launch. Reporter gabe brriel says t bootstrapping served its purpose and bootstrapping will be staying with t. After we expanded to our second company, people began to see potential in it. Every time we show it, its built the business. For many entrepreneurs its not enough to just start a successful Small Business. They also want to give back. Thats the case in chicago where one former veteran has expanded his barber shop business, allowing limb to teach other veterans not only how to cut hair, but also how to start a company. Nbcs ron mott that his inspirational story. Do whatever, but ill take care of him. Reporter for Jerome Williams taking care of number one means taking care of others. Interesting, the location in a grocery store. Hows that worked out . Fantastic. Reporter a fixture in Northern Indiana outside chicago. An operation that started humbly five years ago with three barbers and now boasts 37. I took guys who didnt have any kind of clientele and put them in place where a lot of people needed mayor cuts. Reporter after a career in the marines he went to nursing school, was honest with himself and got out. I realize that you dont want a person in health care thats just going it for money. Reporter so he tried his hand at barbering and with his personality and pinchant for wooing people has built a successful business as diverse behind the razors and scissors as underneath them. The way he focuses on business and how he makes things happen. Reporter williams isnt merely satisfied with giving opportunities. He mentors. Teaching his crew the ups and downs of ownership. Ivan duncan has joined those ranks, partnering with williams in a shop that opened this summer at ohare airport. Jerome gave me that opportunity to work 24 7, you can make as much money, if you like. 1. 6 million is the goal. Reporter williams clearly has financial goals for himself seeing other reach theirs motivates him to keep js growing one barber shop at a time. Its important for me to help barbers become owners because once youre an owner, then can you help others. Reporter a philosophy he never wants to see out of style. Its good. Reporter ron mott, nbc news. We are near the end of this year, which means that now is the time to set up your company to be even more productive next year. Here now are five mustdos to check off your list before 2014 is over, courtesy of entrepreneur. Com. Number one, get your books in order. Take hard look at your financials and take actions to push in the right direction next year. Two, gather with your staff. The end of the year is a great time to reflect on the companys performance an get your team on the same page. Three, seek out savings. Look how you spend your money and find ways to lower costs. Monthly software services, for example, often grant a discount to those who pay a year in advance. Four, evaluate your companys technology. Find out what software your employees regularly use, and which ones they never do. Consider eliminating any unused systems next year. And, five, contribute. Making donations of your time or money helps build a sense of purpose for your staff and your company. Do you have any idea how much your company is worth . If you were to sell it tomorrow, how much would somebody buy it for . There are no hard and fast rules for valuing a business but we wanted to take time to show you how to start to come up with a number. Brandon is here to give us a quick rundown of Company Valuation 101. Lets start, brandon. Great to see you. A company is worth what somebody will pay for it . Exactly. Baseball cards, houses, businesses, the same thing u. Might have a number in mind but it might not be what you get. Lets figure how to get a number to start with. A couple components obviously. The first is its based off of a multiple of your companys cash flow. The more cash flow your Company Generates the more valuable it becomes, the faster it generates cash the more equity you build and the more desirable that equity becomes for a perspective buyer of your business. Yes. Talk to us about ebitda. What you will probably look at is a multiple of or ebitda. What that is, tell us what it is and where you find it. Exactly. Cash on ebitda, synonymous. You basically go to your income statement, find net income, add net income plus interest expense plus taxes plus depreciation and amortization expense and that ebitda number represents the pool account to service the debt. Youve found your ebitda. Got that number. Income statement, have that number and now get a multiple that youre going to multiply it by something. How do i no . Am i multiplying it by four, ten . How do i pick that number . Generally, for Small Businesseses the proxy is four to six times. Generally thats the multiple used times ebitda. Your business generates 100,000 of ebitda, probably worth between 400,000 and 600,000. The important point one dollar is worth four to six dollars. A lot of people try to use Company Credit cards to buy sports season, cars for family, but it reduces your taxable income for the business and hurts the vaum of your business. Again, 1 is worth 4 to 6. Thinking of selling my company, doing it as a multiple. Spending money on Something Else that money is not multiplied. Yeah. You better really like those sports tictsds. Tickets. You say 4 to 6 but it varies between industries. You should look at other Companies Like yours that have sold recently . Yep. See what their multiple was. How to you find those . Theres a great site called gf data, what we use. Yahoo finance has public data but not ssoofapplicable. Just like is your house, can you get financing for your home . If you cant its not worth as much to a potential buyer and how predictable and sustainable is your revenue . For example, you have an Apartment Building fully occupied youre confident that cash is going to come in. No occupanty, obviously its less likely. The two primary components in my experience and view, credit worthiness and predictability and sustainability of your cash flow. Brandon, thank you so much. Helpful to dial it back and get the basics on this. My pleasure, thanks. When we come back, our viewers share their favorite online tools and apps to help their businesses and how to turn a brick and mortar into an ecommerce site, and looking for the right holiday gift for your clients or staff . Well give you suggestions for sciencerelated products created by some talented women entrepreneurs. If i can impart one lesson to a new business owner, it would be one thing ive learned is my philosophy is real simple American Express open forum is an online 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 its open for everyone. Theres not one way to do something. No details too small. American express open forum. This is what membership is. This is what membership does. Giving a holiday gift is the perfect way to tell your clients and your best customers, thank you. Its just showing a token of your appreciation, and it can also be a great opportunity for you to support a Small Business. So here to deck the halls with interesting science inspired gifts from women aunt tentrepre for the story exchange, a nonprofit and contributor to the new york times. Good to see you. Every year we get to do this. Playing santa again. This time a new theme. Science. I do, yeah. We affectionately call this our geeky gift guide, so many female entrepreneurs are inspired to make these products. Its an affectionate term. The first one . Old school. Yeah. Old school. Floppy disc coasters, if youre a certain age you may not know what these are. Used to make fun coasters. Natasha of the new york city area makes these and likes to do products for the hightech, highstyle home. Where do you find these . These are online. We can search for floppy discs. Exactly. What are these cute little bags . Her company is also called technosheet. Okay. Perfect. These are reusable snack bags. Theyre sort of like its ike a zip lock you can keep using over and over again. Transport christmas cookie if you want or put grapes or carrots or celery. Brat for work. Bring a snack to work with that. Lurch that. And made my sherry french of michigan. She used to work in the Automotive Industry and used automotive processes to invent these bags made with super durable material and you can throw them in the dishwasher and wash them over and over again. Brilliant, for just taking a little snack to work. A very fun gift. A good stocking stuffer. Sp bang . Yes. Every year you bring a scarf. You know that . Theyre really good gifts. Cant help it. Whats fun about these scarfs made by michelle banks of washington, d. C. , and she likes to see the art in science, and so if you look at, closely at all of them what she does is, she does paintings of cells and neurons, even ekg readings and puts them on scarves. These are red blood cells. Kind of interesting. We really like this one, which shows the division of cells which is mitosis, i guess. Theyre fun and unique and its a good way to flaunt your geekry to wear these. Those are really cool. You wouldnt have known thats what that is and then have something to talk about. Yeah. And then so these are more for women, for female clients or employees you might have. This is probably a better gift for men because its kind of a chunky its a belt buckle, chub actually and i find this amusing. The quad draek equation, made by a person who started a business doing all of these accessories that are mathinspired. Really loves math. Thats cool. Thats a fun one for men. Lets move on to these. So these are these are Earth Science posters, and theyre made by brianna fuela, a selfemployed illustrator from new hampshire, and what shes trying to do with these is to make scientific information that can sometimes be presented in a dry manner. Shes trying to present them in a colorful, visually appealing aesthetic way and these are the smaller sizes. They also come in these bigger sizes. Hmm. And we thought these would be really cool framed, maybe in a Conference Room or lining the hallways of your office. So really pretty and eyecatching. And colorful. Thats neat. Exactly. And these are those are purses . Yeah. These are ceramic jewelry. Made by peggy muddles who actually works as a scientist in a Genome Center and studies, its like the evolution of path genic bacteria or Something Like that, and she needs a Creative Outlet so has this business where she actually these are these represent bacteria. So these are little images of bacteria that are on these jewelry. And again sort of like our scarf lady, kind of sees the beauty in the science, in the microbiology. And what is so neat about these, they are incredibly unique. Right . If youre giving these to a special client or a customer, youve thought about them. Right, right. Thought about something they might like, that they might care about. Theyre really one of a kind and you would not find things like this at a big box store. Right. Or anything like that. So really unique. Okay. And what do we have here . Oh. These are the super nerdy a, b, c blocks. I did not name them. Thats actually what theyre called, made by tiffany art, great gift for young in other words everywhere. Look at the blocks. They have a lot of science information on them, like a stands for atom, b stands for and w is for wavelength. They would be great for kids, like, if you have employees with kids, or theyre also really good for young employees. I had to one of my coworkers had this on her desk this week. I literally had to tear them away from her to bring them into the studio here. They might be fun at a tech startup. I can see them next to a pingpong table or Something Like that. You said kids, sometimes its nice to give something to somebodys kids because frankly adults have a lot of stuff and dont necessarily need anything more, but to be thinking about somebodys kids. Thoughtful to think of someones kids. Colleen, thank you so much for bringing all of these. Appreciate it. When you come every year im thinking what i can steal from you on your way out. Im sure. Happy holidays. Thank you. You, too. And heres a gift that keeps on giving for your company. 7 we have a brand new small biz tool segment for you. We went out ant asked our Small Business viewers to share what web tools and apps they use to keep their Companies Running efficiently. On website i use all the time, every day, is bigcommerce. Com. My back end solution for my web store. Its less thanes 25ds a month. 24. 99 to be exact, and it runs my entire store. I use it every day. Highly recommend it. Its a great way to have an online store presence for a low cost. A favorite website of mine is investapedia. Allowing me to understand a little more the finance side of things pertaining to my business. It allows me to understand certain terminology and what i should be doing for my business, fundamentally, because, you know, finance is such an important part of returning it. The partner rapport reports a weekly recap every thursday of media and news trends with regards to new media and digital media. Its been great to use that and leverage it for get out in ways to harness social media trends, new platforms and look whats coming up on the forefront. Emyth because theyre send notes and tidbits on daily basis how to grow your businesses and what challenges are out there and often i find i can relate to the business challenges that therapy addressing. So i found this app recently called dual lingo through an artist and it basically helps you to practice languages that you dont use all the time. When im not in a country i pretty much use it every other day to keep my skills and language up. The application im going to recommend you to use is named cute cut. Its application available on different mobile phone, and its a great way to cut your videos online and on the go. So it helps you to to pause any videos for your business. Its time to answer some of your business questions. Lets get our board of directors in here who help us out. Angela is the cofounder of saver the success, a Business Network for female entrepreneur, and denise is the ceo of the s3 agency, a brand elevation group. So good to see you both. Pleasure to be here. And youre an entrepreneur choiceover . Many times over, a spa and organic skin care line. The next question from susan, return as review website. Sdhou a tiny business, a staff of five, stay up to date, relevant sand keep up with the bigger guys . Our main challenge now is competing with yelp, frip adviser, we have to be selective with advertising, were a Small Company that could be a benefit to be tiny, if she plays up on that. Absolutely. Local is key. Word of mouth marketing is so important. It is the cheapest and most powerful way to get your word out there. Activate your loyal customers. Another thing that a lot of entrepreneurs are a little scared of but its effective is p. R. People get a little scared of it because they think, oh, how do i get into the local paper, even in a national magazine, and its a lot easier than you think, diypr, because reporters they want good stories. If youve got a great story to share, dont be shy to contact your local reporter, and the third thing is, i dont know if youve heard of it, weve used this in our own business. Every door direct marketing. Eddm. You can choose a route you want to target, and you have the mailer that youve got and then the post person will deliver it to every mailbox on that street. Which sighofi think is smart in getting the word out srnlgts it expensive . Not if you compare it to an ad or a p. R. Firm. Its really reasonable, and we use it quite often. Got it. I would say hear this person talking about, yelp, frip adviser, what are they really like . I dont hear the brand diff differentiation. People want big influencers. Differentiate, recognize who you are, recognize your strengths and dont go against yelp. Saying i am the nantucket expert, the one you need to talk to yeah. Why should i go to you instead of yelp . Here is an email from christina. I own a busy business sharpening knives and tools. A good decision to have internet store. How do you go from retail to implementing an ecommerce component . Ideas . Well, im not sure if shes looking to extend to selling knives or looking to have the Service Going through, where youre mailing things back and forth at the postal service. If its that, sounds like it might be that, youve got to remove the barriers. People arent used to buying shoes through the mail until zappa made every possible. Returns, doesnt fit, send it back. No harm, no foul. Or dollar shave club. Look at that. Razor blades in the mail. In a box, put your knives in here. Sending you the box and ship them back to you in two days. Id send my knives out to get sharpened. And take away the need to drive somewhere and drive back. Exactly. How does she get the first customers . A great question. Build it and they may not come. Right . Right. For us, we use the power of social media. I cant describe how great instagram has been for us, facebook has been for us. Once you figure out your secret sauce and really figure out how to get the Customer Base excited and how theyll start to instagram about you, it can take off like you know, hash tags, like wildfire. One thing weve done thats really increased our influence within the social media market is, every order that goes out we send a simple postcard that says follow us on instagram, on facebook. Youd be surprised how many do that and hash tags you designate you kind of own. They really take off and people Start Talking about it. I cant think of a better way to Start Building traffic, because when you have a retail store, the name of the game is, bring in walkins. Right . Online store, do the same. Want to get the online traffic. So be as attractive as you can with your seo and she has a base of customers like do you from people coming into your store. She can use them to build up. Right. Use be surprised how many will go into our store that may live in california, shes in new york. That may want to purchase from her later on. Right. Okay. Great. So good to see you guys. Thank you so much. Take care. Thank you. Thanks so much for taking time out of your day to join us. To learn more about todays show, jut head over to our website. Its openforum. Com yourbusiness. Youll find our segments plus web exclusive content with a lot more information to help your business grow. You can also follow us on twitter its msnbcyourbiz and on facebook and instagram as well. Next week, we meet one entrepreneur whose line of temporary tattoos is the latest craze, but that doesnt mean she says yes to every opportunity. I started this company because i wanted to fix the world of temporary tattoos and im not just going to guess distracted and i will focus on it and i dont want to stop until people call temporary tattoos. Well see how this brooklyn temporary Tattoo Company maintains laser sharp focus to make sure theyre brand name sticks, even when all the others fade away. Until then im j. J. Ramberg. Remember, we make your business, our business. If i can impart one lesson to a new business owner, it would be one thing ive learned is my philosophy is real simple American Express open forum is an online 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 its open for everyone. Theres not one way to do something. No details too small. American express open forum. This is what membership is. This is what membership does. She has desoeuded she will keep her money safe by putting it in the bank. And this scenario, i am the bank. Thank you very much, and we will keep your phumoney safe, becaus im the bank. As a bank, its my responsibility to give julie her money