as washington grapples with the economy, entrepreneurs are doing the same. why lawmakers shouldn'table looking to small business owners to make a dent. we do an intervention with the owner of a housecleaning business who needs to clean up her act. that and more coming up on "your business." small businesses are revitalizing the economy. express open is here to help. that's why we're proud to

present "your business" on msnbc. hi there, everyone. i'm jj ramberg. welcome to "your business" where we give you tips and advice to help your business grow. the government and congress continue to try and get a handle on the nation's economic problems while main street america including small businesses struggle with the effects of high unemployment. there is a lot of talk out of capitol hill about small businesses being job creator. but a new report by the kaufman foundation show they are opening with fewer employees and aren't hiring once they get going. robert lighten is the vice president of purchase and policy at the kaufman foundation. riva is here from grow biz media and brad harrison is the founder and ceo of bhv, a business

development firm with a small venture capitalist firm. robert, i want to start with you since it comes out of you. there's been so much talk, you guys put a report out a year ago saying small business is the engine that drives the economy and now one year later you're coming out and saying small businesses aren't even hiring. what does that mean for the economy? >> so actually what our previous report said is that it's not just any small business, it's really new businesses. those are under five years old that have been responsible for the -- for virtually all new jobs since 1980 but we took a electric look and tried to quantify it and asked ourselves is the new job business or is the new firm start-up business engine slowing down and the answer is yes and found that the number of jobs created by new firms started slowing in 2005

and then took a dramatic dip during the recession and really hasn't yet recovered. >> robert, is this a function of -- how big a part of this is a function of firms failing or firms not having the capital to grow versus technology? >> that's a good question. all we can do is make guesses. the fact it started falling before the recession may mean it was a canary in the coal mine so to speak telling us the economy would slow down, but i think once the recession hit, it's difficult that the capital has to be affecting firms. it may not affect firms doing business on the internet. they can go to the cloud. a lot cheaper these days to use technology to start your business but if you're having a restaurant or any other business that's got capital equipment and

so forth, you can't do all your business on the internet so capital has been scarce since the recession. >> i want to ask you, brad. do you find that people are not growing as quickly as they were a few years ago. >> i think people are being more conservative because it is very difficult to raise capital an so that adds uncertainty. if your business doesn't go exactly as planned you might run out of capital. what people are really doing, they're hiring fewer people and asking them to do more. where in the past you might have a salesperson, a marketing person, a technology person, now you might have one person doing sales and marketing. one person doing two jobs. >> i am assuming you tell people do more with less. >> the technological impact is one thing. the other aspect of all of this

is that the concept of the fte. the full time employee being a unit of measurement is getting increasingly outdated. i don't have any full time employees except me and that is occasionally doubtful but i have 16 people on w-2 who i pay and contribute to what i do. any new business starting up will try to stay as flexible as possible, try to have variable cost relationships with people doing work that would otherwise be in the sort of old economy and fte so i think there's a lot less of that happening and as brad said people are looking for ways to keep their -- >> we talked about being flexible. you see that a lot, as well. >> i do. you know, my business is one of those businesses where about 3 1/2 years old and we're still the same three people. we hire people out on as-needed

basis. i think what we have to look at is technology and the recession gave us a freelance economy where a lot of people are working for many people collecting many paychecks and the businesses that aren't, the restaurants that were mentioned or retail stores, people aren't spending enough money to go into those places that those people need to staff up i think there's two different things going on that are impacting those numbers. >> do you think that this is a sea change? this is going to stick even as things get better? we will stick with this freelance contractor economy. >> i think to a certain extent, yes. the world has changed and people are going to have to get used to the fact that a lot of people won't be doing full time employment. >> there was something about doing contract work or being refrancers and maybe there's something there. maybe all of these people are gearing up to start their own

thing and hire more people as the economy gets better. >> well, we hope that's the case. and in fact if you look at another statistic in our report it shows that the overall number of start-ups including a lot of the people that are on the show. people that only have one employee, namely themselves, the total number of start-ups is up. what is down is the number of employer start-ups hiring one person. so i think a lot of the conversation you've heard reflects the fact that we've got a lot of these consultants and freelancer starting business but if you add up all the jobs they're creating, they're still not creating as many as they were doing collectively before the recession. >> thanks for talking about it. we all thought it was interesting. thanks so much. you know, we are talking about all these big picture things and what this means for the economy but foam small businesses what they're really

thinking about is forget the big picture. i care what's going on in my four walls and how do i grow people. reiva, this is where we called you in. she talked to someone who needed advice on how to tidy up. she had been spending so much on her company that she accumulated a little professional clutter, shall we say, as you see in the minute. you're laughing, so am i. the time had come to give her business a scrubbing. ♪ just making it easy >> i'm looked for constructive critici criticism. if you make me cry i'll be upset. >> reporter: dana's housekeeping. >> one in sacramento, fresno and arcadia area. >> reporter: from her company's

headquarters she runs a business with one full time employee and about 60 independent contractors. >> dana's is a referral agency. we provide housecleaning services, typically we have our clients make a priority list of the chores they'd like us to do. tubs, toilets, run some laundry. let's clean the fridge, let's clean the oven, chase the cobwebs. >> turning the tables on her housekeeping for a change of this after connie's daughter said the business could use help. >> she told you there was a small business in dire straits that could use updates. >> connie was ready for the challenge. >> i've got to sit outside and look at the business and not look upon myself as failing when i know i'm not but i know i can do better. >> the next day we got down to work. re reiva showed up to assess the situation. >> i'm connie. thanks for coming. >> my pleasure. >> the first issue to tackle,

the way dana's housekeeping schedules contractors. >> look at that wall and get it over with. >> what is that wall? >> that is a frightening wall. the wall. well, actually it's called a scheduling board. >> the all paper one takes up a corner of the office. everything is done by hand. the paper and push pins are color coated but the information isn't saved on any computers. it's a system very few understand. >> i have one niece coming in and helping because the filing is out of control and this is out of control. speaking of customer files, guess what's next. much like the schedules these records are all handwritten. >> i really am curous about all those boxes over there. can you talk to me -- >> you don't like this, you are really not going to like that. >> reporter: they're breaken down into categories like branch and client status. none of the sames, numbers or addresses are saved anywhere

else. >> this is scary and you're just -- it's what is in your and jack jackie's brain. >> she gets her talking about marketing. dana's gets the words out with referral and calls to former customers. >> jan, it's connie. >> we send a postcard backup saying i'm sorry we missed you by phone. here's the specials, give us a call. we get those too. >> so you have a ton of prior and occasional. >> yes, just you and jackie are calling. >> yes and sometimes i bring somebody in. >> connie and jackie both have computers on their desks. what are they used for. >> the website and i do e-mails. >> what does jackie think about this. >> it's definitely not the best way. we spend a lot of time, waste a lot of time looking for client cards, filling out client cards.

>> and connie agrees, she says she's never taken the time needed to properly upgrade the company's infrastructure. >> you can't grow because you're so tied up your energy and time into maintaining this system which there's so many other ways, simple way to do it that you'll be astounded. that can happen. we'll talk about that next. >> her first and most significant piece of advice. get new computers. >> the computers are a little ole, a little out of date and because you're going to have to be getting new software, make sure your computers can handle it. it's just two, so you can go anywhere, big box store, order them online. doesn't matter. >> with those reiav can'ts connie to invest in a contact management system. computer based systems and web-based systems so you have to figure out which one you want

better. you can look them up and say, oh, i think i can deal with that. after you buy that system and install it, the whole family. anybody who can type, comes in, gets those cards and gets them in there. >> the cms will make dana's marketing easier. >> i've been listening to you. i didn't ask you for anybody's address. you need to start collecting them so you can put them in the system. if you want to push out a special, you can't sit there and call every client and say, hey, we're having a deal. you can push it out with an e-mail blast. >> reiva ace she has to pack them up. if everything is stored in the cloud, you don't have to worry about it. if it's on the laptop, as well, you can access your cyst blas

it's not here in the computer. it's where you are. >> and finally reiva says the scheduling board has to go. she has to find a program that caters to her contractor. >> jackie loves doing that. >> i'm excited. i now have a really good excuse to really push connie forward and say, we got to get this done. >> sure, connie has a little bit of work ahead of her but she as a goal in mind and she wants to achieve it. >> you could go on forever working with the system. >> i could but i'm very tired of it. >> absolutely time to move on. >> think of all the things you'll be able to do. >> more marketing, freedom, more growth the whole nine yards. i see it as a real window of opportunity to extend my

business. >> so reiva, everyone here just looked at those files and said, oh, my gosh. somebody lights a match often her business is gone. >> so easy to make it that easy. so thank you for going in there and showing -- shedding some light on the 21st century. how are things going now? >> i did. i talked to connie this morning and i'm really excited. the big news is the board is still up there but she's moving offices and promised me the board is not going with her. that's a big accomplishment. she's starting the input with her smaller office in fresno and everything is going in the computer and she's testing all these 30-day systems, all these

customer management systems and says everybody has a 30-day free cyle so she's trying archbishop out for 30 days and then pick one -- >> we applaud her. i want to check in with that company again in a year from now and i predict tremendous growth just because they're going to have time to grow their company more. thank you for doing that. it was fun. >> thanks, jj. >> debt has been on everyone's mind. but it's an issue that faces small business owners, as well. here to you are five tips to get debt-free courtesy of "debt free for life" by david bach. all progress begins with making a real decision. how much business do you have and become motivated to pay it off. do the debt math. you'll find yourself with more

money if you pay more. if you have credit card debt, the more interest rate is lower, the more money you'll save. paying down debt will dramatically increase your score and finally, if you don't have cash, don't buy it. don't borrow money your business doesn't need. when we come back we'll answer some of your business questions including one about the quickest way to get $250000. and marriage works for her professionally and personally. carly roney one of the founders of "the knot" when we come back. this is my band from the 80's, looker. hair and mascara, a lethal combo.

i'm jon haber of alto music. my business is all about getting music into people's hands. and the plum card from american express open helps me do that. you name it, i can buy it. and the savings that we get from the early pay discount has given us money to reinvest back into our business and help quadruple our floor space. how can the plum card's trade terms get your business booming? booming is putting more music in 1996 carly roney and her husband started theknot.com. a one-stop wedding planning site for engaged couples. since then they have expanded it into an all compassing lifestyle media company that provides content from weddings to babies. they renamed it xo group incorporated to better reflect

their growing stage. in today's learning from the pros. she talks about finding the yin and yang and putting away your pride ♪ gee i really love you and we're going to get married ♪ ♪ going to the chapel of love not ♪ >> planning a wedding was a nightmare and the industry was totally outdated. it was super that decisional. didn't reflect the world around me and my husband was chinese and there was nothing for a little white girl marrying a chinese guy and you're like, wait, it shouldn't be this way. you're throwing a fantastic party. this is your oscar moment and this was when i realized if you could change it and produce technology and style, it was

something i could get my head around and that's where the passion came from. ♪ hey, baby, i think i want to marry you ♪ they were talking all the time and exchanging ideas and what happened was we started getting e-mails from our brides even the message board not talking about weddings. does anyone else test driving a car? what is the heck is my i.r.a. and -- oh, i see. they're going on with their lives and that's when we started with message boards geared towards our newlywed audience. dave and i were co-founders of this company together and it really has been amazing for us because we're kind of yin and yang. he's all business and strategy

and i'm extremely creative and many ways operational at the same time. if you can find no other option on the planet but to be in business with your spouse make sure from day one you foe exactly who does what. when there's too much crossover, it cannot only cause tinge in your relationship but in your life so but if the two of you can become a powerhouse together it can be a winning combination. ♪ in the name of love >> you need to put away your pride. you have to be willing to really put your neck out there at every single turn. i remember after one event i was pitched as speaking at this glamorous fashion show and i was like great. good marketing opportunity. it was on an incredibly rainy disgusting day. four people turned out. but you have to find a way through those moments in being a entrepreneur.

♪ in the name of love >> it's time now to answer some of your business questions. les and brad are with us once again. the first one from jonathan. he writes "if you have a really good product do you invest in your sales staff or do you use the money for something else?" it's such an open question. i guess it depends how good your product is. do you have enough to sell. think a lot of people have this, how do you in general figure out where you should put your money? l ech les? >> i think what the specific question is mathematical. how much does it cost to get 1% more market share and what is the profit you'll make and as long as the curve hasn't split keep investing in your salespeople. when it becomes too much it is time to switch on the brain and find something else to sell. >> makes it easy go sales and marketing go hand ahand.

and hand. >> how much do you want to help the sales staff. i find that leadership and understanding the vision on how to grow the business is pretty important. >> such an important person to hire, that salesperson. they're the face of your company when it comes down to it. the next one is about the fastest way to find funding. >> i'm looking to raise $250,000 in angel funding and what's the quickest best way for me to achieve that. >> any way that is quick? >> not if you're talking smart money because everybody is going to take some amount of time to do due diligence. i would say the most important thing is to have all your materials together. make sure you understand what the cap structure is and what terms you're offering so if you do find somebody that's interested, you're prepared to

take the money right away. that's having the right corporate structure all the what i to having use of proceeds and what you'll do the money. >> for $250,000 where do you start looking. >> it's an awkward size. what i would say you've really got to make statistics work for you by going out and pitching to far, far more people than you think you have to. what happens is people go to one sources and get really hung up on trying to convert just those two sources. >> and something happens. >> and you get so emotionally caught into that one negotiation that you're not in a healthy position to make one so i say go everywhere. go to family and friends, talk to people like brad. i would find every single you have and whittle it down. >> it is time consuming. it takes time away from working in the business. >> you need to focus on it. there are a lot of angel groups popping up where you can get selected to be one of five or

ten companies. >> those of those are looking at tech companies or high growth companies and not everyone really fits into that. >> well, you know, i think to some extent you got to turn over every stone. >> right. >> what you do find in those angels are people that come from all different industries. >> true, true. >> so might have their at theous condition death but somebody may be sitting in the back of the room that sold theirs for $50 million. those organizations like tech stars are great places to go. walk in some night and a same not in tech but do you have any idea for me. >> people do like giving it. let's go to a question about marketing online. >> i'm finding it difficult to market certain products in this digital era with so much noise on the internet. how would you go about it. >> it's so true, right? ten years ago you could send out an e-mail and people would open it. now you send out an e-mail and

everyone deletes it. there is a lot of noise, even though there's facebook and twitter, how do you make it stick. >> set a side of a day aside and work your day in numbers and invest in it but throwing a little bit out to each which i see many businesses do is you get nothing. >> i guess it's no different than might have asked about television, right. >> i think what he's leeing to, online you can identify customers so know who it is and refine your marketing spent to target those customers so you might try google ad words and they don't work, don't keep throwing money at it. facebook ads might work and you understand you're targeting to women 18 to 34 and you can target directly to that audience. i think it's about figuring out

what works, backing into the economics that work and then targeting those channels. >> and the beauty about the internet you can find so much information about people responding to you. >> almost too much. >> les, brad, thank you south and if any of you out there have a question for our experts all you have to do is go to our website, openforum.com/yourbusiness. click the ask the show link to ask the question. or if you'd rather, you can e-mail us at yourbusiness@msnbc.com. want to take your advertising and marketing to the next level but don't quite know where to start. check out our website of the week. thrivesoftware.com is designed to help you take the guesswork out of your sales and marketing strategy of for $20 a month they analyze your business's

performance and gives suggestion on how to improve it to get sales up. to learn more about today's show click on our website, it is openforum.com/yourbusiness. you'll find all of today's segments plus web exclusive content with more to help your business grow. don't forget to become a fan of the show on facebook facebook. you can follow us on twitter. @msn @msnbcyo @msnbcyourbiz. stories that took me an the country from whitewater rafting to hot ballooning in the napa valley to find out how they're sufficie surviving.

until then, i'm jj ramberg. we make your business, our business. this is my band from the 80's, looker. hair and mascara, a lethal combo. i'm jon haber of alto music. i've been around music my entire life. this is the first alto music i opened when i was 24. my business is all about getting music into people's hands. letting someone discover how great music is, is just an awesome thing. and the plum card from american express open helps me do that. i use it for as much inventory as i possibly can. from picks...to maracas... to drums... to dj equipment... you name it, i can buy it. and the savings that we get from the early pay discount on those purchases has given us money to reinvest back into our business and help quadruple the size of our floor space. and the more we expand, the more space we have for instruments and musicians to come play them.