hi, there, everyone. i'm j.j. ramburg. welcome to yourself. we give you tips and advice to help your business grow. what better place to do it than

the 2011 small business summit. small business owners, investors and journalists gathered to press small business issues like utilizing social media and marketing. here, the saying goes, if you can make it here, you can make it anywhere. in fact, it's very much the dream of many entrepreneurs from all over the country to hope business in new york city. what exactly does it mean to make it in new york? ♪ >> new york has a style of its own. >> this is a tough market. this is new york city. this is not the landscape for the weak, for the undercapitalized. you know, the people that don't want to work 4,000 hours a week. >> she knows what it takes to run a successful manhattan

retail store because she's one of the city's top real estate agents. >> okay, i have the e-mail. what are we going to do. >> as chairman, she says she often sees numbers that could take your breath away. >> if you cross park avenue, it's $500 a foot. the next block, it's $800 a foot. as you get close to fifth, it's $1,000 a foot. it's only money. it's only money. if they make a lot of money, they will do well. >> really, it isn't only money. she says making it in new york depends on many other factors as well. >> it rains maybe nobody goes out. the store manager doesn't show up. maybe something is wrong with the window. they are there waiting for customers. >> why would anyone want to open a shop in new york? >> you are in connecticut,

people don't count you as anything even though the stores are fabulous. oh, you are in connecticut, you are not in new york. so we want to be in new york. >> that's laurie. she owns two women's resale stores in connecticut. they are called round about designer consignments. >> what made us want to do business in the city is being in new york. >> last year, she opened not one but two new stores both of them in new york city. >> what i was shocked at is the security deposits involved. i knew the represents would be higher, that went without saying. before they negotiate elise, they want to know that you can pay between six months and a year security deposit. >> each landlord demanding a year's worth of rent for security, she was forced to take a large bank loan on top of using much of her savings. she has no regrets. this is taking her business to

the next level. >> it gives us buying power. >> one store in new york city in the right location can do more than a dozen suburban stores and everybody knows that. >> it is an eight. it's $169. >> let me try it on. >> i bought michael karrs red fox leg warmers here. i cannot walk down the street without having 20 people ask. >> identifying the right location requires an understanding of specific shopping routines in each neighborhood. >> it matters what side of the street you are on, what corner you are on. are you on the northeast corner? i thought that's ridiculous. it's not. people have their walking habits. >> she has to be in soho and look like she belonged there like she was chanel or any of

the other retailers there. >> once she found the space, she needed faith to gain the confidence of skeptical landlords. >> our dresses range between $250 and $500. at a retail store, between $1,000 and $5,000. >> laurie had been very successful in the burr bs. to come into manhattan, the most competitive market in the world, in the world, with everybody, i had to make a presentation for laurie so that when we found the right store, the landlord would be impressed. >> after she signed the lease and opened shop, that's when she started learning the difference between suburban and city shoppers. in the suburbs, people come in vehicles. >> bad weather in the city is

bad for business. >> in the city, everybody walks. it's one of the things i didn't realize. >> another difference, finding good staff is easier in the city. >> i will say it is much easier to hire people in the city than in the suburbs. we'll put an ad in the paper for new york, we'll get 200 hits on it on craigslist. 200 people applying. they may not all be qualified. connecticut, we get six. >> when she wanted to create a national franchise, she could not do it in westwood. one store in new york she gets the attention. ♪ let's hear it for new york >> starting a small business whether it's here in new york city or in your hometown takes funding. so, that's one of the big topics here at the small business

summit. do you go with a venture capitalist or company. people are asking these questions. we are sitting down to talk to brian today. thanks for joining us. >> thanks for having me. >> you raised $35 million for your company. you are author of the book "inbound marketing". >> that's right. >> so you have been a venture capitalist and you raise money for venture capitalists. >> yes. >> what do you think about venture capital money, pros and cons? >> i'm a big fan of it. i think of a baseball analogy. a venture capital his, if they are a baseball player, ten at bats, they are trying to hit a grand slam on every hit. they make one grand slam and strike out ten times. it's a risky gain. if you are going to raise money from a venture capitalist, you have a chance to become a billionaire which is nice if you

want to be a billionaire. there's a high likelihood you will make nothing, essentially. not everyone should raise it. >> how is it different than raising money anywhere else? why are your chances different? >> let's say you want to boot strap it or raise a little friends and family money, you have a higher likelihood of making $1 million or $2 million. you are more likely to swing and miss and not take on risk. there's no chance you are going to be the next bill gates. >> got it. you are taking a big risk. there could be big rewards or give up equity. >> exactly. exactly. >> who should take venture capital money? >> somebody who needs a lot of capital, who has to build out a major offering and absolutely needs capital. somebody who has an appetite for risk is somebody who wants to swing from the fences.

it's simple. if you want to put a dent in the universe and build something big and special, go and raise it. if you are not sure and you want to be conservative, don't want to spend the money, you know, you're not sure you have a billion dollar opportunity in front of you, stay very far away from venture capitalists. >> how much work is it to suddenly have them on your board, you have to report to them because they gave you all this money. >> it's a lot of work. they are very fussy. you watch the facebook movie, it looks easy to do that. they run around silicon valley, wham, they have it. it's simpler on tv. if you look at steve jobs, he got you fired in the 1990s from his own company he started. you give up a fair amount.

>> a fair amount of rewards at the end should you hit. let's turn to angel investors then. who should go to an angel? >> just about anyone. angel investors aren't swinging as hard. if you need a little bit of capitol, $100,000 to $1 million, angel is a good move for you. i'm a bigger fan of raising from angels than friends and family. friends and family, if you lose their money, it's awkward. >> how do you find them? you network into a bunch of people with money. >> yes. in certain cities, there's really good angel network. here in new york city, there's a very active angel community. a lot of people made money in hedge funds. bosses have an active community, san francisco. it's tricky outside those cities. if you just ask around in the tech community, the angels start

popping up. if you hang around at m.i.t. or harvard or the meet ups in new york city or san francisco, the angels are looking for deals. >> you say tech community. we are talking this kind of money we are talking about is focused on technology right now. >> really focused on tech. it's internet. it's biotech. it's companies where you can get a monster return. >> right. all right. thank you so much. we appreciate you joining us. >> thanks for having me. new york based designer cynthia made a name for herself in the fashion industry. she's created a name-sake collection beyond women's wear from wet suits to band aids, diapers to tools. she's thinking of designing unusual things and forging relationships with retailers like target before it was a fashionable thing to do. ♪

>> in college, i did have that sort of moment when i met this woman that asked me about what i was wearing. she gave me her business card. she was a buyer from a great store in chicago. she said be in my office with your line on monday. i went to the fabric store. it was a friday. sewed all weekend, brought my five things to her office. i was like one. what's the style number on that one, two. i was from the fake it until you make it school. i think there's a certain amount of awareness. if an opportunity presents itself, then you have to know to go for it. she gave me an order. i got a check in the mail and i was in business. i was walking through little italy and i stopped to get a coffee and i walked into this place. andy warhol was sitting there

having a coffee. i was like oh my god. i had gone to art school so i had an unbelievable admiration for him. i said if i don't do this, i'll always regret it. i handed him an invitation. i said i'm having a show. it would be great if you could come. he barely looked up from his coffee, he goes, thanks. >> i was still holding the invite. he didn't do anything so i set it on the table in front of him and spun it in this way that i said oh, i don't know, maybe andy warhol is going to come. he thanked me for inviting him. i think he'll come. around the time i was approached by target, nobody had done it. nobody was doing runway shows and selling to a mass merchant. it was very scary. i have that warhol mentality that's do everything.

it seemed modern and seemed right. it's either going to be the end of my career or the beginning of a new chapter. i think that sort of walking that line is, i think, what keeps me really excited about what i do. we're doing so much i'm like keep them guessing. i'm like oh, well, if that doesn't work, then we have all these other things going on. i think times have changed. i think when i started off, you know, you present a collection and a good review could catapult you to the top. a bad review could kill your business. now, it's in the hands of the public, you know? they decide. there's reviews every minute. somebody is saying something good, maybe saying something bad, you know, but it's like there's so much information that it's so diffused that all you can do is put your work out

there and hope that people like it. still ahead on this special edition of "your business" from "the new york times" small business summit, carol roth answers questions we got from the attendees here. and we all know about the daily deal sites. can they work for your business? we talked to the ceo of living social. ♪ living in america. sam: i'm sam chernin. owner of sammy's fish box. i opened the first sammy's back in 1966. my employees are like family. and, i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card. so we can accumulate as many points as possible. i pass on these points to my employees to go on trips with their families.

when my employees are happy, my customers are happy. vo: earn points for the things you're already buying. call 1-800-now-open to find out how the gold card can serve your business. does it make sense to put an offer up on a daily deals website? are you going to get a lot of loyal customers or bargain customers that are never coming back. we have the ceo of living social. you are here to tell us how to get loyal customers to go to sites like yours. thank you for joining us. >> thank you for having me. >> i am a user of sites like yours and groupon. i have gotten great deals. i have heard they get a bad rap

and people never came back. how can you turn that around and use living social to get people to come back? >> i think the first thing to remember is it's a marketing program. if you don't think about it in a smart way that makes sense for your business, you may struggle with having a positive expoorns. there's three people involved in every program we run. there's living social, the customer that buys and the merchant. all three of them need to feel like they won and happy at the end of the day to have a successful program as well. >> you said provide values. do you mean in the value itself? >> i think value can be construed in a couple of ways. cost saving, it can be having a fantastic experience and feeling special when you are there. people are interested in finding out new things, why should i go

back to this merchant? we bring them to the store and then it's really up to them to find a great, fantastic service to get them to come back. >> the next point is surprise and delight someone. you give them more than they bargain for. >> it's a powerful phrase that you use. if you can delight the consumers and merchants as well, the volume and ease they will be able to do a program with us. you find out they work very, very well. >> you mean use mobile the first time someone comes to your sight or communicate with them after the experience? >> well, mobile is a way that, with our merchant partners they can go get realtime business is a little slow, they can get somebody in. living social where lunch rush is slow, get people to come in. >> it's a neat idea, they are going to have empty seats anyhow and now they are filling it.

they are not wasting money. >> they have staff there. they have food that's got to move. we give them the opportunity to do that. >> finally, think customer first. how is that different than any other day, thinking about your customer first? >> i think a lot of what we do with merchants, it is something where they are going to get customers the next day. so, they really need to have that mentality of, okay, when i work for living social i'm going to start seeing it the next day and be prepared. it's going to be the most successful program i have. they need the customer first mind set. >> do you suggest they have a mind set to come back then? >> whether they try and, you know, develop and foster a longer term relationship to convert them to a facebook fan or twitter follower. >> thanks so much. it's time now to answer some of your business questions.

jay is with us. he's a small business columnist for "the new york times" and president and founder of the golds group. carol roth is here, a business strategist and a panelist here on "your business." great to see both of you guys. the first question is about entrepreneurship. >> what do you think about before starting a business plan? >> carol this question was made for you. you wrote a whole book of things to think about. >> before you start a business plan, you have to figure out who your audience is. you can write a plan for yourself to figure out motivation, timing and opportunity or a plan for investors. they care about something else entirely, which is how they are going to make money. you have to know who you are writing it for, make sure you think about what your business is, the kind of risk you can

take out of the equation and doing all the things that prove that you are the right person to bring value to the customer. >> jay, you started your business right out of school. i'm guessing you didn't have a business plan? >> no. you have to understand, when i started business, entrepreneurship wasn't talked about. there was no category. if you had a list of jobs, there was no school or classes, nothing. when i started business, i heard you are going to waste your degree. >> that's a different way. do you need to write a business plan? >> in hindsight, it's a good idea to have a business plan. you think about aspects of the business you never thought about. i started ten without a business plan and five are still around. i probably would have been more successful with all of them. i decided to make photo frames

and go to a show. >> find the holes in your idea. >> right. >> this question comes from somebody at the conference. they said when you make a key hire, how many times do you interview someone? great question. it's a hard one. >> i start with who is doing the hiring? the entrepreneur is the worst person to do the interviewing. they like people. they are into their company and talk too much. they are in a hurry. add that together and you have an ineffective interview. when i had a woman take over the hiring, she's way better at it than i was. you have to ask the right questions and you have to hear the right ang. the typical entrepreneur is not hearing it. there's a reason some people are better at interviewing than others. it's not about how many times they are interviewed, but the quality of interview.

we interview them twice. >> i actually want to change it all up. if it's a key hire, i'm into dating before you get married. if there's a way to hire on a consulting basis or longer term basis and test them out first, it takes the pressure off. put them in a lower risk opportunity, then you are not stuck with them and have to go to the prenup. >> good question. this question comes from frank. when do you decide to take out more money for your business or just quit? how do you know, are you throwing in good money for bad? >> there's a grow-up stage in business. if you have problems, you have to figure out, are the problems with your whole business concept? is it the math won't work? you can't charge enough? you have tried, they won't pay it. the competition is too fierce?

there's just not enough market for you? there are legitimate reasons to quit. on the other hand, there are problems you can fix. you hired the wrong person. you are buying too high. it's down to analyzing. can i fix this and do i want to fix it? some people shouldn't be in business. it's okay to say it's not as fun as i thought it would be. i'm going to go back and get a regular job and two-week vacation and time to myself. there's nothing wrong with that. >> this is a relevant question. as the economy turned, a business that might have been good isn't working as well. do we invest more? >> you have to give yourself time. entrepreneurs go into business and think there's going to be a ticker tape and people lining up around the block. it doesn't really happen. >> it hasn't happened for anyone

i know yet. maybe in your business. >> five or ten years. >> exactly. you have to give yourself enough runway. realistically a year and a half to two years to make sure the business is viable. that being said, if you have gotten into something, you are saying this isn't what i expected. it's not really what i want to do. by the way, there are other ways to be successful. get real with yourself and go back and get that day job. >> thank you so much for all your advice. we appreciate it. if any of you have questions for our panel, go to our website, the address is openforum.com/yourbusiness. hit the ask the show link to submit a question for the panel. again, openforum.com/yourbusiness or e-mail your questions and comments. small changes to your marketed plan can have a big

effect. here are five low cost ways to boost sales curtesy of entrepreneur.com. >> add your twitter link by adding it to your e-mail signature, you are getting word out about your business when you hit send. the back of your business card can serve as a miniadvertisement. it's a way to give facts about your company. position yourself as an expert. tweeting, blogging and free advice are effective ways to build your brand, fast. share mailing lists. partnering with sights to attract a similar audience is a way to target your demographic without paying big money. get a phone number. for a fee, you can get a number to stick in the minds of customers. daily deal sites like living social and groupon can help you.

now, with our website of the week, you can save money on your small business needs as well. bizdeals.com have deals from security camera systems to business listing subscriptions offered for a limited time. registering for the site is free. to learn more about today's show, click on our website. it's openforum.com/yourbusiness. you'll find all of today's segments with more information to help your business grow. don't forget to become a fan of the show on facebook. we look forward to your feedback. follow us on twitter at msnbc your biz. next week, retro clothing with a legendary sex symbol. >> we did some research and '50s inspired fashions an several names came up.

one of course was marilyn monroe. another was betty page. she was known as the dark girl. she was scandalous. she was edgy. >> how the unusual legacy of iconic '50s pin-up betty page helped them gain visibility beyond their wildest dreams. until then, i'm j.j. ramburg. remember, we make your business our business. shazi: seven years ago, i had this idea. to make baby food the way moms would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with farmers that grow our sweet potatoes

and merchants that sell our product. vo: get the card built for business spending. call 1-800-now-open to find out how the gold card can serve your business. >> at the center of any criminal investigation is a dark hard and the iron hand of justice. >> you can