succeed, try and try again. how a business owners failure helped their company become profitable. what small business owners can learn from the likes of lady gaga, justin bieber and madonna. that's all coming up next on "your business." hi, there, everyone. i'm j.j. ramburg.

welcome to "your business" where we give you tips and advice for your business to grow. starting a business came naturally. sometimes having a great idea isn't enough. after starting two technology companies in the '90s, he learned the importance of having the right business partner and how timing can mean everything. after he started his third business, a baby lifestyle brand, he was willing to hop, skip and jump ahead of the competition. ♪ baby, baby, baby >> when michael diamond started the skip hop brand of baby products with his wife ellen, it wasn't the first time he started a new business. in fact, it took three tries and three different companies before he got it right. >> i grew up in a world where you are your own boss. that's all i really saw.

it's all i really knew. it was much more natural for me not to have a boss. >> for michael, starting a business came easy. making the companies work long term was the tricky part. an entrepreneur of the go-go era in the '90s. he started a web design company with a partner. >> we had a company that built very large websites. >> as the company grew they were seeing eye-to-ee less and less. they did not have the same goals as when they started the company. >> we began to disagree on the rate of growth we wanted to pursue, the way we wanted to pursue it. i am very much a growth kind of person, reach for the next opportunity. >> all though it was bittersweet, michael left to pursue his next big idea. money was plentiful and michael

had no trouble raising capital for his next brain child. >> i started a company i clips. it was a venture backed business. we followed the more traditional route and raised significant amounts of money. we were going to create a system that allowed people to share video on the internet. >> what is an i clip, screening messages that you create. >> it was youtube before its time. >> when the markets dried up, they went bust. michael had to let 35 employees go and start all over again. when a company no longer is and it flat lines and you know it, you have to move on. >> less than a year later, michael was plotting his next business. it was entirely different than

anything he had done before. the third time was the charm. >> this company, skip hop was good for many, many years. we achieved that with smart deals with our suppliers and smart ways of managing our risk. we didn't put a lot of money into the business but a lot of vision into the category. >> with lessons learned, this time, michael had the right partner, his wife and perfect timing for launching a baby gear company. >> it's amazing. we are only eight years old. at the time my son was born, all the diaper bags were winnie the poo or very old fashioned. i wanted something sporty, my husband could use it. i could hang it on a stroller. i came up with that idea.

it's not that long ago the looks were very old fashioned. since then, people picked up and did a modern design on baby. >> skipping beyond the traditional diaper bag, they have an array of products all over the world. after two businesses failing, the ultimate test that skip hop is here to stay was their performance during the economic downturn. >> 2008 was difficult for everyone in this category. a lot of companies questioned, are they real? is there real demand for my product or riding a wave? in 2009, we saw that our products were still very much in demand. we knew that we had built something meaningful. we really reached our customer in a unique way. it's not a luxury purchase, but parents really wanted to have our products in an up or down market.

when a small business doesn't work, it can certainly be devastating, but as we just saw, it can be a great learning experience to build from. let's turn to this week's board of directors for their thoughts. phil davis started three businesses. his most recent, his restaurant phil the fire. jen is a serial entrepreneur. she's launched three businesses and the author of "what if and why not." alfred is the editor at large. great to have all of you. >> thank you for having me. >> phil, you kind of reopened your first business. you saw a failure and you think that's what makes you a success? correct? >> yes. i had to reinvent myself in the

process. i had to distinguish between defeat and failure between emotions and passion, in between who i am and what i did. through that process, i brought phil the fire back stronger and better and do things right when i take a bite at the apple. >> this idea of distinguishing about emotions and passions. that's the only way to learn, right? your book, "what if and why not" tells people to go after it. >> knowing when the timing is right and the circumstances are examples right now. sometimes the timing is not right. you have to step back out of your emotions, reflect what worked, why it worked, what wasn't working and re-evaluating and reinventing yourself. being an entrepreneur is about being a person willing to evolve. reinventing yourself. >> michael diamond, what i love

about this piece, he's a true entrepreneur. he can't imagine working for someone else. >> if you are an entrepreneur, you are an entrepreneur all the time. the road to heaven is paved through hell. every negative experience you have was necessary. you had to have that experience to equip you for when you got to the point of getting it right. if he didn't have the earlier failures, he wouldn't have made the current business. >> phil, in your personal experience, do you think you had to fail to succeed? >> absolutely. one of the things, it forces you to dig deep. i dug deeply into myself and came out stronger and more determined. i had wisdom and the gray hairs to prove it. i had been through the fire and okay. >> where did the gray hairs go?

how did you get yourself to have, sort of the stamina, the ambition to do it all again after you failed? >> you know, for me, it was the fact that i had done it once. it was a multimillion dollar operation. though they crashed, i knew if i did it once, i could do it again. the second time, i would surround myself with the right people. i'm a better owner, better manager after having gone through all of that. it's an amazing process when you don't run away from failure, but run into it. you come in stronger. >> you can see a lot of serial entrepreneurs. almost every successful entrepreneur out there had some failure. how do you know if you are that person and just not good at the job? >> i'm good at reading biographies. you often don't get the story of the road the entrepreneur had to

travel to become a great success today when you read a news paper article. it's what some call a failure. the difference between a winner and losers, winners just keep going. >> thanks for this advice. good luck with your restaurant. thank you for joining us. >> thank you so much. thank you so much. he opened his first clothing store in up state new york at the age of 18. by the time he was 23, he was already bankrupt. today, designer and manufacturer tommy hilfiger runs a $4.6 billion premium lifestyle brand available worldwide. we sat down to talk to him about putting your business first, staying one step ahead and always telling the truth in this learning from the pros. ♪

>> i would say the bankruptcy when i was 23 years old taught me a tremendous lesson. it taught me to really watch the business end of the business. being a creative person, having all these dreams and ideas is well and good but if you don't have that business acuman, you end up with nothing. ♪ step by step >> you have to realize a brand is very much alive. it's almost like a child. you have to nurture it and you have to protect it. you have to continuely ask yourself what the next step is. what the next material or color is. for us to stay a step ahead of our customers, it is the very best idea. if you are a step behind, you fall off the cliff. if you are too far ahead, they

don't get it. any successful person is going to be under the microscope and going to at some point feel the heat on something. i think the best way to combat that is to be totally honest. absolutely honest. if you made a mistake, say i made a mistake, i'm moving on. i learned from it. i apologize. if someone is accusing you of something that is not true, you have to hold up your hands and say this is untrue. it's completely untrue. they are accusing us of having poor quality in the clothing. show it to us. if something is wrong, we'll exchange it and give you something new or improve it and correct it. denial is not an option with me. ♪ don't stop thinking about tomorrow ♪ >> i think the minute you rest on your laurels or become

satisfied with your success you become complacent, arrogant or too comfortable. we have a philosophy in the company and the philosophy is that every season has to be better than last. read a survey where we are number one in a certain category in the country or number two in designer names in america or something like that. i never take those things seriously because i think, okay, that was written yesterday. you have to think of tomorrow. the minute you stop thinking about tomorrow, you lose. don't forget about the past. think about tomorrow. ♪ don't stop thinking about tomorrow ♪ still ahead, we answer your business questions including how to avoid going into business with someone who may not have your best interest in mind. what can natalie portman teach small business owners?

we'll share their best practices coming up. 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.

our fascination with celebrities can teach us a lot about what to do and what not to do when it comes to branding. the a-list knows how to rise above the market and grow their fan base. if you want to know the secrets to successful marketing, gaze at the stars. jennifer hill represents emerging growth companies. great to see you. >> great to be here, thank you. >> you gave me a list of celebrities. since i was in junior high school, in her heyday, we're going to start with madonna. >> you have to reinvent yourself. it means taking your core and the core of your product and always adapt to the market. madonna does it well. from the time she was in her early 20s to now, in her 50s, she reinvents her sound but making sure she's adapting and

leading in trends. entrepreneurs have to do that. you can't say i have one market and it's going to pass by. >> because of technology, you have to pay attention to the world and how your customers are changing. moving on, natalie portman. >> be a grand ambassador. natalie portman was a vegan for some time. they developed a line of vegan shoes. she couldn't find red carpet styles that didn't use leather. they teamed up to display her passion through this brand of shoes. >> as a business, find a cause you care about or your own cause? >> your own cause for your business. christy, a supermodel is a passional yogi. he wanted to funnel that into a clothing line, a book, the

lifestyle brand that focuses on well being. that's what they do, they know the product well. celebrities have a leg up in the sense people know who they are. if the product isn't good, it's not going to go. >> there are a lot of failed celebrity businesses out there. justin bieber is a model of success. >> create your own fan base. his mother put a video of him on youtube then usher comes calling. using social media, facebook, twitter, commenting on blogs. you can create a lot of interest. one of the pieces of advice i give is share the wealth of your information back whether it's on a blog or commenting on other ones. talk about what you know but do it in a way that gives back. you'll have a lot of people following you and showing interest in you and your product. >> there are examples of small

companies that did a good job with social media and word of mouth as justin bieber did. >> absolutely. finally, lady gaga. adapt unflappable confidence. she has many things to be written about. she's a case study in a lot of journals now. the one thing you see about her is she is always on. she believes in herself. that confidence emanates and radiates in her. it's one of the reasons why people are so willing to follow her. it's an important trend for entrepreneurs. >> what do you do if you don't have it? >> fake it until you make it. if you don't believe in you and you are not projecting people should believe in you, you aren't. >> just important as your customers, your employees. >> all right. we have learned a lot from the stars, thank you. the economy may be down.

five tips on how to keep employees happy during tough times. >> say thank you. recognizing the hard work employees do with a simple th k thanks can go a long way. offering inexpensive rewards. you may not be able to offer year end bonuses but try a gift card. provide gym memberships. beyond showing you care, it can pay off in a healthier, more energetic team. seek input. employees will feel they have a stronger stake in the company. it's harder for workers to leave a business they helped build. finally, pay for classes. by helping employees pursue their interest and build on areas that make them feel better about themselves, you'll have happier workers. it's time to answer some of your business questions.

jen and alfred are with us once again. the first is about trusting a business contact. >> in dating we can see the red flags all the time. in business relationships, how do we look for the red flags to ascertain someone interested in working with our business or interested in taking us for a ride. it is kind of like dating. you have to understand them. >> speaking of someone who made a lot of dating mistakes, the most important thing in this situation is to talk to the other people who know them. whether it turned out well. people who observed their business behaviors and how they act in relationships. it will give plenty of indication of how you interact with them. >> not just the references they give you. dig deeper than that. >> i joked business and dating are the same thing. it starts with your instinct. if you feel something is not right, you keep pushing that

square into that circle, then you know to pull back. if it becomes work, if it's easy, it's working. if it's constantly work to make it happen, it's probably not the right relationship and you should back off. >> i agree. you know when you are talking to someone, how they are going to react later. negotiations can get sticky. as long as somebody is fair, then you get a sense of how they are going to be later on. >> you can't want it more than they do. if you want it more than they do, you are in trouble. >> sometimes you can't help it. >> you have to hold back. >> this is from tina, i own a small real estate brokerage firm. people who register on our site they can save searches and provide us information. i e-mail them, but i would like to capture more clients. >> this is a textbook case for

e-newsletters. good, useful e-mail letters that have good information that get to the heart of what makes them decide to become a client or not become a client. they get something in the mailbox that is not a sales pitch but a service. that will turn the tide if you are able to use e-mail addresses. >> education plays into part a building credibility and building trust. they might be mulling over the ideas at that time. if you are continuely contacting them in ways they feel you are educating them and not selling them, whether through a newsletter or video or hosting cocktail parties where they can see you face-to-face and get to know who you are as a person and not feel you are trying to take something from them or get something from them. when they are ready to make that decision, you are going to be the first person they contact. >> it's good. it's a lot of work. you can't just send them stuff

about your business. you have to get them interested. >> you have to make it their idea to come to you instead of feeling you are forcing what you need on to them. >> moving on. this is from lauren. how do i know if i have a good accountant? good question. if you are not a numbers person, how do you know? >> if you are not a numbers person, it's crucial to get an accounta accountant. make sure he is small business specific. they understand what small business owners aobstacles are, what they can write off, giving guidance in their transactions and give them an understanding of what the next year or three years should look like. then you know you are working with a good accountant. ask for referrals. the most important thing is they have to understand how to grow a business. >> you are looking for two types

of expertise. you are right. one is small business tax planning. not just general tax planning, small business. two, they have to be connected. a good small business accountant should refer you. three, this is overlooked a lot, personal tax planing. they have to do a good job of managing personal taxes and business taxes. >> i love the idea of connected. i know we ask our accountant for referrals all the time. >> too many people get just a numbers cruncher. it's good but only the beginning. cpa is just the start. how do i come up with a formula to price my courier business given gas, vehicle maintenance and insurance cost. that's the first part. >> he's off to a good start. figure your expenses. then see what your competitors

are charging. chances are, they are not too far from the ballpark of where you are charging. if you under cut them you are not going to make it. that's another piece of research you need to do. what are other competitors doing in terms of pricing. >> understand the brand equity you want. do you want to be the higher cashe? it goes back to your service and what it looks like. some people want to be higher priced to send the message they are the best and highest cashe in the industry. people want to pay for that because there's a psychological thing, they are the highest so they must be the best. >> we talked to hot air balloon companies talking about how do you price yourself against your competitors. >> the price, the value and the

quality of the service have to match. >> exactly. >> if that's not in line, it won't work. >> thank you for this advice. it was helpful. if you have a question for our experts go to our website, the address is openforum.com/yourbusiness. click the ask the show link. it's openforum.com/yourbusiness or e-mail your questions and comments. yourbusiness@msnbc.com. jen and alfred had helpful advise about how to improve your business. let's get great ideas from small business owners just like you. >> the first business plan you wright is not necessarily the business you will end up in. it's very important given the economy right now to be flexible and to look for opportunities outside of your core concept.

my business today is not what it was 12 years ago. it is growing in part to my staying open to opportunities that the economy has presented. >> find like-minded people that are in business. some could be start up like me and some could be people that have been in business for years. learn from their mistakes. learn from their successes. be around as many people as you can that run businesses successfully. >> learn your product. know your product. believe in it. believe in yourself. just go with your natural instinct. if your goal is to help people, if your goal is to make streams of income, whatever the reason you come into the business, you stick with it. are you starting to lose track of your business listings posted on the web? if so, check out our website of

the week. yext.com puts businesses on their sight. using the power listings you can correct your businesses profile and get tracking reports. packages range from $13 to $34 a month. to learn more about today's show, click on our website. openforum.com/yourbusiness. you'll find today's segments plus information to help your business grow. become a fan of the show on facebook. we love your feed back. follow us on twitter. next week, what did one entrepreneur do when he thought his business was on the verge of closing his doors? he asked his employees to make a sacrifice. >> i would pay everyone else, not myself. i did that as long as i could. then it reached a point we

needed more support. >> we'll tell you why some workers agree to work for free. until then, i'm j.j. ramberg. remember, we make "your business" our business. 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 things you're already buying. call 1-800-now-open to find out how the gold card can serve your business.