small business owners say lower our taxes. we'll have that and a lot more coming up next on "your business."

>> hi there, everyone. i'm j.j. ramberg and welcome to "your business" where we give you tips and advice to help your business grow. what do big commercial names have in common? the answer is they are all commercial co-operates. today we take a look at how independent businesses are working together to survive the tough economy. >> carpet stores were closing up like flies around here, and i thought, it's not going to be us. >> an independent carpet store

owner in michigan is a realist when it comes to business. >> we were in desperate shape. but we just hung on and worked hard, cut back on help. >> the big boxes were coming in, the home depots and lowe's were coming in, and they were putting the locals out of business. >> the founder and ceo is a fighter. his organization helps the small ones. >> the local, independent business person has the brains, and they have the talent but they don't have a scale. >> individually none of the small businesses have much buying power, but together as members of the retail cooperative, they can compete with anybody. >> you have to level the playing field. we have the same rules and scale as the big boxes. >> the membership is made up of

more than 1,100 flooring retailers. >> when we buy something, we are buying it at x amount. i have no idea what the guy down the street is buying it at, so how can one independent retailer buy like we do? >> we buy multimillion dollars worth of flooring. >> you realize the cooperative is a very, very large business. >> we're actually bigger than starbucks. we're bigger than bed, bath and beyond. >> membership in the carpet line cooperative gives them the extra leverage necessary to operate

their own store. >> you buy your merchandise with all the other dealers, so carpet one has all the clout. >> it's kind of like bulk food. the larger the purchasing power, we have better prices. >> the granddaughter is one of three siblings that run the day-to-day operations. >> this is two yellows. >> i have it at $2.28 a square foot, because i bought it arizona at an amazing price and can turn it over to the consumer. >> if we were not numbers, i would not have a rebate heck to make people happy with two times

a year. >> hey, i got the rebate check. i think you will be very, very happy. it's about double what we got six months ago. i know. >> this coming summer we'll reach $1 billion of rebate amounts, which is an amazing number. in a typical year, we pay out somewhere around 35, $40 million. these carpet one members have managed to survive the recession much better than nonmembers. we had a net loss of the membership within the system of only 50 people from the beginning of the recession to the end of the recession. >> there's a velvety look to it. it's tough, and the whole

landscape has changed. people have lost their homes and jobs and everything, and half of the houses are upside down, and so they are watching every penny. >> we don't want you to pay your c.o.d. until you are totally satisfied. >> they are paying for the product, and second they would be paying more for insurance, and they would be paying more for marketing and they would have less sophisticated prices. >> she takes great pride in the dedication of her three children. >> i don't know how many people can have children that work with them and love what they're doing, and have a future, and that actually makes me tear up, because for them to love this business, and it's a wonderful thing.

>> many small businesses can benefit by opting into co-opts. let's look at a consulting firm, and michael rosenbloom. he's a partner. and stella is the founder of a company that designs creative team building experiences. great to see all of you guys. adam, this is so interesting. we were having a conversation about carpet one, and you have to be called carpet one. but what if you have your own brand, and if you were being clobbered by the big guys and wanted to get purchasing power. can you join a co-operative.

the owners decide. and the model has been around since 1844, and it works in all different scales and businesses. >> you are watching at home and think it sounds like a great idea. >> well, there's coopts in every different sector. and there are also other types of co-opratives. and there are consumer co-opts, and worker co-opts where they own the business. >> what things do you have to be worried about? what questions should we be asking? >> i have a question about, you know, what about freelancers,

and service-oriented people, can they create coopts? what about, you know, independent people who are marketers and accountants and lawyers, can they rally together to get a cheaper share of a voice out there so they are not the little guys fighting the big guy? >> that's a good question. i just formed a group that is just that. it's a cooperative of consulants. we sherry sources. website and other information to make us more competitive against other folks. and there's a freelancers union, and it's a co-opt spirit in where they work together to get insurance for those folks. >> you get your products cheaper and marketing, and now you have to deal with other people running your own business.

>> absolutely. so there is a slight loss of independence that you are going to have to give up, but it's for a greater good, so you can get to the scale and the business can be sustainable. you have to measure whether it's the right fit for you. >> you work with a lot of small companies, and does it sound like something that would sit well with the company you work with or no? >> well, i can see it from both sides, and maybe the question to you, on the one hand the internet has made it easier for the small business to get a presence and build a marketing presence, and on the other hand the internet is noisy and incredibly hard to rise above that because everybody can feel the presence, and if you are seeing the internet has grabbed hold and more and more small businesses are online, is it an incentive to join a co-opt, or it's better to stay independent?

>> there are organizations and it and web co-opts where they have come together. one of the things that makes co-opts such a powerful business model, they live by the seven principles. one is concern for community and cooperatation, and they have an economic participation and member control of the business. it works in a variety of different types of businesses. there's no sector of the climate untouched by that. >> i just want to end this by saying is there one place somebody can go if they have questions about this. >> well, depending on the sector that you are interested in, and there's a lot of information available, obviously on the web, and through our organizations to you is a port the types of businesses that you might be interested in, so you have to do research. >> yes. >> this was great. thank you so much. very important for a lot of

small businesses to know, because i would say a lot of small businesses don't know about co-opts. thank you for your advice here. social networking is a great way to get the word out about your business, but is your staff onboard? here are five ways you can make your company more social courtesy of matchable.com. >> people won't tweet if they don't know how to use twitter. and two, find influencers within the company. recognize the employees and highlight their work. three, launch a fun contest. consider reporting everybody's score, and follow-up with incentives and recognition. four, engage. highlight team members' accounts. and number five, focus on fun

ways to use twitter. so your employers how to use a hash tag they can relate to. using twitter for fun will show them ways that it can be used for work. washington has been talking small business. just last week president obama proposed a series of tax breaks and other incentives including a 10% income tax credit for small businesses that hire new employees, and the capital gain for small business investments, and then there was a plan that proposed giving 20% tax cuts for companies fewer than 500 employees. so we took these proposals to the focus group of small business owners around the country and got their reaction. joining us for this week's small biz sound off is wayne. revoted for president obama.

and then rob is from free port, new york. he voted for mccain in 2008. nice to see you. >> thank you for joining us. you have interesting responses and passionate responses to these proposals. rob burke, i want to start with you on the set. >> sure. >> when you hear about these tax incentives, is your first reaction i will hire new people because i will get a tax credit? >> makes no difference to me if they give me tax incentives in the way i staff my business. >> why not? >> because i staff it on how things are going and what our needs are. if they give us an tax incentive, that means i will hire more people -- >> you are getting rewarded for something you would be doing nay how? >> yeah, sure if you want to give me money i would be happy

to take it, but i would like to know how we will pay for it. >> and this is to start with the specific proposals. rob, what is your sense on the credit for businesses who hire people? >> on this issue, i tend to agree with rob. the last time i checked you are not going to hire somebody just because there's a tax incentive. if you don't have the business lined up, you are not going to extend yourself. right now the american people have pushed their human capital to the absolute limits and they are nearly at their breaking point. if you want to grow your business hire now regardless of what incentive is in place. but the overall picture is more money in small business owners' hands is more jobs. >> that gets to what the republicans are talking about is the 20% cut for small businesses. would that help you and the small businesses you work with and how? >> absolutely. i service thousands of small businesses and fortunately i do

quite a bit of public speaking and a lot of feedback i get is if there was more money in our hands we would be expanding our businesses and marketing more and putting more people on our staff to be able to grow and do things that we were not capable of before. if i use myself as an example. i bought a building in a new york state empire zone and got incentives to grow my employment base and keep the community growing at a local platform, not only have we exceeded the expectations, that money has done so much for the community and the local environment that these programs work but only work when it gets back to the job creators in america, and not the federal government. >> when you hear a plan that says i will cut your taxes, what is your reaction? >> i don't know that cutting my taxes is the way i will run my business to be honest with you. i don't know i will vest in capital equipment anymore quickly than i do now. i run a profitable business.

can it be busier? sure. i am happy to take a donation, and want to know how it's going to be paid for. and i feel like this is not focused on the big picture. >> rob? >> well, j.j., do you mind if i disagree with rob with the way i would handle that situation. rob, you mentioned that, you know, you wouldn't increase investment in your organization if your taxes were lowered and you had more a cash. i think a lot of business owners think opposite, a lot of people that i communicate with, if they had more money in their pockets, they would be expanding their businesses, just polar opposite of what you just said. >> a quick response is the devil is in the details. i think it's the nature of the small business and how successful or unsuccessful if it

and what the growth opportunities are and what challenges are they facing. >> do you think these things are too big? they are giving money to everyone in some of these cases when they need to cherry pick a little more? >> there's an element of one size fits all and it doesn't. that makes sense. >> and often times they talk about companies that are smaller than 500 people. does that ring true? is that something that is going to help a 500-person company is not going to help a 10,000-person company necessarily? >> well, if you look at the local landscape in and around any major urban area, you will find it's 6 to 10. a 6 to 10 person employer shop doesn't have the same needs as a

400-person machine shop. it's not a one-size-fits-all situation. and the administration needs to look and segment on the employment situation a lot more than they are doing now. the spa does a great job, but they are in the con fines of the administration currently in power. >> both of you, thank you guys so much for joining this small business soundoff. we will check with you with other issues that come up. appreciate it. earlier this week, we asked the viewers what type of tax breaks would help their company. here are a few of the responses. christine said no employment tax at all. and regional wants the u.s. postal service as primary shippers. let us know what you think on

twitter. when we come back, how much of your company do you give to am. potential partner? how do you create a brand to helpyms+m buying into being healthier? and just in time forzv valentins day, our panel her lingerie line. 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.

valentine's day is just days away. our elevator picture hopes that's got the panel in the mood for her pitch. >> hello. my name is precious williams. i'm a full-figured diva, size 22. guess what, there are over 40 million women 14 and a large just like me and we want pretty why you underwear. it is too bad most mainstream len injury accompanies don't create companies for women my size. that's where my company companies in. curvy girls celebrates the beautive a curvy woman. our designs are stylish and fresh. and our first month of operation we sold over $10,000 worth of merchandise and won major plan competition. $500,000 for the following things, purchase additional

inventory, our own brand house of lingerie, online marketing campaign and completely revamp our website. we will give 25% stake in my company in exchange. thank you. >> precious, that was one of the best pitches i have seen on this show. >> thank you. >> nicely done. >> thank you. >> that's my opinion. which actually doesn't count. you hear a lot of pitches. did she get everything in there? >> yeah. i thought it was impressive. you are capitalizing on an opportunity probably underserved right now. there's would things you said that i would just want to think a little bit about. pitch for $500,000 sounds like a lot. that would be valuing the company at $1.5 million. is the business worth $1.5 million today? are you asking -- giving away too little? or is the company asking too much in capital? the other thing that made me a little bit nervous in the pitch was it felt like you are a vp manufacturing, vp of sales, vp of marketing.

you sort of don't want to boil the ocean. pick, you know, perhaps it is the design you want to win at. and maybe you can find partner help with the other stuff or just find other stores to carry it and don't spend as much time on the web. but pick sort of what part you are going to be sort of -- going to really own. if -- be good at. >> great advice. >> i love the story that you -- that you created from yourself. it is about you, representing 40 million other women. you set out for market size which is fantastic. what i want to hear is how you are going to set yourself apart from your competitors. what's going to happen when victoria's secret hears about serving curvy women. how will you continue and maintain your brand and stand apart from them? >> would you, based on this pitch, knowing what you know, take another meeting. >> absolutely. >> same here. >> all right. >> congratulations. nice job, precious. >> thank you very much thank you for your help with this. if any of you out there have a

product or a service and want feedback from our elevator pitch panel on your chances of getting interested investors, just send us an e-mail. address is -- include a short summary of what your company does and how much money you are trying to raise and what you attempt to do with the money. you never know, someone watching the show maybe interested in helping you. time now to answer some of your business questions. stella and mica are with us once again. the first one comes from david and he writes -- i have a great product and i had some partners in the beginning that didn't work out. i'm the soul owner now and i am terrified to get more partners. and i'm growing fast and approached by several people interested in a partnership. if i take on partners what do i ask in return important my shares of the company? great question. what do you think? >> why. so -- you know, i'm faced with this a lot with our businesses. it is hard to take in a partner. the analogy we say is date before you get married. to the extent that you can, start working with somebody and

get a little feel for how it is going to be. you can pay them on a consulting basis or say look, i'm not prepared to commit to your involvement in this business so let's just start working formally and see where it goes. i think that's always better than rushing to form a pich really early. that oftentimes doesn't end well p. >> right. >> what do you think? >> i think the very fact the question is being asked means that the role that this partner will play isn't defined. the strengths that they are going to balance out in the team isn't clear. if you are going to take someone on make sure they are genius at something you are not and really contributing. and also your equity is the most valuable thing you have in a small business. so often small businesses are handing it out for things like a website or a logo and -- just that's -- hold on to that for as long as you can. and until you really need a partner. >> it seems to me also that a lot of people forget to have these really big talks. emotional talks. logistical talks. emotional talks about how are we going to work together? what do we do if this does not

work out. at this point, at this point. how will it look going forward? >> yeah. what happens if you have a baby? what happens if i celebrate different holidays. little things like that matter. >> this one is from paul. he says health conscious customers come to my business because of my name and concept. if we go after the general population how do we create a new message to get everyone? you are wondering what the company is. >> well, i mean the general population, one out of three people is obese. i'm not sure how that is like a different message necessarily. what i would really consider -- there's -- they manage the market research and chains like energy kitchen all along the east coast which have been doing a great job selling good food under 500 calories. their logo -- motto is -- fast food does not equal fat food. and so they really leverage the energy message which if you want to be a little bit more progressive and not target

weight loss which happens to be a $60 billion industry, which is not a bad thing, you can go for like energy if you want to talk about -- something that appeals to everyone. >> right. >> i just wonder why -- why the -- this company feels the need to go mass market. i think one of the things people forget is strategy is about as much you are not going do what you will do. it may be tempting to get into the mass consumer market. they may be able to carve out great niche of the third on you know, whatever percentage of americans actually are very healthy -- health conscious. avoid the rest of the country. actually focus and become very good and very well known within the demographic you are trying to hit. >> exactly. if the food is good, target that demographic. the word will get out. >> that's right. >> great. thank you so much for this advice. very helpful. and if any of you out there have a question for our experts go to the website. openforum.com/yourbusiness. hit the ask the show your link

and submit a question for the panel. or if you would rather you can e-mail us your questions and send us your comments to the address is yourbusinessmsnbc.com. do you wish had you panel of experts available to bounce ideas off of? and answer all of your questions? then check out our website of the week. it is a free website that connects you with people who are available for in person, phone, video chat office hours. you can choose who to consult with based on specialties and availability. product design, programming, marketing, start-ups are some of the topics listed. it is also free to host your own open hours. to learn more about today's show just click on our website. it is openforum.com/yourbusiness. you will find all of today's segments plus web exclusive content with more information to help your business grow. and don't forget to become a fan of the show on facebook. we love getting your feedback. you can follow us on twitter.

it is @msnbc. an arizona entrepreneur had an epiphany. >> i said okay, you know, with this kind of overhead, we need to close the store and get mobile. >> taking your store directly to the customer instead of making your customer come to you. we make your business our business.