small business owners confused and frustrated over health care choices under obama care. and how do you know when it's time to get rid of outdated inventory and restock? small business solutions to help turn profit coming up next on "your business."

hi there, everyone. i'm j.j. ramberg, and welcome to "your business." the show dedicate d to giving yu tips and advice to help your small business grow. let's say you've got a product on your shell of, an item on your menu or a service you offer and it's just not selling the way you want it to. do you leave it alone and hope for the best? do you promote it? or do you just abandon it? deciding what to sell and how long to sell it can be exciting, frustrating, and disappointing. but it is something you must do to keep your customers coming. ♪ art is everywhere >> things change and things get old and things -- new things

come out, and you have to be willing to give things a chance. >> what stays and what goes? >> you have to be willing to look at things with an honest eye and say, even though i love this, it's not working. >> those are two of the toughest questions that patti and richard face in their business every day. >> kind of like a hardware store for artists because you have to carry a lot of products all the time. >> we want a broad spectrum in our store, that's why we have so many items here. >> the owners of san clemente art supply and custom framing in san clemente, california, have about 49,000 products for sale at the store and on their website. >> and everybody needs something different. so you have to have a mix of paints, brushes, and papers. those are your basic things, and canvas. >> and the challenge is it to figure out what to stock and what not to stock on their shell he was. >> we kind of do that all the time. it's kind of a rolling thing.

>> it's an issue of dollars and space. >> we can't sell everything out of here all the time. we're not a huge store, so if we bring something big in, something else generally has to move and get squished or go. >> deciding to send a product on its way isn't easy. but the need to keep inventory in check has helped guide decisions. >> people walk in and if you don't have that, they're going to go some place else to get it. so we have to have it. >> before determining what goes, something has to be ready to take its place. no space is ever allowed to go to waste. >> the dividing line for me has been do i want to bring in something new? and if i can move something out that's not doing well, then we'll have space and we'll have dollars to do that. >> it usually happens when the herdells and the store manager attend a trade show. >> there's a couple of different shows where we're offered the best discount, and that's the best time for us to buy it.

>> or even when they get requests from customers. >> we listen to our customers and they tell us what they want us to carry. >> once a new product is in the pipeline, it becomes a matter of sales and real estate. bringing things in is usually a lot easier. once something is not selling anymore it's like a breakup. you don't want to look at it and there's a lot of denial. after a while, it has to go. >> richard's first step is to look at the numbers in the point of sales system. >> we have a report that we can run that's called top sellers. if i ran that report it would show me what is selling and what's not selling. and that would determine what stays. >> patti and lisa to things a bit differently. they have a test of their own. >> if there's a thick coat of dust, it's really not moving. >> when it's down at the bottom shelf and it's all the way to the left or all the way to the right, it's on its way out. >> but poor sales do not.

>> that's a decision how quickly we want to move it out. >> people are saying good-bye to some not so bestsellers. they may get a second chance. >> placement is really important. if i'm looking at something, the first thing i would do is move it and put it stage center and see what happens. you think that people see everything in your store but they really don't. most only see what's at eye level and everything above or below is lost. >> if sales don't budge, that's when it's time to send a product on its way. >> we can't necessarily sell it really quickly but we can definitely clear it off the shelf and put it some place visible in order to had help its exit. we mark things down in a gradual way. we'll mark it down a little bit and then a little bit more and then a little bit more and we try not to go below our cost. if we can recoup our cost, we're happy. >> lisa says deciding to get rid of something like a line of paint or brushes isn't as easy as you might think. >> we've had some horrible breakups but it's necessary. it should be just based on

money, but you can't keep emotion out of if. >> but she admits despite any personal connection to the products, sometimes they just need to go. >> a retail store is about real estate and every part of it has to be producing for you. you can't just have something sitting there because you love it but no one else is buying it. >> while making sure the art supply store offerings are fresh, it's happened that an older product has been given the ax only to get a new lease on life. >> we let it dwindle down next to nothing and we realize we shouldn't have done that and we brought it back and repopulated the it display. >> with so many product going in and out the door, pat they and richard have stayed flexible. they're always willing to find what their customers need. >> you can find most of what you're looking for. and if we don't have it, that's the other part of business. we're going to help you find it. >> if other entrepreneurs find themselves in patti's position, she says you should be asking yourself a few questions.

>> is it popular? are people wanting this item or is it just you loving this item? patti says be honest with your answers and your bottom line. if you think you need to make a change, don't wait. just do it. >> if you have made the decision to do it, you should go on and do it and get that space cleared away whether it's on a menu, on a shelf, go on and do it and then you have the dollars and the space to do something more interesting, more worth your time and effort. and if you have any regrets, you can always bring it back. >> unsold inventory is something no retailer wants to see. so how do you avoid it and what else can you do when confronted with merchandise that's outlived its profitability? we have a great panel to answer these questions today. angela is co-founder of savor the success. she also owns a spa which develops and sells products. and heather thomson is the creator of the shape wear

lineupy by heather. you'll recognize her as one of the real housewives of new york city. great to see you. >> so good to be here. >> do you think -- you guys both deal with products and a lot of products -- is figuring out what stays and goes an art or a science? >> it's a science. it's the most important part of your business. inventory kills. it's the number one reason of going out of business because they have too much cash on the shelves. and i really love the artist in these people, the artist in me. i have a soft spot for that, but they have to get tougher with what they have on the shelves and they have to understand who they want to be. do they want to be the everything store where things are collecting dust, or do they want to be the store that has the newest and the best. i have a specific position, two positions in my company that are called planners. and all they do through the reports, the pls system that he spoke of, they look at what's working and what's not working. and with a system like that, you

can actually plan objecsolescen and replace something that is starting to down trend with something new and more exciting and you're never having to wait and save so that you can bring this in with your dollars. it's really managing your money. >> if something is not doing well, do you give it a chance? do you move it up higher on your shelves or say it's not selling, let's get it out 0 of here? >> like heather was saying, inventory is a cash flow killer, if you have inventory just sitting around. what i would love for those store owners to do is invest more training in their salespeople because one thing she said that is really important to hone in on is if we don't have what they want, the customers will leave. not if the sales person is passionate about something and educates the clients on we don't have this but we have this. investment and training in salespeople is key. >> education about the products they do offer. if they say they don't know that we offer it, i think they have

to do a better job telling the consumer what they have. and don't sell customer service short. sometimes you just can't be all things to all people. if you do have to send them down the road, send them down the road in a way that wants them coming back. >> is it just about the numbers, or do you have some things that maybe very few people buy but you know those people tell a lot of people about your spa, for instance? >> yeah, absolutely. i mean, we have products that are really high profit margin centers for us and at that are not. the same with customers. and influencers and so i think it's really important to be able to invest in, you know, customer service as well as employees, really sharing the love of what's in the store. >> and the basics that they mentioned in their store are so important so that's the bread and butter of the business, the brushes, the paints, the papers. everything else i could consider fashion. so you have to bring in the new and you have to phase out the old. it's important for them to really understand what the bread and butter of their business is, the basics always keeping them in stock, never running out is most important and then those

kind of lost leaders, if you will, the attractive, fun things. you have them -- you make sure that they have a planned shelf life. and then if it proves itself, the product, then it gets a basic spot. >> all right. well, perfect panel to answer this since you deal with this every day. thank you. >> small business owners grappling with health care costs. the obama administration announced that a part of the affordable care act aimed at helping owners provide insurance to their employees will be delayed until 2015. under the small business health option program or shop, owners were supposed to be able to choose one plan for all employees or let the staff choose between a number of pl s plans. the part allowing the employees to choose is what is being delayed. here to help us sort through this latest health care conundrum is paula wilson. she heads up her own insurance agency specializing in employee and small business benefits. great to see you, paula. >> good morning. >> so what's interesting about

this, we're talking about for businesses that have less than 50 employees. there still will be a place to go and get insurance for your employees, but the idea of having to choose one plan versus letting your employees choose your plan really changes things, doesn't it? >> well, are i'm a california agent. and in california we've had multiple choice for years. most of my small businesses have their employees choose between up to 20 plans. and we do have private exchanges in california that offer multiple plans and many levels of benefits. so it's not really anything new here. and the california shop exchange will open on january 2014. >> there are a number of states that have actually taken this on themselves. and for them employees will be able to go in and choose their own plans. since you work with so many people where employees choose their own plans, do you think in the states that don't offer this, this will slow down the number of people actually taking

advantage of this? >> i'm not so sure because the federal exchanges will open in the states that haven't gone on the ball yet and in california and other states we do have choice for small employers in most states. most already offer their small businesses many options. it's just not widely known. i don't know why. i don't think it will slow it down at all. i think the learning process is so large that giving everyone another year to get into the groove isn't a bad thing nationwide. >> so you both provide insurance for your employees right now. are you worried about what's going to happen, or do you think you'll keep things at status quo? >> well, definitely not status quo. we have to look at the options out there and we're betting all of the options we have to make strong decisions -- i mean, it's a big cost of doing business, health care. i believe in providing it. i'm looking for the best talent out there, so i have to be attractive to that talent.

things ebb and flow. we all have to pull together. the more people covered, hopefully will, you know, balance it out down the road. >> right. and what about you, angela? how much are you looking at how you might change things with your employees? >> i think the confusing thing for most entrepreneurs is how is this really going to affect my small business since we have fewer than 50 employees, and so i think a lot is awareness and figuring out it's a complex issue and how is this going to affect my business and my employees. >> and the idea whether premiums will go up or down, no one knows the answer. one thing people are worried about is the insurance can companies -- there's a new tax on insurance companies for some of these plans and some small businesses are wore 0 yid that's going to get passed down to them. is that your worry? >> i'm not worried about it at all. i'm sure of it. there will be many new taxes not to mention a whole list of essential benefits that will need to be provided under the new plans. prices will go up. and with the rate compression,

the younger people are going to see the greatest rate increases. however to the point of the small business, they are probably going to -- when you have multiple choice, pick a defined amount. they will allow each employee to use and purchase whatever they want. they can hold their cost where they want to. >> one last thing which is a rebate. so under the affordable care act, insurance companies, if they didn't spend 80% of the premiums on medical care, they have to send that money back to people. should a lot of small businesses be expecting a rebate this year? >> not this year because they've adjusted their rates accordingly after having to go through it last year. i have to say the average employee received about $2.18 back in my groups. and we did see rebates the first year. but the insurers are getting better at it. >> got it. >> i'm not expecting too big a deal this year. >> thank you so much, paula. i appreciate you coming on and trying to sort this out for us.

>> thanks so much. >> health care is one ben pit that really helps you attract and keep top talent. it comes at a steep price. here now are five incentives that cost your company very little or next to nothing but reap huge awards in employee satisfaction and loyalty courtesy of pentrepreneur.com. one, negotiate local discounts. nearby hotels, restaurants, and attractions may offer corporate customer programs. two, organize delivery service. have a local dry cleaners provide free pickup and delivery of your employees' clothes. many businesses are willing to provide this service to capture and keep new customers. three, consider an interest-free computer loan program making it easier for employ yaes to purchase computers for their personal use increases the technical productivity of employees on the job. four, offer free lunch time seminars. financial planners, health care

workers, and other professionals will often offer their speaking services at no charge. education is beneficial for both your employees and your business. and, five, provide supplemental insurance plans that are administered through payroll that are paid for by the employee. these plans are offered at a lower rate to employers so everybody benefits. we have lots more information and advice on helping your business become profitable. coming up, angela and heather talk about how women can break into male-dominated businesses and how certificaservice based business owners can hook up with large organizations. and welcome to the jungle. today's elevator pitcher appeals to our panelists with his wildlife themed clothing. ♪ i' 'm a hard, hard ♪ worker every day. ♪

i' ♪ i'm a hard, hard worker and i'm working every day. ♪ ♪ i'm a hard, hard worker and i'm saving all my pay. ♪ ♪ if i ever get some money put away, ♪ ♪ i'm going to take it all out and celebrate. ♪ ♪ i'm a hard, hard worker... ♪ membership rallied millions of us on small business saturday to make shopping small, huge. this is what membership is. this is what membership does. today's elevator pitch will combine his passion for drawing with his love of nature to come up with a brand of clothing. let's see what our panel thinks of his business. >> hi, my name is rick waters. i'm the owner of omunky, a wildlife clothing company. this t-shirt brand started out as a hobby of mine, has grown

into a popular outlet of my quirky personality. as you can see a monkey features unique designs featured on super soft, 100% cotton t-shirts. i feature fun and fresh designs for the masses. running a solo operation is a bit overwhelming. i handle everything from design to order fulfillment. the only thing i don't do is the printing of the shirts. i leave that to professionals. it leaves me like i don't have enough time in the day. at this point i'm looking for $250,000 to $500,000 and i would use this primarily to hire employees, particularly looking for people in marketing and web design. i would also like to do more street fairs, something i do to supplement my selling online at omunky.com. this would allow me to expand my inventory and online presence. for $250,000 to $500,000 i would be willing to give up 15% to 20% of my company. >> all right, rick. well, i know three little monkeys at home who would like

this very t-shirt. thank you for your pitch. good job. okay, let's start with you, angela. did he get everything in that pitch? >> i think you did great. one thing i would love to see is from the get-go, state your status and how successful you are. i know you are successful already. and i know you're very passionate about it. speaking from that place would be amaze. >> what did he get in his pitch or what did he miss? >> he got across what he is doing. i don't think he got across enough what he wants. you have to look at the valuation of your business and how do you arrive at 15% on of what? 20% of what? what's the worth of your company? what are you retailing the t-shirt force and how much does it cost to you make them? all those are very for tidbits of information for an investor to really look at your business. i would focus on business plan. i think you got the passion and art down. >> thank you so much for coming on the program. we appreciate it. your shirts are fantastic. thank you, guys, for this advice. appreciate it. >> thank you. they are great. >> and if any of out there have

a product or service and you want pete back from our elevator pitch panel on your chances of getting interested investors, send us an e-mail. include a summary of what what your company does, how much you intend to raise and what you plan to do with that money. we look poured to reading through your ideas and seeing you on the show. time now to answer some of your business questions. an jael and heather are with us once again. the first one is about an all-too common struggle for some female entrepreneurs. >> how can female business owners break into markets specifically dominated by men? construction and technology. >> you know what? i misspoke. when i said all too common problem i wanted to say all too common question. i don't know if it is a problem. i will let you speak first. how can they break in? >> stop thinking about it that way, number one. you know. i mean, educate yourself in what

you are passionate about and go get it. whatever your gender, whatever your anything, it does not matter. go be you and do what you are passionate about and learn it and do it well and you are going to succeed. >> there are a lot of women in those male-dominated fields really there to -- want to help. women are stronger together than apart. that's what i always say. also, you know, there's some founder of this household name brand company that called me. he was a ceo. lijing for a lot more read mers the technology field. i would like on bring them onboard. men want to bring in a welcome that -- different dimension in business that women bring to the table. >> interesting. we did two stories. one a woman who fixed race car motors. male dominated industry. another one who trained bulls. you know. male dominated. neither of them talked about being a woman in a male dominated industry. >> both said i'm just doing my job. >> most dynamic board is full of both x and y chromosome.

>> moving to the next question. this is an e-mail from keith and the question is -- how do you pursue service contracts with large organizations? what methods seem to work best? i'm going start with you. you started your company with the success and then got in with a big company to sponsor you. it took some years. how did you get in? >> power of people. i believe in human relationships and human contact and so, yes, we got a -- a mice contract with a big organization. and it was really because i had developed meaningful relationships with key people. not just one relationship because there is a lot of turnover in these big corporations. but five or six. and then once they leave the company they are all friends and tell me different things i can do. really the power of people. >> how do you meet those people? >> well, i think it is the power of your pitch. you have to be passionate about what you are doing and you have to know your business. and -- i get pitched all the time. the first sentence, you know in an e-mail, if it does not float my boat i'm moving on.

what value are you bringing me? if you are trying to bring a value to my organization, if you are trying to save me money, make me money, you better let me know that right away. so it is the power of the pitch. and you have to be consistent in your followup each time thinking about how the other person on the receiving end is feeling about your pitch. >> i love what you said about sort of what can i do for you versus what can you do for me. >> exactly. >> absolutely. >> if you are selling something you better know that. >> thank you so much for all that advice. very helpful. really appreciate it. you work with service providers that charge by the hour and then find you are in the dark on what the final bill will look like. then check out our website of the week. aiming to make the billing process transparent for all parties involved. this site provides clients with a real-time dashboard of everything you are being billed for. you can also request real-time clarification regarding activities and receive alerts or e-mails when certain treasury holds are reached. service is free for you to use

but your provider has to agree to sign on to use view bill services. in our shopping small segment we try to give you unique ideas for selling your products and growing your customer base. today's guests has a social network that does exactly that. john is the founder and ceo of open sky which has some new opportunities for small business owners. it is great to sooe. >> did you great to see you. thanks for having me. >> i have been following open sky. maybe some of our audience does not know what it does. what you are doing for small business is so neat which is why we invited you on. tell us about your social network and how it works. >> open sky is an amazing way to shop where you can join open sky with your friends and to discover artisanal goods made by america's best small businesses. it is -- it is a main street online for discovering great products. >> so -- a store. on the store and based in nebraska. i have all of these neat things. i already have an online presence. maybe i'm off-line and maybe not. why would i come on? >> what we built really is in

marketplace for -- america's best small businesses and to open store pronts in our community and get followers inside of open stores. like they have followers on twitter or facebook. those followers share their -- products they love with their friends and just like they retweet or repin something on pinterest. anna merchant on open sky can sell lots of products and build a community around their business. it is a way to grow business online and by opening a store inside of open sky. >> i am a store in nebraska and i have jewelry there. huge. you come on and buy my jewelry. then all of your friends see. >> the way it works is you join -- merchant joins open sky, opposite a store front. builds a community around their brand. people who they know who love their products. those folks see their goods and they love and it share it with their friends. they tell two people who tell two people. associate am amplification. >> it is like facebook.

what's so meet about-face book people are plot going there specifically to shop. her going there for all kinds of things. open sky is all about shopping. i may follow my friends frend who i think has impeccable test. when i see she buys something i buy two. >> did you discover goods based on what your friends are loving and sharing on the platform. think about in our time star of lives, we don't actually get to go shopping with friends and discovering extraordinary products or shopping on main stre street. if your friend is in is an plan and you are in new york, it shows up in your open sky feed. >> you have some people who have tons of followers. >> yes. >> so if one of those people buys my jewelry, then it is going to -- it is going to amplify how many people learn about it. >> someone like molly sims has a million people following her on open sky. if a small business makes beautiful jewelry and molly sims loves it, a million of her connections on open sky will see it in their feed. or -- alicia silverstone, who

is -- a vegan, or someone like bobby flay in food. when he discovers a great artisanal product and shares it with his connections, that business gets an express train to growth. that's what it is about, helping small businesses. help them get discovered by america's consumeers. >> does this cost anything? >> it is free for the small businesses to join. what -- our whole mission is to empower small businesses to grow. what we saw is that if you are a small business, you build a store online and what you then -- no one comes to it. no one knows it is there. or you -- put your goods in amazon and you pray somebody searches for your products. or you are on facebook and get followers but will is no buy button on facebook. you can't sell anything there. >> great to see you. thanks so much for explaining this to us. >> thank you. thanks so much for spending the last half hour with us. to learn more about today's show, just head over to our website.

openforum.com/yourbusiness. puck follow us on twitter. please don't forget to become a pan of the show a facebook. next week, some small business owners are up in arms over the impact of negative customer reviews on yelp. >> having a reputation trashed after 25 years of work, it is -- it is an awful thing. >> we talked to owners who have had success on the review site. and those who peel like they have been treated unfairl lyunf. we make your business our business. ♪ i' 'm a hard, hard ♪ worker every day. ♪ i' ♪ i'm a hard, hard worker and i'm working every day. ♪ ♪ i'm a hard, hard worker and i'm saving all my pay. ♪ ♪ if i ever get some money put away, ♪

♪ i'm going to take it all out and celebrate. ♪ ♪ i'm a hard, hard worker... ♪ membership rallied millions of us on small business saturday to make shopping small, huge. this is what membership is. this is what membership does. after a week of stories on the electronic information u.s. spy agencies collect fueled bay steady drip of anonymous leaks and now the flood gates are open. the latest comes from the new york times. late last night. a report that detailed and national security agencies capacity to collect and store e-mail, another electric ronnic information on a wholesale basis. using new computing methods that turned the nsa puts it into the virtual landlord of the digital assets of americansnd