he came up with a high-tech solution to an old school problem. checking your coat in the digital age. plus, some spicy business advice from the ceo of chipotle. >> it's a brownie. >> time for a brand new year of entrepreneurial wisdom coming up next on "your business."

>> announcer: small businesses are revitalizing the economy and american express open is here to help. that's why we're proud to present "your business" on msnbc. ♪ hi there, everyone, happy new year. it's great to see you this week. i'm jj ramberg, and welcome to "your business." there are a lot of entrepreneurs out there who are using technology to shake up old school businesses. just think of ubar, a company now worth billions, which simply makes it so we can reserve a taxi. uber took an existing industry, made it more efficient, and customers went wild for it. today we meet a student of entrepreneurship who saw the same opportunity with the old coat check business, and he's

changing a system that hadn't yet caught up with the times. derek had just about had it. >> i don't want anyone to get a ticket. >> a college student at a college bar, he had lost his coat in a place he thought was safe. >> i hid my coat somewhere. it got taken. i was like, you know what's annoying, these nightclubs, they don't offer a coat check. >> but he wasn't just any college student. he was a senior majoring in entrepreneurship at indiana university, and he didn't just lose his coat, he found an opportunity. >> i went to the bar owners, asked them how they provided coat check, they said some tried, some hadn't. i said, well, do you mind if i come in and get racks and set it up and see if i can do this? yeah, you know, do it. >> he borrowed $500 from his

parents, bought some cheap racks and hangers, and launched coat checks. his first client was a sports bar, the same place his jacket mysteriously disappeared. >> derek handled everything. he set it up, tore it down, checked the coats, had the insurance. it was really hands-off approach for us. we didn't have to do anything. >> kilroy's saw the benefit, not only was it better for the customers, who no longer had to worry about their coat walking off, it was better for the bar, which was now able to serve drinks at tables that used to be piled high with coats. they quickly made the coat check mandatory and with easily 1,000 jackets checked in on busy nights, derek's business took off. >> in burlington in the peak season we made about $50,000. >> derek had an old school model and he and his partner thought if it were to be really

successful, coat checks needed a 21st century makeover. >> he was making a lot of money. i made $50,000 in the last four months. let's sit down. let's map this out. so, yeah, he was doing really well. you have to find a way to replicate his process. in order to do that is through technology. >> through his time at kilroy's, derek knew all the kings in the process, forgotten coats, lost tickets, the fact so many people have black jackets, and the crush of people at closing, all wanting their coats back at exactly the same time. >> people don't understand how stressful it is for coat checkers. we built something that makes it easier, not only allows me to track everything, but to use it. >> turns out he could, a coat check for today's customer. one that runs on a phone or tablet. takes photos of the jackets as they are checked in, and tracks each hanger with a q.r. code, and for the customer, no more

paper tickets just waiting to be lost. your phone number is your claim ticket. >> no one's ever thought about using an iphone or ipad to check in a coat or check in a valet, but the technology is there, the software is there. it's just a matter of knowing the program. >> with the app now built, derek has made the move from indiana to new york and has snagged some huge clients. this year he's testing at large venues like the theater at madison square garden and high profile events like new york fashion week, with plans to turn his business into a franchise model. >> we have a first major contract to do the fashion week event, and the customers were delighted with it, and really the light went off, like, this is where we need to put it to, these high-end events, working with brands, because not only are you providing a great service, but it's a cooler way of engaging, you know, with your customer. >> this area, engaging with the customer, that derek and jerry

see as having potential for exponential growth, not only in delivering them their coats, but in delivering information. >> people don't like receiving a text in the middle of the day to say come to our nightclub on sunday, but if you text them as they get there and as they are leaving, thanks for coming, this is what's going on down the road, those are points people are engaged with the venue or what's going on, and that's a great point to interact with them. >> and that kind of customer intimacy is something potential customer webster hall in new york city is very interested in. >> being able to take that customer data and tie them into our p.o.s. systems, see their customer history so we can better serve them, hey, last time you were here you had a vodka soda, do you want us to have one ready for you? just knowing more about people and their habits so we can reach them easier. >> we're looking to disrupt this industry, change how things are done, you know, we're looking to make things more secure, give

people peace of mind, allow people to trust these services. but until we illuminate that claim ticket, that's the goal. if you're a retailer, it's unfortunate, but, of course, you have to worry about products walking out the door unpaid for, so here we have for you five low-tech ways to prevent shoplifting courtesy of entrepreneur.com. >> one, put out the welcome map. make eye contact and greet every customer that walks into the store. two, keep your shelves neat. if your store is unorganized and messy, then it's more likely that missing inventory will go unnoticed. three, let there be light. address dark, poorly lit areas in your stores like corners or behind the shelves. four, have a secret code. have a signal for employees to

alert them of suspicious activities. and five, keep a clear line of sight. if an employee or other customer can easily see the crime happening, thieves are less likely to steal, so don't create any hidden barriers. for all of you who have vowed to get more organized this year, and i suspect that is a lot of you, listen up. our website of the week can help you out. a productivity tool that helps keep you and your team on track. you can add projects on trello and list everything that needs to get done to complete them, as well as assign tasks to people on your team. you can add as many people as you want to have access and updates are made in realtime across platforms. steve els, the founder and ceo of chipotle mexican grill

opened his first restaurant in denver, colorado. els, who considers himself a chef first and ceo second broke all the rules with chipotle and helped pioneer by using fresh, high-quality, sustainable ingredients. the chain now has more than 1,550 restaurants and serves nearly a million customers a day. he talks to us about hiring the right people, transparency, and making sure the customer gets exactly what they want. ♪ >> so, luckily, i didn't know the fast food rules. i didn't know what made for a fast food model. i certainly had eaten fast food growing up, but i didn't really understand the economics or the mechanics behind fast food. i knew what i had learned in cooking school, how to source

food and how to cook according to classic cooking techniques, and i learned how to create an environment, so those are the things that i took to chipotle, which wasn't typical for fast food. so it really elevated all the different parts of the fast food model. one of the things that customers really appreciated about chipotle from the very beginning was this interactive service model, where people get exactly what they want, not only for taste, but for diet also. and that's a theme that has proven itself out to be very, very important over the years as you see different diet fads, different diet trends. we stay focused on just a few things, so on the surface it looks like we have a very focused menu, some people say limited, i like to say focused. but it's the combinations you can make from all those ingredients that allows you to really pay particular attention to all the details that goes into making something really,

really great. part of the model of chipotle that i think has led to our success is this idea of transparency. you know, certainly, there's transparency when the customer walks in, they can look right into the kitchen. it's exciting for people, but there's another part of this transparency that i think is very important also, and that wasn't so obvious to me at the beginning, but it has to do with the sourcing, so we want to make sure we're very, very transparent about our sourcing. we want people to know exactly where we're buying our food and who's raising the food, and we don't want any mystery. the more transparency there is at chipotle, the more attracted people will be to it, and our mission is to make more sustainably raised food available to everybody. top performing people want to be around other top performing people, and they want to know

that they have a future ahead of them, and they want to know that they are going to be respected and that they are going to be part of something really, really groo great. and so we've been doing an amazing job of bringing in people who otherwise would not have thought about getting into the restaurant business or even the fast food business. so we look for certain kinds of characteristics that you can't teach. we look for people who are enthusiastic, people who are honest and smart. we can teach people the business. we can teach people how to cook. we can teach people how to run a restaurant. you can't teach people how to be hospitable, though. we encourage our managers to look for some basic characteristics that we think are going to provide for great future leaders. we have a lot more ideas about how to kick start your small business in the new year, including how to find the right person to advise on your company's marketing strategy and how to market a b to b business.

and i head out to a bakery in new jersey to check out the dog treats that has this company's four-legged customers going wild. you're comfortable here. it's where you email, shop, even bank. but are you too comfortable? these days crime can happen in a few keystrokes. american express can help protect you. with intelligent security that learns your spending patterns, and can alert you to an unusual charge instantly. so you can be a member of a more secure world. this is what membership is. this is what membership does.

if i were to look back, i would say the bankruptcy taught me how to really watch the business end of the business, because being a creative person, having all these dreams and all these ideas is all well and good, but if you don't have that business acumen, and if you don't know how to balance the creative with the business, you end up with nothing. now, here are three things you need to know this week about small business. a new gallup poll shows small business owners are split over whether the minimum wage should be raised. of those surveyed, 47% said it should be raised from the current $7.25 to $9.50. 50% disapproved. legal services company rocket lawyer surveyed 1,000 small business owners about their outlook for the new year. 80% expect 2014 to be better than 2013. 35% say they will hire more employees in the next six months. and which state is the

friendliest to small business? according to the small business and entrepreneurial council's yearly rankings, south dakota comes in first based on economic and policy environment. nevada and texas closely follow. that aha moment, the one where the light bulb goes off can happen at any time. for one couple it was on their honeymoon when they desperately missed their dog and decided they needed to start a company he could be a part of. peanut butter macaroon, just looking at these treats is enough to bust your diet, but hands off. they are not for you. that is, unless you walk on all fours. seven years ago, pet pastry chefs eric and jessica tally opened up their dream business. >> we decided to start a dog bakery, actually, on our honey moon. we wanted to go back to work for ourselves. >> neither one of us had ever run a business. >> in the very beginning, we worked out of our kitchen

apartment. it's simple, clean ingredients. >> their idea was to create all natural, organic treats for pets. within two years, devout customers were literally begging for more. >> how many people work here? >> there's six of us, eric, myself, and four employees. >> so six of you guys to make enough baked goods for how many stores? >> 950. >> wow. >> when is the last time you pulled an all nighter? >> yesterday. >> today, they are competing with the big dogs. both online and in gourmet shops. >> our gross sales will be over $2 million by the end of this year. it's exciting. >> it also helps that the snacks taste good, too. >> there's no liver? >> these are all the sweet ones, that are tasty. >> that's a brownie, so it's carub and pumpkin. >> that tastes amazing.

i do, i need a bowl of milk and i'm set. >> with new treats always in development, they are constantly asking for customer feedback, though my focus group seemed a little distracted. >> bark if you like the second one best. raise your paw if you like the first one. anyone like the brownie, guys, anyone? >> we get amazing phone calls and e-mail. i get pictures of every dogs' birthday celebration. i love our customers. >> and the feeling is mutual. once customers fall in love, the only issue is, they never want to leave. >> come on, we got to go. it's time now to answer some of your business questions. let's get our board of directors in here to help us. slava ruben is the go founder and ceo of one of the largest crowdfunding platforms in the world. and denise is with an ad agency with a special focus on social media. great to see you guys.

great to see you again in the studio, happy new year. >> you, too. >> right back at you. >> let's get started with the first question. the first is about expanding your reach overseas. >> i have an international clientele, and i'm trying to grow my business and put together a strategic way of marketing that would include s.e.o., advertising, and direct contact with my clients, but i'm not quite sure how to find the right person or company to help me succeed in this. >> you need to hire a marketing agency that has some experience internationally, right? >> you do. i really admire that you're looking towards digital, because that is the way to go international, especially for a startup. you have somewhat of a neat product with the quick-release belly ring, it's a neat thing, but don't forget branding. if you can find someone who does branding first and execute

digitally, a great way to do that is networking. just like you want to do digital branding, go to your linkedin, go to your fans. if you can find one of your fans with branding experience, digital, and likes what you're doing, you have the trifecta. >> she's talking about going international, and what you're talking about makes a lot of sense, and we do it here. how do you get that same experience overseas? do you target specific countries? how do you go forward with that? >> i think that's a really good question. in terms of the networking piece, i think it's important for her to find an individual through linkedin or other resources. i would actually look at, is there already a customer in that market that maybe wants to work with you? if they are already passionate about your product, they can do a good job in figuring out the culture and differences in that geography, but going global and one country at a time is quite challenging. it's an exciting thing. >> let's move up to the next

question about the lack of direct competition. >> we are one of the largest provider in north america and we don't have that big of competitors in the market right now, so we are wondering how can we stay motivated and grow the business and focused. >> love that question. because when you have competitors, you're worried people are nipping at your heels. if you don't, you can get a little lazy, then suddenly somebody sneaks up on you and, you know, you know what happens then, you're petrified. how do you get that fear when it doesn't exist? >> i think competition is a great thing. it means there is a market and other people are going after it. if there is a situation where you feel like there is not a compete, set milestones that compete against yourself. what is your north star? what are you trying to accomplish, your dream scenario? you're not there yet. set steps one step at a time, like a ladder. that way you feel like you have to compete against yourself against a deadline to hit each one of those steps on the ladder. >> that's a good idea.

you make up a good competitor. company x just entered our market, would we be doing anything differently or not? >> i think there is a mistake when you say there is no competitor. there is always a competitor. if i make potato chips, i may not think apple is a competitor, but there is a snack out there. there is a much wider field looking at what this business does. particularly, they're doing company perks and that's something that if your company isn't using them, your company is using something else. by default you're using a competitive product, may not be the same space. anyone not using you, think of them as your competer. >> i think part of what he's talking about is this outside pressure to keep his employees motivated. and there are other ways to keep your employees motivated and excited about pushing out products and working harder. to what you're saying, make internal milestones. >> absolutely. >> it would be anything from, hey, we need to deliver this brand-new product feature by deadline. why shouldn't we grow 30% next quarter and don't grow that 30

and be upset. you can think of other ways of incentivizing toward hitting goals. >> i think deadlines are good for this, for motivating people, always. finally this question about getting the word out about your startup. >> i am a very new business. i just opened six weeks ago. and i am trying to find the best way to launch marketing campaign to run my business and let people know i'm in their neighborhood, that i have my doors open. >> okay. she's a coffee place. she's your client for a second. what would you do? >> i would say immediate is the focus, immediate attention in your immediate area. hyperlocal is the way to go. think about ways to do that. groupon can bring people in. you can have local media, local bloggers come in so they can taste the coffee, experience what's different and then amplify the message to their network. really important tactics. >> this is the kind of thing where it is word of mouth, right? >> absolutely. i think the number one marketing campaign for a coffee shop is

having a good product. if you have good coffee, good location, good experience, people will talk about it. that said, you want to try to get the word out besides every one customer at a time. i say the younger the company, the more intimate the relationship you need with marketing. if you've been around for a while, you can use newsletters or other things. but now you need to be superlocal, talk to one customer at a time. create an event once a month where people talk about first friday, you go to this coffee shop to get a 50% discount and that sort of consistency can get people to come more often. >> maybe make a partnership. go to the hair salon and say i'll give you free coffee for a week and you can serve it to customers as they get their hair done. >> that's a great idea. >> i feel like local businesses, the ones that really work together seem to be working the best on these kind of main street type businesses. >> and ones that work within the community, having a loyalty program is always a great way to get first triers to become

multitime buyers. >> denise, slava, so nice to see you guys. we'll see you here many times throughout the year. thank you. we answer questions from our viewers every single week here on "your business." if you have one, please let us know. go it our website, the address is openforum.com/yourbusiness. just hit the ask the show link to submit a question or you can e-mail us if you would rather. it's yourbusiness@msnbc.com. time now for our 140 character piece of wisdom. or a few pieces of wisdom. here are some helpful and inspiring tweets we read recently. ty godwin, choosing a target audience doesn't limit you, it increases the odds of you connecting with people willing to pay for your services. our friend brian halligan, i noticed more companies doing the co-ceo thing.

used to be taboo, but it seems to be making a comeback. and these words of wisdom from event company entrepreneur week, stupid questions are better than stupid mistakes. it is obvious that social media is a highly valuable tool for many businesses. but far too open it goes overlooked in b2b world. social media might be a key component of your marketing strategy. bobby harris is the founder, president and ceo of blue grace logistics, full service third party logistics provider that in 2012 was awarded as inc.'s 500th fastest growing company. congratulations on that. let's talk about social media. we talked about it on business to consumer. but i need business and i want to talk to another business. what role does social media

have? >> it allows the people that are supporting your brand to engage with the other businesses that you're working with. so you -- you're able to talk to them on a day to day basis. most importantly allows them to know everybody in your company, allows them to not know just your brand, but the people behind your brand. give me an example. let's make this concrete, give me an example of a company that may do this. >> let's say there say large shipping company and they push out a lot of products with your company, maybe 200 employees and maybe five of those people are economic buyers. but at the same time, those five people are usually the engaging two three people within your company. if they're engaged with youen a social media platform, many times almost the entire company knows your entire company. it is very powerful. >> everyone from my customer's company is actually following my twitter feed and everyone in my company is following this as well. so we're all in this together. okay so when i'm doing that, it is quite different than when i'm

talking to customers. do you suggest you allow a lot of employees to write on your twitter feed, for instance? >> we do. that's the big difference. you don't want just marketing handling your twitter or facebook. you want everybody engaged. every single person in your company. want them to be engaged with all your clients. and each other. >> so anyone in the company said go for it, under our company name, to speak to other companies, not to speak to consumers, but to speak to our customers who are other companies. write whatever you want. >> exactly. >> and you've got to put guidelines around there, i imagine. >> it is -- we have it -- what we call an open social media policy and it is a very interesting subject to say the least because they take those social media platforms home with them and represent you. whether you're doing social media at your company or not, people are at your company are and they have the right to speak about you and your -- in the business. >> in b to c, it is very important to create a personality, right? you want to have a personality, want people to be engaged with you.

want to hear what you have to say, whether it is funny or whatever it is, right? smart, whatever it is. you want them to like you because then they'll buy your product. in b to b, do you find that same kind of thing? >> you do, but not such a direct correlation. for instance, a twitter feed is handled by one set person under the name of blue grace. but more importantly, most of my employees have, like, bg in their twitter hand sol when they're talking, people know they're working at blue grace and they represent us, but not necessarily on all their views and everything. but we want them to know the real people behind the scene. >> great. thank you so much for coming on and talking about this. really appreciate it. >> thank you. thanks so much, everyone, for joining me today. and, remember, you can revisit the show on our website. it's openforum.com/yourbusiness. we'll post all of today's segments, plus some web exclusive interviews and tips. you can also follow us on twitter, @msnbcyourbiz and we're on facebook too.

next week, the role of equity when trying to get your business off the ground. >> when there is no physical currency given, there is no other way to value someone's time and effort but with equity. that's the only currency you have. >> we'll talk about how one company's equity breakdown shifted over time and why these two entrepreneurs say a 50/50 ownership split isn't a bad thing. until then, i'm j.j. ramberg. remember, we make your business our business. but who looks after us online, where we spend more than 200 billion dollars a year. american express can help protect you.

with intelligent security that learns your spending patterns, and can alert you instantly to an unusual charge. so you can be a member of a more secure world. this is what membership is. this is what membership does. legal marijuana comes to colorado. where is it going next? much of the country's locked in a deep freeze this sunday morning. but if there is one thing we're learning, it is that things are always changing, including some things that many people thought would never change. prohibition against pot has ended in colorado. that state became the first in the country this week to legalize the sale of marijuana for recreational use. so what happens next in the movement to make marijuana legal everywhere? the new york mayor bill de