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. they created dog treats even a human could like. >> that's a brownie. it has pumpkin. >> time for entrepreneurial wisdom coming up next on "your business." small businesses are

revitalizing the economy and american express open is here to help. that's why we are proud to present "your business" on msnbc. hi there, everyone. happy new year. it's great to see you this week. i'm j.j. ramberg. welcome to "your business." a lot of entrepreneurs are using old-school technology to shake up business. a company worth billions of dollars make it so we can reserve a taxi on our smartphone and track it as it picks it up. it made it more efficient with technology and voila, customers went wild for it. today we see a student who saw the same type of opportunity with the old coat check business. he's changing a system that

hadn't yet caught up with the times. derrick had just about had it. >> i hate the ticket. >> a college student at a college bar, he lost his coat at a place he thought it was safe. >> my coat got taken. it wasn't there. i said what's annoying is these nightclubs don't offer a coat check. >> he wasn't just any college student, he was a senior major anything entrepreneurship at indiana university. he didn't just lose his coat. he found an opportunity. >> i went to the bar owners and asked why they didn't have a coat check. he said some tried. some hadn't. and i said well, if i come in, get racks, set it up and see if i can do this. they said, yeah, do it next week. >> he borrowed $500 from his

parents, bought some cheap racks and hangers and launched coatchex. >> derrick handled everything. he set it up. he tore it down. he checked the coats. he would the insurance. he was really hands off approach for us. we didn't have to do anything. >> kilroy's quickly saw the benefit in their bottom line. 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 table that used to be piled high with coats. kilroy's quickly made the coat check mandatory. with easily 1,000 jackets checked in on busy nights, his business took off. >> in the peak season we made $50,000. margins were huge. >> but derrick had a pretty old school model. he and his partner thought it would work to be simple,

coatchecks needed a 21st century makeover. >> he was making a lot of money. i said what are you in the coat check business for? he said i made $50,000 in six months. i said let's find a way to replicate this process with technology. >> from miss time at kilroy's, derrick knew on the kinks in the process, lost tickets, the fact so many people have blackjack ets. and the rush of people at closing all wanting their coats back at the same time. >> people have to understand how stressful it is tore coat checkers. can we build something that makes it easier? >> turns out, he could. a coat check for today's customer. one that runs on a phone or tablet. takes photos as they are checked in and tracks each hanger with a qr code. for the customer, no more paper

tickets just waiting to be lost. your phone number is your claim ticket. >> no one ever thought about using an iphone or ipad for coat checking. the software is there. it's just a matter of building the program. >> with the app now built, he made the move from indiana to new york and has snagged huge clients. this year he's testing coat checks at the madison square garden and new york fashion week with plans to turn his business into a franchise model. >> we have our 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 get it to. these high-end events, working with brands. because not only are you providing a great service, but it's a cool way of engaging with your customers. >> this area, engaging with the customer, that derrick and jerry

has had the potential for exponential growth. >> people don't like receiving a text saying come to our club on sunday. and as they are leaving, this is what's going on down the road, those are points when people are engaged with the venue oren gauged with what's going on. that is a great point to interact with them. >> and that kind of customer intimacy is something webster hall in new york city is very interested in. >> being able to take that customer data when they check in there, tie it into our p.o.s. systems so we can better serve them. we know you like vodka. we'll have one ready for you. knowing people and their habits here so we can reach them easier. >> we're looking to change how things are done. we're looking to make things

more secure, give people peace of mind. a lot of people trust these services. but until we eliminate that claim ticket i'm not going to be fulfilled. 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 mat. shoplifters want to be anonymous. so make eye contact and greet every customer that comes into the store. two, keep your shelves neat. if your store is unorganized and messy, 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. the cue should be easy to remember and not identifiable enough do make a customer feel targeted. 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. trello.com is a productivity tool that helps keep you and your team on track. you can add projects, they are called borats on trello. as well as assign tasks to people on your team. you can have as many people as you want to make access and comments and changes. and updates are made in real-time across platforms. 20 years ago, steve els 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 the fast casual movement 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 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 mechanics behind fast food. i knew what i learned in cooking

school, how to source food and classic cooking techniques and 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 has proven itself out to be very, very important over the years. you see different diet fads, trends. we stay focused on just a few things. so on the surface it looked like we had a focused knew. some people say limited. i like to say focused. but it's a combination for all of 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 sources. so we want to make sure we're very, very transparent about our sources. we want people to understand who is buying our food, who is raising the food. we don't want there to be any mystery. the more transparency at chipotle, the more attracted people will be to it. 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 great. 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 feature 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. we encourage our managers to look for basic characteristics we think will 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 b2b business.

and i head out to new jersey to check out dog treats that has this company's four-legged friends going wild. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. if i were to look back i

would say the bankruptcy when i was 23 years old taught me a tremendous lesson, to really watch the business end of the business. 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 minimum wage should be raised. 47% say 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. which state is the friendliest

to small business? according to the small business and entrepreneurial 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 that he could be a part of. >> peanut butter macaroons, bonbons. just looking at these treats is enough to bust your diet. but hands off. they're not for you. that is unless you walk on all fours. seven years ago, pet pastry chiefs eric and jessica opened up their dream business. >> we decided to start a dog bakery on our moneyy moon. we wanted to go back to work. >> neither one of us had run a business. >> we worked out of our kitchen

apartment. there's no chemicals. it's simple, clean ingredients. >> their idea was to create all natural organic treats for pets. within two years, devout customers like pippa and sweet potato pie were literally begging for more. >> how many people work here? >> six of us. >> so six of you to make enough baked goods for how many stores? >> 950. >> when is the last time you pulled an all-nighter? >> yesterday. >> today bubba rose biscuit company is 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 ones that are tasty. that's a brownie. so it's carob and pumpkin with a yogurt on top.

>> i just need a bowl of milk. that tastes amazing. 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-mails. i get pictures of every dog's birthday celebration. >> and the feeling is mutual. once customers fall in love, the only issue is they never want to leave. >> it's time now to answer some of your business questions. let's get our board of directors in to help us. slavo rubin is ceo of one of the largest platforms of the world. and ceo of s3 agency, an ad agency with a special focus on social media. great to see both of you guys. >> thanks so much.

>> thank you. >> great to see you here again. happy new year. >> thank you. >> back at you. >> the first question is about expanding your reach overseas. >> i have a international clientele and i'm trying to grow my business and put together a strategic way of marketing including seo, 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. >> it's interesting. you need to hire a marketing agency who has some experience internationally, right? >> you do. i admire you are looking towards digital. that is the way to go international, especially for a start-up. i did take a look of what you're doing. branding. don't forget branding. i think if you can find someone who does branding first and can execute digitally, you will be creating more than a product

that at some point can be competed out of the marketplace. a great way to do that is networking. just like focus for your customers. go to linkedin. go to fans. if you can find a fan with branding experience and loves what you're creating, you have the trifecta. >> it makes a lot of sense. we do it here. how do you get that same experience overis seas? do you target specific countries? how do you go forward with it? >> yeah. i mean, 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 like was mentioned through linkedin or other resources. i will 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 of figuring out the culture and differences in the knew answer of that geography. it is quite challenging. it's an exciting thing. >> let's move up to the incomes question. it's a question about a lack of

direct competition. >> we are one of the largest providers in north america. we don't have competitors in the market right now. we are wondering how can we stay motivated and grow the business without that big competitor. >> i love that question. when you have competitors, you are worried about people nipping at your heels. so how do you get that kind of fear almost when it doesn't exist? >> i think competition is a great thing. it means there's a market and other people are going after it. if there is a situation where you feel there's not a competitor, you need to set milestones and compete against yourself. a really good way is what is your north star? your dream scenario. and one step at a time like a ladder. you have to compete against a deadline to hit each one of the steps on the ladder. >> that's a good idea. and maybe make up a competitor.

pretend company x just entered our market. would we be doing anything different or not? >> there's always a competitor. if i make potato chips. i might not think apple is a competitor. but they are a snack. they are a much wider field. they're doing customer perks. by default, you are using a competitive product. maybe just not the exact same space. think of them as using your competitor. >> i think part of what he is talking about is this outside pressure to keep his employees motivated. and there are other ways to keep employees motivated and excited about pushing out products. to what you're seeing, make internal milestones. >> absolutely. it could be anything from, hey, we need to deliver this by a deadline. we only grew 10% last quarter.

why grow 30% next quarter and if you don't grow the 30 you become upset. >> i think deadlines are really good for motivating people always. finally, we have this question about getting the word out about your start-up. >> i own a very new business. i opened six weeks ago. i want to launch a campaign to run the business, let people know in their neighborhood that i have my doors open. >> okay. she's a coffee place. she's your client. what would you do? >> i would say immediate is the focus. immediate attention in your immediate area. hyper local is the way to go. think about ways to do that. groupon can bring people in. have local media, local bloggers. they can taste the coffee. those are important tactics. >> this is word of mouth, right? >> absolutely. i think the number one marketing campaign you could have for a

coffee shop is having good product. if you have good coffee, a good appearance, people will talk about it. that said, you want to get the word out besides every one customer at a time. the younger the company, the more intimate in terms of marketing. if you have been around a while, you can use newsletters. you need to be super local. talk one customer at a time. create an event where people talk about first fridays is where you go to this coffee shop to get a 50% discount. that can get people to come more often. >> to to the local hair salon and say i will give you free coffee for a week and you can serve it to people who are getting their hair done. >> that's a great idea. i feel if the local businesses, we have been going around the united states this year. 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 a way to get the

first triers to become multiple time triers. >> i hope you have a fantastic new year. >> we answer questions from our viewers every single week here on "your business." if you have one, please let us know. openforum.com/yourbusiness. or you can e-mail at. >> time for our 140 character piece of wisdom. here are some helpful and inspiring tweets we have read recently. entrepreneurial consultant ty goodwin said 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 said, i've noticed more companies doing the co-ceo things.

it used to be ta pwaou but seems to be making a comeback. stupid questions are better than stupid mistakes. it's obvious that social media is a highly valuable tool for many businesses. but far too often it goes overlooked in the b2b world. they use twitter and linkedin on a daily basis. bobby harris is the founder, president and ceo of blue grace logistics, a full service third-party logistics provide tpher 2012 was awarded as the 500. congratulations. that's a big honor. not an honor. you did the work and now you got it. congratulations on that. >> thank you. >> we talk a lot about it on business to consumer. i want to talk to another

business. what role does social media have. >> it allows people supporting your brand to engage in other businesses that you're working with. you are able to talk to them on a day to day basis. it allows them to know everybody in your company. not just the brand but the people behind the brand. >> give me an example of a company that might do this. >> say there's a large shipping company. they push out a lot of products every day with your company. maybe they have 200 employees. 500 are economic buyers. but at the same time those five people are engaging two to three people within your company. if they're engaged on a social media platform, many times, almost the entire company knows your entire company. it's very powerful. >> got it. 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 kind of all in this together. so when i'm doing that it's

quite different than when i'm talking to customers. do you suggest you allow a lot of employees to write on your twitter feed? >> we do. that's the big difference. you don't just want marketing handling your twitter or facebook. you want everyone engaged. every single person in your company, engaged with all your clients and each other. >> you say good for it. under our company name to speak to other companies. not to speak to customers. write whatever you want? >> exactly. >> and you have to put guidelines around there, i imagine. >> we have an open social media policy. and it's a very interesting subject to say the least. because they take those social media platforms home with them and they represent you. people at your company are. they have a right to speak about you. >> in b2c it's important to create a personality. you want people to engage with

you, want to hear what you have to say whether it's funny or whatever it is. smart. you want them to like you because they will buy your product n.b2b do you find that same thing? >> you do. you don't see such a direct correlation. for example, twitter feed is handled by one set person under the name of blue grace. most of my employees have bg in their twitter handle, letting them know they work at glue grace and represent us. >> thank you so much for coming on and talking about this. really appreciate it. >> thank you. >> thanks so much, everyone, for joining me today. remember, you can revisit the show on our website. it is openforum.com/yourbusiness. plus, web exclusive interviews and tips. you can follow us on twitter.

@msnbcyourbus. the role of equity when trying to get your business off the ground. >> when there's no physical currency given, there's no other way to value someone's time and effort but with equity. that's the only currency that you have. >> we'll talk about how one company's equity breakdown shifted over time and why these two aunts say a 50/50 ownership split isn't a bad thing. until then, i'm j.j. ramberg. remember, we make our business your business. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner.

we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. the most important thing we knew before today about the chris christie scandal was sent from bridgette ann kelly to a christie appointee saying, for some reason, quote, it's time for traffic problems in ft. lee. they control the george washington bridge, the busiest bridge in the world responded to that apparent order by saying, got it. that was the most important thing we knew before today. for cover, before today, we have mr. wildstein and somebody else