small business owners upset over president obama changing rules concerning overtime pay. and how the owners of popular udder cream helped their small business grow by keeping it small. that and more, 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, i'm j.j. ramberg and welcome to "your business." the only show on television that addresses the needs and issues confronting america's small business owners. president obama wants to change the rules governing overtime pay. the president signed a memorandum which directs the labor department to propose rules that would expand the number of employees eligible for overtime. the rules would affect salaried workers who make more than $455 a week. and those currently ineligible because they are designated as management. many small business organizations oppose those changes. including the u.s. chamber of commerce and the national federation of independent business. they say small and medium sized

businesses are already reeling from dealing with the affordable care act and proposed increases in the minimum wage. representative scott tipton is a republican from colorado. he's a former small business owner, and a member of the house small business committee, where he chairs the subcommittee on agriculture, energy, and trade. and william dunkelberg is the chief economist for the nfib whose most recent small business optimism index was down significantly. great to see both of you guys. >> j.j., great to be here. >> thanks, j.j. how you doing? >> i'm good, thank you. i want to start with you, representative. you were a small business owner, so take off your washington hat for a moment and put your small business hat on for a second. why are you against these rules? >> you know, this is another example of the president unilaterally stepping in, and we've had testimony just recently as last monday down in pueblo, colorado. this is creating uncertainty in the marketplace when we've got to be able to have certainty. i'm talking small job creators,

be on the small business committee or on these roundtables what we're hearing is moving rules, regulations coming out of washington, d.c., mandates coming out of washington, d.c., that are creating uncertainty for these small businesses that create seven out of ten jobs in this country, that are necessary to get this economy moving, they don't know what field they're going to be playing on. they have real costs that they have to be able to take into account. and this is really not creating jobs, not protecting people, it's hurting jobs and creating uncertainty. >> well, let's take uncertainty out of the equation for a moment. let's say we are certain the rules are going to change, we're certain this is how much we're going to pay. would that fix things? >> it really wouldn't. because part of the problem is we're going to have washington making business decisions. what may well work and make sense in new york city may not make sense in pueblo, colorado, or grand junction, colorado. >> but, bill, let me ask you a question. if small businesses were exempt, you know, just like as they are with the aca if you have under 50 employees. if small businesses were exempt from this, would you feel better about it? >> well, possibly feel better about it. we still don't like the idea of

the regulation that's there. and, of course, exemptions get changed. and how many changes have we had to aca already. you know, if they don't get enough revenue and things aren't working right, they'll say, okay maybe it should be 40 employees or 30 employees. that's the game that usually gets played. we really don't like to see that. but this is all driving, you know, the cost of labor, right now as scott pointed out, it's very uncertain, but it would be good to know all the rules if they get fixed when we hire workers, of course we're making investments. it's not just the one you deal for us. you hire worker, you train them maybe in the second year they start really to pay off. but we don't know what the costs are. when you don't know the costs of something, you don't say you'll take it, and this one size fits all thing from washington, where 24,000 is supposed to be the same real number in real terms cost of living in new york city, as it is, you know, somewhere out in the midwest. well you know that's not the case. that creates major dislocations and distortions. >> but those who are in favor of

these rules, bill, say that it's really just a matter of fairness, right? so there has been this cap about $24,000 a year, once you reach that, earning that much money you are ineligible. but that has not kept up with inflation. and so, as a matter of fairness, the rule that we have right now just don't make any sense. >> well, fairness is in the eye of the beholder. so what are you going to, you know, who's to say what's fair and what -- where did they come up with $24,000? and where did we come up with the fact that the minimum wage ought to be $10 versus $7, or, because again, you know, it doesn't make any sense. and fairness, there's no way to judge fairness. what's the standard we use for fairness? >> and representative? >> you know, i think it's very important to understand that if we let the economy really work we can create opportunity, and we can increase wages. seven years ago, driving through colorado i stopped at a mcdonald's, they had a signing bonus and sign-up on the window and said we'll pay you $10 to be

able to work in mcdonald's. far above what we're talking about in many cases right now. when we let the economy really work, when we get it moving, we're going to be driving up wages, we're going to be creating opportunity. this isn't coming out of washington, d.c. we had 4,000 new rules, regulations, coming out. 62% of those were impacting small businesses. we're paying $10,500 plus right now just in compliance costs per employee for small businesses. these are driving down innovation, job creation, and adding one more rule, one more regulation, when we want to talk about fairness, let's get the economy moving, and that's going to create optimum fairness and opportunity in this country. >> let me give you an example then. big business. corporate profits, up, and then that has not necessarily been passed down to the hourly worker, who maybe should be getting overtime, maybe shouldn't.

so there is a -- there is a situation in companies where there is enough money and it's not being passed down. so how do we keep that from happening? >> you know, j.j., i think the realization we have here is a disconnect between washington and the real economy. washington views every business as microsoft, or ibm, or gm. the number one job creator in this country, creating seven out of ten jobs, happens to actually be small business. they're the ones that are suffering underneath it. and to be able to try and make that nexus between big business and small business, there's a wide divide. >> bill i just want to ask you, in looking through the lookingglass, what do you fear? what happens if these proposals get made, turn in to the norms? >> well, it just makes it harder for us to hire people, and to understand what the costs are going to be. you can't hire workers who don't bring enough value to cover their own costs and we don't even know what the costs are going to be.

and scott makes a really good point, you know. if you just talk about little mom and pop hamburger joints across the country, look at the problems they face with minimum wage, with all the compliance costs, with these kinds of regulations that happen to them raise the costs so they have to make enough money to pay their salary. but if you took 50,000 of those and put a mcdonald's sign on and added up the profit of all those, and somebody says wow, look at all the money they're making, let's move that money. well you know, each of those units has to live on its own bottom, or get closed down. >> well bill dunkelberg and representative tipton, so great to see you. really appreciate your input and your input and your thoughts on this issue. as your business grows, typically so does the size of your operation. lucrative deals often mean more employees, more equipment, and maybe some outside funding. one family-owned company, which has seen some significant growth, has managed to buck that trend. as major orders started coming in, the owners reaffirmed their commitment to keeping their big brand small. ♪

>> we looked at every bottleneck we had in the process and we found a way to eliminate it. it's an effective, well-oiled machine. >> improving the efficiency of their family business has been a profitable decision for linda kuzior and her brother bill kennedy. >> we keep it small and we keep control. we've become more efficient with our use of money and the revenue has gone up. >> the pair runs redex industries in salem, ohio, but they're best known for their brand, udderly smooth. >> not in my wildest dreams did i ever think we would be so well recognized. the cow spots are very much our brand. >> the maker of lotions and moisturizers which linda and bill's parents launched in 1978 originally produced veterinary pharmaceuticals. >> the way we started was went from the farmer for the application for the cow, then the former brought it in and said here try this is pretty

good, then it went to the farmer's wives. ultimately it's word of mouth. >> products like their hand creams are so popular that you can find them in all 50 states. and 12 countries. >> we have to make sure that we keep our 70,000 retail outlets in stock. very nice problem to have. >> that includes some of the biggest chains and the smallest stores. >> walmart, walgreens, rite aid, cvs. dollar tree, dollar general. >> such brand reach, customers may think they're buying udderly smooth from a large company. but they'd be wrong. redex is a lean operation with only 17 employees. and customers take notice. >> they are impressed that we can fulfill the pipeline the way that we do nationwide and worldwide. >> the key to success and staying small has been focusing on efficiency. linda says when they took over, the production line needed an upgrade. >> we just looked at everything and said, you know, where's our slowing points and looked at a way to eliminate them. it was a labor intensive way to produce a product. and we knew we had to get smarter. >> at one point, the company was

actually bigger. >> we used to operate with two shifts, the product would be filled into the jars, and it would go into a pooling room overnight and we would start to ship at midnight to cap it by hand every night. >> that alone slowed everything down. and so, bill and linda made necessary changes. one major accomplishment was automating production. >> we had to look to see how can we automate. how can we make it so that the product isn't being handled so much by hand. we mechanized, and what used to take us 20 hours, we would generate maybe two pallets now we generate two pallets in probably 30 minutes. >> they weren't always able to make as much cream as they do now. >> a batch size was currently at 1,000 gallons. our batch size back then was 150 gallons. so we were constantly making a lot of batches in the course of a day. >> bill says one idea just led to another.

>> once we increased our batch size, it kind of had like a snowball effect. then we could see that we could batch good but we couldn't fill quite as fast. then we fixed the filling. after the filling was taken care of we couldn't cap as fast. then the next aspect was, you know, how we could just keep going. >> the addition of a cooling system and a mechanical capper allows orders to be handled faster than ever. >> the order from amazon that's shipping today, we received yesterday. we received walmart orders today, that have to ship today. we weren't aware that those were coming but if that's the best kind of situation to have. >> another result is a more flexible schedule for employees. the typical work week is four days. friday is for catching up. >> as a 4-10 operation when our tanks are hot, it's one less day of reheating, it's one less day of cleanup. it's one less day of setup. >> mulling over production needs is constant. there's so much potential for growth. and there's still more to do. >> it's an everyday process.

i think as you see it now, it was over five years to get the plant where we're at right now. you know, we still look at what we'd like to do to optimize it. >> bill and his family do not believe in cutting corners. they always invest in top-notch equipment. especially if it can speed things up. >> rather than buy a capping machine that can go 100 a minute we'll buy a capping machine that can do 250 a minute. >> the udderly smooth business strategy has been so successful that investors have taken notice. so far linda and bill just haven't been interested. >> sometimes you look at it a little bit longer than usual. but, ultimately, it's about being true to the brand, and maybe if we find the person that has the same approach, maybe we'll look at it a lot longer. but right now, it's been doable. >> another motivation for keeping the business small, is time with family. their parents set the tone at redex, and they have followed in their footsteps. >> what mom and dad have done for us is make sure that we know where we came from. that we have our roots.

that family comes first. >> bill and linda will never shy away from growth opportunities, and improving their operations. their goal, however, will remain. to keep their family's big brand small. >> we chose to stay family owned and operated, because it's what works for us. i don't know that if we grow that large, if we would have as much fun doing what we do on a daily basis. because if you can't have fun with a cow and the cream that was developed originally for cows, there's something wrong. it's a good idea to keep an eye on what your competitors are doing so check out our website of the week which will help you with that. trackmaven.com is a web application that gathers and tracks the online activities of all your competitors. you can monitor what they're blogging about, tweeting, and posting on facebook, all in one place. you can also track their ads, and media hits, as well. need to melt the hearts of tough customers who are on the

fence about your business? here now are five ideas for sweetening the deal, courtesy of allbusiness.com. one, annual rebates. reward customers for doing business with you long-term. give money back at the end of the year based on their total purchases. two, wave fees. buyers hate up-charges. improve retention by eliminating things like processing fees, and small order charges. three, shipping discounts. maybe you can't afford to send products for free, but offering customers 25% or 50% off on shipping is still a big win for them. four, bargain basement buys. it might be an overstock, a closeout item or damaged goods. presenting a buyer with the possibility of saving 50% or more will win you some points. and five, loyalty programs. give your customers a reason to buy more or use more hours of your service. when we come back, maintaining a company culture.

investing in office space, and how having a hobby can help your small business. and we stretch out with today's elevator pitcher and her online physical therapy sessions. 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 marketing of

ben & jerry's was simply communicating in an honest and authentic way what the company was. so we wanted to have an anti-corporate company. we wanted to be anti-authoritarian. we wanted to fight the establishment. we wanted to be involved in political issues. we wanted to do things in a fun way. we wanted to give away ice cream. we're trying to bring about a certain kind of world. if you happen to believe in that kind of world, and you happen to like the ice cream, partner with us. it is now time to answer some of your business questions. let's get our board of directors in here to help. adam rich is the co-founder and editor in chief of thrill list media group overseeing all of the editorial content for this men's lifestyle brand. and cori lathan is the founder and ceo of anthrotronix a firm specializing in human computer interface design and product development for mobile platforms and robotics systems. good to see you both. you guys are like on opposite

ends of the spectrum of what you do. >> but somehow we get along. >> at your core you both built these small businesses and have grown them. that's what we're here to pick your brain about. let's get to our first question, it's about maintaining company culture. >> i'm concerned about when's the best time to start building out the team, and adding people to the board of directors. really want to make sure that i'm not going to affect the corporate culture in a negative way. >> great question for both of you. because you started small. you grew so quickly so how did you keep your focus? >> a big part of our culture is that we've been successful. >> right. >> and that's come through hard work and also getting the right people in the right places, and so this question's kind of an interesting one because it feels like kind of putting the cart ahead of the horse. there's nothing that's going to really undermine your company culture like not having the people there to be successful. so, i think that needs to be the

first priority. >> and really you need to think about this culture as you hire this board of directors or advisers and hire new employees. >> yeah. we've really managed our growth over the years, so this question really resonated with me. and you know, ideally if you can try out a person first that's i think one of the best ways to see if they're appropriate for your culture. so we hire a lot of summer interns at all levels to really summer employees. that's a great way to have kind of a contract employment, try them out, see if they fit in. see if, you know, if it's a mutual benefit. i think a board position is much harder. you really have to know someone. it's a much higher risk. you have to know they can help you grow your company. >> you spend a lot of time courtship period with board members? >> yes. yes. and -- but the last thing i would say is, you know, sometimes it's worth taking a risk.

you know, get someone on the board who you think can take you to the next level. what's the worst that can happen? you fail. you move on. >> okay. let's move on to the next one. it's about ways to attract people to your business. >> what are smart hobbies that an entrepreneur can participate in to be able to attract the people that's going to have a significant impact on their business? >> that's interesting. i think it seems to kind of fit more with you. >> yeah. it sort of depends. you have to think about who you're trying to attract. sort of my first answer to this one would be go and do rich people stuff. go play golf, go sailing, play squash. if you're looking for investors or people to be that sort of critical condition that gets you in the room with the right people, that's a really good way to go about it. maybe you're trying to find developers, and then you need to go to the kinds of things you will find those people. it's like that old adage that you want to dress for the job that you want, not the one that you have. maybe you need to learn how to play squash. >> and you spend a lot of time learning, cori?

>> no. i think i've taken the opposite approach. i've been true to my passion for s.t.e.m., science, technology, engineering, mathematics and robotics education, and for years my company has either coached or sponsored robotics teams. we've developed this great professional network, some of whom ended up being investors. >> you're going into what happens to be your hobby is the area you're in so it works for you. >> exactly. >> thrill list lists events so you are talking about consumers, people who use your sight. >> the stuff we end up covering and sharing with our audience is being done by the chefs, the bartenders, the people that are on the ground in all the cities that we cover, and they all kind of know each other. there's usually, in any city, even in new york, there's so much going on, there tends to be kind after small inner circle of the people doing the most interesting stuff, and they kind of know one another. and so just going to those things because they're fun and cool sometimes gets you further it in terms of the right conversations. >> makes you part of the community. okay. finally we have a question about the need for an actual office. >> how much do you really invest

in an office? office space can kind of go to waste if you really don't need it. what's a good mix for a startup? how many people should you put in an office? >> that's interesting. do you believe in letting people work from home and work remotely? there's been a lot of talk about that obviously this year. >> absolutely. our culture supports flex time, telecommuting, but we are a hard tech company which means we have a lab, and sometimes you have to come in to get the work done. also, some of our best ideas come from actually being in the same room and brain storming and floating ideas you just can't do remotely. >> do you need an office for that or just a meeting place once a week? >> for us, a lab space has been critical because we really need -- we need our soldering iron and 3d printer. for us a physical space has been important. i agree, for a lot of people, you know, maybe you don't need

to invest in that. >> i think i completely agree with c 0 ori. the nature of the industry is critical and that's the first question you should ask. if you're running some kind of like a phone bank, you're going to need somewhere people aren't shouting over one another. if you need a lab, you need the space and the equipment. if you have a content team, maybe you can just all bring your laptops to starbucks and set up shop for the afternoon. that's really kind of the first question any entrepreneur needs to ask themselves when they look at office space and start flexible. get a desk at an incubator, start small. don't sign a lease until you have a good sense what your needs are. rent's high. >> rent is high but i do think it is hard to run a company, depending on what kind of culture you have, where people aren't together for at least some portion of the time. >> it is. for what thrillist has done over the years covering what's going on in a lot of different cities, it was something we never really had the option of. we weren't going to cover seattle from new york or cover london from new york.

it was something we kind of had to get around immediately, and so there are things you can kind of do to try and make it feel like you have a virtual office. quarterly we have a meeting that is just sort of our all hands and we talk about the state of the business and stuff like that. in the office everybody is drinking beer and hanging out. and so for my team outside the office they'll buy themselves beer and take a picture and send it around to the group and brag about whatever their local scene is turning out. you have to be a little more creative. >> next time i think you should send them beer. making them go buy their own. >> it's surprisingly complicated to send beer state to state. >> that's true. it probably is. thank you so much. and we answer your questions every single week here on the show, so take advantage of the experts we have. if you have a question, submit it to our website. the address is openforum.com/yourbusiness. once you get there, hit the ask the show link or e-mail us to yourbusiness @msnbc.com.

a lot of people who need physical therapy don't get it not because they don't want it, but because of logistical or financial reasons. today's elevator pitcher developed an online business to help them. hi, i'm helene the ceo of simple therapy. we provide video exercise therapy for people who can't get to regular physical therapy, either because they can't leave work two or three times a week, or because the cost of insurance copays add up to a couple thousand dollars. we are available online or at home for anywhere access. three months of unlimited video sessions cost just $30, what a typical co-pay costs for one in person visit. each time a user like me with my busted backlogs in is they get a customized experience based upon inputs that adapt over time. we replicate the thinking of our team of doctors and pulls content from our video library of over 300 exercises.

i'm seeking $1.5 million in funding to build out our sales channel and to market to new audiences. we aim to become a national household brand, and i think that investors can receive significant roi because our market is huge. pt is a $27 billion industry, and that doesn't count the tens of millions of people each year that go to their doctor, get a prescription and never go to pt because of high cost or inconvenience. >> all right. thank you. i'm going to give each of you a white board and i want you on a scale of 1 to 10 evaluate the pitch. how much did this pique your interest not as a product but as a business. if you can put that down. the were you doing some stretches? >> i was. that was our golfers stretch. >> my back has been hurting. i need to check out. >> i have something that can help you. >> great. adam, you both have your numbers? adam, let's start. 7 out of 10. give me something that she did right. something she can improve upon. >> i think that the rationale behind being able to take what a physical therapist would be

doing on a one-on-one basis and turn it into scales is attractive in terms of startup. where i was left kind of wanting more was in terms of really who the audience was. is this something you will take directly to the consumer or signing up hmos and medicare, that sort of thing. i'm left wondering about liability with a bunch of people injured in their homes without direct supervision doing things like stretching and potentially kind of stretching themselves. >> cori, what's your number? >> i gave helena an 8. >> one thing she did right, one thing to improve upon. >> i think the fact you really motivated the product was fantastic. i wanted to sign up. i think it's a big market. i think it's leveraging a lot of trends that are going on in personalized medicine and wellness. so i think that was great. i also shared adam's concerns about liability. and then my other concern was about fda regulation and what you're putting in place to potentially cross some of those hurdles.

>> and i have to say to get an 8 from cori means a lot because she knows a lot about this industry. thank you so much for pitching on the program. we appreciate it and good luck with your company. and thank you for your feedback. >> sure. and if any of you have a product or a service and you want feedback from our elevator pitch panel and your chances of getting interested investors, all you have to do is send us an e-mail. the address is yourbusiness@msnbc.com. in that e-mail please send a short summary what your company does, how much money you're trying to raise and then what you intend to do with that money. i look forward to reading about your companies. thank you, everyone, so much for joining us today. you can catch the segments from today's show again on our website openforum.com/yourbusiness. you'll also find some web exclusive pieces that we've put together for you there as well. we're also on twitter. it's @msnbcyourbiz. of course on facebook and instagram as well. next week we find out who may know your brand better than you do.

>> it's leopard and it's a white motorcycle jacket and it's red plaid and it's a silver star and it's something washed dirty and it's a stud and it's a lightning bolt and it's pink and green. >> it's your company's buyer. that's who. find out the secret to being a great buyer from one of the best in the country and see me in the outfit he just put together. until then, i'm j.j. ramberg and, remember, we make your business our 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. today was the biggest day in the ongoing bridge-gate scandal surrounding governor chris christie of new jersey. we still do not know why access lanes on the busiest bridge in the world were shut down. gridlocking a small town in new jersey on the orders of a senior member of governor christie's administration. but today we learned a lot more about what happened with a new resignation, and tonight, a new response from one of christie's former aides in the eye of the storm. the most striking part of today's events was how much of the events were actually carefully choreographed. several of these developments looked planned and well coordinated with team christie