is a franchise a small business or part of a big corporation? that's being debated as seattle makes plans to raise the minimum wage. and this entrepreneur discovered the way to boost her baby seat cleaning business was by partnering with big brands moms trust. 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 jj ramberg and welcome to "your business." where we address the needs and issues confronting america's small businesses. attempts to raise the minimum wage -- recently passed a law raising the minimum wage to $15 an hour. that is a 61% increase. the law gives small businesses seven years to comply but franchises have to comply within three years. because the law claims that franchisees are really big businesses with ties to big corporations. similar laws are being considered in chicago, boston, philadelphia and san francisco. stephen colbert is president and

ceo of the international franchise association which has filed a federal lawsuit seeking to overturn the seattle law saying it treats franchises and other small businesses unequally. mckeanny howl is the owner of seattle-based plum restaurants and with the main street alliance. she's been the leader in getting the seattle minimum wage bill passed. great to see both of you guys. >> great to be back on, jj, thank you. >> thank you. >> i want to step back a moment from the franchise, the big business debate, about just talking about the minimum wage. mckeanny, you worked hard to get this bill passed. why do you think it's so important? >> i always believed in raising the minimum wage. to be perfectly honest we need a living wage. $9 an hour is not a living wage, neither is $7 or $2, which is the federal tip minimum wage. none of us sitting here debating this would accept that. we have to work hard to raise the wage for low-income workers because it boosts the economy.

and with the raise of the wage in seattle, we're putting 3 billion more dollars into low-wage workers' pockets and that goes to the sneaker shop down the street or my restaurant. that goes directly to small business owners' bottom line. >> steven, the franchise issue aside for a moment, what do your constituents feel about the idea of the minimum wage raising at all? >> well, first and foremost, it's important to remember the minimum wage was never intended to be a living wage. it was meant to be a floor, entry level workers. lesser skilled positions. because of the pressure on the downward economy, it's put the franchise industry and the quick service restaurant industry in a tough place. people coming out of college or reworked out of a job can't seem to get the job they want and/or get a new job at the salary they were used to making.

it's putting downward pressure on the economy. franchise industry is an industry that works on thin profit margins. >> let's get to the franchise issue. why do you think that franchisees are being treated unfairly in this? >> well, in seattle, the city council passed unanimously 9-0 and the mayor subsequently signed that bill that would bring the minimum wage from its current $9.25 an hour -- excuse me, $9.32 an hour in seattle up to $15 over seven years if you're a small business with under 500 employees. if you're a big business with over 500 employees, it would take you three years to get there. however, they have lumped franchisees, small independent owners or operators in with the larger businesses, even though they have under 500 employees. if i'm a subway on this side of the street and i've got 10, 12, 15 employees and i'm a nonfranchise business across the

street, i have 10, 12, 15 employees, i get seven years if i'm a nonfranchise business. if i'm a subway i have three years to phase in to get up to $15. and that's going to be a tough slide for our hard-working folks. >> makini, walk me through some of the thought process for making franchisees thought of as big corporations rather than small businesses. >> jj, it's unconscionable for franchisees to -- for a big business to hide behind their small franchisees. it's a fundamentally different business model you get corporate support to create your menu and store front. you get corporate support on staffing and staffing levels. when you have a small business you do all this yourself, you build your business from the bottom up. you do your own marketing.

you can't compare a small business to a business like mcdonald's. to be perfectly honest, the franchisees and the multinational corporations share the same association. so they're a lot tighter tied than stephen is actually making it sound. and you had a fundamental different business model. i think that they can get there a lot quicker. >> stephen, based on what makini is saying, shouldn't there be support from the mothership, couldn't there be some support from the mothership to get them through this period quicker? >> look, i think it's important to understand that not unlike makini who put her own skin in the game, her own financial resources and effort to build plum restaurants, these small independent owners, the franchisees in seattle and around the country, have put in their life savings, their investment savings or taken out a loan or in some cases have done all three to pay an initial

franchise fee to a franchise company and make ongoing royalty payments for use of the trademark, to license the brand. by the way, they declared that by the national labor relations board, the small business administration, the federal trade commission and by several state laws around the country. >> we're unfortunately going to have to end it there. it will be interesting to see how this plays out in cities across the country. but i thank you both very much for explaining both sides of the issue. >> thank you. >> thanks for joining us. >> thank you. having a great idea gets you part of way to having a great business but not all the way. as the new kid on the block, it can be hard to get people to try out your service. i recently went to california to speak to the owner of a baby centric business who figured out that partnering with some big names brought her instant credibility and customers. ♪ oh, baby baby baby

♪ you know what i need >> it's a tuesday afternoon at this high trafficked whole foods in elcalifornia. right near the entrance in this prime real estate there's a tent set up where moms and dads can get their kids car seats cleaned. >> the partnerships have totally taken my brand to the next level. >> this is the founder of clean be baby, an eco friendly cleaning service for car seats and strollers. this relationship with whole foods is a boone for her business. >> they provide the space and electricity for our steamers. they also provide the marketing. >> let's be honest, people often ignore their car seats. she saw a true need in the market. but while moms were excited about the idea, investors weren't as exuberant. >> investors often thought the idea was niche, not a sexy

high-tech business they would generally invest in. >> with no marketing budget, how would she find customers? >> how many cold e-mails do you think you wrote in the first days? >> thousands. no, probably in the hundreds, though. for sure. >> so she came up with a plan. she needed to build trust and awareness and the best way to do that was to partner with brands moms already knew and loved. basically get a stamp of approval that would short cut the whole sales process. >> it was really important to try and borrow brand credibility from established brands just so that an unknown brand like clean b baby would be able to get moms to listen. and hopefully try and pay for our service. >> stephanie is the marketing manager of the pump station. a popular baby store in los angeles. jennifer offered to do a free day of cleaning in their parking lot for pump station customers. >> our moms were intrigued.

>> through these early events jennifer learned something unexpected. she was bringing as much value to her partners as they were bringing to her. moms wanted the service and while their car seats were getting cleaned, they needed something to occupy their time. >> while they drop off strollers, they check out the store, come in, learn about our services and they shop around. we offer them a 20% discount. >> some of our retail partners see up to 40% growth in sales on the days of our events t. wasn't just retailers jennifer approached. she also contacted the children's hospital los angeles which lends out car seats. she figured if she could say she worked with them, parents would know she had a safe service. getting the hospital staff to take a chance on her was all about developing a relationship. >> my team felt that she was good people. i mean, she just seemed like she's salt of the earth and she would make it happen in a real way. >> i had to prove myself and the company through doing a lot of free cleanings for them and

proving that we delivered the quality of the service that -- and the level of service they required before i actually approached them and said can i start using your logo on some of our marketing materials. >> with niche retailers and the hospital on her side, jennifer was off to a good start. and then the honest company called and offered to supply jennifer with all the cleaning products for free. >> i love the honest company because they make the safest, most effective products for my family. >> honest company spent a lot on marketing. >> uh-huh. >> i've seen tv commercials. jessica alba is one of the co-founders. >> yes. >> does that stretch out to you guys? do you feel the effects of their branding? >> absolutely. and we've been lucky that they will post about us on social media and through their blog and other brand of content they speak about us. >> all of these relationships make all the difference to customers like danielle darnault. >> i know the products are safe. i know there's a guarantee.

that's such reassurance. and to know children's hospital oiz recognizes the safety efforts is a total stamp of approval. >> after proving her concept, jennifer started going after partnerships with some of the bigger brands, whole foods, babies r us, nordstroms. with all of these companies sending out e-mails and putting up posters advertising clean b babies events at their location, the company developed a stronger reputation. >> in association to making sure it's eco friendly and it's clean, it actually augments to the brand. it's helpful to associate them with that. >> today, clean b baby has more demand that they can respond to. investors are no longer a problem. she proved the company works and just raised $500,000 with commitment for more ♪ come on baby >> with up to 15% of the sales

commerce sites coming from mobile, it is time to get your site up to date if it's not already. here now are five ways to boost mobile conversion rates, courtesy of "entrepreneur" magazine. one, build it right. optimize the website to match what you're trying to accomplish. it should take no more than two clicks to reach anywhere on the site and make sure the search box is displayed prominently. two, build with mobile features in mind. for example, use the gps that's built into smartphones to estimate shipping costs or integrate qr code readers and click to call buttons. three, use e-mail capture forms. form fields should be large with buttons that are at least 40 pixels. eliminate typing wherever possible and offer options veey a dropdown menu. four, be personal. send personalized messages to names in your database. and five, encourage sharing. images and videos are social proof that your customers like

and use your service or product. place social sharing buttons strategically so getting the word out is a natural part of the user experience. we have more great advice coming up as we answer your questions on key metrics to keep an eye on and getting your employees to treat your brand with respect. and i go up, up and away to find out what this hot air balloon company did to rise above its competition. 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. i want everyone to be a differencemaker versus a caretaker. i want emto feel like they can influence the department they're running or working in. if they're just there kind of being a caretaker and doing what someone did before, that means they're not thinking and passionate about trying to make it better. as we saw with clean b baby earlier, it can be difficult to make your product stand out from the rest. that's why a hot air balloon company in california's napa valley had to figure out how they were going to beat their competition to achieve sky high profits. ♪ look up in the sky on any clear morning in california's napa

valley and this is what you see. hot air balloons, flying high above. dotting the sky with their colorful canvases. to anyone on the ground, these balloons and the rides taken in them seem indistinguishable. but the pilots and the owners know exactly who is who. >> those are some of the blooms, we call one napa valley bloom. >> they founded their company above the west in 1979. and started working at it full time soon after. >> i used to have a real job. and then after the merger and acquisition, you know, you either pay too much, know too much you get fired. >> when they began there wasn't much competition, only one other company. today, there are six. and any tourist looking to book a ride can find a bunch of flyers that frankly don't look that different from each other. carol ann says she works very hard at making above the west

stand out. >> i actually think that's one of the hardest things to do. from a marketing point of view. >> early on, the rogers decided they were not going to compete on price. that that was just a losing battle. >> we realize if we lowered our price $5, they'd lower theirs $5. >> the problem with having price being the only thing that differentiates you, there will always be someone who's less expensive than you are. >> today they're the most expensive company in the area. they charge one flat nonnegotiable rate, doing things a bit differently from some of the competition. >> everyone is able to sort of move up under us with their stated price but then they discount under that to get more people. >> they say that their pricing may turn off some people but those aren't the customers they're after. >> the passengers that come with us, i think they are more interested in value than in price. >> because of the high prices, they're able to offer a more

customized experience, taking up fewer passengers, only doing one trip per balloon a day, which limits waiting time, things that endear them to other luxury services around the area. shirley quick is the manager of a high-end hotel nearby. >> we feel confident when we recommend their company, that they'll get the same level of service they would get from us. >> all of these choices, the pricing, the limited rides, have also limited the rogers' ability to grow the company. >> were we to decide to get really big, we would have to change what we do. we are the size we are because we want to be the size we are. we think that's the best way to offer really excellent ballooning experience to our passengers. >> that said, carol ann admits there are times she and nielsen look across the sky and have a moment of wondering. >> sometimes you do look at someone else who may be is flying more people and you

think, well, gosh, maybe we should just do what they do. >> but then she says she comes back to her senses. >> you have to think long term. because there's a lot of short-term marketing strategies that could change things for you a little bit but then have consequences for you in the long run. >> and knowing that you have a strategy that you're going to stick to gives you time to focus on what this is really all about. >> i enjoy it. i enjoy it. ♪ it's time to answer some of your business questions. let's get our board of directors in here to help us out. kimberly is a columnist and editor at large at inc. she's a co-founder and editor of digital media startup that's rebooting women's content. carol roth is an on-air contributor at cnbc, a former investment banker and investor. thanks so much for being here. >> thank you.

always good to see you, jj. >> the questions, the first one is about the importance of your brand. >> as a solo entrepreneur, one of the things i have a hard time with is hiring other employees to protect mayan brad which is actually my name. how do i find other employees that can represent me just the same as i would myself? >> we've done this story a few times because it's so hard. particularly because people want you, your name is on the sign, everyone cares, how do you get people to represent you? >> absent cloning, i think the challenge you have to face is most people hire for skills. and i advocate hiring for values. so you can find someone with great shared values, character, work ethic. it's very easy to teach somebody most skills. it's very difficult to teach somebody to care. i think i would really refocus around the way that you're hiring and then also be really clear about your value

proposition so they're communicating the brand the way you want them to. >> it's interesting, too, right, because you have to create this baby and let him or her go and put their own spin on it, too. >> i think you also -- a business owner may be surprised at how much, very detail oriented training is necessary to really make this happen. i've spoken to other business own her are in this same situation. they found when they sent the new people out to clients, they had to be precise about, you cannot text. when we write e-mails to clients, if it's a monday, starts how was your weekend? just very granular things, that make it seem as if it's all one company, we all care the same way and we're all on the same team. >> there's a balance. you want to be clear but you want to give people the latitude to make common sense decisions. >> of course. >> sometimes when there's overtraining and something goes offscript, which happens a lot

in small business, the employee fumbles the ball so to speak because they're not exactly sure what to do. >> let's go on to the last question. it's about plotting your growth. >> what are the key metrics that you think are critical for a business owner to keep their eye on to really build effectively? >> good for her for asking this question. too many people don't pay attention at all. >> metrics. i love metrics. obviously every industry has ones that are specific. i think everybody knows to take a welcome at revenue growth. the ones that sometimes get past entrepreneurs are profit margin. not just the dollars but on a percentage, after your cost of goods sold, percentage of revenue, what do you have left over to cover your other expenses? you have to make sure your profit margins are high enough so that you're covering your expenses in a way you can go down to your profit margin which is what you have at the end of the day. i think a lot of the challenge is that the entrepreneurs don't know where to go for this information. one of my suggestions is go look at public company filings. even though they're bigger

business, it gives you a little bit of a sense of industry benchmark. if you're a restaurant company or a service business, you can understand what a gross margin might look like or what a profit margin might look like and be able to compare it to your business and give it a good goal. >> i would ask business owners to drill deep near that and to think about cost accounting. most business owners, especially first-time business owners are bad at this. they don't know what it is or how it works. to use a basic example, if you're selling cok cookies and you're renting space in a commercial kitchen, you no he what it costs you to make them and what your buyer is paying. when you open up another location in another city, your costs change again. you may be profitable with one location or product line and you may be losing money in another. you need to know the cost and the profits of every single thing you're doing and where you're doing it to really build

for that kind of growth she's talking about. >> i would also look, too, depending on your business, look at efficiency numbers, right? how many customer service e-mails are you getting through per hour? how many this are you getting through per day? that will tell you which are the good employees an which ones should go. >> and also attrition. if you have a revolving door, you have other problems to address as well. >> so great to pick your brains. thank you for stopping by on this. and if any of you out there have a question for our experts, we answer them here on the show every single week, just head on over to our website. the address is openforum.com/yourbusiness. once you get there, hit the ask the show lunk to submit a question for our panel. again, that website is openforum.com/yourbusiness. or if you'd rather, send us on e-mail, yourboys @msnbc.com.

we are always checking out social media to get motivation from success entrepreneurs out there. let's share some of what we found on twitter. small business expert and "usa today" small business columnist rhonda abrams tweets in the u.s., 49% of business prospects turn into sales with in-person interactions, 32% without. business coach jerry quinn says the more emotionally connecting experiences you create for customers, the more coins you put in the piggy bank of customer loyalty. here's someone you should follow on twitter. miss carol roth tweeted i just had to explain to someone that i have a very difficult time with business monogamy. you do. you're always doing so many things. >> i call it like focused a.d.d. i'm good at focusing on one thing but i have to have a lot of different things going on all the time. i'm bad at making commitments. i have been married to my husband for 15 years but that's potentially the only one

long-term commitment i've ever made in my entire life. i'm out there with all the different businesses. >> by the way, you started a business and you also write for inc. i started a business. i'm working here. all right. if you are like most entrepreneurs, your smartphone and laptop are probably two things you absolutely need to run your business. so we talked to some small business owners about what online tools and apps they can't live without. >> i use pro-prompter because i'm starting to do a number of videos for internet marketing. pro-prompter is a very simple teleprompter where you can hook up with an ipad and iphone and do a very nice video. >> i love flip-a-gram. because you can create pictures that tell the story of what you're doing, add it to music and convey all of your products and services to somebody in a quick, fun way. you can send it to them on social media or e-mail.

>> the social media i love is event bright. i'm able to sell tickets to my trainings and be able to check people in right off of my phone when they come. it takes care of all the back-end work so i can provide my services and let it all happen for me. >> we love send out cards. send out cards allows us the opportunity to reach our clients in a very high-touch way because they allow us to create cards and send gifts. and really provide a little motivation for our students when they're doing the things we want them to do. it's very automated. it makes it look like we are really touching them at the time that is important to them. >> an app that i really like is contact sync. it allows you to sync your google contacts with your phone or mac address book. that way you don't have to go to google to get your contacts. >> great app is appointment core. it's an app we use to schedule

appointments on to our google calendar or outlook calendar automatically for us. when leads come in, they can schedule them themselves and one of our sales people can call them and follow up with them. >> an app that i like is mobit. and it is for text messaging but they have landing pages totally optimized for websites. everything can be done through your smartphone and it's a fantastic app for small businesses on a small budget. thanks, everyone, so much for joining us today. if you want to see any of these pieces again, we posted them for you on our website. it's openforum.com/yourbusiness. you'll find all of today's segments plus some web exclusive content with a lot more information to help your business grow. you can also follow us on twitter. it's @msnbcyourbiz. we are on facebook and instagram, too. next week, the owners of a plumbing and heating business combat owner burnout by

reinvigorating the company with a new business philosophy. >> we started looking at models like nordstroms, disney, zappos and said if we can take these belief systems they have and put it into our company, no one else can copy that. it would be unique. >> find out how they rebuilt the company to last by having a sharp focus on both customer and employee satisfaction. until then, i'm jj ramberg. 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. at the website of the iranian state-run media company called press tv, they've got a special news section just for news about the united states. so it's basically the news about america from iran. and so according to iran's state-run media, these are the top stories in the united states right now. number one, obviously the story that has transfixed america, congress staffer arrested on gun charge. that's the very top story. second story, u.s. foreign aid clobbers third world. also, they've got a story about the curse of american exceptionalism. big business loves desperate workers. and then their main international story, u.s. taxes