painting while drinking classes have become hot. but have you constructed a sustainable business model based on a trend. 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 everyone i'm j.j. ramberg and welcome to your "your business." the show dedicated to helping your small business grow. getting your customers to embrace your brand is hard. but when you do it right, it's sort of magic. that's when you get customer loyalty, and a business that is more than just a passing fad. we visited one company which combines paint, a few glasses of wine and a smart business plan that's making it all work. >> i think it's still here because it hit a nerve. >> people said it's a fad. and i always say, well was golf a fad? >> renee maloney and cathie deano's company has a colorful future. they know that it's more than just a trend. >> we built this concept thinking it would just be a fun night out for women. >> if it had been a fad it would

have fallen off way before now. we started out in a recession, and we never missed a beat. >> the founders of painting with a twist in mandeville louisiana, say they saw demand right from the start. >> people were waiting, you know, open open open at the front door when we would get there to open the studio and we were noticing that there were people coming from the city. they were driving across two bridges. >> and now after eight years in business, they know why their customers keep coming back for more. >> a fun night out where we paint, and drink a little wine maybe, if you'd like. >> we do have champagne in the back if you need a little liquid courage. >> and there's an artist at the front of the class who tells you step by step exactly how to paint a painting. you're with your friends and you walk out with your bottom line you completed painting and everybody else cleans up. yeah. it works. >> the pair owns five locations, and there are now about 200 franchises. from the beginning, the focus has always been on the customer.

>> we want them to know that they're the most important person. every time they look at that painting or think back to that night i want to make sure they had the most positive experience. >> of course drinking wine is part of the fun, too. >> it took the fear out of it for people like me who were afraid of art. and intimidated by artists. >> the founders wanted their customers to have a place where they could unwind and be social. >> and they're forgetting the day-to-day life. they're not thinking about the kids and the bills and the stress of what life is out there. and they can escape here. >> and that's why once a client signs up the staff learns as much about them as they can. >> mrs. jones knows that mrs. jones is important. and we built it in every part of our system. so from our back panel system when mrs. jones calls there's notes there. she likes to sit in the front and she wants to be on the left-hand side and she likes to bring her mom. >> all of those details are great but renee and c.a.t.ee took customer service a step further. they give people reasons to come

back. >> making sure there's a variety of music, there's a variety of artists, there's a variety of experience. >> a variety of times is important, too. evening classes don't work for everyone. >> the original model was a girl's night out. and so in looking at those numbers we saw that we were making 75% of our money and 25% of our time. >> they added classes at times to fill studios that were otherwise sitting empty. >> that's when it sort of morphed into more. it turned into coffee and canvas in the morning. >> events like corporate team building and birthday parties are now part of the schedule too. with so many classes offered, the company needed enough art to keep painting. >> we have 5,000 pieces of copyrighted art. that's growing daily. so we have to make sure that there's new product that people are, you know excited about. >> prints are created by staff. it helps with employee engagement and keeps their creative juices flowing. >> your artists have to be happy in order to give the experience that you need. you have to let them create. most of our art now is being created in the franchise level.

>> even though there are thousands of prints there are certain ones that are customer favorites. >> we can see through tracking the art what's the top ten in the country. the artist in the studio when they're creating new art can see our customers really love red. or our customers really love a local flavor. so we can actually look at the analytics of the artwork and of what the customers like. >> the business is also designed with flexibility in mind. the calendar for any studio can be changed to help with the numbers. >> you can see how many people have signed up for that event. and if someone doesn't feel like they're really excited about the egret on saturday night, it can get switched out and all of a sudden that's a popular painting and people have signed up for it. >> some customers make dozens of visit, they're always trying out new concepts. they treat their locations as working laboratories. >> we always test everything in those studios. so that way we know you know what's going to work and what's not going to work. >> working with larger canvases

was one idea that was a winner. but not every idea is as successful. having winners and losers is all part of the innovation process. >> we do focus groups. we find out who is our customer and what do they want? and we talk to our franchise partners. they're boots on the ground. they know what's going on in their community. >> the employees get evaluated regularly, too. because they are on the front lines of the company's growth. so customers get the chance to rate instructors. >> we do surveys with our customers pretty often to find out what you know what they're feeling about a certain artist. we train. when they come into the system we also will do training after they're into the system. >> as painting with a twist sees more competition, cathie isn't looking back and renee says she's more focused than ever. she's not backing down because this business is not just a trend. it's here to stay. >> we gave people what they were looking for. and then we kept it fresh. and we kept it new. with competition. it really keeps us on our toes.

keeps us coming up with new ideas. and really it just makes sure that you're on your "a" game you're given the best experience out there. >> to get new customers and particularly to get repeat customers you have to excite them. people need to come away from an experience with your company wanting more. and this is a responsibility that needs to be felt across all departments of your business. not just marketing, not just customer service but also your tech team needs to feel this. lior arussy is the founder of strativity group which helps customers with their experience and satisfaction for both b2b and b2c businesses. he's author of the book called exceptionalize it stop boring start exciting your customers your employees and yourself. >> thank you very much for having me. >> thank you for topping by. i like how you excite your customers and your employees.

you can't excite customers if your employees aren't excited. so let's go through this. your first point we talked about which is customers are not always right. so, don't try and excite everyone. try and excite the right people? >> absolutely. and you see most businesses are following like let's grab as many customers as possible. >> right. >> some customers can be toxic to an organization. you can overservice them and underservice your loyal customers. you need to be very conscientious of who are the good customers. who are the kusz hers you want to focus on and the rest of them, send them to the competition. that's what i call win-win. it's when you take your worst customers send it to your competition. now you win twice. you can focus on the right customers. >> this leads to focus on profit not market share. >> especially small businesses they focus on growth but sometimes they pursue growth at all costs. you know we call the best sales people like rainmaker they sell ice to eskimos.

really? it's going to be much greater than how much margins you're going to make on it. be conscientious about where is your sweet spot. who are the right customers that appreciate your value and delight them. give them so much that they will then become advocates go and tell everyone that you can believe what this company just did for me. >> it's hard for companies to always be exceptional. >> let me give you the secret for that. focus on emotion, not on rational. let me give you a great example. this is a true story, i personally witnessed it during our work. customer calls a flower shop. early in the morning, very stressed, he's demanding to ship a dozen roses to a certain address. he provided all the information, rationally speaking the employee had all the details to go and process that. she stopped. she asked him sir, why are you so upset? and it took her a little bit of probing he said i'm a busy executive, i worked late last night, i came home i forgot my anniversary, i slept on the couch, my back is hurting and my wife is fielding my calls. she said sir with your permission i'd like to put a

small note to your wife it was actually us who made a mistake yesterday and shipped the flowers to the wrong address -- >> they've got his loyalty. >> and i'm going to throw in a small box of chocolates with it and i couldn't believe that. the guy's like are you going to do this for me. of course there was no negotiation on price. two days later she calls them she's like how is your back? everything is great. well, do you mind giving me all the addresses and phone numbers of your friends and family and their anniversaries and i'm going to call two days before each one of those and i'm going to decide with you what to do so this will never, ever happen again and she took a $29.95 transaction converted it into $5,000 relationship just by paying attention to the emotions. we so focus on processing that we forget the human story. this customer did not need a bouquet of flowers we needed a marriage extension, he needed an alibi. the same thing we need to do as small business owners step back what's the emotional context of what's happening here. what are they really trying to do. how are they going to use the product. what are they going to do with it.

what will they celebrate. who else is involved. and try to secretary and create a story for them a story they can then go and share with others. because that's the most natural way. ultimately, either you're going to invest in sales or upgrade your product to a story that's just through empowering your employees to tell the story, share your values. what's the purpose of the organization. people are craving for purpose, craving for passion in a world of self service and apps where you self yourself loyalty is going to the ones who supply people. >> thank you for sharing that story with us. >> thank you. >> thank you very much. there is no better way to welcome a new employee than by setting them up for success with a good read about the industry. here now are five books you should have waiting on a. zero to one by peter thiel will encourage your new employee to go above and beyond and be willing to thes things that haven't been done before.

two, rework by jason fried and david behind meyer hansson helps break bad habits debunk myths and set the stage for creating an environment where people work smarter not harder. three, the hard thing about hard things by ben horowitz this book provides good background on building and running a small business. four, the art of the start by guy kawasaki is a step by step playbook on how to handle many of the common situations a start-up faces like sales pitching, branding, and pricing. and five the ike acarus deception by seth godin sees yourself as the artist to inspire your newest hire to think of more than just the bottom line. msnbc has joined new york's 92 tornado street on a special project called seven days of genius. starting today the network will devote this week to taking a closer look at those geniuses

who have changed the world. we see this all the time in the entrepreneurial world. and so today, we're highlighting five innovators and great thinkers whose business ideas have made a big difference in the way we live. richard branson's genius comes from his love of a challenge. early on he latched onto the attention grabbing brand virgin and launched his first venture, virgin records. going after the big established record stores. then came the record label which had big hits during the british punk rock phenomenon. in the mid '80s his love of aviation led to the creation of virgin atlantic airlines and these days he's taking on another challenge leading the way in developing commercial space travel. >> i have a slogan which is screw it just do it. if you're thrown in the deep end, if you're thrown into the swimming pool as long as you've got your parents watching you there's a chance you'll end up swimming.

>> jeff bezos is the genius pioneer of e commerce. he launched amazon.com in 1995 to sell books on the burgeoning internet. explosive growth led to an expansion to other products. making amazon a millionty billion dollar company and the template for other online retailers. >> lots of happy customers. >> we're in this for the long term. >> bezos is busy growing his empire. he purchased "the washington post" two years ago and is now turning amazon into a digital media powerhouse. sarah blakeley had a simply genius idea that turned into a booming business. she cut the legs off a pair of pantyhose, leaving the top part and called them spanx. she research and wrote her own patent, self-funded the company with $5,000 in savings, and did focus groups with friends and families. her keen sense of marketing led to the product's incredible success. >> with the spanx packaging i took a really different

approach. the whole industry had hat beige and gray and white packaging with the same half naked woman and every package and i went bright red and put three animated cartoon looking women on the cover of the spanx package. and i think that women just really responded to it. >> she still owns 100% of the company becoming the youngest female billionaire in the world. in 2010 when travis and derrick couldn't get a cab in san francisco they decided the taxi industry needed some disrupting. the result was uber. an app-based network that allows users to find a taxi or town car. the company became a touchstone in the sharing economy. and andre young, better known as dr. dre, is the rapper record producer and entrepreneur who dissatisfied with available sound technology created a head phone line beats by dr. dre. they became wildly popular and in 2014 the company was bought by apple for $3 billion.

there are, of course many many more entrepreneurial geniuses who have had an enormous impact for businesses large and small, and consumers. "washington post" small business columnist dean marks is the head of the marks group a firm that provides technology and consulting services to small and medium businesses and julie hanna is an entrepreneur and investor who is a board director for kiva. so good to see both of you guys. you know gene it's interesting you use the word genius because to be a genius it's more than coming up with a good product. right? it we can be smart and good business people but you look at someone like jeff bezos right, i mean he's i would say he is a genius so what separates the two? >> the people that have sort of creative genius as we know, we all have different definitions of what they are. i deal with small business owners. i do not deal with guys like jeff bezos. they are one in a million kind

of guys. the genius that run companies successfully and grow them are the ones that know how to buy something for a dollar and sell it for five. and although that doesn't sound like that's some markup of a genius it is a fundamental thing that business people need to know to be able to profit. and i meet too many people say this guy oh, he's smart so he knew what to do he was born with that. some people just are not really capable of being successful entrepreneurs or growing big companies because they don't have that dna to do it. and one of the basics of that dna is knowing how to run a possible business and knowing how to grow it. >> julie you're an investor and you've had some great companies that you've invested in lyft and the lending club and so when you're talking to entrepreneurs who are thinking about backing how do you determine okay i think there's a little bit of genius here that's that's someone who's not just going to build a good company but they're going to build a great company? >> i say it comes down to one

think which is aspiration. so what the defines the difference between kind of a big idea a gigantic idea is the aspiration of the entrepreneur. are they thinking on a mass scale basis from the get-go? and those that's really i think a defining factor it's what makes an idea big versus small. the other is kind of this relentless obsession, and pursuit of a better way, and sort of a boldness and a creativity around that. >> right if you're julie maybe you don't necessarily always want to invest in the genius. you want to invest in the great business person and when you find the person who is both well then aren't you lucky? and isn't the world lucky? all right well thanks guys i think this is a really fun topic to talk about. we went through a big list of geniuses, you could imagine we talk about there are so many more in all kinds of fields that we are going to be talking about on msnbc this week. coming up a lot more advice to help your small business grow

from gene and julie as they answer your questions on going from freelancers to full time employees and building a customer base online. american express for travel and entertainment worldwide. just show them this - the american express card. don't leave home without it! and someday, i may even use it on the moon. it's a marvelous thing! oh! haha! so you can replace plane tickets, traveler's cheques, a lost card. really? that worked? american express' timeless safety and security are now available on apple pay. the next evolution of membership is here. this week your biz selfie is a very cool one. it comes to us from william of

snow hill north carolina. he owns the ham produce company and this great picture of him in his planting fields was taken with a drone. which i planting fielding was taken with a drone. it doesn't make it a selfie, it's a dronee. just take a selfie of you and your business and send it to usus at yourbusiness.com. use the #yourbizselfie. it's time to answer some of your business questions. jean and julie are back with us now. the the first is about taking staffing to a new level. >> as a small business owner, i'm interested in running a lean

organization with part time and freelance staff. for budget reasons and also for legal reasons. but when is the right time to hire full time employees? >> julie, i will start with you. i think when you talk about budget reasons, part-time, freelance staff can be cheaper buts will be more expensive as i've found with my own personal experience. there's this great turnover and training. you don't necessarily take that into consideration when you first make these decisions. >> that's exactly right. i would commend her on being so resourceful, and creative and lean. i'm a believer in starving your way to success. and there's nothing more focusing than being resource constrained. we talk about being resource constrained as an issue, there's an upside to it as well. it drives focus around first thing's first. in terms of in deciding where to

invest in permanent full time employees versus outsourcing, you're right, there's a cost to having outsourced or part-time employees. it comes down to the core functions that uniquely differentiate your business. you want those to be committed employees. that's a core asset. peripheral functions that are like accounting things like that you know we live in a virtual corporation world and there's a lot of flexibility in obtaining those businesses. >> i have a dozen employees and sub contractors as well. you can rely less on subcontractors to get the work done. they have the ability to leigh any time they want. they have the ability to work for a competitor of yours. the other thing that terrifieses me is exposure to the irs. you have people that you rely on

more and they're doing more for you. if you don't follow the 20 rules that the irs has, you could be subject to liability. >> it's incredibly important for someone to understand the difference between an employee and a contractor. you don't want to be in violation of that. >> in the end, it's like buying a tuxedo. i know you're looking at me like i'm nuts. when you buy a tuxedo 200 bucks each time or you buy it for $1,000. if you're going to a lot of parties and are social you commit to buying a tuxedo. >> let's move on to another question about getting customers. >> how do you go about building your customer base when you don't have a brick and mortar store, but you don't want to inundate your customers with too many e-mails. >> julie, you are in the heart of silicon valley i'll start with you.

>> the first key to building customer base is this kind of maybe sounds like it should go without saying but really important is having a product that people love. and that they love so much to -- that they want to tell others about it. the next is building a trusted, incredible relationship with members. e-mail is not about customers, it's about establishing a relationship with them. it's about earning the right to communicate with them so they want to hear from you. oftentimes the starting point is how do we get you to boy ouruy our product, and then flip that how do we make this about you not us. what is the walking around problem, or walking around opportunity where the customer's mind is how do we add value to it. >> if i can add to that as well julie's right.

you never want to put a sales punch down a customer's throat buy from me. educate them provide them with information that will help them. so when they get e-mails from you, they look forward to getting them. more importantly, my business is a service business. one thing that i recommend is looking to where your business is coming from. most of my business comes from referrals now. rather than going out to end user customers a few years ago we built a list of core people that refer us work. i.t. firms in the area. we make it a point to reach out to them individually 25 to 30 individuals. each month i send them a personal e-mail on something going on something to continue on that relationship. most importantly is that i can't put a gun to somebody's head and say buy from me now. all i can do when a person is needing something, they think of my firm first. >> great.

gene and julie, thank you very much. really appreciate it. and we answer questions every week here on the show. so if you have one and you have not been able to find the answer we will do it for you here. the address is open openforum.com/yourbusiness. send us an e-mail to yourbusiness@msnbc. selfies, we know it's the entrepreneurs like you who have the latest scoop on apps and web tools that help grow your small business. here are ones our viewers tell us they use regularly. >> we use hyperlapse it was created by instagram that takes video and shrinks it down to 15 seconds. so it's really useful for vine, instagram videos which is a growing marketing tool.

>> one app i like is schedule gram. you can schedule your posts so you don't have to be on instagram every day to post. you post when people respond you can respond to them. it's a paid service. it's about $13 a month for one account or 40 a month for unlimited accounts. >> one of the dailies i read pretty much every day monday through friday is a news leader called theskimm. it's focused on takeingedeing the headlines of the most important news stories of the day and making them fun and witty. >> 99designs is an excellent website it allows you to reach out internationally to designers for branding content. you set up a contest, basically give a rate. you have designers internationally provide you with content. you get to choose one.

>> i adore the flipboard app. flipboard allows me to couple my articles from all over the internet whether it be mashible in social media or whether it be invest dominguez investpedia giving me stock advice. one app i love to use is the adp payroll app. it facilitates my payroll much quicker. it's a life saver. >> one website i use is rent the runway. you can shop high-end designer looks, gowns, dresses and rent them for just a period of time. it allows me to save a lot of money on clothing especially when i have to attend nighttime events galas, premieres. things like that. to learn more about today's show, head over to our website, it is

openforum.com/yourbusiness. once you get there you'll find all of today's segments and web exclusive content with a whole lot more information to help you grow your business. you can also follow us on twitter, and we are on facebook and instagram as well. coming up next week we meet a phoenix-based wedding photographer who knows how important it is to make sure her associate shooters are a good representation of her brand. we'll tell you how she's expanding the reach of her business by hiring people who are as passionate about her company as she is. until then i'm jj ramberg. remember, we make your business our business. american express for travel and entertainment worldwide. just show them this - the american express card. don't leave home without it! and someday, i may even use it on the moon. it's a marvelous thing! oh! haha! so you can replace plane tickets, traveler's cheques, a lost card. really? that worked?

american express' timeless safety and security are now available on apple pay. the next evolution of membership is here. the votes are counted. who won, who lost at cpac? all right. good morning. thanks for getting up with us this first sunday in march. here's what we have ahead on today's show. the third time is a charm for kentucky senator rand paul. he won yesterday's cpac straw poll. it's the third time he did that. it wasn't necessarily a clean sweep, though. who was close behind and does it mean anything? casey hunt will join us at the big board to break it down. you are looking live at moscow where thousands are