how do you starbuck a business? see how these harvard grads are doing that with nail salons by adapting the coffee company's culture of location and customer experience. and cut down on inventory that isn't selling. at vice on whether to stock or not. that plus tips on keeping your company safe from cyber criminals. 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 business." the show dedicated to giving you tips and advice to help your small business grow. can a nail salon chain become the next starbucks? well if the founders behind a boston-based company called miniluxe have it their way, it will. they've modeled their business after the coffee giant and hope that their brand becomes equally ubiquitous. it started with a challenge. >> small cappuccino. >> what is out there that can be starbuckable. that's pretty damn cool. you know we took a industry that is mundane, cup of joe on every

corner and changed what it meant. >> when tony chan issued the starbucks challenge to his colleagues at cue ball a small boston investment firm his partners didn't have to look far for the answer. >> one day i was walking down the street of my hometown, actually and i noticed nail salon to the right and nail salon to the left and the light bulb went off. >> the $8 billion nail industry was just the kind of business they were looking for. >> we are doing to the nail industry what starbucks did to the coffee industry 30 years ago. taking a huge fragmented market and convincing customers to trade up for a better experience. part of that trading up -- >> if these mostly harvard educated men look like an unlikely bunch to start a chain of nail salons they'd be the first to agree. >> i can tell you for sure i never thought that i'd be working in a nail salon. and when i left harvard business school halfway through to join this company i remember my mother asking me you're dropping out of harvard to go to a nail salon?

>> so in 2007 this group of management experts, all of whom have extensive resumes growing and starting companies, set out to build a better nail salon. they called it miniluxe. testing and fine-tuning the idea in a worst case scenario location. their hometown boston where the pedicure season is short. we asked them to share some of their strategies for starbucking a business. their first tip? let readily accessible data help inform decisions. like where to open the first store. >> i remember the first location sitting out there with a clicker, counting the number of people walking by the store. that's data. data that we collect for every single potential site that we're going to have a miniluxe. >> following their starbucks manifesto they wanted to be located where there was a ton of density in traffic. another tip for finding a prime location, find another store that has the same kind of customers you want. in the case of miniluxe they searched for you guessed it,

starbucks. and another company they admire and share a customer base with, whole foods. >> it's amazing how much information you can find. addresses of all the whole foods in the state of massachusetts. addresses of all the starbucks in the state of massachusetts. and we know those companies have spent a lot of money on figuring out where they should be. so how can we piggyback on some of the work that others have done and build next to a whole foods and a starbucks? >> another priority for the start-up, improving conditions for the customers and the employees, by tackling lax hygiene standards. a persistent and widespread problem in the nail care industry. >> when you walk into a miniluxe you'll see we have a clean lab. we utilize a professional grade autoclave to sterilize all the tools. if we can't sterilize a tool we'll give it to the customer or throw it away. >> and they tack near page from the starbucks rulebook. they wanted to elevate the overall client experience and at miniluxe that means a whole

bunch of things. like utilizing technology for online booking 24/7 and greeting customers differently when they walk in the door. >> you're walking by the store, you'll get a notification that there's an appointment would you like to fit in there's an open slot. that same technology seussed on the technician side that allows them to remember what nail polish was that this customer used the last time. or exactly how it was that they liked their nails done. these are all strategies that i think any good business owner would employ. they may do it on a notebook. we think if we systematize it across our whole change and i think we'll create an experience for consumers that will be unparalleled. >> equally important to treating the customer right is treating the employees right. just like at starbucks, career development, a healthy wage and benefits are an important part of the miniluxe strategy. >> when i first joined i was a part-timer. and when the full-time position became available i became full-time, and i expressed

myself to them that i'm interested in moving up. i want to make a career out of this. and they listened. now i'm a senior. >> we're trying to offer a level of compensation that is highly competitive in the industry but perhaps more important, is one where there could be a career progression. and as you're learning skills as you are developing within miniluxe, as you're building your client base that you can earn more. our full-time employees are paid health benefits 401(k) paid time off. we try to encourage profit sharing. one of the things that you want to do is help people understand that they are a critical part of the overall profitability. >> but providing benefits for employees is costly. so one of the ways they increase profitability is by staffing efficiently, anticipating things like the weather to predict their demands from one day to the next. >> warmer weather is going to result in about a 5% increase in client traffic.

for every 10 degree weather change. and it's going to change your likeliness to get a pedicure versus a manicure another 5%. having a expectation of the weather for a different week we can translate that into our demand forecasting. and subsequently our staffing forecasts so that we can schedule technicians efficiently. >> miniluxe now has eight stores in massachusetts and one in texas. many, many less than starbucks has. but they say they're on their way. >> i think this is a business that's long overdue. i think others tried it but we'll be the first to nail it. >> if you have a company which sells products a lot of your capital is likely tied up in inventory. if things aren't selling, that's a problem. we went to visit on art supply store in california, which carries thousands of to get a better understanding of how to figure out what not to stock.

>> things change and things get old, and things new things come out, and you have to be willing to give things a chance. >> what stays and what goes? >> you have to be willing to look at things with an honest eye and say, even though i love this, it's not working. >> those are two of the toughest questions that patti and richard herdell face in their business every day. >> we want a broad spectrum in our store. that's why we have so many items here. >> the owners of san clemente art supply and custom framing in san clemente california have about 49,000 products for sale at the store and on their website. >> everybody needs something different. so you have to have a mix of paints brushes, and papers those are your basic things and canvas. >> and the challenge is to figure out what to stock, and what not to stock on their shelves. it's an issue of dollars and space. >> we're not a huge store.

so if we bring something big in something else generally has to move and get squished, or go. >> deciding to send a product on its way isn't easy. but the need to keep inventory in check has helped guide purchasing decisions. before determining what goes something has to be ready to take its place. no space is ever allowed to go to waste. >> the dividing line for me has been do i want to bring in something new? and if i can move something out that's not doing well then we'll have space and we'll have dollars to do that. >> once a new product is in the paperline, it becomes a matter of sales and real estate >> bringing things in is usually a lot easier once something is not selling anymore it's kind of like a breakup. you really don't want to look at it. there's a lot of denial. after awhile you're like it's got to go. it can't stay here anymore. >> richard's first step is to look at the numbers in the point of sale system. >> we have a report that we can run that's called top sellers. if i ran that report it would show me what's selling, and

what's not selling. and that would determine what stays. >> patti and lisa do things a bit differently. they have a test of their own. if >> if there's a thick coat of dust, it's really not moving. >> when it's down at the bottom shelf and it's all the way to the left or all the way to the right, it's on its way out. >> people are saying good-bye to some not so best sellers, they may get a second chance. >> placement is really important. if i'm looking at something the first thing i would do is move it and put it stage center and see what happens. >> if sales don't budge, that's when it's time to send a product on its way. >> we can't necessarily sell it really quickly but we can definitely clear it off the shelf and put it some place visible in order to help its exit. we mark things down in a gradual way. we'll mark it down a little bit. and then a little bit more. and then a little bit more. and we try not to go below our cost. you know, if we can recoup our cost we're happy. >> lisa says deciding to get rid of something like a line of paint or brushes isn't as easy as you might think.

but she admits despite any personal connection to the product, sometimes, they just need to go. >> for a retail store, is about real estate and every part of it has to be producing for you. you can't just have something sitting there, because you love it, but no one else is buying it. >> while making sure the art supply store is offerings are appreciate it's happened that an older product has been given the ax only to get a new lease on life. >> we let it dwindle down to next to nothing and then we realize that we shouldn't have done that and we've brought it back. and we repopulated the display. >> if other entrepreneurs find themselves in patti's position she says you should be asking yourself a few questions. >> is it popular? are people wanting this item? or is it just you loving this item? >> patti says be honest with your answers, and your bottom line. if you think you need to make a change, don't wait, just do it. there are a lot of great apps and websites out there that

can help your company be more efficient and the best way to find the most useful ones are to go to the people in the trenches. so we asked our viewers for their suggestions on the tools they can't live without. >> an app that i love is phonto because it allows me to take images and photos and add words and other types of copy to the image. this is perfect for instagram, which is a channel on social media that my business really relies on. >> an app that i learned about and used recently is haiku and that has enabled me to put my messaging and branding in to a consolidated format with slides that are creative and messaging that's short and sweet. because we know that we don't have much of an attention span these days anyway. so we have to be short and sweet and to the point. >> so cora is a website where you can ask questions of experts and influencers of all different

industries answer those questions and they get voted up so that you can see kind of the most relevant and interesting responses for a question that is close to the community. >> one of my favorite apps is called ship station and we use ship station to ship multiple packages on a daily basis. it really streamlines the shipping process. for an e-commerce company it really saves a lot of time. >> i use onlinevideo.net because we are able to put a lot of pieces on there and also view other people in the same industry, or even outside industry to see what they're using to help each other in moving ahead the future of the online web video content world. >> ransom ware and mobile mall ware can be a big threat to your cybersecurity. the next time someone brings their tablet or smartphone to your office make sure they're not bringing a virus with it. our guest says most data breaches are actually fairly unsophisticated and there are several simple things small business owners can do to make sure that your web security is up to snuff.

vinny troia is a security computer expert and he's the khost of his own st. louis based security company called night line security. great to see you. >> thank you. >> tell me about this. if somebody brings their tablet or phone how does that then translate into what's happening in your office? >> well so you have a lot of mixture of devices, you have apple he can vices and android devices. and the apps on the android app store don't have the same rigorous testing process that apple puts them through so it's much easier to get an app on the android app store. literally all you have to do is upload it and it's on so people are creating duplicate apps fake apps and things with malware embedded into it. and when the devices get infected they go to the office and continue to spread the malware that way. >> so you talk about having filters. this is number one that you need to do when you've got wireless in your company. >> right. absolutely. i mean you really want to know what your employees are looking at anyway and you want to block certain things. there's certain websites they don't need to be going to anyways so there's plenty of filters you can install that will kind of take that back from

them. >> but will that help for the wireless, too, so for the guest who is coming in with their phone and connecting -- >> no that's a separate thing. for the guests i mean the thing you want to do is have a guest network. >> got it, okay. >> so employees obviously employees and guests need to be separated so anything where you have critical network files, confidential files, personal employee stuff that should absolutely be separate from anything that accepts tablets or outside devices. >> so these filters that you can install, they have a list you know, those companies have a list of places that your employees shouldn't go. >> exactly. >> you don't have to tell them a list. you don't have to be up-to-date on things. >> exactly. they'll do it for you. >> outdated software. do people know this but they're just not doing anything about it. >> no this is the biggest problem because when malware spreads, it is spread by infecting software that hasn't been updated. so this is really the number one thing you have to do is keep your software up to date. it's an expensive process to go around and hire someone to update all the machines but i mean it just has to be done. >> yeah and how often does it

have to be done? when is something considered outdated? as soon as the new one is out? >> well i mean microsoft for example puts out new security fixes every tuesday. that's given. i mean you absolutely have to do that. apple whenever any time you see an update notice you should probably update the software. more often than not it will be a security update. >> got it okay. and then we talked about before having a guest network and then be cautious about what you open via e-mail. again, this is something that we know, it's obvious. our employees should know about it. yet people are victim to this all the time. >> yeah it's -- it's how -- it's how malware infiltrates companies. they send out phishing attacks to random employees, they open the attachment because the software searches adobe acrobat or flash needs to be updated the plal ware is able to inflect the computer. it's a chain reaction. >> tell me in the scheme of protecting yourself how much of this is a technology solution, and how much of it is a just make your employees aware of things that they could be doing wrong? >> security awareness is the

number one thing that's lacking right now in all companies. train your employees. at the very least you should have some sort of security awareness training annually. a lot of companies don't do that but they should. you know teach your employees about what threats are out there. show them you know what to open what not to open how to do things in a safe manner it's just not happening. >> so where do i get that? so i'm a small business and i'm listening to you and say okay i want to do this annually is there a powerpoint or some presentation that i can download and show my employees? >> there are a lot of online tutorials that you can send your employees to. a lot of companies will also hire speakers to come out that's much more engaging and people will pick up -- people will have a much better experience with them, as well. >> got it. all right well thanks so much. it is such an important topic. it's not a problem until it's a problem and it's a huge one. >> exactly. >> appreciate you reminding us. so i'll pay attention to this. >> thank you. not everything is created equal. if you're going to take the time to read an e-mail newsletter it

should be useful and helpful. here now are five must-read inbox worthy subscriptions that will make you a smarter entrepreneur. one, smashing magazine newsletter caters to web designers and developers. but small business owners can also benefit from knowing the latest trends and techniques in web development. two, hbs working knowledge newsletter. with content from the minds of harvard business schools, 200 plus faculty members, these e-mails will help you and your company stay at the cusp of innovation and change. three, emarketer daily provides you with the most complete view of digital marketing available. the information is relevant across all industries. four, expost facto vc tomacz tunguz writes daily blog posts about key questions facing start-ups. and five wp beginner is a free resource website offering tips that will allow you to bring

your small business to the next level. coming up, a lot more good advice to help your small business including a question about how to mix up your inventory to get customers to make a purchase and what to look for when searching for your first location. 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's your biz selfie comes to us straight from the pickle baron from key west florida. justinyourbizselfie coming from pickle baron. want to see yourself up on our screen? we love getting photos from around the country. take a selfie and send it to yours byness . it's becoming a major problem for a lot of small bys particularly in big cities. rising rents are forcing them out of their stores and offices. as reported some store owners are fighting back. >> some consider it an institution after opening in the late 1830s. by next month he'll close his

doors for good. he said his building was sold to a hedge fund who then tripled his rent from $20,000 per month. >> we had a thriving business here. business went up every year. with all the chain stores with all the chain pharmacies around we still were able to increase business because we just provide add service here. >> but steady busy isn't enough in the face of soaring rents from coast to coast. office space and storefront rentals in new york city have increased by 0% in the last five years and in san francisco the problem is even worse with storefronts up. a new campaign called save nyc is hopeing to change that. the save nyc campaign is modeled off another recent initiative called save soho out of london.

that's aimed at protecting art vendors within the city. and officials have recently stepped up their efforts to help shield mom and pops from commercial outliers there. >>. >> there's third general shoe repair out of upper east side. he ended up settling out of cord when someone wanted to expand in his store. >> i feel good about new york city having an old busy staying here and hopefully we can start a trend where landlords say, hey, we need to keep some of the old businesses alive to keep the character of new york instead of becoming a cement city. >> rocco realizes he's a rare story. according to the center for an urban future. >> it is time now to answer some

of your business questions so let's get our board of directors in here to help us out. investor jesse coal is the ceo of a clothing line hot hippie. so good to see both of you guys. >> great to be here. >> let's start with the first question. it's about leasing a new space. >> so our business is 2 1/2 years old and it's run out of a garage currently. we're expanding and looking into looking for a first commercial industrial space and i was wondering if you had any tips on things to look for in that first location and signing that first lease. >> good sign when you move out of your garage to your first space. you know a little bit. >> start about six months out and make a list and start visiting them from worst to best and in the process you're going to be asking questions, talking to the leasing agent, and you will educate yourself and really try not to telegraph everything you're thinking with the leasing

agent. whatever you hold back will help you later in the negotiation pro saenlsd if possible ask them to prepare a lease and offer to you first. >> you've been through this process. any tips? >> i think what's most important for us is spreading a wider human capital draw. employees are obviously the most important thing for the success of your business. >> for me, what was the real estate going to be able to provide my staff? transportation successability. anything that would make my potential employees or current employees feel very very safe. >> what's interesting is my company moved offices recently and suddenly it was a bit harder for people to commute there and it's not something, i admit, we totally thought through. we did it in the end. it's something -- some people don't remember to think about their employees. >> right. >> let's move to the next

question. from a business opener who erowner who has a lot of customers browsing but not finding. >> how to i find new merchandise that fits my store. >> i have to start with you. you have a store. what happen whence you see people come in they're looking at stuff and they walk out the door? >> sometimes i don't necessarily think it's the product. i think it's really about the human experience and interaction and interface with the customer. for me most importantly, it's about educating my staff on how to interact with a customer or a potential customer. engage to make that customer feel good in making that purchase. >> i guess monica one way to find out is by surveying your customers or the potential customers. >> absolutely. talk to your customers. but if you're getting traffic through the door. you're doing one thing right. it's a matter of converting them. it could be a matter of price or product mix. i think she has a stamp business

and it's in a novelty type of space. she may be getting traffic who is interested in the product but not the purchase. >> if she gave some examples of some neat things you could do with the stamps and suddenly open up their imagination. >> takeaways are also very, very important. what i mean is the price points for a clothing company could potentially be too high for a customer. something offered at a register, something that identifyies them, something they can afford and take away and have a remind over their shop, that will bring them back. >> and set up a website so you can get that traffic and convert them later. let's move onto the last one. it's a question about striking a balance in the business of one. >> what kind of tips and tricks do you have in balancing all of it when you're the person trying

to do your own accounting your own web development and awe of the things you need to do as a business but you're not yet in a place where you can hire all that out. >> by the way, you also have a life you're trying to balance in there too. >> it's the prado principle. figure out what you're spending your time on and where the vast majority of the income or sales are going to come from your business. i think in the very beginning of a business process, you don't have a business until you have sales so you should definitely be prioritizing the product and getting out there and selling and everything after, that it's a matter of being effective in how you spend your time. it's a very common problem for small business. >> for me i would suggest keeping your expenses in h1n1. there are a lot of tools on the technology front that will enable, help and assist business owners and entrepreneurs to be able to do it themselves. one rule of thumb or advice i would have is not do the

accounting yourself. >> yeah, yeah. >> you should know the accounting practices, know your business, but it's always best to have somebody else keeping an eye on your financials as a layer. >> we hear that a lot. if there's going to be one thing you outsource, that's a good thing to do unless you're very good at it which most people are not. there's a lot of places where yo can hire taskrabbits. >> the complication is training the people. it takes so much time. >> that's very true. thank you so much, guys. this is really great advice. we really appreciate it. >> thank you for joining us. if you want to learn more about our show head over to our website, openforum.com\yourbusiness. you can also follow us on twitter.

it's @msnbcyourbiz and we're on facebook and instagram as well. next, they've slashed their payroll to zero. >> we have no payroll. >> or employees. >> nor do they have the legal authority to treat me as an employee. >> they've done away with having an office warehouse, or even filing cabinets. until then i'm j.j. 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 battle over religious freedom and equality moves to center court. all right. good morning to you. thanks for getting up with us this final sunday morning of march. if you're a little blurry-eyed this morning then it might be because like me you stayed up a little bit past your bedtime watching the dramatic ncaa tournament game between kentucky and notre dame with the irish falling short, heartbreakingly short, agonizingly short with kentucky earning a trip to the final four keeping its dreams of a