good morning, coming up on "your business." the owners of this cow cream business built a big brand and kept their operation small. plus, a new study with alarming statistics, abuse sieve bosses. let us help make your business better.

hi, everyone. welcome to "your business." anyone starting a small company likes to think that they know who is going to buy their product and how much money they're going to need to get it off of the ground. the truth is more often than not you never really know what will happen until you're in the thick of it. that is pretty much what happened to an entrepreneur that created a new swing. he realized that running your own business has highs and lows.

this brand and it's product are on the up and up. >> we sold the house, bought a bus, loaded up the kids, adopted a dog, and set out on a 14,000 mile tour visiting over 100 stores all over the country. >> they took the ultimate sales trip in 2015. >> i knew i wasn't going to learn unless i got out there and saw what a day was like in these stores and creating relationships. >> he is the charleston, south carolina creator of the swurfer. he meets independent toy store owners to explain. >> you can sit on it, stand on it. >> taking this toy store tour was not the original plan.

when he first developed it, he had an entirely different audience in mind. >> i wanted to go into the surf and case world, and things started taking off. >> it didn't take long to realize he had to change gears. the lightbulb went off after he spoke to people at his local toy store. >> we're like this is so cool, innovative, and different. we want this in our toy stores. >> that inspired him to pitch other independent stores and well, but he was a novice. >> these stores don't get a lot of attention from national companies. they're continuously looking for unique products, that you can't find at a mash retailer.

>> it simply may not have been if he did not go the extra mile. >> it was a game changer. instead of saying here is our product, you this is what it does, they could get on it and experience it. this is not a product that people have seen before. >> and he was able to develop relationships with store owners that were invaluable as he was learning the ropes. >> we have been in business 25 years, made many many mistakes, gone through them, and come out better for it. it was nice because he was constantly communicating with us. >> the owners are all small, independent business owners. they have been doing it for a long time. other companies have helped them foster and grow. >> for something trendy, it's all about the timing. >> the shelf life of a hot item is about three years.

they know to get on it quick and embrace it. >> not being able to move fast enough could potentially kill what could otherwise be a great business. >> rob and business partner matt ackerman had a hit, but too many things were going wrong. first they didn't have enough money. >> i think we learned there is always more that you could spend money on. >> rob wants to boot strap the business using his own safings and boot strapping everything. they could not buy the extra inventor inventory. >> $100,000 sounded like a lot of money, but you don't realize how quickly you can go through it. we thought it would be enough. >> we did our first trade show and rote over $100,000 in orders in one day and we realized we'll knee more money. >> another $450,000 followed

thanks to an investor. rob and matt learned to pay very close attention to their supply chain. >> they had gotten a rude awakening when one of their suppliers didn't pull through. >> it became clear he was not going to be able to do it. over that period of time we had to find different sources for what we needed to do. >> they also discovered their packaging was all wrong. >> they had to work with it. originally it was in kind of a plastic bag. we had to readjust that for a little bit. >> i fought it, i was like it's doing all right, we're selling a ton of these, but this type of product is a packaging that they have to sell it. the toy owners want you to succeed. they're really champions for

you. >> the company is growing. last year they did six times the revenue from the year before and they expect to dot same again this year. >> i think it has been huge for us. >> this industry is very forgiving. it will always be attributed to giving me my masters in small business. it will always be the place where i learned and really cut my teeth. >> almost every small business wants to grow, but the trick is often to do that without diluting quality and brand. that was the challenge for a familiar brand of hand cream. this family owned company worked hard to keep it small even when major orders started coming their way. improving the efficiency of their family business has been a

profitable decision for this brother and sister. >> we keep it small and are in control. >> revenue has gone up. >> they run red x industries in sal salem, ohio, but they're best known for utterly smooth. >> the cow spots are very much our brand. >> the maker of lotions and moisturizers, which bill and len da -- linda's parents started in 1978. >> first it went to the farmer for the application for the cow. and then it went to the farmers wives and then it was word of mouth. >> they are in some of the biggest chains and the smallest stores. with such brand reach, they may think they're buying it from a

large company, but they would be wrong. they're a lean operation with only 17 employees and customers take notice. >> they're impressed that we can fulfill the pipeline the way that we do nationwide and worldwide. >> the key to success has been focusing on efficiency. when they took over, the production line needed a upgrade. >> we just said where is our slowing points and looked at a way to eliminate them. >> at one point the company was bigger. >> we had two shifts, it would be filled into the jars and go into a cooling room overnight and we would start a shift at midnight to cap it every night. >> so bill and linda made necessary changes. one major accomplishment was automating production. >> we mechanized and what used to take us 20 hours we would get

two pallets and now we get two pallets in maybe 30 minutes. >> typical workweek is four days. friday is for catching up. >> as a four ten operation, when our tanks are out, it's one less day of reheating, clean up, set up. >> bill and his family do not believe in cutting corners. they always invest in topnotch equipment, especially if it can speed things up. >> rather than buying a capping machine that can do 100 a minute, we get one that does 250 a minute. >> and another motivation is keeping time with family. their parents set the tone and they have followed in their footsteps. >> mom and dad made sure we know where we came from. >> they will never shy away from

growth opportunities and improving operation. but their goal will remain to keep the 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 duo on a daily basis. if you can't have fun with a cow and a cream that was originally developed for cows, there is something wrong. looking for opportunities to grow your small business is an essential part of the long-term success of your company. check out these five business expansion strategies. one, expand your offering, new products and services help you naturally attract new customers. two, revisit your sales data, who are you failing to reach. three, invest in marketing and

referral campaigns. increase your brand's visibility. four, collaborate with other businesses. you can create a partnership with a complimentary company and ideally it helps you both grow. five, look for new opportunities. if you run a brick and mortar store, look at your inventory and see if there are products or services you can offer online. you can open an ecommerce store front with relatively low overhead. startling and discomforting findings was recently published. they found that more employees at small businesses are experiencing abuse by supervisors than those at larger companies. we brought on two professors behind the study to talk to us about what they learned and shared ideas how how business owners can be better leaders.

we have patricia and dale. both are professors. so good to see you both. >> hi, good morning, thank you for having us. >> there is so much talk about the culture at small businesses and how they're very employee friendly, and that's why when you hear a story like this, or see a study like this, it feels like it is in contrast to what we're reading about. i would love for you to start by telling us what you found. >> one of the things we found is that the difference of reports of abuse is high ner small businesses than large biss. and the factors that change that have been things like does the manager have social support? a higher revel of education? or does the manager have a

feedback system where he gets information from his employees? when they lack that, they tend to have employees that feel their being abused more. >> when we say abuse, what are people claiming to experience? >> sure, being a tough boss, high standards is different from abuse. abuse is calling someone out, e belittling them, demeaning them. starting rumors about them. sabotaging their work. making it impossible for them to succeed and calling them out and blaming them for thing that's are not there. it's not one time that you're upset, this is an ongoing consistency. that so that employee, coming into work, knows they will probably get picked on, yelled

at, for no good reason. the boss will threat ton fire me. it purts that persts that persa position. >> did you get the sense that it was the boss? right? the founder and ceo, or one level under thaem aem that are this. >> it typically was a response recorded regarding the owner but there was managers as well. >> so if someone out there is listening to you and thinking this sounds familiar, is it manage training in is that where we should start? >> it includes that. i think one of the assumptions that small business owners make is that they're running a family or a family culture.

i don't know about you, but there are times you could not tell your father or mother how you really felt about something. and when the managers don't provide a system to receive feed pack, that's when they run into trouble. it gets to a level when they reported high levels of abuse, it was twice as likely than the alarmer companies to report high levels of abuse. they cannot only make sure they receive and listen to the feed back, but if they have other managers in the business, education which i think the largest factor for reported abuse in the corporation. >> it is that feed back, that tough look in the mirror, and getting objective coaching.

not family that can tell you the honest truth about how you're behavi behaving. you must just think i'm being tough because i have so much invest invested. >> you have to be, if you're the owner of the company, you have to want to step back and say am i doing things right, could i do things better. if you're a manager you need an owner or boss to come down and they is not working out for you. i believe that is hard to do. >> it is, but when you look at what happens, because people who are soundly abused, they will leave. they show them this is how we

act around this place in is okay. they're not going to treat the customer well, treat each other well. they're going to quit and be absent more often because you made it such an unpleasant place for them to be. it will start to show up somewhere. if you don't get religion and decide to take care of this, you will struggle because you will get a very, very bad reputation in that employment community. now one will want to come work for you, and know one will want to stay that is very good. >> thank you for joining us. it's a good look at that. people should take a hard look in the mirror and getting 360 degree feedback. appreciate you stopping by. earlier in the show we showed you about the creator of

a stand up swing. today's elevator pitcher is trying to also make inroads to that word. >> and most recently cofounder of little global chefs. >> there is $6 billion worth of toy vehicles sold every year. there is only one thing missing, toy roads to drive them on, that's why i invented play tape. it sticks to any plat surface, it's easy to tear, reposition, pick up, and recycle. it has 25 industry awards. it is patent pending and made in the usc.

they will expand tenfold this year as we release hotwheels play tape. i have done four start ups and i have a team of industry experts with 50$1 million for a 17% stake in the business to expand sales, marketing and our product line. investors can expect a three -- sorry, six to ten-x return in three to five years. >> good job. what a smart idea. before we talk i'm going to give you two these. >> thank you. >> i want two numbers. the first one is what do you think of the product. the second the pitch. >> you know, it's often the most simple things that make the most sense, right? >> yes. >> i wish i'd had this when my kids were little and using these toys. >> that's what i said. >> i was drawing it myself. owner of three businesses right now, right? >> yeah, and two start-ups. and two kids. >> it keeps growing. >> and a husband. sort of. -- >> no, i am still married. >> so i thought that the product was fantastic. having my own patented product

myself, i can understand how difficult it is to get something so innovative into stores so i congratulate you. that's why i gave you a 9. and a 7.5 for your pitch. i think you came up strong in the beginning and got a little bit nervous in the end. but great job. >> thank you. >> all right. sonia. >> so, andy i gave you an 8 for the product and a 7 for the pitch. i have a 4-year-old son who would absolutely love this product. and he's constantly dragging his cars around my house up the walls, on the floor. wherever he wants. i think a track would be great for him. i love the product. in terms of the pitch i thought you had almost everything that i would want to hear in the only 60 seconds that you had. and it was very well structured and you said it in a way that it made me want to hear even more. one of the things i would have wished you had spent some time on was your successes to date in terms of revenue. i'd love to hear kind of how big your business become, and where you see it going moving forward. otherwise i thought it actually was a very good job. >> i'm going to add something, too.

what i thought was good that we don't see a lot on this program is you said, i -- this is my fourth start-up, and we have a team of experienced people. and that is least piques my interest enough to say, what happened with your last start-ups? and who is that team? so we don't hear that a lot and i think that was really great. >> thank you. >> congratulations on the success so far. good luck with everything going forward. you two stick around because we're going to have you give some more advice a little bit later in the show. if any of you out there have a product or a service and want feedback from our elevator pitch panel on your chances of getting interested investors just like you just saw here, just send us an e-mail, the address is yourbusiness@msnbc.com. in that e-mail include a short summary of what your company does, how much money you're trying to raise and what you intend to do with that money. you never know, somebody out there watching the show might be interested in helping you. when we come back we answer your questions on hiring a full-time employee versus the independent contractor. and why successful business owners need to take time to read.

our cosmetics line was a hit. the orders were rushing in. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials. amex helped me buy the inventory i needed. our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at open.com >> when do companies need to decide if somebody is an employee or an independent contractor? >> that's a great question.

you know, for years, we could turn to the irs for the answer to this question. they published a 20-point list of things to help you determine if someone is an employee or a contractor. if you dropped a person through that list, and they went all the way to the bottom without catching anything, you had yourself a contractor. however, if they, on the way down, they caught any of those 20 points, that is an employee. and you better treat them like one, including payroll withholding and all that. now, things have gotten a little bit more complicated in the last year because of the department of labor. they're now weighing in on this. it's not just the irs.gov, it's now the dol.gov that you need to think about. the department of labor now have their own employee versus contractor criteria, so you got to check them out, too. so, here's my point. if you haven't asked the question, you probably got a problem. deal with it or find a professional to help you there. a lot of them out there who will. individuals and companies.

we now have the top two tips you need to know to help your small business grow. kalika and sonia are back to give their thoughts. thanks so much. you guys, i can't wait. two serial entrepreneurs. you've both ben through this so many times. kalika, just to give some context, three companies in two start-ups, right? >> correct. >> okay, what's your tip? >> so i believe that leaders are readers. and that ceos need brain food. in order for you to be successful in today's business you really need to feed yourself intellectually, philosophically, personally, professionally. so i say just pick up -- i read five back books last month and i think it's really important for everyone to get a whole list of books to read. >> where do you find the time to read five books in a month if you have kids and you're married and you have three businesses and two start-ups? >> on plane rides, or in the hotel room, but i already have a list of books, and i read three books online from this past week, i just finished a year of yes, i'm reading big magic.

but some of my favorite business books are small giants, i really love the knack. and i love your book, too. >> oh, thank you. very kind of you. okay. let's move on. so reading, great idea? >> to my top tip is you should always be pitching your business nonstop. you should be pitching your business idea to anyone who will listen. so i've been on both sides of the table, as an entrepreneur, as well as an investor and when i talk to entrepreneurs a lot of the time i hear that people are worried to talk about their business. either they think someone's going to steal it or they think that their business idea isn't quite ready to be heard yet or they're nervous about some other thing. what i say is tell anybody who will listen about your business. because you will learn so much. one, you'll prab 'tis your pitch and you'll make it better each time. you'll iterate it, hone it, and be more concise and be able to tell it better each time. second, you never know who you're going to meet. so if you're at dinner with friends and you're telling your friend about your idea, they may

know someone else who can become your next business partner, your next us is her, your next acquisition, who knows what, right? >> i think that's the real point is you never know how someone might want to help you. in order to pitch it all the time, though, you have to be able to say it in a way that makes it interesting to other people. so it's not just, oh, she's talking about her business again, right? it has to be something exciting. but your business is teaching cooking skills, and getting kids to eat better. right? >> yep. >> and so that's easy to talk about. right there. sort of infinite interest in that for anyone who has kids. >> and it's all about context and knowing your audience. you're not going to give your buttoned-up pitch to every single person if you're at a dinner party. it's about finding ways to bring up what you do or what you're interested in. organically in all types of conversations. >> let's just say you're starting a company that makes springs, right? interesting company. there's a lot of room for growth. how would you bring something like that up in a conversation? >> well, i would say when people ask you what you do, be honest. oh, well, i am working on a

business that builds springs. and people say, really? springs? and then take it from there. and sometimes you're not going to be able to go through your entire three-minute pitch. but, if you give people a little bit of a taste on what you're doing -- >> and you're excited about it, other people get excited about it. >> yes, definitely. show your passion. >> and do you read a lot of books? >> i definitely don't have time to read four books in a month. but i was taking mental notes on the books that kalika's been reading. i wish i had time to more. i'm going to take that tip and do that. >> well, great, thanks to both of you. thanks so much for joining us today. we would love to hear from you. if you have any questions or comments about today's show, just send us an e-mail to yourbusiness@msnbc.com. you can also go to our website, it's openforum.com/yourbusiness. we've posted all of the segments from today, plus a lot more. and don't forget to connect with us on all of our digital and social media platforms, as well. next week, a stay at home mom

launches a boutique boudoir photography business out of her bedroom. >> there were a lot of naysayers at that point that said to me you can't do that. it's not safe. it's not smart. it's stupid. why would you want people in your bed? what are you doing? and i just sort of tuned everything out and said it doesn't matter i don't care what you think this is what i want and nothing's going to stop me. >> from the bedroom to the bottom line we learn about the sexy business of boudoir. until then i'm j.j. ramberg. and remember we make your business, our business. our cosmetics line was a hit. the orders were rushing in. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials.

amex helped me buy the inventory i needed. our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at open.com gop showdown. republicans hold their last debate before new hampshire. can donald trump stay on top? >> how tough is it -- >> a lot of times -- >> let me talk. quiet. a lot of times. a lot of times -- >> the bottom line, this notion that barack obama doesn't know what he's doing. he knows exactly what he's doing. >> there it is the memorized 25 second speech. >> also the battle for the soul of the democratic party. >> she has the entire establishment, or almost the entire establishment, behind them. >> i have a progressive who gets things done. >> what does it mean to be progressive in 2016?