good morning, coming up on msnbc's "your business," the owners of this baked goods company got taken in by the pie in the sky promises of predatory lenders. what you need to know to keep from being a victim. we'll show you how this small plumbing business transformed itself by emulating strategies used by bigger companies. plus, some winning techniques you should be using to make sure you're getting p d paid. roll up your sleeves. it's time to get to work, coming up next on "your business."

hi, everyone. i'm j.j. ramberg and welcome to "your business," the show dedicated to helping your small business survive, thrive, and grow. imagine the thrill of getting funding for your company only to discover to your horror that you are paying interest rates that annualize to 60% or even 100%. today, we meet two victims of small business predatory lending, a couple of founders who started a bakery business that from the outside looked like it was doing great.

but they were drowning under a series of loans with terrible terms that they simply could not meet. we take a look at what happened to them and how you can prevent this from happening to you. known as the dessert divas of baldwin hills and crenshaw in los angeles, katara and shoniji launched southern girl desserts eight years ago. inspired by their southern roots, this baking duo wowed the west coast with their secret family recipes. >> our signature dessert here is our sweet potato pie cupcake. >> i didn't even try the frosting yet. that is amazing. within the first year of opening their doors, business was booming. so they staffed up, big time. >> we went from having one employee to literally overnight having 24 employees. everything was going great. we were probably paying out

about $40,000 a month in payroll. >> but the costs of keeping up such a large staff soon proved to be problematic. >> we had overhired. so that was the first time we said we need a little help with payroll, let's just take out a loan. >> because southern girls desserts was a newly established business with little credit history, qualifying for a traditional bank loan was off the table. left with minimal options, the two decided to explore other kinds of loans. from day one they had been inundated with unsolicited yet enticing offers. >> when i tell you they contact you, day in and day out, do you think you're in need of $200,000? >> stuck with an immediate need to deliver on payroll, they decided they would work with one of the brokers who had contacted them. they took out a first loan and paid it back with no problem. but that was only a temporary fix for the looming payroll issue.

they soon found they needed a second loan. without knowing it, they became fast victims of predatory lending. in a move that sent their company in a downward spiral, they needed to take out a third loan to help them pay back the second one. >> that third one was the one that sunk us. >> typically these loans are laced with confusing and misleading language. annualized interest rates and that can be over 100% and hidden brokers' fees, all of which can take a business down, quickly. conan knoll is the vice president of entrepreneurship at the small business majority. >> the devil's in the details. they're hiding the key financial information. a lot of the information is not presented in plain english terms. it make it difficult to understand the true cost of the loan. >> some loan brokers are known to use abusive tactics. >> predatory lenders can be very aggressive. they can e-mail, call, text. one hallmark is they use high pressure techniques and say you have just a couple hours to make

a decision on this loan. >> they become your best friend. they're likeyeah, so, , you're getting married, oh, me too. they get you on that phone like they've known you since kinder kindergarten. you trust them completely. >> and that trust is instrumental for predatory lenders to successfully trap their prey. >> they know you're in such a rut and they prey on you and they pounce on you. it wasn't about us, it was about all these people we have employed. so we did whatever it was that we could do to ensure they had checks in hand. when it was time. >> at one point, the loan terms allowed their lender to dip into their business banking account on a daily basis. >> we were paying upwards of $10,000 a month. all of our cash was being eaten up. and we were just drowning. we could not see any light. >> so what did you do? >> we took another loan.

>> you walked through this door every day, you have this beautiful business that you built from scratch, knowing that if you lift the curtain, behind the scenes, it was a disaster. >> uh-huh. >> what was that like for you? >> it was horrifying. there were lots of tears on both of our parts. we're like what in the world is about to happen here? >> it's an embarrassing situation for people to get into. >> we didn't feel like there was anywhere we could turn. >> the alternative market is highly unregulated. we don't want to throw the baby out with the bath water. and stifle innovation. capital is the life blood of small business. there are a lot of responsible lenders. >> for small businesses who either find themselves victims of predatory lending or are looking for trustworthy and transparent lenders, there is help. cdfis, community development financial institutions, help many small businesses access safe investment capital and you don't empower people with

crucial information about the lending process. they then eventually turned to san francisco based opportunity fund to help get them back on track. >> it was such a wonderful blessing to work with them. >> how did you get over that shame of having been taken advantage by a loan? >> it wasn't until we started sharing the story that we realized, like, we've got a lot of people like, me too, you know, the hands are like, me too. >> for anyone trying to protect their business from predatory lending practices, one word of very familiar advice always seems to ring true. >> if it sounds too good to be true, it probably is. do you know what it takes to build a company that leads? growing a small business that has fiercely loyal customers and employees takes work and thoughtful planning. for the owner of a new jersey plumbing company that meant

bucking all of the trends in his industry to get his business to the top of its game. ♪ 20 years ago, mike was an electrician working seven days a week, 18 hours a day. >> first ten years, i always tell people it was like a hamster wheel. it was me and rob, my business partner, in a van and we would start early morning, end at night. >> today, gold medal service that company that was once mike and rob, employs 128 people, has more than 100 service trucks on the road and brings in more than $20 million a year. what happened after ten years? >> rob came to me. he was really burnt out. he came to me and he says, look, i'm done, i'm out. i want to get out of business. i said, look, if you're not going to do it, i'm not going to do it. he says, no, let's make a change. i'm not going to go anywhere. let's do this. >> rob meant change their two-man operation into a different kind of business.

one with employees and processes and more customers. one where they would be the bosses, not the technicians. they wanted to create a company that bucked all the stereotypes. >> we know the stereotype, right? the plumber's crack, the electricians, tradespeople will come, they're going to be dirty, they're not going to be polite. >> so they looked outside their industry for inspiration. >> we started looking at models like nordstrom's, disney, started to look at zappo's. we started to say, if we could take these belief systems they have and put it into our company, no one else could copy that and we'd be really unique. >> they were determined to build a business that would last. and to do that, they felt they needed to have a laser sharp focus on both customer and employee satisfaction. they summed it up with four core values that direct every single decision they make. >> core value number one is safety first for our family and theirs.

>> safety first for our family and theirs. that's interesting. >> yeah. >> i imagine that was very deliberate. >> it was. because our family is everybody inside our company. we care about them as much as we care for the customer. >> the second value is to deliver wow through service and exceed every customer's expectations. mike and his team go over ideas on how to do this at every single meeting. from simply wearing floor protectors and having tucked in shirts to suggesting ways to interact with customers. >> let's look at it in your sense when you're in front of the customer. hi, mrs. jones, i did my greeting. is it okay where i parked, let me put my floor protectors on. is it okay where i put my tools right here? >> michael jackson has been with the company for five years and says he still learns something new from every one of these gatherings. >> it also helps you see things maybe in a different light sometimes. if you're going through houses constantly and you don't have interaction with someone other than the customer, sometimes you can get stale. sometimes you can forget a step.

>> the third value is to always have the highest level of integrity, to do the right thing, even when nobody's watching. gilbert has been a gold medal service customer for eight years. he says it's these values that keep him coming back. >> above and beyond is the standard for them. they set high expectations for their service technicians. they don't try to oversell you. they educate you about what's taking place. >> and finally, the fourth is to be a great place to work. all for one and one for all. a sentiment many of the employees never felt until they joined gold medal. jeff describes the office as a second home. >> family atmosphere. comradery between not only the upper management and the lower guys, but the technicians themselves. a lot of guys are friends in work and outside of work as well. >> from inspirational signs hanging on the wall to their values ball that they throw around at the meetings. >> a lot of times when we have a meeting, we'll throw this

around. wherever your thumb lands you have to say what it is. compliment someone. if i got this, hey, jj, you're amazing, this interview is amazing and i appreciate you for it. >> this isn't the kind of thing you see at most companies like theirs, but it may be soon. mike has been so successful growing gold medal that he now offers classes and mentorship to other companies, including competitors on how to create a winning business. >> i think any time you help other companies, you raise the bar. and when you start pulling that up, it not only pulls my company with it, it pulls theirs too. >> mike's got his army, he's got his vehicles on the ground, and he's determined to change this industry service technician by service technician. ♪ every like on instagram could be getting more exposure for your small business. entrepreneur.com gives us five tools that will help you tap

into all the ways you can use instagram to raise awareness for your brand. one, use yotpo to search and collect images on instagram that are relevant to your brand. you can display them on your site to show potential customers that actual people love your product. two, prepare your posts ahead of time with buffer. you can schedule to have push notifications set to remind you exactly when to upload your image or video. three, best buddies tells you who likes your photos the most. knowing who your biggest instagram fans are can help you gather more information on your target customer and brand influen influencers. four, find and analyze your followers using socialrank. you can sort your subscribers by geographic area, gender or by specific keywords and hash tags. and five, minte.io helps you better engage with your

customers. and keeps track of important stats that will help you better engage with your customers. it feels like we are continually hearing about a major hacking. corporate, political, or retail. as we've reported, small businesses are not immune. today's elevator pitcher has developed a cyber security software tool to help thwart those attacks. let's see if our judges think it's a valid deterrent. tanya is founder and ceo of social content analytics firm sharably and brad harrison is founder and ceo of scout ventures. >> hello. my name's matthew lewis. i'm president and founder of fish train. cybersecurity is the greatest concern for companies today. it's so easy for a hacker to infiltrate a network and steal crucial information. one of the easiest ways is through a phishing e-mail. when the victim interacts with it, they're immediately hacked and malware is installed on their computer. what we do at phishtrain,

we custom tailor a fake phishing e-mail. when the employee interacts with it, they're enrolled into an educational module based on the severity of their intersection saying, this is what you did wrong and this is how to avoid phished in the future. back on the client end, they can see if the employee clicked the link, enter credentials on a fake landing page, the device they were on and drill down further to see more specific data. today, i'm looking for $500,000. for 30% of phishtrain because of our technical edge over our competition, our foothold on the global marketplace and our high profile partners and clients. thank you. >> congratulations. good job on that pitch. >> thank you. >> let me give these to you two. i need two numbers. one, what do you think of the product, and two, what do you think of the pitch. i love this. it's almost like a secret shopper but for cybersecurity. >> exactly. >> i think it's a really neat idea. let's see what our panel thinks.

>> thank you. >> brad, let's start with you. >> all right. >> are you drawing a painting over there? >> i'm giving more specification. so i thought the product's really interesting. we see this as a really big need. we're spending a lot more time focused on cybersecurity. and i think it's an elegant approach to how you educate people. in terms of your pitch, i thought it was a nine, which is the highest one i've given. i thought you were engaging, you made eye contact and you were clear in what you needed. so i thought it was a great job overall. >> brad's first nine. good job. tanya? >> i did an eight and a eight. i thought the pitch was really strong. you educated on the problem that businesses could experience. i would have loved for you to pepper in some examples of just how clickble these phishing e-mails are because that would get my paranoia up and the product just sounds like it's really needed. i feel there was a lot of talk around phishing a while ago and perhaps people have gotten a

little lax. it really opens up the opportunity for businesses to get harmed. it seems like it's a great time for this. >> if you're a small business owner, too, what seems neat is the ease of it. you just send this out to your employees and you quickly see who fell for it or not. it's almost like the secret shopper. congratulations on everything. good luck with your company. we appreciate you coming on the program. >> thanks a lot. >> and thank you, guys, of course for your advice and feedback. >> you're welcome. if any of you out there have a product or service and you want feedback just like you saw from our elevator pitch panel on your chances of getting interested investors, just send us an e-mail. the e-mail is yourbusiness@msnbc.com. in that e-mail, please 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. we look forward to reading all about your companies and seeing some of you here in the elevator. managing your cash should be one of your top priorities as a small business owner. that includes ensuring you get paid on time.

unfortunately, your clients may not share your same sense of urgency. we've invited greg waldorf to come take to us today. he's the ceo of invoice to go, a mobile app that makes it easy for small business even owners to track work and get paid. so good to see you, greg. >> good to see you. >> i have heard stories of companies sending invoices to big companies and filling out one small part of the form wrong and not getting paid for months because the invoice gets lost in the shuffle. >> it's pretty typical. small businesses have so many cash flow issues. that's why getting a professional invoice to their customers quickly is so important. the first part is doing it digitally. not using paper and pen, not just using a microsoft word template. that's what our customers love so much. >> that's what you're saying. make it professional. make sure you have all the fields that you need. make sure it looks good. so when someone on the other side gets it, they understand this is an official document. >> we say itemize, itemize, itemize.

make sure there's nothing your customer won't be able to understand, so as soon as they receive it, they can get on with paying you. >> that's so true. one question and it gets put in the to-do list in your client's office and that to do-list may not get to for months. whereas if they understand the bill, they pay it, it's done. >> and if they can receive it electronically that's one less thing for them to do. they would rather receive it in their e-mail than in the mail. >> like we like all of our bills now. let's talk about keeping the terms simple. before you even send out that invoice. this gets to your point about making sure they understand it. >> our customers really need to speak to the person who's going to be paying them before they do the work about what the expectations are about being paid. we're really surprised how many people don't have that conversation. if you have a digital invoice, you're able to reconfirm what you've already agreed to. >> got it. again, if you talk about it before and they're simple, everyone understands it, they get the bill, they pay it, they don't have to put it on the,

okay, i have to call this person and figure out what this bill is. >> exactly. >> and the next one, let's send things immediately before people forget about it. >> the hardest thing for a lot of small businesses is to do their invoicing promptly. what they need to do is right when the work is done, think about all the work that they've completed and put it onto the invoice. instead of doing it on sunday night one or two weeks later where not only is it late, but you've forgotten a lot of the work that you did. >> right, right, exactly. again, if you're worried about cash flow, get it out there so someone can pay you back. now, you've talked about digital a bunch already in this conversation. what's wrong with sending someone something in the mail? >> one of the biggest things, if you send it in the mail, they don't get it as quickly. another thing, you can see when the person received the invoice. we have a new feature in invoice to go right now that lets you see when your customer has opened the e-mail and viewed your invoice. >> that way you also know when to follow up with them. >> exactly.

>> i know you've looked at it, let me give you x amount of time. how much time do you suggest? that people give before you call? >> it depends on the industry. whatever the amount of time that's stated on the invoice, you need to promptly follow up if you haven't yet received payment. using an app like invoice to go allows you to automate those reminders. once the invoice is late, the customer, if you choose will automatically receive a reminder. >> and then finally, we've already talked about itemizing, but this is also client dependent. that should just be something you talk about in the beginning, how much detail do you want? >> yes. it's really important to talk about detail. one example would be photographs. a lot of customers want to see an image of the work that's been completed. it gives them confidence that the work was done properly. everyone has a smartphone today. with an app and being able to take pictures, you can send through images of the work that's been completed. >> is there ever too much information you can give on this invoice? >> i don't think there's too much information you can give.

>> got it. if you want more information here go onto the next page. >> it just saves the small business owner from having to respond to more questions. >> thank you for stopping by. we appreciate it. >> thank you for having me. when we come back, more on how utilizing metrics can help you deal with investors and employees. and how to find a consultant that is going to help, not hurt your business. will your business be ready when growth presents itself? our new cocktail bitters were doing well, but after one tradeshow, we took off. all i could think about was our deadlines racing towards us. a loan would take too long. we needed money, now. my amex card helped me buy the ingredients to fill the orders. opportunities don't wait around, so you have to be ready for them. find out how american express cards and services can help prepare you for growth at open.com.

i need to hire a consultant and i've seen the damage that the wrong consultant can do to a company. how do i know which consultant is right for me? >> you need to hire a consultant just like you would hire an employee. do they have shared values? are they passionate about the end result you're looking for? really focus on them as if they were entering your company as an employee or even part of your family. they need to be what you want for the long-term and have share goals and outcomes. >> we now have the top two tips you need to know to help your small business grow. tonya and brad with back with us. brad, lets start with you. you recently sold the company or

one of the companies you're investing in was sold and you're helping run a few others. what's one thing that makes them successful? >> i think the key is to focus on metrics and reporting and do that on a consistent basis. it helps you communicate internally with your team. everybody knows what the goals and objectives are on a weekly, monthly and annual basis. and it also helps you communicate with with your investors who you might need to go back to for more capital but we think that that reporting is the most important thing to understand the vital seens of your business and it's a really good level of discipline to keep everybody on the same page. >> so the key is though figuring out what metrics you want to follow and how often. >> absolutely. >> these are the ones you look at daily. these are the ones you look at monthly. >> and look at your key functional areas. personnel, marketing, finance, product, technology. if you focus on each of the key areas, and the objectives of each of those key areas, it

keeps everybody aligned, everybody on the same page. and most importantly, it helps you identify things that are going really well but it also can identify problems early on so you can change the way the company is acting. we think it's the most important thing and the difference between great entrepreneurs and the ones that are going to struggle through their businesses. >> what's also interesting about metrics, you put together a list. these are the ones we're going to follow and then people that may be owners of one metric or another always have a reason why it's not working. we didn't put enough resources against us or we did this or did that but at least it gives you a way to talk about it. you find this happens in your company? >> 100%. it also sets the expectations about what you're tracking as a manager and what a team lead ought to be tracking and maybe it's the wrong metric but if you haven't stated that up front you might be thinking success is one thing and they might be thinking another. >> and you see the tension a lot between product technology and

sales and marketing. >> yep. >> sales and marketing is always arguing they're not doing as well because the product isn't where it should be or they haven't released the features on time. whereas, you know, that's sometimes not the case. sometimes it's just that sales and marketing is not properly doing their own thing. >> the metrics at least give you a jumping off point. >> correct. >> an objective jumping off point to have these conversations. >> it gives you a time frame in which to see change. >> right. >> we always want to make forward progress. if you have a metric that's not performing and you mack a decision in your management team to change what you're doing, you can look at how that impacts the metric over each week and see how you can improve the business. >> all right. tanya, you're up. >> my top tip is to tackle the hardest thing on your list first. i don't know about you but i love making lists. it brings everything out of my mind and on to a page and i can list out 25 things and get 23 done and not handle the critical two. my top tip is to start with the

one you have been avoiding. the one that maybe people aren't pressuring you to do but they're critical for your business and once you have overcome that at the start of your week or at the start of your day, you've already had a when. you're not afraid of anything and nothing is looming over you and you can knock everything else out with a clean conscience and great organized list. >> that's the thing. if you have something on that to do list you know you don't watch the to do, no matter what else you're doing, it's sitting right here in your gut. >> and it swells in proportion to the amount of time you sit on it as well. recently there was one thing i knew hi to do. i was making it bigger and bigger. when i finally tackled it, it took me 15 minutes. i had to concentrate and push through it but everything after that is easy. >> by the way, i love making lists also. do you like it too? >> i actually use something called follow up.cc. i manage everything in my e-mail

inbox, so i forward things when i want to deal with it. >> that's interesting. >> when i want to deal with something rather than have a list i just use my inbox so it comes to me on the day i want to deal with it. >> i'm you, tonya. there is such satisfaction in a list. >> physical list. >> great. so good to see you both. thank you so much. this week's your biz selfie comes from tim willett that runs kayaking ohio. this family run business rents out kayaks and helps take trips on the local sandusky river. that looks like fun. what a good company. now pick up your cell phone and take a selfie of you and your business. send it to us with your name, the name of your company and location to your business@msnbc.com or tweet it to @msnbc your biz. use the #your biz selfie and we're excited to feature you here on the show. thank you so much for joining

us. we'd love to hear from you. if you have any questions or comments about today's show e-mail us at your business@msnbc.com. also please visit our website. it's open forum.com/your business. we've put up all the segments from today's show plus a whole lot more. don't forget to connect with us on all of our digital and social media platforms, too. we look forward to seeing you next week. until then, i'm jj ramberg. remember, we make your business our business. brought to you by american express open. visit openforum.com, for ideas to help you grow your business. but after one tradeshow, we took off. all i could think about was our deadlines racing towards us. a loan would take too long. we needed money, now. my amex card helped me buy the ingredients to fill the orders.

opportunities don't wait around, so you have to be ready for them. find out how american express cards and services can help prepare you for growth at open.com. there's a couple of different ways to take a snapshot of where we are in terms of the news at large. from the wisest lens in terms of our country and the world right now, there are fraud things going on in the news. this week after north korea launched its nuclear, the u.s. military flew nuclear-capable b1 bombers over the korean peninsula as a show of force. we're in the habit of doing this whenever north korea gets up on its hind legs and tests dangerous weapons. but right now flying the nuclear weapon-capable bombers is a sign that the o