good morning. coming up on nbc your business. how do you sustain a business long-term when it's based on a phenomenon. the owners of this hot paint and sip company think they found an answer to how to make their brand last. that plus what you need to do to boost growth and profitability. that is all coming up next on your business.

hi, everyo welcome to your business. the sh dedicated to helping your growing business. from cup cakes and food frux to spin spg paint ball, now the business has turned nationwide obsessions to very appealing adventures to many, but getting in the right time and right know how and surviving beyond the craze can be challenging. nate one of the founding fours of the scape room in u.s. we sat down with nate who

unlocked the key to success for seattle based company puzzle break. you are trapped, thyme is ticking. the only way out is to solve hidden mind bending puzzles and crack some codes. escape rooms are still riding high since they broke through state side in 2012. >> how many of you have no instead what you're about to get into today. >> the immersive entertainment experience has been a phenomenon throughout the rest of the world dating back to 2007. >> this is so fun. the rush. it's amazing. people hooked. >> an escape room sl a real life game where players are locked instead a room and in order to break free, have to unriddle a series of clues and beat the clock. frl the moment puzzle break

cofounder caught wind of the worldwide obsession, he just went for it. >> i immediately knew that it would be a smash hit. i loved this genera of video games. understood the build, it was a no-brainer. we built that first room from good will. started with an initial investment from my own pocket of $7,000. we put tickets up for sale. crossed our fingers. >> initially no one came, but all it took was one group and puzz break w off and running. they played and they toldll their friends and some of their friends came and played. it snowballed very, very quickly. >> within one hour at puzzle break, the curious became die hard grand advocates. you can market until you're blue in the face. make the best product in the world the real recipe to viral growth is make customers love what you do. we were profitable instantly. we recovered initial investment

in months. >> timing can be every with a novelty business. being first in seattle positioned puzzle break to get the most buzz. >> we were enormously lucky with the time. we got the first groups and a ton of free press. what the heck is this. can't wait to write a story. >> the landscape of trendy business can offer huge rewards. also very adisrupt declines in rev. >> we know exactly what our next step is going to be at all times so no matter what happens, trend of escape rooms or entertainment whatever, we're able to immediately jump and innovate. we always want to be on the bleeding edge. never want to be playing catchup. the strongest part of your team dynamic is your ability to communicate. >> next step is kavg out a in each of high end escape room offering one of a kind sinmatic experiences. >> this is the same technology

that drives disney experiences. this is our mad scientist laboratory. we got stuff everywhere that you can build anything under the son, decor, tech, whatever you dream it we can build it. all of the technology is what hidden. you don't know that the piece you're working on is actually a complicated piece of machinery and you put this chess piece there rotate the table in such a wage and a huge moment happens in the other room. all about having the infrastructure and resources to respond quickly to what the trend if this business is going to be tomorrow and the day after tomorrow and ten yrs from now. >> puzzle break set sail to high seas scoring an exclusive partnership with royal caribbean cruises. >> most expensive escape room built ever. takes place in a spaceship. it's amazing. >> he's not got a totally different market. one on the ship where there no

competitors. that's amazing sgll jason, editor and chief, seeing nate's outside of the box and swift thinking a must in order to thrive and survive with a novelty business. >> you have to be thinking constantly about how you can innovate inside of your space. >> another business that started as novelty concept and ultimately sparked a craze with endless number of competitors is spink ls cup kates. >> hot cupcake shop even after the phrase hot cupcake shop stopped being a thing. >> queen of knowing how to bake your trendy brand behind the hype. >> giving people constant new reasons to talk about them and put them on instagram and tweet about them. that's smart when you think

about soul cycle. they have created a community of people passionate about being part of soul cycle. it becomes their identity. those are the kind of businesses you want to run. the ones people are really executed to tell about for you. novelty ventures have a lot of appeal, but those in the know say you better go into it with eyes open because if you're not smart about it, the death of a trend can also mean the death of your business. >> if somebody is going to go into a trend based business, you have to know this may not last very long. you don't want to invest terribly heavyhere y don't have to. short-term leases are really smart way to just mitigate your risk. don't staff up too much. do what you can with a lean staff so you are not spending too much even if everything is

sach wait rated. if you can come up was a concept that innovates past what everyone is doing, you still have a fighting chance. like escape rooms and cupcakes, painting while drinking classes were the rage two years ago. the owners of painting with a twist knew in order to succeed with a concept long-term they had to be more than a passing fad. now with 337 franchises they learned how to grow and sustain a great business plan creating fierce customer loyalty. >> i think it's still here because it hit a nerve. >> people have said it's a fad. i always say well, was golf a fad. >> renay and kathy has a colorful future. they know 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 never missed add beat. >> the founders say they saw demand right from the start. a fun night out where we paint and drink a little wine maybe if you would like. >> we do have champagne in the back if you need liquid courage. there's an artist at the front of the class that tells you step by step how to paint a painting. you be walk out with your bottle of wine you completed painting and everybody else cleans up. yeah. it works. >> from the beginning, the focus has always been on the customer. every time they look at that painting or they 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. people like me afraid of art and intimidated by tist. >> the founders wanted their customer to have a place where they could unwind and be social: that's why once a client signs

up, they learn as much about them as they can. >> mrs. jones knows mrs. jones is important. we build 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 front. likes to sit on left-hand side. likes to bring her mom. >> they took customer service a step further. give people reason to cam back. >> making sure there's a variety of music. variety of artists. variety of experience. >> variety of times is important too. evening classes don't work for everyone. >> the original model was a girls night out so in looking at those numbers we saw that we were making 75% and 25% of our time. >> added classes a at times to fill studioses that were otherwise sitting empty. >> that's when it sort of morphed into more. turned into coffee and canvas in the morning. >> events and birthday parties

are now part of the schedule too. with so many classes offered the company needed enough art to keep painting. five thousand pieces of copyrighted art. that's growing daily. new product people are excited about. >> prints are created by fad. held with engagement and keeps creative juices flowing. designed with flexibility in mind. calendar for any sdio can be changed to help with numbers. >> you can see how many people signed up for event. if someone doesn't seem excited about saturday night, you can get switched out and all of a sudden that's a popular painting and people are signed up for it. >> since some customers make dozens of visits they're always trying out new concepts. treat their locations adds working laboratories. >> we always test everything in those studios. we know what is going to work and what is not going to work. >> working with larger canvass was one idea that was a winner. not every idea is successful.

having winners and losers is part of the process. >> we do focus groups. who is our customer what do they want. we talk to franchise partners. they're boots on the ground. >> employees get evaluated regularly too because they're on the front lineses of the company's growth. so customers get the chance to rate instructors. >> we do surveys with customers pretty often to find out what they're feeling about a certain person. we train when they come into the system and also do training after they're in the system if we feel they need it. >> as painting with a twist seeing more competition, kathy isn't looking back. she says she's more focused than ever. she's not backing down. 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 kept it new. with competition it keeps us on our toes. keeps you us coming up with new ideas.

makes sure your on your a game. given the best experience out there. there is a secret to becoming permanently profitable, says our next guest. says it requires as simple shift in mind set. forget countying as we know it. here with smart tips to help your company earn more than it spends is mike. ceo of profit first professionals. a group of accountants, bookkeepers who drive profitability. author of profit first. transform your business from a cash eating monster to a money making machine. >> so god to see you. god to see you. >> book was successful the first time. coming out newly revised. traditional accounting is very logical. take your sales. subtract expenses what is left over is profit. problem is there's a study, 83 pgt of businesses survive check by check. not profitable.

what's wrong and what's wrong is we humans are not logical. we are behaviorroll. noshl mall. what comes last gets ignored. old accounting, sales expenses saying profit. profit is last. wait until the end of the year and say i didn't make it this time maybe next time, but with sales minus profit equals expenses that's what i'm suggesting. take your profit first. you assure profitability. >> i get it. okay. that's your point put profit first. basically say this is how much i want to make now i better make all of my expenses fit here. >> right. you actually have to reverse engineer your profitability. >> use the envelope system. i suspect that helps you on this. >> it was the old envelope system. my mother actually when she would get a check. cash it in put a portion into food, mort and so fo would go to food store, use the food envelope and tre was always enough money.

don't con fut that with the same amount money. there was always enough money. she worked with what was in that nfl. in our businesses we need to do the same thing. when money comes in set up money for multiple different purposes. taxes, pay yourself. operate expenses. all these different envelopes. divide the money based on percentages. >> what happens if you suddenly see there's an amazing marketing opportunity that's going to take more money. where do you borrow from. >> you better get innovative. there's constantly opportunities you could do and we don't innovate. oh, i can run a facebook ad for $10,000. i have the money in my own pay. might as well take it from me. don't do that. you start unwinding the system. if you can't pay your bills with the money in the operating expenses account you don't have money to afford the bill. >> that's the point remove temptation. if you end up having money

before you start spending it, think what would do i when i was first starting out. what would do i if i didn't have this money. maybe you'll come up was a better idea maybe you won't maybe you will. >> that's when we're most innovative. when we get more money for business we default to the dumbing down of money. we use mey to buy what's obvious. i want to get innovative again. remove temptation. money comes in, reserve it. hide away and will literal will transfer money to another bank account you have no access to. you have to go to bank and get a certified check and pull money out. you'll be forced to be innovative startup again. >> finally get in a rhythm. talked about everything you have to do. just start doing it. get used to it. >> so many businesses wait for a stack of billing to pile up. business is great. looking at the bills. all the money flows out. very spore at i think. we need to get in a rhythm. don't touch it. don't spend it.

allocate it. once every two weeks. that's when you look at bills and pay with what's in your operating expense envelope. here's the deal. if you can't pay those bills, you can't afford those bills you have to find a way to cut expenses and increase margins. >> mike, love seeing you all the time. thank you so much. the first impression is everything. especially when it comes to making a sale. this week, ysf magazine gives us five things to keep in mind when designing the packages for your product. one, appeal to your target audience. understand the kind of graphics and colors that are going to attract them the most. >> two, stand out and this doesn't mean that louder and brighter is always the better. be thoughtful about ways you can make your branding different from other products out thereto. >> three, details are everything. pay attention to mall things like how you're package feels or the unboxes experiences these

are toumps your customers will notice. doing this well will help build brand loyalty. four, consider distribution. will your product only be in stores or mainly online. it should account for how you make your merchandise available to retailers and customers. calculate cost. easy to splurge on ctomer packaging. compare prices as you execute your vision. hi, my name is sashia. mom of two and founder of fresh bellies. new baby food company changing the way kids it. did you know despite the growth in organic baby food we're seeing a rise in picky eating and childhood obesity. the way we've been told for decades to feed our babies. blabd food, flavorless mush.

we are at forefront of change. in line with recommendation fresh bellies introduces babies to real flavor from the very first bite. never mix fruits and vegetables and season with garlic and rose mary. our food is also preservative free and sold refrigerated at retail. in our guest to build a new generation of healthful adventurous eaters. looking to join 35%. together we can disrupt a industry and promote healthy industry by focusing where it all begins, babies. >> nice job. thank you for coming on and sharing that with us. mike and kate lynn, two numbers, the first one one through ten what to you think of the product. we didn't have you taste it like we normally do. >> and second what do you think of the pitch. >> ready. here we go. product exceptional product. i think it's very unique. i wish you drove home on the

push. why i gave you a five on the pitch. i didn't know other products had sugar added through fruits. i want you to emphasize size the problem. i didn't hear numbers. i want to know the revenue you're doing now. the food is interesting. the return i'm getting is very interesting. the pitch could be stronger. it will product seems unique. i'm excited about it. likewise. i also gave the product an eight. i think it sound really exciting. nice job starting the company, by the way. as far as the pitch i gave it a seven. here's the major thing you need to thi about in the pitch and also just in general talkingo consumers. you really have to make sure you're addressing barriers to consumption and so if you're talking about parents and parents with babies they want to know the kid is going to eat the food. >> that's exactly what i was thinking. >> exactly if i knew that babies loved this i would be buying it right away. >> you want to make sure you're

addressing those concerns rights up front. >> do that through stories or sales. >> good luck with everything. as someone who cares about kids eating well. i hope you do fantastic. >> thank you both. stick around we need more from both of you. when we come back, how do you get a sales team to sale just the way you would. how an all-female pennsylvania car repair shop is defies gender stereotypes. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services

can help prepare you for growth at open.com. what are some good ways i can go out and train them and sale like i do. the answer is within your question which is about the training. first, you put together the procedures and all the policies that actually make you successful. what are the conversations that you should have with the custers. and train, train, train. . most people miss out. they'll show people technology. they'll show them how to use lead management system, but they won't train them on on how to sell or what made you successful. we put everything on paper and train off that and keep everyone

within those bounds. it worked really well. if it worked for me, it worked for the others. hire the right people and train, train, train. >> over the years we reported on the increasing number of women owning businesses in traditionally male dominated industries. in suburban philadelphia the owner of girls auto repair center running an all-female job all while wearing red healing. has her story. >> they call themselves she cannics. >> we're here at girls auto cannic repair center. armed with drills and bright red heels. started an all female garage designed for women. >> i always feared i was being taken advantage of and not making the right choice with my car. why don't we create something for women. we don't need the guys. >> that's why she quit her job as an engine. took night classes to become a mechanical and opened her up

other shop. >> there's females out there that say no, let my husband, let my boyfriend. that's fine. those who want. those who have questions. you can come to us. >> and the customers love it. >> i think it's fantastic. i want to see more of these kinds of clinics pop up. >> in fact, more than half of u.s. drivers are women, but less than 2% of mcss are. >> so women are spending the money. >> the reason we are spending so much and we are the number one customer there are more women drivers and we tend to pay the bills and spend the money. >> that's why they fix cars while teaching their customers about them. >> this is your oil dipstick going to measure the amount of oil in your engine. pull this out. get your little rag. you want your oil level to be up to the max. >> it doesn't stop ere. >> the big reveal is our nail salon. her rair shop is a clubhouse for women. full nail and hair beauty bar. >> you are getting your car serviced. >> yes, i am. >> and you're getting the nails done. >> fabulous.

best combination. gl combination of beauty, brains and brawn. >> morgan rat ford, nbc news. upper darby pennsylvania. we now have the two top tips you need to know to help your small business grow. mike and kate lynn smith. founder of simple mills. back with us once again. so good to see you. >> thank you. thank you for the elevator before. you were in the bedroom, let's start with you. >> my top tip. >> this is going to blow you away. don't use gentlemen america labels for names. if i said i'm a lawyer. if i'm said i'm integrated counsel. you made the face. you made the face. you don't know what i do. that means i can point out how i'm different than the competition. if i say i'm a lawyer. you already know what i lawyer does. i can explain until i'm blue in the face how great i am, but you won't listen because you have it defined. in your business use unique

labels on your category. i can explain what that means. also the service you provide. i owned a forensic company we did a computer crime investigation. we didn't do data images. we did data encapsulation. our clients were ch were lawyers would say what's data encapsulation. it's so superior than data imagines what why our process was more secure. unique terms people have never hedf before. >> can ilay devils advocate. have i people coming to me with things like that. i feel like this is gobble eventually after i ask a thousand questions i'm going to get to i'm a lawyer. i know what that means. >> don't use like marketing cheesy terms. i'm the queen of social media. whatever. i'm integrated counsel. i do legal services like any lawyer does, but here's how i'm different. you have to push away the generic competition and say that represents only a portion of what i do.

>> caitlyn. >> my tip actually has to do with hiring. what i think is the most important thing to hire for is passion for your organization. so when you look at simple notice for example all our employes are passionate about what's in the food. what's in the center aisles of the grocery store. makes a big difference in what we accomplish. it's like a back scene for the difficult times. there are difficult times in a business. there are times you have to work late hours. times when things aren't perfect. you need something to push you beyond just a sally. >> do you think there always has to be a passion for the product or can you just have a passion for the group that you're working for or that you're working with or the processes that you work through. because sometimes it might be hard to find the perfect person product or do you think you xact alwa need to. >> i don't think it's cessarily the product. i think it's the why. ve you ever seen the ted talk

with start with why. >> yes, on this show many times, yes. >> it goz back to that. you have to start with the purpose of the business so while your product may be something like legal services there might be a different why behind it and people can relate to that. >> good thank you both very much. great advice. >> thank you. this week's your business selfie affordable lawn sprinklers. he installs lawn sprinkle ir gas station and lighting system. services more than 4,000 residential customers. thank you so much for sending that in. relove seeing pictures from around the country. all of you out there, please pick up your cell phone, take a selfie of you and your business and end it to us at your business msnbc.com or tweet it. include your name, the name of your business, and the location and use the hashtag your business selfie. thank you so much for

joining us today. we love hearing from you. so if you have any questions or you have any comments about the show, e-mail us at your business. or if you missed anything, just head over to our website. it's open forum.com/your business. we posted all of the segments from today's show plus a whole lot more. connect or digital and social media platforms as well. we look forward to seeing you next time. until then, remember, we make your business our business. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order

or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com. happy friday. you know how news keeps happening on fridays in recent weeks? we're having another one of those. two big stories have landed late in the day today and into tonight that are kind of a one-two punch for this white house and its ongoing scandal and mishandling of national security issues. one of these stories is really brand new. i think at least it will be brand new to you tonight when i tell you about it. the other one is a rather devastating follow-up to something that broke last night that we covered quite a bit on last night's show. we've got one of the top democrats from the intelligence committee here to talk with us about both of these things, but they are both developing and/or breaking tonight.