the debate rages on. what can small business owners do to contain health care costs. plus, what you need to do to retain your customers. it's all coming up next on "your business."

hi, there everyone. i'm j.j. ramberg. welcome to "your business" where we give you tips and advice to help your business grow. the health care reform movement in washington. president obama emphasized the cost of health care coverage on small business. >> if you strike out on your own and start a small business, you'll be able to get coverage. we'll do it by creating a new insurance exchange, a marketplace where individuals and small businesses can shop for health insurance at competitive prices.

for those who still can't afford the lower prices, we'll provide tax credits, the size that will be based on your need. like wise, businesses will be required to offer the workers health care or chip in to help cover the cost of their workers. there will be a hardship waiver for those who can't afford coverage. 95% of all small businesses, because of their size and profit margin would be exempt from these requirements. >> mary landrieu joins us. thank you for joining us senator. >> thank you, j.j. >> what is the most important thing small business owners should be looking for in a proposal? >> we are trying to do an advocating on behalf of 27 million small businesses in america. it's to keep at a minimal mandates and taxes on businesses at this time.

this is going to be difficult. we want to try to provide insurance reform and larger pools to small businesses like little hardware stores and cleaners. they have the opportunity to provide quality, low cost insurances like the big businesses do. it's something businesses wanted for a long time. the challenge is how to get it for them by reforming markets and not raising taxes too high. particularry at a time like this. >> there have been things that said if you are a small business over a certain size, you have to provide health care coverage. what is your reaction to that? >> well, the house bill has come under a great deal of fire. as you know, conservative, moderate democrats as well as some republicans said we cannot go the way the house bill was taking us in terms of mandates on business. we are trying to modify that

approach and that's one of the challenges that's before us now in the senate. either it's exempting more businesses out or combining it as the president did for the first time saying individuals have responsibility as well. we're not just going to put mandates on business, particularly small businesses, but individuals have to get to the table as well. we are trying to find a way, mostly, for the small businesses to give them the insurance, private insurance reform they need. their people should not be dropped when they have a catastrophic situation. their premiums cannot continue to go up like they have in the last 40 years. businesses know this. that's why i think business should stay at the table and work with us to find the right solutions for them. >> what is the solution? how do you get health care costs low enough so that small business owners, most of whom want to do the right thing and provide health insurance for their employees.

how do you get the costs low enough for them to pay for them? >> there are a couple ways. if you can get more people covered, that lowers the cost. you have more people in the program. it lowers the per unit cost. right now, the problem is we're going the opposite way. we have less and less people covered. so, it becomes more and more expensive per person. businesses know this. that's why they have come to congress to me and others and say help us create our own pools. they want to do this and expand. they want to do it in a private sector model, not a public sector model. it's what we are working on. >> what is your opinion on the idea of a tax credit for business that is are too small to provide health insurance or who need help with it? >> well, we are debating the tax proposals now. the bottom line is large companies have been for a long time in america able to write off their health insurance

coverage. now, a couple years we made adjustments and gave some additional credits. we are trying to figure out a way to expand coverage, lower cost and provide equal tax credits to people in small businesses and large businesses. i'll do that without adding to the deficit. this is not going to be easy, but it is necessary. small businesses will tell you themselves under the current system, they have to pay higher premiums or drop coverage. it's not helping any. >> we are watching this closely. thank you so much for joining us. >> thank you. as lawmakers continue to debate health care reform in washington, the reality is there's no immediate relief in sight. if you need to take some type of action, here are five tips for containing health care cost wsj.com. number one, look into group

coverage, even if you are a sole propry tership, some allow group access to rates and plans. bundle your services. you're likely to get better premiums. three, find out about purchasing coalitions. some trade unis and industries offer memberships to negotiate lower rates. four, offer consumer directed options such as health saving where employees pay for smaller expenses use iing pretax dollar. make sure you have a wellness program in place that encourages your staff to get healthy. >> it's one of the financial issues affecting small business owners. another is losing customers. his clients don't sweat the small stuff. what's the message? let's make a deal.

>> more now than ever, people are saying i lost my job. i need to cut back. i don't want to cancel, but i have no choice. >> it's this harsh reality that sweat fitness day after day. >> one is a gym membership. >> the recession caused customers to rethink their spending. the reason for tightening their budgets are almost all the same. >> when people call up to cancel, they are cancelling because they lost their job and they are being downsized orf, ? their salary is being reduced. i would say that 50% of the phone calls we take are people calling to cancel. cancel and or freeze their membership. >> with a flurry of calls coming in since the beginning of 2009,

a shift in business tactics appear to be the best solution. first, he delayed plans to expand until 2010. he made it clear he wasn't willing to give up current customers without a fight. >> you really have to think outside of the box here with the way the economy is now and do things you would think you would never do to get through. i think there's really no rule book right now. >> that's why he turned to his first line of defense, his sister. the so-called director of sweat fitness. they focused on the power of the simple phone call. >> we had hundreds of people call in the last few months about losing their jobs and needing to cancel. it was the only reason they were cancelling. >> once a call comes in, sweat staffers get down to the real work. they let them know cancelling

suspect their only choice. their business strategy encourages making deals with clients. membership freezes and reduced monthly fees. >> we assess their options. it might not be let's cancel. put it on a hold. see where we are in four months. it might be let's reduce your rate 20%, 25% for six months and then revisit. >> those aren't the only choices, either. sweat allowed different billing options to keep customers in the fold. >> we bill every two weeks or put them where they are not on automatic billing and they are coming in and paying us directly so they don't have to worry the money isn't going to be in the account on that specific date. >> the bargaining chip is free personal training sessions. >> if we offer them two free

sessions an they get the confidence, they are more apt to stay and get results, which is what we are all here for. >> of course, a little personal training never hurt anyone dealing with the stress of losing a job. >> we tell our trainers to work with people, listen to what's going on with them and try to find a way to get them on path and keep them working out. >> as far as he's concerned, he's doing his part to help people stay afloat during the tricky economic times. they are not supporting just anyone. >> we're doing it on a case by case basis. if we get a phone call, we handle it. we're not just offering it. >> he hasn't heard complaints from full paying customers. for those he does offer deals to, it's not always easy. >> you see how low you have to go to keep somebody. if you say i'll take $5 off your membership and they say i still

want to cancel, if you take $10 there's a fine line where they are going to stay. you have to feel it out. >> the process takes its toll on the people answering the phone. >> some weeks are worse than others. people must do a lot of budgeting over the weekend because mondays, the phones are ringing off the hook with hi, i'm calling to cancel my membership. >> so far, he's been able to save 80% of clients on their way out. he wants them to know the staff is there to listen. >> we are here to talk. i would take a phone call from anyone if they wanted to talk to me. it doesn't happen at every gym. >> we're here to help people. if you shut the door on people, they'll never come and knock again. a lot of times, people are more worried about the bottom line than caring about people. i think caring about people is one of the most important things human beings can do.

so, how can you tactfully negotiate with customers and should you? let's go to this week's board of directors, susan is the founder of sbtv.com and paul lewis founded five companies, both regulars on the show. >> thanks, j.j. >> the first thing i thought of is how can you give one guy a discount of $5 and someone else a discount of $10? aren't they going to find out and get mad? >> there's a problem with that. everybody is going to talk. if you give one person a different deal and they talk, the person paying more money is going to get angry. >> they said none of the full paying kcustomers are upset abot it. >> it may be true. the risk you run is number one, once you cut your price, it's hard to go back up. secondly, what are you going to

do when people look at you and say if you can give me a 20% discount now and still make money, weren't you gouging me all along? look at how you might be able to give a scaled back offering. let's say unlimited usage at the gym, maybe certain days of the week, only certain facilities. make smaller chunks or packages people find affordable, but stay within their membership. >> there's a marketing per speck tiff to use it to your advantage. if people lose their job, they need to relieve stress. coming to a health club is a great thing. if you put that in place, we're not something you want to give up. >> you have free time now. >> you have free time on your hands. bring in an ex-coe worker with you. >> or, what i would do is suggest a gym workout networking

opportunity for people looking for new jobs. >> one thing that seems smart is they are trying to keep their customers. you shouldn't let people be walking out the door. there are gyms everywhere. if they are walking out the door and need to reup their membership, they may go somewhere else. >> it's better to get some revenue from a current member than zero revenue from an exmember. >> nbc universal and american express joined together to shine a light on american small businesses. is there a small business near you that you treasure? if so, go to nbc.com/shinealight. the entries will be narrowed down to three finalists by myself, ellen degeneres and diane von furstenberg. you and the public will choose a winner. we are looking for businesses that touch you in a way the one we are wabt to show you touched

our viewer. this is a way to make sure no child goes without shoes. blake mycoskie has a product and he's marketing it by telling a story. >> it's the way the guy -- >> and having other people tell it. >> i want someone to ask me about my shoes so i can say have you heard about tom's before? this is the story. >> everyone who wears are sures are marketers of our shoes. >> spend a little time with blake and you feel compelled to buy his shoes. he founded tom's two years ago after meeting a group of children in argentina that couldn't afford shoes. >> i thought, what if we sold

them in the united states and for every pair of shoes we sold, we give one back to the children who don't have shoes. within six months, he sold 10,000 pairs of shoes and given away the same number. >> it's emotional. to sit there putting shoes on people's feet, my mom and dad and friends are doing it. it's what it's all about. this is the fulfillment of the promise we made to these people six months ago. >> she saw a friend wearing the shoes. she made fun of him. once he told her the story, she was hooked. >> i went to the website, still didn't like the shoe, but fell in love with the concept. >> she now works for tom. >> i bought a pair and now i have maybe over 40 pairs of shoes. >> it's typical of employees of tom's. there are 36 of them and

interns. by the end of a few months, they become evangelists themselves. as a result, he spends his marketing dollars on getting customers involved with the company, not on traditional advertising. >> i feel like advertising is hard to do in a personal way. word of mouth marketing events, fan club type stuff. that's a personal way of interacting with customers and letting them know of new products. >> by the end of the year, he predicts he will have sold and given away 200,000 pairs of shoes. >> we can give away lots of shoes and have great profit. it comes from a restaurant downtown. a shop on main street. a factory around the corner. entrepreneurs like these are the most powerful force in the economy. the reinvention of business begins with them.

and while we're sure we don't know all the answers, we do know one thing for certain: we want to help. come see what the beginning looks like at openforum.com how do you see cure confidential information from the hands of fired employees, we'll have the answer when we return. during times like these it seems like the world will never be the same. but there is a light beginning to shine again. the spark began where it always begins. at a restaurant downtown. in a shop on main street. a factory around the corner. entrepreneurs like these

are the most powerful force in the economy. they drive change and they'll relentless push their businesses to innovate and connect. as we look to the future, they'll be there ahead of us, lights on, showing us the way forward. this is just the beginning of the reinvention of business. and while we're sure we don't know all the answers, we do know one thing for certain, we want to help. come see what the beginning looks like at openforum.com it's now time to answer some of your business questions. susan and paul are back with us again and the first one comes from gregory and he asks --

paul, i'm going to go to you since you have experience of this. >> thinking about this now it is probably too late, unfortunately. it is so easy to take information of a computer network. >> he hasn't fired them yet. >> but if they -- >> they know? >> they may sense it, right? if he walks around with a different attitude, emotion, they'll sense it and take the information they want. e-mail it to the home address. >> what should he have done a few months ago? >> he's not -- he doesn't have a problem yet, right? because what he can do is be honest with the employees and say, we are facing tough times. i need to lay some of you off. i want to make this win-win as best i can. i would love to hire you back once the economy turns around. i'll ask that you don't take the confidential information from the company that will hurt us that remain here and as an

incentive,ly pay you a severance but at a point in time maybe 90 days from now when i'm sure that you didn't take anything from me. honesty i think is key. >> anything to have done before? >> absolutely. put my lawyer's cap on here. any employee that you hire you should ask them to sign a confidentiality agreement and noncompete up front. people say that's just a piece of paper but you're finding more and more companies are enforcing those and saying that the work-related data is proprior tear and if they take it to hurt or injure your business, not only the employee but the company that hires them may be liable. >> just -- just to a point on that. now that they're employed and now where they're laid off, you are not allowed to ask them to sign at this juncture. >> do it up front. >> unless there's an offer in consideration. you could tie the severance

package to that confidentiality and noncompete agreement in order to get this amount of severance. you have to sign this document. >> okay. let's move on. this is about outstanding bills. >> the problem we have in our business now is really collecting our invoices. so many of the people we deal with are buying cakes, small quantities but really stringing us along as far as our payments go. >> susan, you have experience in this one. >> oh, do i ever. i call it my very expensive mba. small business owners should never get into the banking business and when you start allowing a discuss manier to get behind on payments you are becoming their banker. and what happens to me was i had a small advertising and pr firm. i had a huge client and ended up being 90% of the business. they started lagging behind on the bills. i didn't want to lose that customer. they ended up going bankrupt and guess who went out of business? so you cannot let a customer get

behind on the bills. >> on the other hand should you try to work with your customers right snou they're struggling. >> they're struggling. it is important to understand that everybody is struggling. so when you go to the customers, you have to let them know that you are in the same boat. you can take credit cards from them. get them to pay via papal. but let them know that you're in trouble, too. so if they don't pay, we have a trickle down effect. >> next up, a question from ashley and she writes in -- >> first of all, four years with no vacation? never happened to me. take your vacations, everyone. >> that's right. >> you have to lead by example. right in what's good for the goose is good for the gander.

if you have an exception to take an extended vacation, that is not fair to the employees. let them know that you worked for four years for vacation and accrued the vacation time and taking it one shot and turn it into a positive saying you trust the employees so much to empower them with the company for a month. >> frankly, look. one of the beauties of having your own business is making your own schedule a little bit and if you built a business to survive without you, i say go take the month off. yeah, create -- you know, talk about in it a way to make it okay. >> sure. the other thing as i said, running a business is your life and i can guarantee she may be taking a month off but she is not really from the business. >> that's right. let's go back to our questions. one from andrea and she asks -- particularly these days when there are, you know, a lot of

sites going down and people couldn't access those somewhat recently. what do you think? >> i have a lot of experience in this from a technical, security perspective. it is safe. ma make sure it's a representable site and sites like upper decker.com. there's me.com from apling. which allows you to access the files from an mac or pc or from an iphone. but it is slow and need a persistent internet connection. offline you won't have access. >> do you have a fear something is down for the site for the half hour you need something? >> i actually have more fear i won't back up the information and have a natural disaster or my computer's going to crash so, you know, another service, too, at&t with the solutions which you can access and retrieve your data storage at any time and pay for it with a credit card. to me, the benefits of cloud computing totally outweigh any risk. >> this is the future.

cloud computing. >> absolutely. it is. >> thank you so much for all of those answers and as you know all of these questions come from our viewers so if any of you have a question for the experts, just head to the website. you can submit your questions by clicking on the contact us link and you can view this segment and other portions of the show and you'll find some web exclusive content and videos. find all of that at your business.msnbc.com. surely by now you know about the power of facebook and twitter. but our website of the week may help you connect with even more people. ning.com allows you to create and manage your own social network. users can build a page catering to their industry, other people can join and then interact. if you don't want to create a network, you can look into a variety of existing ones. to learn more about today's show click on

yourbusiness.msnbc.com. you'll find all of today's segments and web exclusive content with more information to help you grow your business. >> i think of this cartoon. man's talking on the phone and he's saying, how about never? does never work for you? and i love that cartoon because it reminds me of all the things that shouldn't be done. >> also, we're interested in hearing about what's going on with your small business so click on the news line icon to take part in the community discussions about today's topics. next week, we meet a high end pool table manufacturer who had to reinvent the business model in order to survive. >> we had a foal low interested in a pool table. came into the wood shop here. saw the saw dust on the floor and said, look at the saw dust, you should make wood pellets. what are those? >> see how he discovered a small product providing a big boost to