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small businesses react to the passage of the health care reform bill. how studying your customers can lead to smart business decisions. and it's time for spring cleaning. we'll have tips on organizing the office. all that and more coming up next on "your business."

hi there everyone. i'm jj ramberg. welcome to "your business" where we give you tips and advice to help your business grow. health care reform became law. what does this mean for you? our small business viewers. >> it's about every small business owner forced to choose between insuring employees and staying open for business. they are why we committed ourselves to this cause. >> the health care reform bill has now been signed into law by the president. but for small business owners, many questions remain. >> once we get the definition of what we're going to have to provide for our employees i don't know if i'll be able to afford it. >> the changes for small business have little immediate impact. for the next four years, companies with 10 or fewer employees earning less than

$25,000 a year on average, will be eligible for a tax credit covering 35% of insurance costs. businesses with 11 to 25 employees are eligible for partial credits. by 2014, states have to set up what are called small business help options programs, these will be exchanges where states work with carriers to pool information options to offer lower rates to small business owners. also by 2014, businesses with more than 50 employees will be required to offer coverage or pay a penalty of $750 a year per employee. let's get reaction from this week's panel. phil towne is an investment adviser and author of "payback time." and mike is the founder of a company that helps first-time entrepreneurs grow their businesses. and he's also author of the book "the toilet paper entrepreneur." great to see you. congratulations. >> thank you. >> what's your reaction? you own a small business. >> it's a surprise they didn't

talk about, the dependents now are labeled at age 26. ued to be at 22. now there is this huge group of people that can get coverage for free under their parents. there's a lot more people taking the benefits of insurance without paying for it. that gets pushed to the small business owner. if you pay insurance now there is no question your ratesing going to go up. >> for people with less than 50 employees and they are providing insurance, it's a benefit, right, they get a tax credit to help. >> yeah, it's usually a great benefit to have a lot more government regulation and government involve mtd in your business. of course. absolutely. you know. i think there are so many better ways to go than this. i would say the best thing we can do as small business owners is vote and stop voting for people who are going to take over your business. >> but i want to say with what we have right now, what can we look for? so whether this is good or bad, what's we have right now so. as a small business owner what can you expect from this

>> one thing you have to watch there is a penalty if you don't get insurance. you still have to pay even if you're not covered. in that clip there are people that can't afford this. they are going to pay no matter what. the people that can afford it now, they are going to have to take on the responsibility of people that can't and get inflated so i think it's trouble. >> here's where it's going to go. $750 for a business as a penalty if you don't insure your employees for $750 a month. so which way you think businesses are going to go. 750 a year or 750 a month. >> if you have more than 50 employees. >> yeah. >> so but that's very key because -- >> and if you're under 50 apparently they take money from somebody's else and give to the you to pay. this is nuts. i hate this. >> people are going to start gaming the system. just watch this. >> for sure. >> because you don't -- there's no such thing -- there is no such thing as a pre-existing condition any more so if i have cancer today i don't need to be insured. i can get my insurance. >> auto insurance i can crash my car, then buy the insurance. >> yeah. >> the one issue for small

businesses gaming the system is if you have 49 employees are you not going to hire the 50th. >> consultants everywhere. we're going to see the rise of consultants. what that means of course is they are going to climb all over you from the irs to be sure your consultants are consultants, we'll have government oversight like you've never seen. >> so we clearly have a one-sided panel here. then we're going to even this out on another day. >> little guys, we know what the impact is on little guys. >> i think you know, one thing that we did say in the piece that is important is that it doesn't affect that many small business people yet. we've got time to figure out this bill and figure out what it's going to -- you're making faces at me. as a business person, as strictly how you run your small business, not your life. just your small business, we've got a little time to figure this. >> trust me, i'm from the federal government. knowing your customers is key to any business. but just how well do you need to know them. one salon owner is closely

studying his customers, where they live and how much they may be willing to spend in order to make sure he can successfully expand his brand. >> there's just a lot more homework not to make a mistake. i don't have the time. i have to make the time for this. it's the difference of success and failure. >> anthony knows his customers. he understands their needs and is doing his best to keep them coming. >> we're a community-based type business, so i need a lot of families. >> his business bernard's salon in southern new jersey is known for high end products. >> the ideal customer is someone that likes a luxury brand. if they are going to spend a loot of money for their services they want to be guarantee add result. >> making sure every cut, color and manicure is yonds just right means rossano puts in more time. >> my day starts at 5:30 and

ends sometimes at midnight. >> those long hours have translated into an immensely profitable brand with two locations and 200 employees. maintaining those figures present add challenge especially in light of the economy. >> in today's market in business, money is a commodity that you can't risk on losing so rapidly so mistakes have to be at a minimum. >> in order to avoid any potential pitfalls, he is doing plenty of homework as he plans to expand his 20-year-old business. >> anthony's motto is once you go up you got to stay up. the only way you can change is actually to go down. that's not what he's looking to do. he's looking to top himself all the time. >> that's why he's adding a new line to appeal to a new batch of customer, calling it b-2. >> he eat, drinks this salon. his passion is building his

empire. >> he's very intuitive, so his intuition and just knowing what clients want i would have to say benefits us the most. >> the line promises the same quality of service at more affordable prices. but before he opens a single door, he wants to know as much as possible about his potential clients. >> i have to study the demographics differently for expansion. i have to actually do it the old-fashioned way. i have to be in the area, presently. and looking for sites myself. and getting the feel of the area. studying what's important. are there schools around there, are there banks, are there in some areas community centers. >> those aren't the only things he wants to know. >> we do look at the population of families, how many are in an average household. are people working in the area. >> he has spent hours speaking with real estate agents and

developers and visits locations to see which businesses locals frequent the most. >> i sit in the parking lot and i do that on usually every day of the week now. and i look at what would sunday be like. is it a busy center. we drive the area, we look at a five-mile radius of the location we have set to look for key sites. >> once new space has been picked, rossano will fall back on his experience to start his marketing. he's known for making special offers that customers can't refuse. one of his most successful came to light when he realized who wasn't coming to the salon. >> we're all about not just soliciting to the higher end client, we're looking to make it affordable for the younger client. >> and that's why students get 50% off their services on mondays. >> and for a long period of time

i didn't recognize that pricing sometimes holds back the desire to get that service done on the steady basis. >> the discount benefitted the business in more ways than one. in fact, the offer had a ripple effect. >> due to what we were doing aggressively to attract students we found that the mothers really started liking our salon. so, we see a lot of mother and daughters coming in on mondays. >> young people weren't the only ones on his list either. so were professionals with families. with that in mind, bernard's is open seven day as week, sometimes as late as midnight. >> there's a lot of people that travel from this area into the city. they don't get home until 8:00. they may go home and tuck their children in, have dinner and they are here. >> a professional woman who works during the day, so to leave and come to the salon between 9:00 and 5:00, when most salons are open, it was ridiculous in our thinking as a salon owner.

>> while he's taking control of his own destiny. he believes his passion will pay off in the end. >> when you understand who is supporting your brand i think then you have a better opportunity to duplicate or even grow your existing business a lot better because you understand what you have to do. phil and mike are back with us now. my reaction to that is that guy is smart. >> my reaction is i've got his name for my next book. this is just how you do it. nailing all the important stuff you got to have, the passion that he's bringing to this, brings to him the desire to really know the customer and to be willing to sit in parking lots. what's cool is he's knots worried about you guys throughout doing this stuff because he's telling us how to do it. he knows his competitors aren't going to do it

>> talking about sitting in the parking lot there is so much on the internet, that's knots enough. >> the first red flag. >> sure. >> brand delusion. >> no. >> says he's a luxury brand. the people that come in for a luxury aren't going to experience it when someone has a 50% cut on a monday. he has to be careful about that. >> that's why he has the second line, the b-2. it sounds like he know this is because he's got his luxury one, the college or the student there is. now he wants to go lower ends. >> can you imagine flying a private jet here and then you have all of the economy passengers on your jet? you want to fly that jet. >> you have coach and first class. he is selling coach because some are going to upgrade, some have parents who want to upgrade and keep filling it. >> there could be. there are definitions of luxury. a private jet you feel the most esteem luxury, then first class,

a light improvements. >> let's bring it back to the hair salons. and the idea of him knowing his customers and spending this much time. i mean, it sounds like he gets detailed spending hours talking to realtors. >> it is smart. one thing that happens, when you are living inside the demographic you got to find the special nuances no one discovers. maybe something happens at 11:00 at night. >> expanding what i call the difficulty for people to compete against him. now they have to be open until midnight. now they got to -- by the way, how come i don't get a foot massage when i come on the show? it's like he's making it tougher in every way he can. so how do they compete? now he's going to chip away at their market. i love this guy. spring cleaning isn't just something you need to do at home. small businesses need to declutter and organize their

space too. so, in this installment of diy professional organizer julie morganstern shares tips how to organize your business with a company-wide cleanup. >> when new york city fashion designer locked an important pattern she realized the time had come to get organized. >> we feel right now that there is a lot of clutter in the space and i think having the clutter prevents us from finding things. we waste a lot of time looking for them. time is money. >> she turned to julie morganstern, author of "organizing from ininside out" for help. >> what is it you want us to accomplish? >> i need to get rid of everything that was accumulated and make order in the way that i can find things easily. >> julie recommends small businesses take time at least once a year for a cleanup day. >> now i think what we need to do is start moving things into

place. >> we can do an effective small business cleanup day, it starts with the preparation. you have to prepare in advance, you have to figure out what supplies you need, file folders, plastic bins and it's important for the owner to sit down and strategize what are the guidelines to give their staff on what to keep and what to get rid of. staff cannot figure out that on their own. everything we're keeping is going to get organized into zones. >> you ready? let's go. everybody to your spots. let's go. >> other key strategies for a successful cleanup day include re-evaluating the space, and labeling staging areas to get things to their proper home. >> we'll use this area for sample sale stuff. >> then i think anything that's going to go to off-site storage,

let's sort of use this section here. >> the last step after the cleanup is maintenance. >> small business, everybody has to be responsible for putting things back where they belong and the way i think of it is it's not putting things away, it's setting them up for their next use. it's everybody's responsibility. >> after a long day of cleaning up, the results are clear. clutter-free space where everything is in the right place. >> it's a miracle as we were saying. >> i think very often for the small business person it feels like it's knots productive to take people out of production to get organized or to create or sustain order. the return on investment is so high, it is worth one day a year to take people offline get things in order so you can be organized and get the most out of your business. >> when we come back we'll have advice about the steps you should be taking if you want to sell your business. and, let the sunshine in. today's elevator pitcher hopes

to light up the panel with his solar powered battery chargers. i own a small law firm and i'm a much better lawyer than i am an accountant. so, when i wasn't getting paid as quickly as i would like, i did what came naturally. i threatened to sue. turns out, that's not the best way to keep clients. so i went looking for answers online at openforum.com it's a place where i can talk with other small business owners like thomas and connie and learn about tools like acceptpay. it's a new way to bill online that can help me get paid much faster, without the need for any legal intimidation, which gives me a warm fuzzy feeling... sort of like these super comfortable socks made from the soft, supple wool of alpacas. looking good. thank you.

owners are asking questions. owners are getting answers. and american express open is building the tools they need. tools like acceptpay, which lets owners take their accounts receivable online. acceptpay. invoice digitally. get paid faster. only from american express open. are you interested in having the "your business" team give your business a makeover? send us an e-mail. yourbusiness@msnbc.com. tell bus your company, what challenges you face and what you've done to try to turn your business around. our address again -- it's time to answer some of your business questions. phil and mike are back with us again. the first one comes from the owner of a gourmet food company. >> we're planning to franchise

nationwide and i heard of different companies that do the whole franchising package. would you go with one of these firms or try to do it on a local basis and see how it grows? >> what i would do is use the franchise model but with my own business. open a second location, just like it's a franchise but own it. if you're going to discover all of these systems you need do correctly first. then you have a franchisable model. >> i would say that the franchise thing is the siren call to the rocks of destruction for more businesses than you can possibly imagine. >> because? >> it's a different business. than the one you're in. >> you're not operating that. >> you're talking about systems business, locating franchisees business and a mass production business. that's not the business you're in. >> which is why mike seems to make sense. >> really good. but -- >> it was genius, actually. >> if you hit it you can have the --

>> we both agree on that is the franchise in a box is not going to do it for going to do it for you. >> agreed. >> i would say there are good franchise consultants and they're free. go to score and you can find betty ott who has been in the business for 16 years and can give you great free information. >> it's a great resource. this is from a tax consultant and he writes, how do i enter into a partnership with someone who has no cash contribution in the business? he'll offer other services such as cleaning services, translation and graphic design. i don't know how to set the terms and conditions on the profit from the overall business. let me start with you, phil. >> bringing in a partner for cleaning is not my idea of a good idea. they have to be really careful about that. your partner has got to bring something, and he can bring one, i think, of several things. they can bring money, which apparently he isn't doing. they can bring credibility and experience or sexual favors -- i mean love. i mean love.

>> phil. >> i think you have to line up with one of those things. the love thing is the reason most people do it. i'm coming in with my friend, whatever. and that's maybe not a great reason. if you're going to do that, then you can value services and figure out the ownership based on services. be careful with partners. >> most partners are disappointed after the fact because the other guy did a lot less. so i found a key way of doing this. what you do is instead of going in with a split 50/50, 60/40, go 5/5 and based on performance metrics, how hard you work, the number of sales you make, the goodwill, wherever the metrics are, every quarter distribute more equity and after three, four years you have a fair distribution. >> i think that's such a great idea. >> that's interesting. i hear so often about 50/50, this guy is not pulling his weight -- >> so there's a reason for mike to be on the show. >> hallelujah. we found it.

>> see, phil, here's the panel. let's move on to the next question. this is from marc and he writes, i am putting together a preparation for a group of investors for the foreclosure market that we are experiencing in south florida. i believe they're wanting to invest $3 million. when investors are fronting that kind of money, what is a return that would really pique their interest? >> you get to start. >> it's not just the percentage, it's the time. you can say, oh, give you 20% return. over 50 years, who cares? it's not just the percentage, it's also the time you can return it. i don't know what the number is. it has to be tan talizing and better than any alternative. >> i know all the numbers and answers. >> did i give you enough time, by the way? >> the first return people want is their money back, so you have to present this in a way that shows low risk and credibility. you have to do that. i don't care how big the potential is. everybody is way more sick to losing money than making a huge return. second, you have to go based on

what kind of returns this kind of investment is getting out there and don't tell them what kind of return you're going to give them. you can get hammered later for that legally and in every other way. what you do is say these kind of investments have been given this kind of range of return. here is how credible i am. i'm going to give you your money back plus an 8% return and we'll split08/20. >> thanks so much, guys. this was great. thanks for your advice. if any of you have a question for our experts go to our website. our address is yourbiztv.com. there you can hit the ask the show link to submit a question to our panel. again, yourbiztv.com or e-mail us your questions or comments. that address is yourbusiness@msnbc.com. ♪ i'm walking on sunshine no electrical outlet? no problem. one hopes his sunny disposition can convince the panel about his benefits of the solar powered battery charger.

>> good morning. >> how are you doing? >> all right. >> giving out cell phones. >> my name is terron sommerville, ceo of solarville communications. we develop various types of solar electronics. we've been working on the concept the past seven years. we are currently located in newark, new jersey, our office is in newark, new jersey and in norfolk, virginia. the products that i handed you today is a solar iphone charger that can charge various types of iphones, iphone touch and electronics of that nature and the other is a solar pouch that can do blue tooth, cell phones, ipods, portable gps systems and portable hand held games and other things of that nature. >> hey, terron, how much money are you looking for? >> currently we're looking for $1.5 million to enhance our business structure, marketing research, market analysis and

developing products. >> all right. well, full disclosure here, i asked him to come on the show because i saw this and as soon as he has one for the blackberry, it is going to be on my phone, but that's just one consumer. i wanted him to get in front of some investors and experts. what do you think, phil? >> well, we're talking about the pitch here. you have to pick it up a notch for sure. and if you do it a bunch, you may have, it's just like doing it right here could be a little intimidating sometimes when you have to do it. i'd say pick up the volume a bit. take it up a notch. the other thing, what are you looking for in terms of return on investment? that is something you want to get into right away because that's going to be shut the door, open the door real quick. >> let's get to mike. what did you think of the pitch? >> one thing i like, the product is something you sell yourself. this is really cool. quite frankly, i would focus just on this product. i know this is an iphone. i know what it's about. i want to know what this is about. this confused me, quite frankly, i don't know what that is. a waffle iron -- >> so let's just get -- you

heard his pitch. he needs to pick it up a little apparently. show the product. would you take another meeting or what would it take to get another meeting? >> i would want to have heard in this pitch something real key and that is -- i mean, these are out there in the market, rei has them. so why this -- why should i be interested in something that's in the market already? i want to hear that, boom. >> that makes a difference. >> it's the usp, unique selling proposition. what makes this different. pitch why this is so great and why you're different. i would take the meeting then for sure. >> great. good luck with everything. look forward to seeing what happens with your business. thanks, terron, and thank you. >> we'll just be keeping these. >> if any of you have a product or a service and you want feedback from our elevator pitch panel on your chances of getting interested investors, just send us an e-mail. the address 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 the money. you never know. somebody out there watching the show might be interested in helping you. are you considering selling your company and moving on to another venture? if so, here are five tips to help you sell your business courtesy of author of "built to sell." number one, consider the scaleability of your product or service. prospective buyers are often looking for something that can easily expand through training or added technology. two, focus on selling the product or service that is most profitable and thus may be attractive to potential buyers. three, try to create a positive cash flow cycle. this may require changing your billing policies and asking for more payments up front. four, make sure your management team is aware of your intentions to sell and is prepared to meet with buyers. and, number five, find a reputable broker. you can contact the american mergers and acquisition advisers