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the economy is improving but some small business owners say they're still struggling. the owner of a saturn dealership refuses to give up even when the company goes bankrupt. getting the leg up on competition at trade shows. that's all coming up next on "your business." it's not just any business, it's your business.

hi, there, everyone. i'm j.j. ramberg and welcome to "your business" where we give you tips and advice to help your business grow. conflicting data out there on the state of small business. spending is up and a number of surveys show people are optimistic about the rest of the year but some are more cautious. just last weekend lawrence summers the white house director of economic council made the quote there is a quiet depression in small business. optimism index was down in february. william dennis is senior fellow with the research foundation and kelly is the owner of falling white, custom woodworking in new jersey and a member of the main street iliance.

denny, i want to start with you, the optimism index is down, what do you think is causing that? >> well, there are a couple of really important points. the first one is that sales remain very bad. they went, they fell very shorply shorp ly in early 2008 and they stayed there pretty much. that's huge, of course. second thing is there is great uncertainty out there. there's great uncertainty about what's going to happen and not only with the economy, but here in washington. and then, thirdly, there's major point that no one seems to talk about and that is kind of a real estate overhang. many small businesses own considerable amounts of real estate and, of course, the value of that has been depressed. and, so, what's happened is that has really drug their balance

sheets down. >> kelly, you're in the trenches and talked about people with small businesses and what do you see? i see a glimmer of white on the horizon. i wouldn't call it optimism yet but i think some confidence is starting to emerge and i'm hearing from vendors that come in and speak to me about colleagues in the business and our business has picked up a little bit. we're actually hiring an employee back from layoff. >> what is this going to take? as much a psychological things as anything else. you might have cash in the bank that you're willing to spend but one is holding on to it just in case. >> yeah, a number of forces at work on the consumer end, that is exactly right. people are waiting to see employment numbers improve. i think if we can get, it sort of turned and now if we get a little momentum in employment, i think you see confidence starts to rebound among consumers and you'll see more activity. real estate is critical for my business, particularly and even

luxury real estate val ues are down and that started to pick up, too. we'll see more people put money down and get stuff done. >> do you see anything happening that will turn this optimism index around as you measure it? >> we did see certainly improved numbers on the market front and we are seeing a few better things in real estate. it's just very incremental and very slow. so, i would expect as time goes ones it certainly will good better, but it's painfully slow when you put it that way. >> what do you tell your members who are worried about their businesses right now? >> they have ever reason to be worried about their business, but over the long haul the tradition, of course, has been that we come back. over the long haul, that's fine. the question is whether many of them could survive until the long term and that's a real, that's a real issue. >> and what do you find? how are people then surviving

right now? >> i think we're all now in this lights on, door's open which means profitability is dubious at best. in my business, for example, we sharpen our pencils when we prepare a bid and we put the price in and they come in and say take it down 15% and they come back after they reward the contract and say we want another 15%. that's 30%, that's our gross profit. it's very, very tough. when i say a glimmer, i mean a glimmer. i really think we need to work on employment. i hope, as denny mentioned that washington focuses on jobs and we get that done. >> i'm happy to hear that you just put out that you're hiring someone. there's a glimmer of hope. i hope i have both you on the show in the not too distant future that everything is looking good. >> wouldn't that be nice? >> to your point, denny, it might take a little time. thank you for joining us.

>> my pleasure. >> thank you. cheryl is no stranger to the troubled economy. the bankruptcy of general motors and the decision to discontinue the saturn brand put her out of business. she vowed to find a way to survive. they call her the saturn lady. >> and it drives great, doesn't it? >> reporter: a fixture on local lancing, michigan, radio. >> i stick with auto business because of saturn and because of the way they did business and treated customers. >> reporter: and a familiar face on tv. >> come in and see why saturn really means people first. >> reporter: cheryl has built a reputation for her no-nonsense approach to selling cars. but the last year has been a roller coaster ride for two of

the most successful companies. >> truck leasing and american business, he was supposed to save gm's struggling saturn brand. he was going to buy out the brand and its 350 dealerships from gm, but, apparently, it has all fallen through. >> never once have i thought, let's close the doors, we're done. no, no, i don't give up that easy. >> reporter: that optimism in the face of overwhelming odds has served her well in organizing an incredible turn around for her business. it's a reminder that cheryl is not your typical dealership owner. >> even to this day women aren't that well known to be the car dealer. they'll say, you're the dealer? yeah, i'm the dealer. >> reporter: she didn't become the owner overnight. she spent 20 years working her way up from the sales floor to management and rather unexpected to owner when the dealerships

came up for sale in 2002. >> my husband is very frugal and he had money in the bank that we were going to do things with. we were going to finish the basement. >> reporter: instead of redoing the basement she became a dealership owner with a different kind of car company. after all, saturn was the place to go for great service and reasonably priced american-made cars. >> saturn was flourishing, we were doing really well. the stores were profitable and successful. huge customer satisfaction. >> she'll give you a coupen for a free oil change. >> all right. >> whenever you had any kind of service they always washed your car and then they gave you a flower. >> all right, thanks. >> reporter: after the one-two punch of gm's bankruptcy and then the sudden collapse of the deal to sell the saturn brand, she was faced with an enormouseses crisis. >> having a huge mortgage on two buildings. owing millions of dollars that you personally guaranteed

sometimes people think that car dealers are wealthy people. we're small businesses. >> reporter: she was motivated to survive not only to save her business, but to salvage the jobs of the 60 people depending on her. her first priority was to keep her customers and employees calm by letting them know that she had every intention of staying open. >> she's really done a good job of communicating to us and continued to give us hope through the process that she was looking for different opportunities and alternatives. >> reporter: the silver lining was the fact that the local hyundai business was up for sale. she immediately called the owner and told them she was interested. the only problem was finding the money to buy the franchise. >> had to take money out on my home and when we're running out of cars to sell and people are afraid to buy the cars because they don't know what's happening to us. it was very, very scary. >> reporter: after scraping

together the money to purchase the hyundai franchise, she was face would the possibility that it was no longer possible to keep both dealerships open. in march 2010, she made the difficult decision to close her store. >> packing up the boxes and saying we're not going to sell any more cars after tomorrow is difficult. it's hard, this is sad. it was tough to choose which store are we going to put the hyundai dealership in. it is a bigger store and we can keep more employees because of the room we have. >> reporter: with the consolidation of the stores, she was able to bring all but eight employees over to the new location in grand ledge. >> thanks, tom. >> reporter: tom sold the last car and is also one of the eight employees she had to let go. >> sad moment. it was a good company to work for, though. i enjoyed it. >> reporter: despite the sadness

with the sudden demise of saturn, she is excited about the new hyundai products and she's excited about keeping the promise to her customers and her employees. >> whether we sell hundred days or chevrolets or saturns. it doesn't matter. the way you do business, we feel it's the right way to do business. now we'll just be wearing a different hat. >> they just have to go forward and we're very fortunate because a lot of people aren't in my spot that have something to go forward with. i'm so lucky that i do. i have to be thankful for that. i am. new chapter, new turn, right? any business that relies on someone else supplying the product could run into similar problems. let's turn to this week's board of directors. erica is the founder and ceo of healthy moms enterprises and executor of aol small business.

great to see both of you guys. we have a few pieces where i come away thinking, gosh, i wish i worked for that person and i had that feeling when i saw that. >> if you met most car dealers, they're not like that. >> maybe that's why she's successful. >> you can definitely tell the response of her customers and the way they talked about their experience with her. she had something special. >> what do you do in a case like this? in general, if your company is going through hard times and you can figure a way to get out of it but it is going to take time, how do you make your employees feel okay? >> reassuring the employees is a very important part of it and even the one employee that she had that was getting laid off seemed like he was, you know, not blindsided. he sort of knew it was coming and he was very grateful to have worked there and had a very great experience and she was very, very resourceful in terms

of being able to kind of see this coming and start the new business with the hyundai business. >> how loyal are you? >> people in small companies, especially, employees have a good detector. the take away i took from this piece, "a," i think she will be just fine. the fundamentals. you can essentially buy a car anywhere. the car wash, the flower, great details that make you want to buy a commodity like a car from someone like that. you hear a lot of entrepreneurs talk about disaster planning. i always say you sort of all have to prepare for a generic disaster. you can't predict a terrorist attack or something like a natural disaster, what would i do if the walls came crashing down? in the case of this, what if you were a toyota dealership? she mentioned she had cash on hand and a plan in place and that's why she's able to bounce back like this. >> i think that even sort of

taking her really large problem and applying it to planning for your own business. which means, you know, every few months you should really be evalulating your supply chain. if, for example, there is a major part of your business that you outsource or you have a supplier that is critical, you want to be gauging the relationship. you don't want to all of a sudven to order something and need it the next month and find out that the guy is going under because it was a bad quarter. >> she had to make her decision on which location to keep and it sounded from her there they were equally profitable or not profitable, whatever the case may be at this point. she kept the one that allowed her to grow instead of keeping what is presumably the cheaper one. >> great thing about entrepreneurs. they don't look at trying to survive, but a few steps ahead and how they can grow. it absolutely was the right decision. as far as the risk assessment, this is an issue that stretches

across different types of companies. you want to diversify. the car industry is a little bit different. you often to have to specialize with one make and one brand. when you talk with potential suppliers the more you can make your range. if something goes wrong, you have other things waiting in the wings. in a crowded marketplace, customer service is one way you can distinguish your business from the competition. here are five tips for improving your customer service, courtesy of inc.com. number one, it all starts with your staff. look to hire people who have a background in customer service. this is particularly important for management positions. two, evaluate your marketing. for example, don't flood customers with all of your direct mail. determine their needs and tailor your marketing to what they will be interested in. three, monitter your business online. sites can help you learn about your customer base without

soliciting people for feedback. four, cater to your clients. try to develop customer service systems that vary on the client and their problem. and, number five, follow up. after you address a problem, call that customer and find out if they're satisfied. still to come, we answer your business questions, including one on what to do when you find out that the boyfriend of your new hire is working for the competition. plus, trade show 101. successful strategies to get your business to stand out on the floor. 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.

no matter what industry you're in, chances are there's a trade show for it. but setting up shop at one is more than just a matter of signing up, so, we hit the trade show floor ourselves to figure out what it takes to get your company prepared. it may seem like culinary craziness. >> it's going to be chaotic during the set up and chaotic during the tear down. >> but new york fancy food show is one of the biggest trade show of the year and a major opportunity for these three entrepreneurs hoping to grab the attention of the right people among the 25,000 attendees. >> i always tell first-time

visitors they have three seconds to get an attendee walking by. >> we make a frozen chocolate souffle. >> you get a perfect souffle every time. >> my product is an awesome oatmeal -- >> that is really good. >> great for you and you should eat it. >> they'll hook up with buyers and distributers that are willing to put their product on the shelf across the country. s country. dan cohen of clearbrook farms has been attending for almost 30 years. has it been worth it to you? >> oh, my god. this is the backbone of all of our retail sales. i mean, worth it? there's really no other opportunity for me to meet these people. >> for a small business owner, a trade show can put their company on the map. it's the perfect venue to show their wares, make deals and grow their business. but making the decision to attend a big trade show doesn't come cheap.

>> ew, $10,000. >> plus $10,000. >> around $13,000. >> we asked the food show operations manager bill lynch for his advice on how newcomers can get the most from their trade show experience even on a shoestring budget. his first tip, read the show materials. >> most exhibitors can save about 40% in their expenses if they just read through the materials. it's deadline dates, getting the orders in time. once you get on site and if you remember, oh, gosh, i forgot to order a table, the expense goes up so much more. >> tip number two, take advantage of show specials. >> we offer a complimentary booth package. it's one of those things where we try to promote that especially to our first-time exhib exhibitors so it would include a couple tables, a couple of chairs, a waste basket, a booth identification sign, and it adds up to about a total of $700 worth of savings if they take advantage of. >> it at this point number three, get educated.

>> many trade show companies are offering different seminars leading up to the shows not only focused on things related to their industry and how to increase their business but also increasing their effectiveness at the trade show. >> dan cohen has developed a couple of his own rules for trade show success. the first, never leave the booth. there's a thing in the industry called the be back, i'll be back, and they just don't get a chance to come back. if you're wandering around looking at the booths like an attendee and you miss the person, he's gone or she's gone. that's really why you're here, why you spent the money. >> his other rule, quickly follow up on leads. >> the biggest complaint i hear from attendees is that they go to a booth. they're interested in their products. and then they get back and never hear from the person. >> and bill lynch's last recommendation is simple and straightforward. >> the best advice is to be lively, to look happy, smile at people, catch their attention.

look them in the eye. it's simple advice but probably the best advice i could give. it's time now to answer some of your business questions. erica and rod are with with us again. the first one comes from a real estate appraiser. >> i'm looking to expand my business, and i wanted to know is it better to go ahead and kind of step out on faith and expand the infrastructure first and hope the clients will come or wait for the clients to come and then afterwards kind of put the pieces together? >> i'm going to talk to you because you have your own business. >> i would say the cardinal rule is to always make sure you have revenue before the expenses. so be prepared for growth. have everything in place. but if you can, you know, hold off until as long as you can to be sure you have the revenues to support those expenditures. >> you're getting nods of yes. >> i was going to say the same thing. it's not like "field of dreams." if you build it, sometimes they will not come.

you want to make sure your infrastructure is set up so you're not inhibiting growth but you want to see that you are growing, that this investment will pay off. the last thing you want to do is spend money on infrastructure and no customers are coming through the door. i would echo that point that you want to be cautiously optimistic and make sure you're growing with customers onboard. >> all right. let's move on to the next one. this is a question from eileen and she writes, my partner and i began a home-based business instructing children and adults to cook. we developed a website almost immediately. for the entire four to six months we had a number of parents sign up their children. it was so exciting. then it began to slow down. i'm not sure where to go from here. so it sounds like she needs to redo her website because she's getting people there but not keeping them. >> and i think it shouldn't really be just about your website. if people are coming, taking a class, interacting with you, they should be telling their friends about about it and you should be doing a lot more in person marketing and telling them to spread the word about your product rather than just relying on a website to drive

traffic. >> i would ask eileen a question, how did you get them there in the first place, whether it was seo, a whole new ball game on the web. word of mouth can go a long way, but things like search and finding -- and really it doesn't just extend through a website like this. you want to figure out in any business, how did you succeed in the first place and how do you replicate that. >> if you got them there first, then you need to make sure you keep them or get them telling their friends. >> exactly. >> and if there's a registration on her site, being able to reach 0 out to customers, with a did you like? what did you not like? it's cheaper and easier. >> when you think about a cooking class, you're probably going to take it once and hopefully if your kids are in it and they like it, you'll sign up again the next semester. that might be an indication of problems if she's seeing a drop-off. >> this comes from barry and he writes, i just offered someone an entry level position in my company. on her first day, i found out her boyfriend works for one of our competitors. should i rescind the offer?

that's hard because presumably -- >> why did you look at me? >> yeah. >> it's a hard one, right? presumably you hired her because she's good and presumably you trust her because you hired her. >> i think for an entry level position as long as you're not privy to sensitive confidential information it shouldn't be a big deal. people will work in a similar industry as their boyfriend or significant other. if there's sensitive information he's worried about, he should be careful with that and then, number two, he should also have a very frank conversation with her about the need for confidentiality. >> i tend to agree with you. it seems entry level. in small companies, we all know, you sit in the same room. it's hard to hide information. you get excited. >> it sounds like a "your business" soap opera. we should send a camera crew. a lot of companies, they often make employees sign some kind of

nondisclosure. it depends on the industry. that may be overkill. having a frank conversation is really the best way to head it off and i think if this company hadn't considered a scenario like this, you will run into more things like this. it's better to have some kind of one sheet you sign that just says will not tell my significant other company secrets or something like that. >> rod, erica, thank you so much. this was great. hope to see you soon. all these questions came from our viewers. if any of you out there have a question for our experts, go to our new website. the address is openforum.com/yourbusiness. or you can e-mail us your questions or comments. the address is yourbusiness@msnbc.com. now that we've heard from our panel of experts, let's get survival tips from small business owners just like you. >> my advice is keep your costs down.

we're a home-based business. we operate on a shoestring. we've been in business for 60 years. we wouldn't be in business anymore unless we kept our costs down. we do much of the work ourselves. >> we suggest that you create strategic partnerships and barter with other people whose services you need and provide the services to them and it will help keep costs down in your startup efforts. >> my advice would be when you experience financial success, don't try to grow too fast. keep your mind on growing but don't get ahead of yourself and bite off more than you can chew. smart phone technology is lending itself to new forms of geographic market iing. if you want to give it a try check out our website of the week to get started. fo foursquare.com is a social networking application that encourages people to explore their towns or cities. businesses can create