the face of rising gas prices. their gummy bears may be gigantic but they want their company to remain small, at least for now. that's all coming up next on "your business." small businesses are revitalizing the economy and american express open is here to help. that's why we are proud to present "your business" on msnbc. 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. gas prices continue to rise and that's hurting both consumers and the nation's small businesses. the price of a gallon of gas is now more than $4 in many american cities, which has a lot of consumers cutting back on spending. as a result, some small businesses are reeling. many entrepreneurs say they're also losing customers because they have to raise their prices to make up for rising energy costs and many small business owners are becoming increasingly pessimistic about the economy. mike miter runs factory services agency, a family owned commercial eating, air conditioning and ventilation company near new orleans. he is also a member of the board of trustees of the national small business association. great to see both of you guys. >> good morning. >> so, i'd like -- >> thank you. >> i'd like to hear how gas prices are affecting each of you. baxter, i'll start with you.

>> in the chicago area gas prices have increased 35% in the past year and nearly doubled in the past two years. in fact, many of our suppliers are passing these costs onto us with hefty fuel charges in the 20% to 30% range. >> and are you passing those increases along to your customers? >> well, we're all about helping people connect with flowers and we're doing everything we can to absorb those costs ourselves rather than pass them on. in fact, we haven't increased our local or nationwide delivery fees for more than four years. we're watching gas prices closely. we know we might have to increase delivery by a dollar here or there, but we are doing everything we can through new technology and good old fashioned hard work to keep those prices down. >> what about you? >> we monitor gas prices fairly closely. delivery costs we see in the delivery of equipment and things we purchase for especially construction projects, and we're able to incorporate those costs -- those increases into our cost when we price a job or when we

bid a job. but we also do a fair amount of routine service on commercial air conditioning systems. we have been forced to add a fuel surcharge for our service trucks. >> we've gotten a lot of comments through twitter and facebook through our viewers out there. i want to read you one because it's reflecting what you're saying, which is, gunner wrote to us, the gas prices are hurting us. our customers don't realize that we have to raise our prices. our vendors are charging us more for shipping. mike, since you are adding this fuel charge, i want to know what your customers are thinking. are they responsive to it? are they upset about it? >> they haven't been upset. we tried to contact our customers. we have a fairly substantial customer base. they're pretty loyal to us. we tried to contact them and let them know what we're going to have to do and we'll add a minimal fee. we didn't increase our service charges on an hourly basis. that overhead is pretty well fixed. quite often our service technicians may be on a job for an extended period of time.

to raise a service fee is not fair to the customer. to put a fuel surcharge that covers that one way there and back trip, and it is a fairly minimal charge, between $5 and $10 per surcharge and that helps pay for the cost of the gasoline. our customers understand that. >> neither of you have decided to raise prices on your core products our core services. baxter, when do you think you'll have to look at this? how long do these prices have to stay high before you say, you know what, we're going to have to do this to stay in business? >> no question small business i suffering but our customers are suffering, too. we're using things like new technology, gps, cell phone, address verification on our computers to make our deliveries more efficient, cut the costs on our end so we don't pass them on to the customers. we also work with 50 other local florists who make their own floral designs but we save gas and keep the planet a little greener, too.

>> on the scale of one to ten, how big of a deal are these gas prices to you? i'll start with you, baxter. >> it's one of many prices. it's the straw on the camel's back. economic adversity forces us all to manage our lives and businesses a little better. for example, many of our deliveries are in the chicago area. but our ten locations are in the suburbs. so, we're investing in opening a new design and delivery facility in the city for more efficient low-cost service. >> yeah, hard times often cause you to be creative and come up with good solutions. mike, how big of a problem is it for you? >> on the scale of one to ten, it's an eight or a nine. our trucks use a fuel card my guys use when they service their trucks. that's a weekly deduct straight from the bank account with the direct pay. when you're used to paying $350 to $400 a week and all of a

sudden that weekly charge goes to $650 to $700 a week it has a serious impact on cash flow and requires us to monitor everything else and pay close attention to what's going on with our cash situation. >> mike and baxter, i thank you both for sharing your situations with us. we really appreciate getting to hear how this is really affecting small businesses. thank you so much. good luck with everything. >> thank you. >> thank you. the creator of the world's largest gummy bears is dealing with quite a dilemma but it's a great problem to have. especially in today's economy. he and his business partner get so many phone calls and e-mails about their giant gummy collection that they've actually had to turn down some potential customers. at least temporarily. theirs is a business lesson in how growing slow and steady may actually win the race. >> honestly, it was sort of born out of desperation.

the whole thing started as a joke. >> reporter: the world's largest gummy bear was only supposed to be a stunt. >> the first ones were made literally in my apartment. >> reporter: but the gag gift derek lawson made for his brother has piqued the interest of millions. >> we started out by making one, we took that money, made two. then four, and now we can make upwards of 3,000 a day. >> reporter: weighing five pounds and standing almost a foot tall, the world's largest gummy bear, which calls raleigh, north carolina, home, certainly lived up to its name. >> it's unique in and of itself. even if it was just the giant gummy bear. i say just the giant gummy bear. that's huge compared to a small one. but the world's largest is completely over the top. >> reporter: lawson and business partner michael horwitz launched their company ggb of raleigh in 2007 with the world's largest gummy bear as their signature item. >> we knew we had a good idea and there's a market for this.

>> reporter: since then revenue surpassed $1 million a year and the number of year-round employees is up about 20. while the majority of business is wholesale, anyone can buy the bears online and check out the company's own laboratory, a candy store in raleigh. >> we test out flavors, we test out the unique things we bring to market and we see what people are saying about it. >> reporter: despite their success, lawson and horwitz are staying grounded. they're focused on a slow growth to business. >> the only mistake we could make is to grow faster than demand. >> reporter: while demand for giant gummy bears, giant gummy worms and other assorted gummy products is consistently high, lawson believes growing the company slowly is actually good business. >> even if we suppress that growth, that's fine. that's a safer place to be, in my opinion, especially in an economy where a lot of people have overextended. >> reporter: the company's philosophy is based on lawson and horwitz's first hand experience with another

struggling business. >> michael and i met somewhere around 15 years ago. miael and his family had a chain of candy stores. >> the low carb craze, big bocks getting involved as seeing candy to boost their sales affected us. we decided, we're going to back out of this. >> and that chain they ultimately had dwindled down to two stores and then one store. >> reporter: the message was clear. the pair had to figure out how to control the company without letting it control them. >> we're taking our time to develop. the way we would have developed it last year is different from the way we see it needs to be developed now. >> reporter: they have put in a few provisions in place to moderate growth. >> as we take on more business, we to want make sure we can also handle the business that's continuing to grow behind us. >> reporter: first off, lawson and horwitz always put their existing customers first. >> we've always felt as we've grown a tremendous loyalty to people who who have been with us as we've grown. what our first rule of thumb is,

we want to make sure we can handle their demand and their wishes as we grow, because, no, they don't drive the show for us but on the other hand they've been there. >> reporter: and production is always paced. >> when you're talking about world's largest gummy bears, we make those per the demand. let's say demand diminishes for the world's largest gummy bear. then world's largest gummy worms need attention. we're never without work. don't mistake the fact we're not making bears mean everyone's off today. there's plenty of things to make. >> reporter: even as the operation becomes more efficient, they have learned to say, not now to certain customers. >> you can't always say yes to just -- just because you could doesn't mean you should do it. >> reporter: they don't want to say no to anyone but they admit it's inevitable. >> we don't want to bring on you and say, where's our product and have us not be able to deliver. we don't want to be that company that is not delivering as promised. >> reporter: just because a potential client may be told not now doesn't mean they'll never get their gummies.

>> we're really pleased that for the most part -- we've had some of those people we've said no to who are now our customers. so, we have come back around and picked them up. they're at the front of the line. you know, we're always looking to make sure we can bring the next one in. >> reporter: another key part of lawson and horwitz's strategy is not taking money from investors. >> it's just a comfort zone. it's something i'm comfortable with. it would have been easy to go out -- we've been extended offers for loans or taken investment money. we've so far turned that down because in a way you can't plan for and build infrastructure for something you're still writing the book on. >> reporter: with many chapters still to be written, the slow growth approach will still get top billing. it's a formula that could treat ggb of raleigh to sweet success. >> we do want to get bigger and we intend to get bigger if we can grow smart and make wise decisions as we grow it, we'll have some accountability for

everyone involved in it. it's hard to say no to customers but sometimes as we just saw it's the right thing thing to do. let's turn to this week's board of directors, mike hoffman editor of inc.com and les mccuen author of "predictable success." great to see you. seems funny to have this guy here, too, let's see what he has to add for it. smells very good. i can smell it from here. i want to talk about this idea of saying no to customers because that is hard. and i've talked to a lot of companies who said, we just said yes and figured out how to deal with it. what advice would you give to someone who came to you? >> do what they do. i think this is very smart. i think where you have a manufacturing business, where you're making product, have all that money tied up, it makes

financial sense to take your time and build your business gradually and makes great pr sense. we're doing a story about them, right? i think it's far better knowing what you can cope with. certainly getting better at that so that the rate of increase, the rate of growth you can cope with gets bigger as time goes on than plunging head long in and trying to work out later, how do i pay the bills? it's no way to build a sustainable business. >> i think people get nervous, right? here is a customer. if i don't take them on now, they're never going to come back. how do you deal with that? how do you get them back later on once you have a business? >> well, you know, to les' point, entrepreneurs are optimists so it's in their nature to say yes to whatever and figure it out later. it's important for them to know what can lead them into trouble, what behavior do they need to moderate. this is a great pair of entrepreneurs knowing saying yes isn't always right for their business.

i think it is wonderful and refreshing to hear people say they have a choice. you can chose to have a great workplace or a great product rather than just trying to go for growth all the time. >> the scenario that suddenly oprah calls you up or someone big and you're not really set up for it but she suddenly is going to mention your gummy bear. do you turn it down? >> you don't necessarily need to connect the production and selling of the product with the publicity impact. for a lot of businesses, something much more mundane might be for a walmart to call you up. >> let's say walmart. >> you go along, you see them. suddenly you have to actually produce this stuff. before you know it, 15%, 20%, 25% of all of your revenues are coming from one customer. second thing happens is they begin to squeeze down the costs a little bit, they make you trim what you're doing. before you know it, your business isn't your own anymore. you're being dictated to. so, i see the walmart effect happen quite a lot. >> i think it's important to set

expectations and communicate so that if people know you're a smaller company and you get the story out about the business and that there is some scarcity, whether it's by choice or just by the level of your operations, people understand that will drive up the value of the product and, you know, you'll get a pass. i think where it becomes an issue long-term to sort of decide you're going to be small is with your people, right? a lot of people, employees, are attracted to a fast-growing, dynamic workplace. at some point are you limiting their options in terms of how they can grow. >> thanks so much, guys. >> thank you. building buzz is important for any business trying to attract new customers. here now are five ways to promote your business without breaking the bank courtesy of entrepreneur.com. first, build a network. attend trade shows and pass out business cards without spencing money on a pricey booth. two, start a contest. contests can get customers involved with and excited about your product. three, be social.

social media tools help a business connect with potential or current customers but stay specific in what you're doing and who you're targeting. four, reward local loyalty. offer a small gift or discount for referrals or repeat business. and, five, be a publicity hound. contribute bi-lined articles to the media. try helpareporter.com that helps journalists find experts. still to come, we answer your small business questions, including what to do when you and your partner have conflicts. and we'll have more on businesses staying small. we'll revisit a clothing company that learned that the way to customer loyalty was by offering them a limited edition product.

i'm sam chernin, owner of sammy's fish box. i opened the first sammy's back in 1966. my employees are like family, and i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card so we can accumulate as many points as possible. i pass on these points to my employees to go on trips with their families. when my employees are happy, my customers are happy. how can the gold card help serve your business? booming is taking care of your business by taking care of your employees. the goal of any entrepreneur is to take their business mainstream and sell their goods and services to the masses, right? well, not always. like our gummy bear friends, a boston-based independent clothing designer decided to stay small and build his brand by keeping a lower profile.

how many business owners do you know that show up at their stores in a casket? >> johnny! >> or a wooden box? well, it's all part of johnny earl's unique business. ♪ he's the founder of johnny cupcakes, a clothing brand headquartered outside boston. a decade ago he started printing t-shirts with the nickname given to him at the music store where he worked. his designs gained a following. with limited resources he could only print a few t-shirts at a time but he found out this may work in his favor. >> girls knows more than anyone. a girl sees another girl with the same prom dress, she wants

to rip off her dress. that's when it hit me. i started making my t-shirts limited edition. once i would sell out of a design, i would never make it again. some t-shirts i would number up to a certain amount so you know there's only, you know, 100 people in the entire world with that one design. >> reporter: as johnny's business grew from his parents' living room into a multimillion dollar enterprise, he turned down licensing deals from department stores and private investors. opportunities that most entrepreneurs would take in a heart beat. >> what are they going to do when they see my t-shirts show up in malls? that would be the worst thing in the world. that will never happen. >> reporter: numbered t-shirts, unique packaging and quirky goodies in each bag are all part of johnny's limited edition philosophy. every t-shirt even has a little, did you know factoid on the inside. >> these little additives make my customers happy. it's like buying a box of cracker jacks or cereal as a

kid, all of these little surprises and things that add to the brand and make it more than just the t-shirt. >> this was the scene at the grand opening of the los angeles store in 2008. people camped out for days just to get their hands on the latest of the johnny cupcake design. >> when we release something new, the flood gates open. >> matthew is manager at boston store. he sees firsthand how making less product is actually better for business. >> when something drops they need to have it. goes along with the limitedness of the product. people know if they don't get it today and wait until next week it most likely won't be here because it goes that quick. >> limited releases are just one of the ways johnny engages with consumers. he also holds special events such as movie screenings of campy classics and an annual halloween party. johnny's found these events forge a bond between the brand

and its customers. something that's not easy to do in the retail fashion industry where fads come and go. >> it feels like a big family. it fits perfect with the brand and with everything that i'm about and where i came from and we like it that way. it's great. i couldn't ask for anything different. ♪ time now to answer some of your business questions. mike and les are with us once again. the first one is a question about conflict in the workplace. >> when you have a business partner and you often don't see eye to eye or completely clash on any given topic, what's the best way to mediate a resolution? >> that's a great question. it happens all the time. business coach what do you

think? >> i think that's one possibility. i think the important thing is that the beginning, you really need to set down what the rules are. you should have a partnership agreement that is written, that includes sort of guidelines on how you're going to grow the business, who's sphere of influence -- who's in charge of what. and also if you're going to break up, how are you going to break up. it is really important to have -- >> the divorce before you get married. >> going in, exactly. >> once you're already in it, already in it let's say you haven't done that you're partners and you don't know what to do -- >> rock, partnper, scissors. >> do you have a partner? >> i do. there is an elephant in the question and it is this. all of the relationships come with conflict, that's part of it. but if you get to the point where you have to ask for advice on how to reconcile conflict because it is happening that often, or because it has got to some extremes, then you got to go back and look at whether or not you're really compatible.

i think a lot of people don't make it because people don't think through ahead of time whether or not to put up with the conflict. it is not like marital relationships. >> this say question about getting an sba loan. >> i was fortunate enough to sell my home five years ago. and i'm not currently a homeowner. yet i would love to be able to get an sba bank guaranteed loan as a nonhomeowner. what are my options to get sba money? >> there is no rule you have to have a home to get a loan, but it is very helpful. >> right. the sba backs loans and according to the website it not disqualifying to not have collateral but they want companies to have collateral. if you don't own your home, don't have collateral to pledge against the loan, you have to be perfect in every other way. >> or have a partner who will

help you get the loan. >> and yes, he's got collateral from the sale of the home and it may well be that will do the job. i would put in a plug for the sbas's website, sba.gov and score.org, a lot of good advice there about how to make your loan application. if you can come up with the laterala collateral, it doesn't become an issue. >> jiames writes, i'm starting t-shirt business online. what are some of the positions that i will need to fill when opening an online business. for example, i have heard of online companies having content supervisors, it staff and programmers. will i need these people. how does he figure out what he needs? >> the nice thing is we know on the internet nobody knows if you're a content provider or it guy or whatever. you're right, j.j. start the business and do it all yourself. there is nothing wrong with doing that.

and then as you begin to understand what the requirements are, you'll naturally see which role you've got to fill in order to let you get on with the more important things. go to sites like script lines, guru.com, look for people who provide those services, look for good references and give them a tryout. give them one thing to do. don't contract them for the long-term. see how they do. if they work for you, put them on a part time retainer. >> you can see if that is the position you need to fill. >> correct. >> that sounds like great advice. it sounds like the questioner maybe is a marketer and t-shirt designer. if that's the case, maybe he needs to think about operations and how that comes along. one note of interest about the t-shirt business is there has been a lot of startup activity in the space in recent years which has been great because the barriers to entry have been low. the price of cotton is moving around a lot now and so figuring out the pricing strategy to make sure you're making a decent margin on your t-shirts is tricky now. >> mike and les, thank you very much for all of your advice. i appreciate it. if any of you out there have a

question for our xeexperts, go our website, openforum.com/yourbusiness. the website is again openforum.com/yourbusiness. or e-mail us your questions or comments to yourbusiness@msnbc.com. mike and les had really helpful advice about how to improve your business. now let's get some great ideas from small business owners just like you. >> it is an oldie but a goody. it is really simple. stay out of debt. for our small business, we're very natural and organic in how we do things and that's actually how we grow the business. >> one important thing to do, especially when you're starting out, is to find a supplier who is willing to work with you -- work with you on small quantities. and also be ready to replenish

those small quantities fairly quickly. >> we did a contest that everybody gets -- whoever meets their sales target gets one month of maid service, cleaning service for their house. it was one of the best sales month. everybody just loved the idea. do you find yourself spending a large part of your budget hiring someone to design your advertising materials? if so, our website of the week may help you. tweak.com is a print and advertise materials service that provides a complete design solution online. from outdoor banners to brochures, tweak offers customizable templates for all your advertising needs. there are options to downloot your projects or print them directly from the site. to learn more about today's show, just click on our website, it's openforum.com/yourbusiness. you'll find all of today's segments, plus web exclusive

content with more information to help your business grow. and don't forget to become a fan of the show on facebook. we love getting your feedback. you can also follow us on twitter. @msnbcyourbiz. next week, an unexpected demographic target, women. >> the majority of women feel more comfortable talking to another woman about firearms. >> find out how an unusual gun shop operator has grown her business by attracting an underserved market. until then, i'm j.j. ramberg. remember, we make your business, our business. .