they made artificial fog for one amusement business and found other spooky customers. how these entrepreneurs scared up new revenue. that and more 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. every halloween, we scare up a good business story from haunted houses in atlanta to an entrepreneur who makes coffins out of couches. in atlanta, they were forced to innovate after getting smoke in their eyes. when the fog started to lift, they found a new customer base. ♪ >> halloween is definitely an

all hands on deck, we are going full force, we have extra staff in. during this time of year, halloween is a major part of our business. >> this time of year, it's tons of calls. it's calls, calls, calls and calls. i like fog. it's fun to blow smoke for a living. >> they do blow smoke for a living. they manufacture frog gis fog used for smoke machines that fill the haunted houses that creep you out at halloween. >> when we started the business, it was more of a necessity for a family entertainment center. >> a necessity because they worked at a laser center that used fog. it triggered chris' asthma, smelled terrible and irritated

kous mers eyes. >> i had respiratory issues. we set out to try to at least make a version that was, for me, breathable. >> not that we were ever going to sell the product. it was just, can we make something that is better for the kids and better for our employees and better for us? >> with nothing on the market to solve these problems, they worked with a chemist to form their own artificial fog making fluid. >> we developed a product that was really cool and, you know, for our use, it was perfect. we didn't need it for anybody else, we just needed it for us. >> they never considered marketing it until another laser person noticed. he said who does your fog? it's great. where can i get it? i said we make it. he said will you sell me ten

gallons, no, mike, just take some. he went back and told everyone with a fun center and roller skating rink east of the mississippi river about us. from there, it just took off. all of a sudden, we were taking fog orders quicker than we were booking parties at the fun center. >> at first, there was limited potential for efforts. >> all of a sudden, we are getting ten times more calls in october than any other time of the year. why is that? >> that was a wake-up call, which they answered. they asked their customers one simple question. >> what do you use it for? we're a haunted house. every haunted house uses fog. wow, we didn't know that. the first guy we were on the phone with looked at us and said you have to go to this trade show. >> the more they listened to the haunted house operators the more

products they found to manufacture. >> we want a ground fog that lingers longer than most ground fogs do. we are using it outside in graveyards. okay, we went and did an outdoor fog. >> that wasn't all they discovered at the trade show. >> we'll be at a trade show and haunted attraction show. my husband is a fireman they use it. note to self, firemen use this. >> all of which became markets for their fog. >> we'll be at a trade show, a bar and nightclub show and we hear yeah, my friend owns a bowling center and uses this, too. you hear from a production guy, we need them on cruise ships. cruise ships have incredible productions. one leads to another. it's done by listening to the customer.

>> that's when the founders found out that rock 'n' roll performers were interested in the allergy-free formula. >> we travel with our own fog. we traveled for years trying a different variety of products. >> craig, the lead singer for hearts of saints is especially sensitive to the smells and irritants by typical fog making machines. >> they all have a stench. as a vocalist, i don't like things to stink and clog my vocal cords up. >> he's not the only one. the business has come a long way and the prospects are great. >> we grow by 100% every year or more. >> now we didn't get into this in this story, but they found other uses for the fog formula,

too. you may wonder why there's so many bubbles here. it opened up more revenue strings for them. let's cut through the fog or bubbles with the board of directors. rod kurtz is the editor of a small business and jeanne marks is president of the marks group. >> never looked better. >> let's get champagne. >> or at least pop them. you know what i love this story so much. it's one of my favorites. one of the things i thought was so funny, halloween, haunted house. he never thought of it. >> i see so many business owners that stumble into their opportunities. you have to be smart to do it and they are the ones who succeed. people think and think and think. it's the guys who stumble into it and see the opportunity. what i like the most about them is they stay focused.

they did not get distracted by other things to do. everything is fog based. >> they found a way to extend the product. >> they focused on the product, not on the market. >> i think these are what i call better mouse trap entrepreneurs. in a way, they stumbled into it. if you listen to the beginning of the piece, they are in the industry. they knew where the need was. if you look at most successful entrepreneurs, they cut their teeth in the industry working for someone else. they saw the cracks, swam upstream. >> i have a client, they are great guys, they are entrepreneurs and make plastics and film type products. they are buying chocolate bars at a discount bar to sell somewhere else. they got a great deal on duct tape. >> you can always use duct tape. >> they get distracted from their core business. these guys are staying focused. >> they are marketing to all these different groups, right?

firemen, rock stars, haunted houses. in some ways, it's tricky. it is the same product. you have to go and figure out where do rock stars go and firemen go. it's time consuming. >> they talked to their customers. they said what do you need? what's the niche. how can we better serve you? it's easier to sell to a fire department than a rock band. you have to listen to your customers. they are never going to steer you wrong. >> he's 100% right, you learn in economics 101 it takes much more to get the new customer. they went after the existing base and they told them what products they need. >> this product sells itself, it seems like. >> everyone can use fog. >> we have. all day long, we are using it here. more than 300 years ago, witch trials in se lem,

massachusetts divided their citizens. today, it's boomed their tourism visits. there are some small business owners that wouldn't mind if the witchy reputation magically disappeared. ♪ >> this could be almost any charming new england sea port, but it's not. this is salem, massachusetts, home to the infamous witch trialed of 1692. fast forward and it's known as witch city where a small business community turned an ugly history into a commercial industry. >> if there's a witch on it, you can sell it. >> there's a hook to why people come here. >> look closely. you'll see witches everywhere. they haunt the streets, the

police cars, the fire department, the newspaper, the high school band and just about every street corner. >> it's a great business. we turn a buck for the city every chance we get and for ourselves. this is all about being successful. >> october is the busy season and the merchants are gearing up to earn a hefty percentage of revenue. >> halloween is big business. over $5 billion is spent nationwide on halloween. a good part of that is spent here in salem. >> tourism event promotor is a modern day wiccan or witch. he, too, is part of the multimillion dollar tourism industry. >> i charge $150 a ticket for my witches ball. it's rated as one of the top halloween parties in america. i give people $150 worth of fun.

>> businesses like theirs depend on the witchy reputation. lately, a new group of entrepreneurs arrived in salem. they have their own vision for the town. they came here to open a bakery catering to upscale commuters whose income is not dependent on tourism. >> we looked at it as a city trying to get a new demographic rather than witch shops. >> he considers himself part of a specialty business serving the new population. >> we have had people come up saying these are the types of businesses that are going to turn salem around. >> having visitors in town and having a thriving downtown relies on an economy driven by visitors.

>> most of these condo people that moved into salem to tell us we should no longer be the witch city are relatively newcomers to salem. >> for every $1 spent by a tourist, it generates $5 to the economy whether paying for a job or benefits to the community. by having active retail stores, it's helping our tax base. >> these people came here long after it was the witch city to tell us how to change our city. i'm going to tell you something, if i didn't like the smell of chinese food, i wouldn't move to chinatown. you can't get away from it. this is the witch city. >> there's still more ahead on this halloween edition of "your business." we'll answer a question from the owner of a funeral home who wants to get customers to spend more. talk about scary? advice on how to avoid tech disasters. shazi: seven years ago, i had this idea.

to make baby food the way moms would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with farmers that grow our sweet potatoes and merchants that sell our product. vo: get the card built for business spending. call 1-800-now-open to find out how the gold card can serve your business. some would say that halloween is not a techie type

holiday. however, many entrepreneurs have horror stories about losing files or an eerie feeling they are being watched. in preparation for the witching hour, our next guest has sneaky tricks to put tech scares into their final resting place. dan ackerman is an editor. all right. let's get to the issue. i am one of those people, the entrepreneurs who lost all my data. it's a nightmare. >> what did you do to prepare for that? >> nothing. now, i'm so prepared. i backed up my stuff all over the place. but i didn't. i had been running my business for years. stupid. >> we tell people to back up their stuff. they say they will. at the ent of the day, you are busy and that's fine until something happened. hard drives will fail

eventually. 100% of them will die. >> how do you back up? >> i say have a three-point plan. have the data on your commuter in front of you, the laptop or desktop. then a local back up. an external hard drive like this. that's easy enough. if your house floods, there's a fire, your computer is here, it's five feet away. make a third back up online somewhere, like with the cloud. use a cloud service or send yourself something by g-mail. three places. >> are there back up services that you particularly like? >> carbonite making sure it's available. >> it does it automatically. >> a lot of services do. you can right click on the file to back it up now.

>> mine does every day at the end of the day so i don't have to think. use different passwords. >> that's the thing that is so hard to do but becoming increasingly important. every website says have your user name and password whether for the bank or itunes. it's hard to remember them. they want a capital letter and number, no repeating numbers. i can't give you a formula because then everyone would figure it out. come up with your own formula. replacing is with ones. everybody knows that. be aware of social engineering. we talked about this. >> we used to worry about viruses and malware. all the people out to do you no good on the internet figured out they don't need to be technological about it, they can be psychological. they get access to your accounts and passwords whether your bank

or facebook through phishing or social engineering. they send an e-mail that looks like a bank or something. you use in and log in to a site that looks like your bank and somebody else has your password. >> if you get an e-mail, then -- >> it's the security environment we are living in. don't click on a link in your e-mail. type in citibank, bank of america and log in from there so you know you are going to the website. you are not going to get misdirected along the way. >> check to see who is looking at your profile. >> it's how they get a lot of people. a lot of them want permission to access facebook. you say yes. if it looks funky, that could be hiding something. >> finally, protect against

internet blackouts. >> if you have to be online all the time, it's going to go out occasionally. there's a bunch of ways around that. if you have a mobile phone, a smartphone that acts as an internet hub, that's great. or a my fi box. it's a mobile hot spot. turn it on and any device within 15 or 20 feet gets on the internet with this. if your service is out but your phone works, one of these should work. be careful who you give the password to. >> yeah. all right. dan, this is great. thank you so, so much. >> thank you. are you looking to use your smartphone or ipad for marketing strategy? here are the top five mobile marketing mistakes to avoid kurt see of entrepreneur.com. mismatching content.

make sure every link you send out works and is suitable for mobile viewing. no promotional budget. posting an app in an app site is not enough. three, too much targeting. mobile devices are capable of tracking and collecting data that is useful for personalizing your marketing. sometimes is cost can outweigh the benefits. four, ignore the potential of voice. it's easy for them to call your business. include your number in all e-mails and all websites. number five, taking privacy concerns lightly. make sure you and your tech providers follow all industry regulations for collecting, using and securing personal information. it's time to answer some of

"your business" questions. rod and gene are here. the first question comes from bev. we own a full service funeral home. after much research we expected the cremation rate to be 65%. it's 98% with customers doing a straight cremation with no other services. how do we get families to honor their loved ones? >> what a cheery question. >> it's in honor of halloween. >> it's a deadly important issue. >> yeah. >> look, we can expand this out which is how do you up sell your customers? she's getting -- they are buying the cheapest thing. how does she get them to do more. >> you don't want to issue to pass away. i have been thinking about this. the funeral business is different. it's not so different than a consulting business. think about yourself. you lose a loved one. the last thing you want to hear is a marketing pitch selling more services or products.

it has to be a genuine approach at the beginning of the conversation. at least letting you know what services or products or things are available. at that point, you leave it go. the hard sell in that business, i don't think it works. >> i think you are right. it's different from a lot of businesses. it's not that different. it is a service and there's a degree of hand holding. people are feeling vulnerable. they are on guard and don't want to get up sold. i say you are not going to win on price, it's going to be on service and value. you need to create the experience for them. not even make price a big part of the equation. walking through the process. this is a special time for you and your family. here is how we are going to take care of you and offer from a service level. >> so much about sales is getting somebody to like you. in this case, more than ever, they have to really like you and trust you. >> bedside manner. >> let's move on to the next one. this is a question about getting

investors. >> what kind of percentage should we be looking at to give away to an investor and how do you know if it's right and what should we be looking for in terms of what to bring to the table. >> it's a great question. he covers a lot. >> it's all you have. it's all you have. our friends would tell you that. this is literally all you have. when i first heard the question, i thought about the movie "bugsby." he was left with nothing. that should be an extreme cautionary tale. you do make a deal with the devil to get it to grow. giving away a piece of the company is not an option. >> that's what i would say. >> give a solution. give away zero. >> a couple ideas. if you are looking for money, there's debt.

you can have people lend you money and promise to pay them back. there are stock options you can do based on if you have certain levels of profitability. expertise, like the question he was asking, a lot of entrepreneurs build a board of advisers. they are happy to be in a start up and they can leverage. >> that's the great thing about the investors. they can joke about angel or vulture. the key question you have to look at, too, when talking raising money, a lot of them get swept up in i have to raise money. they don't stop and think how much do i need. if you are talking giving away percentages of your company, you are looking at a lot of money. >> the reason to become an entrepreneur is not to work for others. the minute you bring in outsiders you are working for others. it's no different than having a job. be careful before giving away

equity. this is the next question, it comes from ellen. an online retailer must coordinate information from the shopping cart, payment gaitway, fedex and quick books. what the is best way to do it? you are a good person to ask this question. >> my company sells products. we always tell the way in the world technology is, pick a vendor and go with them. if you are using a back end system from microsoft or sage, they have tons of partners, tons of third party products that integrate with each other. some you may not like but you pick a vendor and go with it. go with the partners, go with their marketplace. >> it's the halo effect. if you buy an ipod, you buy an iphone and a mac. there are a million options out there. >> are they expensive?

>> i think they have gotten cheaper than ever. i think the issue for entrepreneurs, should i be bogged down with data entry, the minute you ask yourself that question, you shouldn't be because you have so much to do when you are growing your company. some of the stuff you can easily have others take care of for you, pursue that. >> quick books product is called enterprise, it's 3,000 bucks. there are smaller ones. most are a few hundred bucks a user. not that bad. >> thank you guys so much. this was all great, spooky advice today. if any of you have a question for our experts, all you have to do is go to our website. openforum.com/yourbusiness. hit the ask the show link to submit a question. again, openforum.com/yourbusiness or e-mail your questions and comments. the address is

yourbusiness@msnbc.com. rod and gene had helpful advice. now, let's get great ideas from small business owners like you. >> whoever is helping you build your website, you want to make sure you are with them in every step. i'm just learning all this about links and niche and names and all these technical things. i'm the owner of the business. i want to get paid. i want to bring the clients to me so i should be involved in every step of my web page. >> try to do as much as you can yourself in the areas of marketing, legal, accounting, or many of your dollar that is you or your profit margin will get from outside vendors. try to do as much in-house as you can. >> if you are a business owner, resilience is key.

keep on moving and continue trying to grow and do the best you can. it's all we can hope for. we can continue trying. >> do you want to test out what works and what doesn't work on your small business website? check out our website of the week. they see what visitors respond to and what they don't. it's known as ab testing. when users log on, they send out different versions of it. you can try out the service free for 30 days before choosing a service plan. to learn more about today's show, click on our website. it's openforum.com/yourbusiness. you'll find all of today's segments with more information to help your business grow. don't forget to become a fan of the show on facebook. love getting your feedback. next week, we take a closer look

at a phenomenon popping up all over the place. >> our codes represent the shortest distance between curiosity and content. it simply is easier to hover a code than type in your url. >> we'll have a beginners guide to codes and whether or not they make sense for your business. until then, i'm j.j. ramberg and remember, we make "your business" our business. sam: 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.