how do you convince customers to pay for a luxury in this economy? we'll tell you how to apply for sba funding. and the choeth of shoebenny yogurt on the importance of product placement. it's time to make money 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." the show dedicated to 2k3wi6ing you tips and advice to help your business grow. once upon a time, getting a manicure was a big luxury. then the next thing you know, go to any big city and there are manicure places everywhere. and they're pretty darn cheap. with a little consumer education, and a lot of opportunity, suddenly a new market was born. today, we have the story of two women taking a page out of that trajectory and trying to do it themselves. ♪ allison conrad and steffi moran founders of blushington had a big hurdle to overcome when they launched their company. >> a lot of people thought of

makeup just as once in a lifetime, their wedding and prom. >> what we're trying to do is change how people think about makeup. and everyday makeup application. >> blushington is a makeup and beauty lounge where you can go, last-minute and for not a lot of money, to get your makeup done. >> i love it. it's amazing. >> alli webb, owner of drybar, where people can go to get their hair blown out, also dealt with the same type of attitude adjustment. while most people get their hair done only when it gets cut or for a very special occasion, alli had a live idea. >> i wanted to change that and make that an affordable luxury and make it something that you could do once a week. >> these three women are turning luxuries into necessities. in order for their businesses to work, they had to create a market. know that good makeup and hair isn't something you want, it's something you need. and both companies are growing. so, how have they done it? well, first and foremost, it starts with price. from their research, and because

they are personally the target, stephi and allison now that women loved getting beauty services but they rnt aren't really willing to pay the steep price to do it often. >> when we were looking at the market we did notice there were ways to get your makeup done but it was really costly. having somebody come to your home, a couple hundred dollars at least, a minimum. and then, going to a department store, you know, you feel the pressure, and you're really supposed to buy at least throw products. >> so they did the math and came up with a price point they thought would bring people in. >> start at $35. >> today the price has gone up by $5. but even with that increase, something that seemed so out of reach was suddenly not such a luxury after all. >> we're definitely seeing more people coming in for our business meetings. people coming in for charity events. for dates. >> when they conceived of the idea they were optimistic. drybar had already opened and was seeing great success. >> we also looked and knew that

drybar was such a success that they had this really affordable luxury of getting your hair blown out. ♪ >> so when a location right next to drybar opened up, they thought it was meant to be. >> serendipitous, yes. >> it was a sign. >> when alli webb started drybar the first person she had to educate on the potential demands was her brother. >> i went to my brother, who is my business partner and now our ceo and i said i think if we opened up a place and all we did were blowouts, i think that would be amazing. of course he looked at me like i had six heads. >> unlike the women of blushington, alli had already started getting people to think of a blow dry as something they needed to do. she was a stay at home mom with two kids and a desire to get out of the house and talk to grown-ups again. >> i started this mobile business. i was running around town to my friends and mommy friends and just doing blowouts. that got so popular that led me to okay, i think i'm on to

something. >> both alli and stephi and allison are clear while the price point makes the luxuries affordable the experience is critical to bringing people back and bring people back they must, as their businesses survive on volume. at drybar you do not have the typical salon experience. for one, you don't have to sit in front of a mirror. >> you walk in, the music is loud and fun. there's a fun movie playing. >> and the whole process at both companies is not marketed as a big zeal. more like an everyday appointment. >> so you get your makeup down here, full face, 30 to 45 minutes when normally it takes you over an hour. >> for both blushington and drybar growth has been primarily by word of mouth. >> slowly but surely more and more women are trying it. they love it. they get addicted and they tell their friends and then their friends come in. >> it's really good to see familiar faces a lot of the time. and then what's great is they tell their friends about it. >> alli, stephi and allison are all clear that in the end they're not simply selling a makeup application or a blow

dry, they're selling a feeling that was once reserved for the rich. >> we, you know, we kind of internally joke that we're not selling blowouts. we're selling happiness and confidence. ♪ >> convincing consumers to buy into something that isn't a necessity can take finesse and marketing savvy. let's go to two people who have an abundance of both of them. adam rich is the co-founder and editor in chief of thrillist, a men's digital lifestyle publication and alexa von tobel is ceo of learnbest.com. great to see both of you guys again. what i found most interesting about this piece is, yes, there's the luxuries of the necessity which we talked about. but it's really how you educate your consumers. you have a new company, and you have something that you know they need, and they don't know they need it. so, what's the first step? >> well, i mean, i think the thing that's great about this is you have an entrepreneur who

rememberself is the -- she's the target demographic. and so because she knows that this is something that she wants, she's able to speak the language of the people that she's ultimately going after. >> mm-hmm. and in both of these cases, we were just talking to the experience is so -- it's so important because once you get them in the door you have to keep them in the door? >> i think the experience is critical, really for businesses like this. but there's really not a lot of barrier to entry. getting your hair blown out, makeup done, nails done, these types of businesses are very commonplace. so i think it's critical to hone in on the experience so your customer has a fabulous time. a better time than they could anywhere else so they're going to talk about it and spread it. >> i think also important with the experience is because she's creating her own category, she's not beholden to any expectations as far as the experience. so having the movies going on, having the music. it's really something that she could start with a flesh slate on and not have to hue to what people expect of a salon or a more discount kind of operation. >> the women from blushington when i talked to them, they said

we're getting there. it's word of mouth and we're definitely growing. but it has been a challenge to get people to think of makeup as something you do all of the time. and so, what kind of ideas do you have for them to get more people in the door? >> well, i think you could do a lot of things. i think first, creating some sort of incentive to get their community to really share it. one of the things i like about drybar is that you can buy a pass where you can get an unlimited or a certain amount of blowouts per month. i think that sort of will repeat behavior is important. but nothing better than incentivizing your own customer to share and spread. >> this is the kind of thing that, you look beautiful today and then you get to say where you went. >> sure. i do know that when i was in high school and provm was happening, girls were getting their makeup done and it was a very costly kind of thing. if they can tap into that market, you're not only offering them a cheaper alternative, but you're getting a young customer that then has their entire lifetime to use your service. >> the other thing about this, and you guys both experienced this in your business, is that you're forming a habit.

right? >> yes. >> and that is -- that's kind of the test, that's the holy grail for any business, is how do you create a habit? >> yeah. and every single woman who has to get dressed for some event or something they care about, we all go through that same rigmarole of what are we going to do? and i think that they've created a habit of you can get your hair blown out and you don't need a new outfit and it goes really far and i think that that's really powerful habit for them to create. >> and i think the attention they pay to their pricing. i mean you can't form a habit if you can't afford it. >> that's right. >> and that's how they bring people in. i mean that's the core of this is get people in, because of the low prices. keep them in because of the experience. >> yep. >> thanks, guys. developing a strong network of people is one crucial key to success. here now are five ways you can start strengthening your business relationships, courtesy of allbusiness.com. treat vendors like honorary employees. people like the package delivery guy to the material supplier aren't necessarily working for

you on a daily basis, but they could still have a big impact on the quality of your service or product. two, make start-up loan payments on time, no matter what. you don't want to gain a reputation with your bank as someone who doesn't meet deadlines. three, recognize a job well done. give your employees the praise they deserve. four, have one-on-one conversations with customers. usually unsatisfied clients don't tell you, they just jump ship. ask them about what you could do better before there's even a problem. and number five, contact your mentors frequently. think of those people you turn to for valuable advice, nurturing that connection will mean extra hands on deck to help you build your business. contrary to what many people think, the sba does not loan money directly to small business owners. the own actually comes from a bank, and it's backed by the sba, allowing the banks to take

a little more risk than they otherwise may do. today's guest has tips, if you are applying for an sba loan at a bank. brandon hinkle is the ceo of a free online matchmaker between banks and small businesses seeking commercial loans. great to see you. >> great to be here. >> so that's the biggest misconception, right? i'm getting an sba loan, it's coming from the sba. >> that's right. a lot of people assume the check is coming from the government, from the sba. but that's not the case. they're actually working with the bank. so basically what happens is, the bank will, you know, rely on the guarantee from the sba but you still have to get a loan decision from the bank. they still have to look at the credit criteria and the cash flow, and then they're really -- it's really designed to help those people that have a good amount of cash to repay the debt but maybe don't have the collateral or years in business to justify the loan so the government will help. >> and when you go to the bank, would you go and say, hey, i'm looking for an sba-backed loan or would they steer you in that direction once they see your business plan and talk to you? >> if you go to the sba, they'll say you have to talk to a lender

and talk to let's say u.s. bank or some other banks that do sba loans and then those banks will say, the most appropriate deal for you is let's say an sba called a 504 loan or there are certain products they'll recommend. so the sba will literally tell you to go to a bank. >> and that's the other thing. there are all kinds of products, not just one kind of sba loan. do you do that research ahead of time? or should you rely on the bank to steer you in the right direction? >> you should definitely do some research beforehand. or rely on the bank to steel you in the right direction. there's the 504 loan which are meant for real estate and fixed assets and the working capital loans sba 7-a loans which help with improvements and things like that. you want to make sure you're getting the right product for your business. >> if i could go through this process and get a non-sba loan, or an sba loan, is there a benefit to one or the other? i mean sometimes you have no choice but if you did have a choice? >> absolutely. one example is so the sba 504 loan if you're buying commercial real estate, you can -- you can put 10% down with an sba loan.

because there's less risk for the bank because the government is basically cosigning the loan, they're willing to go a little bit further so the amortization will be farther ert out and you have to put less equity down. however, people have the misconception that the rates are always cheaper with sba but that's not true. so it depends what you're looking for. i would say a lot of times the sba is a great product if you're eligible and you can get it. >> are there any downsides? is there more paperwork? does it take longer? >> there's a lot more paperwork. sometimes the rates can be higher. is the sba 7-a loan it's generally a floating interest rate. i think there's a lot more upside. >> when you go in the banks can take a little bit more risk on you but you're still going and you're applying for a loan from the bank. so some things you need to look at. you say first make sure you're in good standing with the state. >> that's right. a lot of people don't realize until right before close that they forgot to pay a bill for the state or their taxes so they won't be in good standing. and so, things like credit reports, background checks, you

know, certificate of good standing with the state are all things you need to have in line before getting approved by the bank. >> okay. then just like any other time, going into a bank you need to have some sort of business plan, and show some sort of plan? >> especially for start-ups because they don't really have financial history so all the bank can use is your industry experience and your future plans. you really want to make sure you have a business plan in place, have three years financial projections, a monthly balance sheet and income statement. make sure you demonstrate that you know the industry. you studied competitors and also sources and uses. what i mean by that is basically a chart that shows what you're going to do with the proceeds from the bank. >> and then finally fill out up all of the application. people just forget to fill out one section or think it's not important. >> the bankers single biggest pet peeve is inpleemt informati information. if you have an incomplete copley indication they'll put your deal in the penalty box and work on the zeals that are complete. they don't want to waste their time.

so you definitely want to complete the loan application. >> brandon hinkle, thank you. this was great. you know, again, every, so many people think they're getting an sba loan and they forget you're actually getting a bank loan backed by the sba. really appreciate it. >> thanks for having me. >> when we come back, we'll talk about what you should do when you want to develop a smartphone app for your small business. and the ceo of chobani yogurt says a business owner needs to wear many hots. that's next in this week's "learning from the pros." you know, those farmers, those foragers, those fishermen.... for me, it's really about building this extraordinary community. american express is passionate about the same thing. they're one of those partners that i would really rely on whether it's finding new customers, or, a new location for my next restaurant.

when we all come together, my restaurants, my partners, and the community amazing things happen. to me, that's the membership effect. in 2005, hamdi ulukaya came across a classified ad for an old yogurt plant. coming from a turkish family that is no springer to the yogurt business, ulukaya seized the opportunity to create chobani. today it's the number one selling greek yogurt in america. we caught up with the founder and ceo to get his insight on the importance of wearing many hats and investing in the heart of your company, in this "learning from the pros." ♪

>> in early days i was maker, sales person, manager of the plant. i was everything. you become manufacturing guy, you become a sales guy, you become a financing guy. you become a marketing guy. whatever you can call it, you do every one of them. you have a taste of every bit of every angle of this business. and then you grow your business later on, you do have a knowledge of, you know, every aspect of that business. ♪ this product is not something new. it's not something we invented. it's been around for hundreds and hundreds of years. and it was available before us a couple of years but it was only in specialty stores. but i just didn't understand why. a simple product like yogurt, why would it be a specialty? we went to these stores and we said, look, we don't want our product to be in a specialty section of your store. we want this product to be in a main daily aisle. that all the other yogurts are. and it was a challenge. some of them didn't think, you know, it was a good business

move. and i think the success is if we could make somebody to say oh, what is this and let me try, and then the yogurt inside will make them to come back again, then, then job done well. when they put this product in the regular aisle, without any marketing or tv ads or anything like that, in a couple of weeks we blow everybody's mind. i always felt that this company's heart is the plant. because we have makers and we're making this product and we're proud of. make sure they know what the strength of the plant so you can invest more. so you can make more products ought of it. so we kept investing back to the plant, back to the plant, instead of taking away from the plant. we just put it back, making sure the most technology is in. be real. i think that's simple as it can be. but today's world, how we are connected so much, the fake come

out very quickly. in our daily life, or in tv, or whoever you are, whatever you are, people know who you are. then we do our communications marketing. it will be our real people who are doing this. we're not going to hire some other people pretending to be like a chobani. and then we just merchandising with real consumers. we didn't use any actors and we won't use it next time. at the same time whatever good is happening, whatever bad is happening, just accept it, and simple and real about it. you compare what you have in the supermarket. and you say, i'm not going to settle just for okay product. i'm just going to make best. that's why i spent almost two years just keep making it. keep making it. and you know, the time comes and some of your people says, this is okay. this is great. this is good. and i would say, no.

that's not good yet. i change if we are going to challenge the big guys or anybody out there, we have to make sure that we make it better than anybody. and then i knew i it, basically i will go into my fridge and eat it every day and i said, man, this is a good product, then i'm done. it's time now to answer some of your business questions. adam and alexa are back with us once again. the first question is from anthony. he wrouts, i have several ideas for smartphone applications. do you know of any application developers who would be interested in reviewing them and perhaps forming a partnership? i get this question a lot. where do you find somebody in. >> that's the million dollar question. you know, my advice because it is very hard to find talented mobile developers and their time is expensive, but if you can find someone that's already built an app in that category and it's a good one, they're going to be -- they're going to understand the value of what you are offering better than someone

that you're just pitching who may not necessarily be specialized in the area that you're looking to develop. and so those -- that's going to be an easier conversation than just kind of going and talking to a generic developer. >> so my question also is about -- for partnering. do you want to partner with someone or would he be better off trying to hire someone to develop this? >> i would say two things. first, mobile developers are extremely expensive. in fact, in the last year the heat on mobile development has really turned up, so you're going to spend a lot of money if you just pay. so be aware of that. the other thing i would say is before i would caution someone to go out and build a mobile app, figure out what the business is going to be behind it. figure out what is this app going to do, how is it going to make money, what does the space look like before you spend a lot of money to get an app out. >> moving on to the next one, this is from andy who wants to know about starting another venture. he writes, we are successful, high-volume photographer, we will photograph around 100,000

kids this year and about 30,000 u.s. marines. how do you add a new product and service to a successful business? both of you guys have done this. adam, start with you. you were content site and then you added commerce. >> i think that my advice to anthony would be similar to what we've done. it's kind of an all in one place play. just the way that he explained that, it was like he wasn't talking about the trophies being anything particularly different. it was really a question of it being a synergy with his existing business. so i think bundling, packaging, putting those things out there in one place i think is where he's going to be able to communicate the value most easily. >> you started as content and have added products. >> so now we have financial planners off our content base to answer your questions. i think the way i would tackle this is go to your users. we have a set of customers we talk about, about 3,000 that literally give us feedback on a regular basis. ask your customers what do you want us to build? what would you be excited to build? they're the most likely user

base to buy whatever you build. >> this vip list of users, how did you recruit them and do you pay them? >> we call it learn vest labs. they write into us on a regular basis, i love what you're doing. we said, hey, we'd love to talk to you on a regular basis and give you the inside scoop on what we're thinking and developing. do you want to be part of that? absolutely. they get to help shape our services. they're excited. they give us clear guidance on what they would be -- >> is this via e-mail? >> via e-mail, phone, and focus groups. we ran about 100 focus groups this year talking to customers in real life. ask those customers, because they're also likely the ones who will buy whatever you're going to sell. >> for those of us in small business, we're often so busy doing business that we neglect taking care of business, so if you had one piece of advice as it retes to solidifying the

operations of a small business, what would it be and why? >> how do you get out of the trees so you can see the foreest? >> so two things. i think as the owner or the ceo of a company, it's so important you, one, hire extremely smart, amazing people who are talented and let them do their job. you should never be the bottle neck. i think that's really important. if anything is sitting on your desk before it gets signed, you are the problem. i think it's important to make sure everyone know what is they're doing and you stay out ever their way. i also schedule my calendar down to 15 or 30-minute segments. i schedule time tok through my e-mails to make sure i know what i'm supposed to be doing at all minutes of day. you only get 12, 14 hours a day to actually work because you need to sleep and eat. it's important to maximize the hours. >> i completely agree with alexa. those productivity tools, whether it's your calendar, setting reminders, just with your gmail account you have a whole suite of docs, calendars, you name it.

constantly innovating and it's free. i think that can be the difference between really being in the weeds and being on top of it. >> being organized. >> totally organized. >> okay. the next e-mail is from danielle and she writes, i put on quickbook seminars and i'm trying to set up a product list of unlimited e-mail and phone support. however, i'm having trouble figuring out what to charge for this kind of service. how does she charge it? >> i think this is a simple question. go to a set of users, ask them what they'd be willing to pay. don't give they any indication of what you're thinking. ask them what would you be willing to pay for a service like this? i think it's always better to start low while you work out the kinks of a service. don't have someone spend a lot of money as you're figuring things out. make it less expensive in the beginning as the product gets better, you can add bells and whistles and features and raise the price. >> i would agree with that. my thought would be to start with something capped and for the people that are hitting their cap go to them and see if this is a service that they've got an appetite for. >> and finally, here is a

question about thinking and acting big. >> small business is all the buzz. how do you have the cachet of a small business and provide the confidence of a large or larger entity? >> in some ways, i feel like that's not even an issue anymore. so many people like working with small businesses. >> i think that for most people that have been frustrated working with a small business, it can really be traced back to a couple things. i think organization and communication, and, you know, you get an e-mail that isn't proofread mixing up your and you're, it very quickly makes the small business seem like a small business. you know, but if you make your deadlines, you communicate when you say you're going to and you seem professional, that's a really easy way to instill confidence and allow someone to enjoy the pluses of dealing with a small business rather than it feeling amateurish. >> i always think about the users. so for small business, if there's an issue you get on the phone with the founder.

i think that's something that's important to hang onto as you grow into a larger business is that incredible customer service. so it literally feels like a little store on main street where if there's an issue you can talk to the owner even as it grows. i think that's a great way to project as you grow and become a bigger business. >> and to get testimonials. if there is some fear you are not going to be able to deliver, put them in touch with someone for whom you have delivered. >> and guarantee your quality. >> thank you so much for all of your advice today with these questions, much appreciated. and if any of you out there have a question for our experts, all you have to do is go to our website, the address is openforum.com/yourbusiness. there hit the ask the show link to submit a question for our panel. again, the website is openforum.com/yourbusiness. if you'd rather, you can e-mail us your questions. the address is yourbusiness@msnbc.com. with many of your customers constantly on the move, know wrg

they're going is your business. if you want to harness the power of location based marketing, check out our website of the week. geotoko.com helps businesses find out who is checked in at their locations. you can build and launk location based promotions at foursquare, twitter. real time location analytics can help you better reap your target demographic. >> to learn more about today's show, just click on your 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. you can also follow us on twitter. it's @msnbcyourbiz. become a fan of the show on facebook. next week two entrepreneurs in need of cash have to find funding after being turned down by a bank they had already been working with. >> frustration with, you know,

all right, i did everything you wanted me to do. i put this dress on, walked down main street, and you still told me i wasn't even second place in the beauty contest is just sad. >> we'll tell you why the owners of this small business were denied and how they were able to bounce back from their funding fiasco. until then i'm j.j. ramberg, and remember, we make your business our business. they have names like idle time books and smash records and on small business saturday they remind a nation of the benefits of shopping small. on just one day, 100 million of us joined a movement... and main street found its might again. and main street found its fight again. and we, the locals, found delight again. th's the power of all of us.