Of the journey. American express open proudly presents your business on msnbc. Hi, everyone. Im jj ramberg. Welcome to your business, the show dedicated to helping your Small Business grow. A few years ago we went to maryland to profile a company that did something rather unusual, they completely opened up all of their books to their employees. They shared almost every single piece of financial information. And when times got tough, they found out that this policy had created some very loyal employees and some amazing results. Now the founders are taking another step to get their employees involved, they are turning everyone into an owner. The year was 2009. The recession was shutting down the economy. And everyone at this marylandbased designed build company took substantial pay cuts. We took 20 from the employees and 30 from management and anthony and i participated at 50 . Elizabeth wilder coowner of Anthony Wilder design was desperate. Back then, we didnt know how long the recession was going to be but it was a strategy to buy us some time. My thought was holy crap. I had been here eight months. Chris thomas, a lead carpenter at the company remembers that time well. All of a sudden were getting pay cuts which was a shock to everybody. Anthony wilder who founded the company remembers watching income drop off to a trickle. It was a scary time a long painful for everybody. While other builders survived by laying off staff, anthony and liz held the team together. Thanks to a management style that encouraged their employees to act like owners. But you know, we grouped together realized if we get through this well be stronger on the backside. And it happened. There were no closed door meetings. George is over at avagon. No fearful gossip. They held regular sessions reviewing all financials every month with every employee. Everyone knew the score. It made things very transparent. People understood. There wasnt suspicion that we were trying to hoard all the cash but rather that we were trying to preserve jobs and have a sustainable company. And it worked in ways elizabeth says she never anticipated. I still get a little teary within i think of it. People came to me that knew other people couldnt afford that cut and said take more of my salary. People were grateful for their jobs. Reporter the team remained together long enough to outlast the broken economy. When it came back we floated right into our old kind of groove where everyone else was scrambling trying to find people and the ones they let go didnt want to come back. Today the company not only has a backlog of jobs but the staff has been repaid all of their lost wages with interest. We paid everything back and i think we were finished paying all the back pay by 2010. Nobody expected to see that money. I first got to see the workings of this unorthodox open Book Management style when we visited liz and anthony in 2009. What do your employees know . What information do you share with employees . Everything. We do hold salaries private but aside from salaries everything is shared with the employees. To many its a radical idea to let the employees, everyone from the Truck Drivers to the top designers, know the details of profit and loss. Most Business Owners consider these details to be highly confidential. Today as they prepare for the future, the owners have taken yet another unorthodox turn. As anthony and i are getting older, we wanted to create an ownership culture, not just have people feel like owners but actually really be owners. After more than 40 years running the show anthony and liz are about to take the first step toward selling the company to the employees. I dont think that our, you know anticipation is immediate retirement. I think this is a tenyear thing. Thon anthony and i will retain way more than a majority for this first piece. They offered us ownership. I want to buy in. Staff architect maryann is one of the employees planning to purchase the stock. Shes been here more than 14 years. You have a minimum amount of stocks to purchase. That gets you ownership. A small percentage but it gives you a vote in what happens. I think that has a lot of value to it. I want to be part of something great. Chris thomas is also buying in. He says after putting down 20 , paying the rest is easy. You can spread that out the rest of the remaining up to seven years. It can come out of your weekly check. Well be able to maximize the value of the company but allowing other people to participate as owners if thats something they want i think is part of who we are and part of our culture. Right now the first step is to sell 20 of the km to the staff. The final goal is to sell 100 to the employees. Liz says theyre still working out the final structure. We said all of us would be in consensus on all decisions. Anthony and i retain the Nuclear Option to veto things but it wouldnt be in our best interest to use that on any kind of regular basis. Meanwhile, the combination of open book accounting and Employee Ownership has everyone from the carpenters to the marketers sharpening the bottom line. We intriziccally knew we did a lot of runs to the lumberyard that werent necessary. Mark and bob regularly listen to the Monthly Financial reports and wondered about the cost of those lastminute supply runs. Home depot runs. Were tracking the receipts that we get monthly to see how many runs were making. And its an eye opener. Simply by reducing the amount of runs from 150 a week down to less than 100, it ends up being a cost savings of 200,000 to 250,000 per year for the whole company. We hold each other accountable. Everybody has everybody elses best interest in mind. Now as anthony and liz are planning to take that ownership mentality to the next level, they seem confident that the ownership culture they created has already taken root. A lot of us already feel like were owners. Were already in that role. Weve taught people how to be Business People and how to be successful. Why not give them the opportunity . As the founders of Anthony Wilder design, providing equity can get pretty complicated. They spent a lot of times with lawyers and accountants on how to do it. Owners of a soap company we met used that as compensation when they first started out. They give us an honest assessment of what they did right and what they could have done better. Equity is so much more than a salary. It is the most sacred thing in a company. Entrepreneur David Simnick understands the power of equity. It is ownership. Dan dahl agrees. When theres no physical currency given, theres no other way to value time and effort. How to value a company and distribute equity are tough decisions with lots of layers. The owners of the alexandria, virginia based company mastered making bar soap liquid hand soap and body wash and had a social mission they were committed to. When it came to dividing up the company, theyve learned as theyve grown, admittedly making some mistakes along the way. It is serious. These are real real dollars. They decided to split the company 50 50 in the beginning. They wanted a level Playing Field for the business. Soon enough, the pair needed help. Thats where dan enters the story. In lieu of a salary they gave him a stake in the company. He was doing a lot of work for us but we felt the pressure to be protective of our equity. They decided his work was worth more than just 10 . And that motivating him with ownership was more than important than retaining equity themselves, so they gave him 20 . They didnt value the company at the time which they should have. Looking back david says the company was new and worth about nothing. He saw problems. He went and fixed them. He saw opportunities. He went for them. More importantly, we saw a partner. The team also saw potential in volunteer stephanie appiah. There was blogging rewriting of web content, making social media pages. There was no money to pay stephanie but there was ownership. Stephanie came in and started kicking butt at everything. So after a while, we said well we did this for dan, we should do this for stephanie. Not knowing the intricacies of distributing equity they didnt exactly do it right. Once again, they didnt value the company but they believed it still wasnt worth much. Equity didnt have a concrete meeting for me. Signing the paper was like im officially on the team. They each gave up 1 percentage point to stephanie which hurt dan who owned less. There was an outside force of what everybody else was telling us protect your equity. When we were going through the dan decision stephanie decision, i felt okay giving up my equity because i knew i was getting skills and expertise. As the possibility of taking on investors neared stephanie approached the team about a larger share. My stake was so little that an outside investor with a large amount of capital could easily have a greater weeks of negotiation, they gave stephanie 3 more again, without value be the company. This time the owners were diluted proportionately. Dan contributed slightly less to bring stephanie up to 6 . Soon after, another equity negotiation was on the horizon. The stakes were higher too. When dan was renegotiating, it was going to be the last arbitrary rebalancing of equity that i expected. Once we gain investment, our portions of the company are actually worth something. Dan knew that too and believed he was worth more. I was acting as if i was a cofounder but wasnt being compensated as if i was. Dans share went up to 23 . He also became president and coo, spirit of of the increase was right in line with soap boxs philosophy. I would rather be in a company of people who want more of the pie and are willing to work for that. When stephanie decided to leave the company, the owners bought her shares back. At what value . Well, again, since they didnt normally value the company, they arbitrarily valued each share, something david cautions other entrepreneurs not to do. The most dramatic equity change was next. Eric announced his exit. I knew in my position as a cofounder with the amount of equity i had i needed to be all in. And i couldnt commit to that. In a pretty unusual move he gave his shares back to the company. Who gives away all their equity . A largest piece tied with your cofounder of the company back for free essentially for free. While david could have become the majority owner, he didnt. He shared it. Contrary to what some people advised them soap box returned to a 50 50 split. David says hes learned a lot about the complications of dividing equity. There are a million theories out there. Hes more aware of the need of creating vesting schedules and how equity can trigger tax events. All of this is about the nittygritty about how to do things. But when it comes to the spirit of what they did, david believes soap box did it just right. When you start out, you dont know what youre doing. We started out at 50 50. If i were to do it all over again, id do the same exact thing. Its not easy. Its going to lead to much greater success than if one of us was over the other one. Potential customers are checking out your site every single do. Do those browsers turn into customers . Entrepreneur magazine has five tools they will say will boost sales. One, yotpo. Consumers read reviews before purchasing a service. Two, leadfeeder connects you to your Google Analytics and grabs data about your visitors. That way you can compile a more effectively of promising leads to follow up with. Three, improvely monitors your businesses online ads to make sure youre not a victim of click fraud. The tool also tracks which ads are working and which ones you could do without. Four hotjar uses heat maps to show you which sections of your website are most popular. Youll gain a better understanding of User Behavior and know what changes you should make to your site. And five unbounce. Your landing page is your first opportunity to attract the attention of online visitors. Design one that will keep potential customers on your site for longer. Having a Strong SocialMedia Presence is great but if it doesnt ultimately lead to revenue, either directly or indirectly, whats the point . Our next guest is going to give us ideas on how to translate that influence into sales. Karen leyland is the president of the sterling marketing group. You are here to talk to us about what social media can do for you in terms of revenue later on. Thank you for having me. So good to have you here. You can do a contest and put up a picture of a cute dog or cat. Or a cat, right . Suddenly you have all these people following you on social media. But if theyre not your target and theyre not going to buy what you have to sell its not going to help. People say instagram is the hot new thing. Ive got to be on instagram. Not necessarily. Its figuring out your demographic, your market and picking the one or two social media sites that are right for you and working them deeply. Thats the first thing you have to do in order to be effective at converting people from coming on your social media to eventually being customers. So what youre talking about is having a call to action eventually turn from just follow or fan into someone who is going to utilize your service. You talk babout, again, a called action. Which is different than about a conversation. It is about a conversation but not just about a conversation. If on your twitter you do 80 content and 20 of the time you do an offer, 40 off for that day with a link that goes to a specific landing page on your website, those people will follow you. The people that follow you, youll have a greater chance that those people will click through to your website. By having a specific landing page for that offer that day, youre encouraging people to start to purchase from you. Got it. The conversation brings them in makes you guys friends. As you would with any friend you have a referral and youre more likely to follow through. Exactly. You talk about putting a subscription to your email or newsletter. Do you think of email as a way where you can sell more than social media . Think of it like this. If you think of it as the person goes to your social media, theyre coming into a funnel or a tunnel. Theres going to take a certain amount of touch upons before theyre going to end up being a customer. If youre selling something tohat costs 19. 99, it may only require a few touch points. If it costs more, it may take more touch points. You want to offer gated content so you have a high value ebook or a webinar or quiz. If a person gives you their email or name some people call it an ethical bribe, you will then send them that con tan the. Its a way to build up your email list. The key here is you cant abuse it. You have to do it in a selected basis. Thats a way to start to create this relationship with the person that started at social media. Now youre nurturing it along the funnel. How do you do testimonials in a way that isnt too salesy. When you have a press release about something youve done its good to put that out on social media with a link back to the release. If someone mentioned you in their blog or social media, you can put a link to that. Part of it is being matter of fact. We were covered on msnbc here heres the lunk. As opposed to im so fantastic, this person talked about me. Thank you for visiting with us. My pleasure. Thank you. Earlier this week, i was asked to testify before the house Small Business committee and one of the topics we tackled was how to inspire young entrepreneurs. One way we try and do it here on the show is by featuring their efforts which brings us to todays elevator pitcher, a Drexel University stup thedent who started her business as a sophomore. We have tom and norm with us today. Im noel wiggins, founder of sycamore lights an a sophomore at Drexel University. Everyone wants a beautiful, elegant home. We make that easy for you at sycamore lights eco friendly luminaries. We sell six colors of luminaries directly to the consumer. Theres limited competition in the luminary market. We utilize led tea lights. Now were ready to aggressively tackle the 51 billion wedding and special events planning industry. By expanding our product line to include smaller luminaries we will have a luminary thats perfect for outdoor and indoor use and has higher profit margins. The mold to create these cost 10,000. Assuming a spring 2017 release well have a full return on investment within a year. Thank you. Thank you. Nice job. You speak with such confidence, which is really fantastic. Okay. You have a very good panel here who have spent their lives listening to pitches just like yours. From both of you, two numbers from one to ten, the product, then the pitch. How do you feel . I feel great. These guys are amazing. I cant believe i get to pitch in front of these people. Lets start with you. Well okay so for the product, i think you didnt ask for enough money. Its going to be an easy knockoff. Youre first to market. Youll need a lot mr money. For the pitch, future is secure. Entrepreneurs like you, you did a fantastic job. Thank you. You did an awesome job. 8 for the product. Its simple. I like simple products that you can produce easily do it cheaply, drive down the cost when you go to volume. Ill give you a 9 for the pitch. Your enthusiasm is overwhelming but most importantly what you talk about is the experience. You can carry that message and the message of the product is an experience message. You deliver that so wonderfully. I give you an 8 and 9. Thank you. Thank you for coming on the show. Thank you for having me. Good luck with everything. We appreciate you taking time and inspiring other young entrepreneurs. Thank you for your advice. If you want feedback from our elevator pitch panel on your chances of getting interested investors, send us an email yourbusiness msnbc. Com. In that email please include how much money youre trying to raise and a short summary of your idea. You never know somebody out there may be watching the show who is interested in you. More helpful Small Business advice is coming up including thoughts on how to find a mentor and how to close that sale. Plus, what should you do when you start a business and then you decide you hate it. Our cosmetics line was a hit. The orders were rushing in. I could feel our deadlines racing towards us. We didnt need a loan. We needed shortterm funding fast. Building 18 homes in 4 ½ months . That was a leap. But i knew i could rely on American Express to help me buy those building materials. Amex helped me buy the inventory i need. Our amex helped us fill the orders. Just like that. Another step on the journey. Will you be re