HATTIE: Hi. I'm Hattie Bryant, every week, we take you inside a business, and you learn about the people who run it.

HATTIE: We've been all over the country, meeting small-business owners, but this place has to be one of the most beautiful spots in the world.

Anyone can escape the hustle-bustle of Los Angeles. The getaway is close and inexpensive. For just $36 round trip, you can take the 26-mile ride to Catalina Island. You could rent a bike from Gary Brown, buy souvenirs from Bob Cranton, rent a horse from Bunny Putnam, or splurge and be treated like royalty at the inn run by Marlene McAdams, all small-business people. You can make the trip to and from Catalina on Greg Bombard's Catalina Express. Like the others, he's a small-business owner, serving the thousands of tourists who visit this magical place every year.

GREG BOMBARD (Catalina Express): (Voiceover) It's such a getaway compared to the daily grind on the mainland. And if you're working all week and you need a break, it's a great place to go do it.

We offer over 30 trips a day, and that's just one way going that way. If you counted both legs, it's 60 trips, and that has never been offered before.

So that opened the door to some type of service that would enable the people to get back and forth to the island on a more routine basis than the big, slower boats that came and went on prime-time applications but not all day long and not in the wee hours of the morning and the late hours of the evening.

The only way we could see to do that was to offer a faster boat and carry a smaller number of passengers on board and create that type of service. We use an airline theory as far as the seating on board. The cabin attendants on board come to your seat. And then for speed, (we) use ride control to take care of the speed. You can go fast, but you need to keep the people comfortable while you go fast, so we offered a lot of amenities that nobody else had available.

All right, so this is the main salon.

HATTIE: This does look like the seating on a passanger airplane.

GREG: Yes and we serve light snacks on board, cocktails or sodas. And these seats are all designed and built in Norway and imported in; small snack bar where people can either walk up to it or they can sit back and relax and the cabin attendant will bring them a cocktail at their seat.

HATTIE: So you get your vacation started off in total comfort.

GREG: Really the technologies in these new high-speed ferries are a lot like walking into the cabin of a 737.

HATTIE: OK, so you're letting me be the captain.

GREG: So, see, now here's some of the technology I was talking about. The wheel that steers the boat--well, instead of having the captain sit there and have to bend over and have to worry about steering from here...

HATTIE: Right.

GREG: He can sit back in his seat put his hand on this lever and he can drive from right there.

HATTIE: It's like a joystick.

GREG: It is a joystick. This is your pilot control, so that you can set your autopilot to whatever your course is supposed to be in this section here.

HATTIE: You can't just say, `Take me to Catalina.'

GREG: You can say that, but if you have to go around something, it won't know to do that.

HATTIE: Now, why are you so proud of the engines?

GREG: I think this is a big piece of the whole puzzle, being able to come up with the horsepower and the systems being able to move this boat through the water at the speeds we want to.

HATTIE: OK. So the four things you're concerned with, right?

GREG: Yes. I mean, safety is always paramount. Safety is the biggest thing there is in this industry, and then speed and comfort come along with it, and the service on board. I mean, our cabin attendants, they do a great job, and the deck hands...

HATTIE: Well, just the whole service process. Buying your ticket. I know your 800 number's great, the people are friendly. They gave me great information. They asked me a lot of questions to help me make my decision about which boat I should take.

GREG: Probably something that really adds to that is we made a decision early on in the existence of the business to build our own reservation system and they're right here with us. So we're selling our own product.

Other people have gone out to either different ticket providers, whether it be Ticketmaster or people like this, and they utilize those types of services. And we always felt that if we're going to do it right, we want to sell and provide our own service all the way from the time you answer the phone and takes the order... actually from the time they start from their home, we've set the whole thing up for them. And that's important to us.

HATTIE: So you can control the quality of service.

GREG: We want to control all the quality.

HATTIE: Can you talk about how much it costs to build this new equipment?

GREG: A boat like we're sitting on, or the boat that just went by, was approximately $1.8 million. And the one we're building now is about $6.8 million.

GREG: But the new ones are going to carry 300 people, so there's a jump in passenger capacity.

(Voiceover) I think the biggest pressure about this whole system is we are the gateway to Catalina. We're no different than if you go to Disneyland. You go through the gate, you pay your money to get there. Well, we're the gate to Catalina.

And to me, in order for people to have a successful trip to Catalina and enjoy their day or week, we've got to make sure that we get them there and we get them there safe, comfortable and without getting seasick.

The deck hands --when the people come down to the boat-- are smiling; they help them with their luggage, they get the luggage put away. That's not a concern the rest of the trip.

HATTIE: How do you get them to do that? In other words, how do you get all the service people to really deliver exquisite service?

GREG: I think by making sure they enjoy their job.

HATTIE: What do you do to make that happen?

GREG: Well, I just think that when we interview people and bring them down and they train to become a deck hand with you and like the service that we provide and actually take pride in ownership and what they provide, I think that's a huge piece of it.

HATTIE: Do you have some reward mechanisms? I'm not talking about necessarily about money, but like gold stars if they get good reports back from customers, or do you have any little tips or tricks that you use to keep people excited about service?

GREG: Well, I'd like to think that, you know, the people really do enjoy their job, and what they want to do is get out there and go from being a deck hand into being a captain with us. And that's how this company's built.

This company, I don't believe, has ever had to go out and hire captains. It's always built from the bottom up.

Movie this up from the bottom of the show for this clip. HATTIE: Again, you had grandfather, father in business for themselves. If someone came to you, one of your employees and said, `I want to start a business, but it's not to compete or anything. I just want to do my thing,' what words of wisdom would you give them? What would you tell them as they step out?

GREG: I would have to say, the water's been my life, so for me to play on the water like we do and enjoy the business we do on the water, I'd ask that person, `Where are you coming from? What do you do? What do you enjoy and can you make that a business?' Because if your heart's in it, you'll probably succeed, as long as you stick with it and grow it.

Yeah. I mean, that's the biggest piece is what do you like to do? If you aren't doing what you like to do, you ought to quit.

HATTIE: What jazzes you? What thrills your soul? What makes you happy to get up in the morning?

GREG: I'd say the new technologies that are available to us, and how can we use them in our business. I mean, that's the exciting part. What can we do? Who's got the newest engine package out? What's going to let us go faster? What kind of ride control systems can we change to that it's going to keep the comfort level above and beyond what the expectation is? And I think those are--you know, that's more fun than anything.

The design and the build and everything else; and then seeing the smile on the people's face is what we all fight for... a happy customer comes back.

GARY BROWN (Bike Shop Owner, Catalina): For what you want, you probably want something more like a 21-speed like this. This gives you the ability to go up and down all of the hills.

(Voiceover) Gary Brown, the bike shop owner, is also mayor pro tem of the town of Avalon, and has been a small-business owner on Catalina for years.

GARY: And you also have the suspension system which softens all of the bumps as you come down.

HATTIE: This is a good old person's bike.

GARY: This bike shop was here in 1954 when I came over with a school to play Avalon, and we rented bikes here. So it's been here a long time. I've had it since 1978. There's about 3,500 full-time residents here.

HATTIE: And do you have any clue how many visitors you get a year?

GARY: We get up to about 20,000 on any given day, and close to a million a year.

HATTIE: Wow! How does a small business get its share of the tourist dollar?

GARY: Obviously, a small business like this is not able to do major advertising in Sunset or something like that that would generate and bring people over here.

Our Chamber's able to do that. So by working together with all of us, we're able to spread things a lot farther.

HATTIE: What would you say those business owners are doing right?

GARY: The biggest thing is the customers service. If there's something that they're asking for, we go out and we get it. It must be what they want. And so I think listening to the people who are coming in your store and seeing what's selling, which these people are pretty good at, is paramount to making sure that it works and that they come back. The key is they come back.

HATTIE: Right. Do you think vision--being a visionary is part of what makes a good business person?

GARY: Oh, I think you have to be. I think you have to look around and say `What are they going to want? What are they going to need?' And you have to meet that need. If you wait and let the need pass you up, you're going to be out of business.

HATTIE: So we can't just react, we have to think carefully about the future.

GARY: Yes. I try to anticipate where we're going to be 10 years from now. Well, we do a whole lot of comparative, especially with the computer now. We know exactly what we did on the exact same day last year, the year before and the year before. We can take that and extrapolate from that what's happening, what kind of adjustments we're making.

We pay real close attention to what's being rented and what's not being rented. When I first started renting the bikes here, we had single speeds and six speeds. We now have single speeds, six speeds, we have 21 speeds, we have 21 speeds with shocks. We put in a lot of tandems with gears because that's what the customer wanted. We make sure we buy bikes with real soft seats, because that's one of the main complaints they have. So it's a matter of making sure that we know what they want and trying to give it to them.

HATTIE: (Voiceover) Shopping is a major pastime on Catalina. Bob Cranton's family owns Catalina By The Sea.

BOB CRANTON (Catalina By The Sea): (Voiceover) My store is a souvenir store. It's gifts and souvenirs. But most people can walk in the store here and, with $100, take home items for everybody in the family.

HATTIE: (Voiceover) Gifts for everybody.

BOB: When you come over to Catalina Island, you usually do it one time. A lot of people do it that way. But when they come in the store, you don't have an option --or most of these retailers-- to get your customer repeat business. But I'll see people come in three or four times in the same day and buy something every time in my store. I've got a good mix of items for everybody, from young people to grandparents who are buying for their grandchildren. They shop around. They do come back in my store.

HATTIE: Well, I was going to say, you must have a good selection because, again, you come right off the boat, you walk right here. And I would walk in and go, `Oh, I like that, but I don't know what else is here, so I'm going to come back if it is the thing I want.'

BOB: Most people are shoppers.

HATTIE: So the product mix must be hitting the nail on the head.

BOB: I think so.

HATTIE: (Voiceover) The adventuresome who really want to see the entire island rent a horse from Bunny Putnam.

BUNNY PUTNAM (Stable Owner, Catalina): Now (referring to a horse that Hattie just fed a carrot), she's your best friend.

It's a difficult business. You're not going to make any money in this business.

HATTIE: So why do you do it?

BUNNY: I don't know. Well, I like being outside. I like the horses and I love the people.

HATTIE: Do you like being your own boss? Do you like the fact that you decide what you're going to do all day every day?

BUNNY: Well, I don't really always do that. The team tells me what I'm doing.

HATTIE: Oh. Your employees tell you what to do.

BUNNY: Oh, absolutely.

HATTIE: OK. Let's talk about that. That's a philosophy you've established, I'm sure.

BUNNY: Absolutely. There are certain daily chores that we all do. We all work together with whatever the needs are. It's more of a family type thing. Somebody needs a day off, they go.

Unidentified Man #1: At the end down here. Here you go, boy.

BUNNY: We rely on the tourists that come over on the boats and planes and stay in the hotels. And we set up guided rides for them according to their height and their weight and their ability. And everything we do is with a guide.

HATTIE: So how have you tweaked that over the years? In other words, you've learned how to make people happy.

BUNNY: Well, in the beginning, we just put them on the horses and took them out on the trail. Now we give a full island tour. We talk about the island, its history, the indigenous plants. We introduce them to some of the animals that may be out there. It's definitely an educational tour.

HATTIE: What is your goal for your customer?

BUNNY: I want them to come back. I want them to have a really good time when they see the island by horseback; which when you're hiking, you're too low -- you just see the ground. When you're in a car, you're going too fast. When you're on a horse, you can go slow and you get the panoramic view. And we have hundreds of repeat customers who bring their friends because to see this island by horseback, it's a unique experience. It really is.

HATTIE: (Voiceover) In 1919, William Wrigley, as in chewing gum, built a summer home for his wife Ada overlooking Avalon Bay. Today, it is the Inn on Mt. Ada operated by Marlene McAdam and Susie Griffin. I talked with Marlene.

Well, tell me how you and Susie got started?

MARLENE McADAM (Inn on Mt. Ada, Catalina): Susie and I were Girl Scout leaders together, and I knew how she worked because we were volunteers, we worked with children, and when this opportunity came up, we decided this would be a good partnership.

HATTIE: So how did you happen onto this location?

MARLENE: This is what happened. My brother was on an advisory board with the University of Southern California; they own the building. And he called me one day and said, `Gee, they're looking for someone to take over this house to make it a profitable situation.' And we started looking at the house and decided, you know, `What can we do with it?' And we thought an inn would be a good use of the building, and the views are incredible so it was a natural.

HATTIE: Again, people watch this and they want to understand how are businesses built. You didn't have a lot of money at the beginning, I assume.

MARLENE: That's exactly right. Almost none. We were highly undercapitalized. Most of the work was done by Susie and me on a daily basis. We were here each morning at 6 AM to do breakfast and stayed through 11 at night to turn down beds. And we did the office workthe phone work, and a lot of the housekeeping work. We did everything. And as time went on and we had more guests, then we could afford to hire some help. So we started with the things we hated the most and relieved ourselves of those, and onto more enjoyable things.

HATTIE: So you started with getting rid of the toilets.

MARLENE: Actually, that's still one of the things I enjoy the most.

HATTIE: Really?

MARLENE: No.

HATTIE: I clean the toilets in my house.

MARLENE: It can be fun.

HATTIE: It's a Gandhi thing, you know.

MARLENE: Yesterday, I was still working on fireplaces. You have to know how to do something in order to tell somebody else how to do it, or to know how much time it should take them to do that same task.

So if you have that background, you can make sure that you say, `Gee, you know, let's hurry this up a little bit,' or `Take your time with that.'

HATTIE: Let's talk about the burnout rate.

You said there's a statistic about innkeepers' longevity in the business.

MARLENE: Right. About seven years is as much as they can take. That's one of the good things about having a partner. We now work pretty much a week on and a week off. And that gives you time away from the inn to pursue other interests, to have another life beyond being here. And when you're here, you're here that entire week. And we have rules, but none of them are rules that can't be broken or changed around to accommodate our guests. And we really do change the rules a lot.

This is the basic--what the room rate is, what time you check in. But all of those things are very negotiable.

HATTIE: The room rate's not negotiable.

MARLENE: It has been. If it's Wednesday and we have a room on Friday, it's very negotiable.

HATTIE: If it's Wednesday and if it's raining...

MARLENE: An empty room is not like a loaf of bread. You can't make anything out of an empty room. You can make bread pudding out of old bread. An empty room is empty. It adds nothing to the business. So we try to fill up every room every night. And if we have to make a deal to do that, great. Let's fill it up.

HATTIE: Let's make a deal.

MARLENE: Absolutely.

HATTIE: You have six rooms. And you are 91 percent occupied.

MARLENE: Approximately, yes.

HATTIE: That is a lot of success. Why do you think that's happening?

MARLENE: I wish I could tell you what the answer is, because we're not sure ourselves. We really try our best to make this a service-oriented inn. Our guests, luckily, come back year after year; tell their friends, tell their neighbors and we treat them well I hope.

HATTIE: As inns go, is this on the high-end of the inns of America, or the middle?

MARLENE: It's probably toward the high-end pricewise.

HATTIE: And did you decide that on Catalina, that would be your niche?

MARLENE: No. We really didn't. It just happened.

HATTIE: But it is your niche.

MARLENE: It is, but not because we decided that. You know, some things you just grow into.

We had no conception at all of what we were doing. I mean, we were brand new at this. Our only background is we were each mothers, so we knew how to mother people. And that's exactly what it is.

It's making people feel at home, mothering them. You're not allowed to give them a time out. That's against the law, and you can't send them to their room.

HATTIE: `I'm paying $600 a night. I get to do what I want to do.'

MARLENE: That's right. And you can't send anybody to their room, but other than that, that's exactly what it is. `What do you need? What can I do?' `How would I make you feel more comfortable?' And that's all it is. And remembering people. You know, talking to them, remembering them, spending some personal time without hovering so that they feel that this is their home as well.

And that's what the idea is.

Unidentified Woman: I've been coming to the inn since 1985. It was so warm and homey and the innkeepers, Susie and Marlene, were so wonderful to be with that we kept coming back. And I come every year, have every year since then. And when you come here, they say, `Just relax. We'll take care of everything.' Your every need is taken care of. You never make a bed or worry about how the dishes are going to get cleaned up, and you always have a beautiful view.

HATTIE: So repeat business is a part of the success...

MARLENE: It's probably 60 percent of our business today, repeat business.

We let our staff know that our guests are always right. We never hesitate to refund money if something is a problem. And we try our very best to solve every problem that comes up.

Move up from bottom of the show for web clip...HATTIE: Advice you would give a small-business owner in growing their business. Someone's watching this and they've been in their business, not necessarily an inn, but some sort of retail operation where they're dealing with customers 7 days a week, 24 hours a day almost, and they've been doing it five years. What would you say to them?

MARLENE: You need to take a day off. You know, this is not your whole life. This should be part of your life and you definitely have to oversee that. But hire good people that you trust. You know, I think you're more powerful if you let go. It means you've chosen the right people for the job, and the more power you give them, the better off you are. You know, they make good decisions if they know they're responsible for a decision.

HATTIE: Even though each of the businesses we've looked at today does something completely different, they're all clearly in the same business. And that is the business of pleasing people. When you make people happy, they come back. And over time, you'll build a business.

(Voiceover) All of the small-business owners we met here are members of National Federation of Independent Business.

Kai Griffin works for them to lobby local, state and federal governments on behalf of small-business owners.

KAI GRIFFIN (National Federation of Independent Business): What our goal is is to actually give the small-business owner, like Gary here, the same kind of muscle as Disney would if they were standing here and trying to send their lobbyists in. If Gary picked up the phone and called the city manager over in Los Angeles, Gary would probably get sent down to talk with an assistant city attorney. In reality, if Disney called, they'd get an immediate appointment. Now I don't think Disney should get that immediate appointment unless Gary gets that same type of service.

NFIB is a member organization. They're our bosses.

HATTIE: So, GARY, how long have you been a member of NFIB?

GARY: I've been a member of NFIB about 12 years now.

HATTIE: Are you glad you're doing this? Do you feel like they're doing what he says they're doing?

GARY: Oh, I think it's extremely important because there's no way that we all, as a small business, can be aware of all of the things that are going down in the state and the federal area. And the thing that they've done for us is they've been able to keep us informed. So that at least I feel that my small little voice is being heard.

move up to close Inn on Mount Ada for web clip...HATTIE: Advice you would give a small-business owner in growing their business. Someone's watching this and they've been in their business, not necessarily an inn, but some sort of retail operation where they're dealing with customers 7 days a week, 24 hours a day almost, and they've been doing it five years. What would you say to them?

MARLENE: You need to take a day off. You know, this is not your whole life. This should be part of your life and you definitely have to oversee that. But hire good people that you trust. You know, I think you're more powerful if you let go. It means you've chosen the right people for the job, and the more power you give them, the better off you are. You know, they make good decisions if they know they're responsible for a decision.

move up to close Catalina Express for web clip....HATTIE: Again, you had grandfather, father in business for themselves. If someone came to you, one of your employees and said, `I want to start a business, but it's not to compete or anything. I just want to do my thing,' what words of wisdom would you give them? What would you tell them as they step out?

GREG: I would have to say, the water's been my life, so for me to play on the water like we do and enjoy the business we do on the water, I'd ask that person, `Where are you coming from? What do you do? What do you enjoy and can you make that a business?' Because if your heart's in it, you'll probably succeed, as long as you stick with it and grow it.

Yeah. I mean, that's the biggest piece is what do you like to do? If you aren't doing what you like to do, you ought to quit.

delete for web clips...HATTIE: (Voiceover) You've heard small is beautiful. Well, small is everything on Catalina Island.

HATTIE: In her book, "Measuring and Managing Customer Satisfaction," Sheila Kessler says more than 80 percent of innovations in high-performing companies come from customers' ideas.

HATTIE: (Voiceover) Most of Trailblazer Foods' products are based upon customer requests. You can read about it here.

Remember, the business owners on Catalina Island have a beautiful location, but it's service that keeps people coming back.