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Three tips to thrive
Financial statements, marketing and staff education
Monthly financials are a must. They tell you what went right and what went wrong in the previous month. Even if the previous month was one that traditionally has lower sales, and the current one is traditionally one that has more sales, the percentages associated with last month can give you a lot of guidance in how you make decisions.
A second aspect of monthly financials is that you need to see them as soon as possible after the first of the month. If you are receiving the February financials on March 25, there is not a lot you can change to make March better. Creating monthly financials is not dependent on receiving the bank statement and balancing the checking account. Monthly bank fees can be estimated in the financial statement.
You’ve made a sizable investment in your business. So, what could be the biggest improvement you could make so as to increase that return on your investment? It’s increasing the inventory turn. This doesn’t imply that even in these difficult times that you need to simply reduce all of the inventory on hand. Doing that can often lead to outages of your best sellers. Instead, you need to analyze your business – category by category – to see what the turn rate is in each. You may find there are categories that need to have their inventory diminished as well as those that need to have inventory levels increased.
How are your financial statements arranged? Did you know there is not a ‘one correct way’ to arrange the information on your profit and loss statement? Instead, you should be asking the accountant to arrange the rows of information in ways that you can best understand them, as well as best use them to make decisions about your business.
What’s the most important tool a retailer can have? It’s not on the bench; it’s a projectionary cashflow statement. Using your last twelve monthly profit and loss statements as a basis to create your projections for the coming year, a projectionary cashflow statement will tell you how much money and inventory you will have on hand for each of the next twelve months. Your accountant should be able to easily help you create this most valuable tool.
Every jewelry retailer needs to define their target customer. Even if you are the only store within a 20 mile radius, you cannot be everything to every customer. The most profitable stores have made that determination and merchandise to suit that customer. It is referred to as the 5/1 or 1/5 strategy. It is easier to sell five things to one customer as compared to selling one thing to five different customers.
In a challenging economy, it can be very tempting to change your target market to one that has less money than the one you previously targeted. That strategy is fairly short sighted as recessions are measured in months. If your business has been there for many years, it becomes rather difficult to reposition your business for something that is going to exist for a fraction of that time.
One of the best places you can turn your advertising efforts toward is cause marketing. Everyone has seen a pink ribbon promotion, but did you know there are over 200 recognized ribbon causes? These organizations are ready, willing, and able to spread the word about your business to the public.
Looking to reach a younger crowd of customers? Then you need to get into social marketing. Think of Facebook, My Space, Linkedin, and You Tube as places to get you started. As an example you can create as many You Tube videos as you like; each one telling of the products you sell, the services you offer, and how your customers can properly care for their jewelry. The best part of social marketing is that it is free.
There are reasons why the traditional media are laying off parts of their staff; fewer and fewer people are watching and reading them. That implies there are fewer people that are going to see the advertisements you place with them. To be successful today, you have to be creative. Your best spent advertising dollars are those that are utilized to stay in contact with your existing customers. Research shows that 65% of customers that move their loyalty from one store to another do so because of the perception that the original store does not care.
Want to make an immediate impact on the profitability of your store? Make a commitment to a staff education program. Bi-weekly, one hour sessions in which you discuss new products, your advertising, practice sales techniques, and discuss ways your business can run better, are one of the best investments you can make. To get the most from these sessions, a written program that you can hand to each participant shows that you do have a formal plan and are serious about improving your business.
A second aspect of staff education that works is having a daily 10 minute staff meeting each morning before you open. It is an excellent opportunity to make sure that everyone is on the same page; reminders of that day’s advertising, displays to be built, merchandise to be checked in or ordered, and resolutions to situations that happened the day before.
What’s the best thing to say to a customer as they walk in the door? It is not, “Can I help you?” It could be to say nothing and simply acknowledge the presence of the customer by looking at them and smiling. If the customer is in a hurry, they will likely approach the sales person and ask for assistance. If they do want to just look around, they will appreciate your unique approach and that you are not rushing to make the sale.
Is selling an art form or a science? It is an art, but can be raised to new levels when a salesperson knows the traits of how customers shop. As an example, you can expect a double digit increase in the chances of closing a sale when the customer touches, holds, or tries on a piece of jewelry.
The average person can hear over 3 times as many words in a minute as another person can speak. It happens in most sales scenarios. The salesperson is trying to explain what they are selling and the customer gets that bored look on their face. The resolution? Asking questions causes the customer to reverse the ratio. And ask they speak they are likely to tell you more about what they like, want, and need.
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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.
Profits Plus Solutions, Inc.