If December is Good. . .

How many times have you heard a fellow jeweler say, “If we have a good December I’ll... go to Tucson this year... buy a better computer... redo the carpeting....” There could be a dozen and one items on the list, something that in too many stores probably would be called a wish list.

Discouraging, isn’t it?

What we’re looking at here is a recurring industry sin of omission – a fundamental lack of planning and budgeting. If you’ve no real idea of what cash is going to come in, then it’s next to impossible to budget sensibly on what should go out.

Perhaps because it guarantees them continued employment, accountants seem to make a big fuss about budgeting. To me it seems there are two simple alternatives. In one you set a revenue goal, figure out how much profit you want and allocate the rest among your various expenses. The shortcoming of this method is that you may not have enough money to fund all the expenses that you believe should be funded.

The other alternative is to figure out how much you need to pay for all the parts of your business that need funds, add in your profit – and then come up with the total needed revenue. The problem here, of course, is that the revenue goal may seem impossibly high. Okay. Let’s keep within the bounds of reality. If the total is 50% more than you think you can produce, your projected spending has to be trimmed. But if it’s only 20% or 25% higher, then the task is deciding how to raise the added cash. Find an exciting new product line? Get a better deal from your top suppliers? Plan some great promotions? Improve margins? A combination of all these steps? It’s really just a matter of ingenuity, determination and hard work.

Increasing revenue could be the topic for a whole set of articles. But what I want to focus on here are some of the too-often-underfunded parts of the business that can benefit when there’s enough cash available. Let’s look at a few of these items. For example, how much have you budgeted this year for:

Improved window and case displays?

Assessing your sales potential on the Internet – and the time and equipment you’ll need to do something online?

Education programs for you and your staff?

Coffee, sodas and, if appropriate, sherry for your customers?

Coffee, sodas and doughnuts for staff meetings?

An 800 number to make it easier for your customers to call the store?

Attendance at shows and conventions?

Each business will have it own needs, wants and priorities. To compile the most useful list of improvements and/or services your particular store should put on the list, why not devote an entire staff meeting to gathering suggestions and setting priorities? Then it’s up to management to add up the figures.

The final dollar amount may seem daunting. If you’re figuring on an $825,000 year and your projected costs plus profit come in at $950,000, that’s scary. But the imbalance is no reason to give up. To start with, think what sparkling new window and case displays, a better educated staff and exciting new merchandise you discovered at a show can do to bring more sales – and that’s before you launch new promotions or look for better supplier deals. Think, too, about staff enthusiasm. Trying something new revs people up; doing the same old thing bores them to tears – or sends them to a more interesting job somewhere else.

All that return on investment along with staff goodwill can go a long way, if not all the way, to bring in that extra $125,000.

I’m sure some buttoned-down bean counter will tell you this sort of simple minded business planning belongs in dreams, not reality. On the other hand, it can be fun, productive and give your business and your P&L a whole new look.