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Do start crunching numbers so you have an accurate understanding of your situation. Without a clear snapshot after the holidays, you won’t be able to make the critical business decisions facing you in 2010.
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Don’t let sentiment get in the way of making those decisions. Only the lean will be in a position to weather the next 18–24 months of retail and supply chain retrenchment and realignment.
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Do use the 80/20 Rule. Apply it as a test of the critical areas in your business. Let it inform you on key inventory to reorder, your best salespeople and store personnel, your core “high yield” consumer base, and the advertising and marketing that provide the biggest returns. This will enable you to work from a position of real knowledge and understanding and help you make better decisions.
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Don’t apply the 80/20 Rule without the help and input of all your employees. Otherwise you won’t have the support you need to implement changes.
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Do assess your inventory using the categories in Jewelers of America’s “Cost of Doing Business Survey.” Use current commodity pricing, apply your current carrying costs and projected yearly store operation expenses, and re-establish new gross margin return on investment levels. This will help you realign your inventory into more-profitable areas and reduce merchandise that’s dragging down profitability.
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Don’t accept your status as the second, third, or fourth jeweler in your area. Identify those immediately ahead of you and start out-executing them in terms of advertising, promotion, public relations, and special sales events designed to introduce your business to new customers that you’ll need to replace your weakest clients.
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Do find some fresh, exciting, affordable jewelry and gifts from your best vendors to put in your windows and cases. Use some of the money you’ve freed up by selling off your slowest, least profitable inventory and invest it in the future “look” of your store inventory. This will energize your sales staff and telegraph to your best customers that you’re the answer to their wish-fulfillment needs. You must have excellent values across the pricing spectrum, while at the same time providing them with something fashionable and fun to wear.
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Don’t fall into the trap of reverting to bridal product at the expense of other key inventory. Selling to brides is a long-term seeding and harvesting process, and you don’t have the luxury of reformatting into a solitaire and diamond stud destination, especially in today’s commodity-driven (and -priced) online superstore diamond delivery game.
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Do read (or reread) Norman Vincent Peale’s Power of Positive Thinking. Commit to rewarding excellence, have incentives for increased sales, encourage good behavior, smile, sincerely thank your best customers, acknowledge outstanding performance, and generate an infectiously positive attitude at all times. Great leaders occupy the front lines and earn respect through their actions, not just their words.
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Don’t follow the herd. Lemmings are only successful because they reproduce faster than they follow each other off a cliff. Don’t accept the status quo as normal. Challenge the standard equation. You have to truly know what you can do, and then work to improve on your most productive and profitable areas and skills, while reducing and eliminating the weakest-performing elements in your business.