The new year is off and running. Have you taken the time for reflection, resolutions and goal setting? Losing weight. Planning a vacation. Taking up a new hobby. What about your store? What are your goals and objectives for your business this year? Now is a good time to sit back, reflect and gain clarity about where you’ve been, where you are now, and where you want to go.
Let’s start with the most basic of questions - do you want to continue on with your business? For several hundred store owners, this will be the year they decide to retire, close or sell their store. This decision is a very emotional one especially for store owners whose business has been their life - often for a period of several decades. Many owners hold on to their properties and miss the optimum window opportunity to turn their inventory and customer good will into what could be a nice retirement nest egg.
As they approach retirement age, many store owners let their inventory dwindle down next to nothing. Understandably so, they’ve been reluctant to go out and spend money on new merchandise, so what they do have is old and unwanted. Customer traffic has slowed. The store just isn’t what is used to be.
The advice I give to store owners who are contemplating retirement is to go out at the top of your game. No doubt there’s plenty of emotion surrounding this decision, but there’s a critical point where you can reap the rewards of all the time you spent building your successful retail business.
Of course, selling your store is an option, but the major difficulty with this strategy is the lack of qualified buyers. Many buyers do not have adequate financing and may want you to hold a note. The note may become useless if the jeweler does not run a successful operation, meaning you never get paid. Many buyers will only offer you a percent of your cost for the inventory, claiming that they would just as soon invest dollars in fresh inventory of their own choosing rather than in your dated stock.
A professionally conducted retirement or store closing sale will often generate as much as 1.25 on the dollar for inventory and achieve close to your annual volume in as little as 8 to 10 weeks. With a retirement sale you have the opportunity to convert all that customer good will you’ve built up throughout the years into cash.
Maybe you aren’t going to close or retire - on the contrary, you want to expand and grow your business. You still need a plan. You need to have your goals clearly defined so you can stock the right merchandise, hire the right people and attract the right customers.
Consider the following questions when determining and writing down your business goals.
- Is your business big enough now to give you the personal income you want?
- If it’s not big enough now, can you reasonably expect it to grow to reach your goal?
- If you want a significantly bigger business, how much additional capital will you need to achieve your expansion goals? Where will you find that capital?
- What are your current customer demographics - which other customer groups would you like to reach?
- What merchandising changes would you have to make to reach those new customers?
- How would those changes affect your present customers?
- Who are your primary competitors and how are they different from you?
- How do you want to be different from your competitors?
- What can you do to strengthen your business against your competitors?
- How can you make your business more flexible so you can adapt to changes that will affect your market in the future?
Make a set of objectives for a year from now, another to achieve in the next three years, and a third to achieve over the next 5 to 10 years.
Obviously, your objectives for the first year will be the most specific. However, don’t leave your long-term objectives so vague that they become useless. Also aim high, but make sure your objectives are attainable. Setting unrealistic goals will simply invite frustration.
Give each objective a measurable value and plan a specific time period to achieve it. For example, write, “I plan to retire in 10 years with a retirement income of $50,000,” rather than, “I hope to save enough money to retire someday.”
As you look at your goals, you will discover some conflicting with others. In those cases you must set priorities. You will either have to postpone less important goals, modify conflicting goals to make them compatible or eliminate some altogether.
Your long-term goals, short-term objectives, timetables and budgets make up your long-range plan. Since your family members and employees will be involved in your business’ future, be sure to discuss your plans with them. Ask them some of the same questions about the store, merchandising and areas for change and improvement. You don’t have to show them every detail of your personal plan, but you should hear what they have to say about the parts that affect them. If your family and key employees agree to its major thrust, the results will be a better plan.
Once you have your basic plan, set aside a time to review it each month. Monthly reviews will keep you from drifting away from your plan. Also they will tell you if your plans are realistic or implausible.
Plan to sequester yourself again in a year and go through the same process a second time. Business conditions change and so do personal priorities, by rethinking your entire long-range plan yearly you’ll always be navigating by the latest charts.
Business planning won’t guarantee success, but it will give you clear direction and greater control over the future of your store. With that and your own good business sense, you should be able to steer a steady course to a successful future.
Bob Epstein is CEO of Silverman Consultants, LLC. Offering a legacy in sales strategies for jewelers since 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, SC; New York City; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 800-347-1500.