The right information can help you predict your cash flow and plan ahead.
This article originally appeared in the January 2016 edition of INSTORE.
I love computers. I’m on mine 12 hours a day. I use it for:
➤ Doing my own accounting with QuickBooks
➤ Emailing friends and clients
➤ Polygon/Facebook/stock sites
➤ Connecting to clients’ computers to help them with QuickBooks and point-of-sale support (i.e. The Edge; Jewelry Shopkeeper, etc)
➤ Updating my 300-plus-page price book for repairs in Excel.
➤ Dollar value of job envelopes taken in that day. This was work we sold to customers and the selling price of the job they left with us. I used a special paper journal made by Beat Yesterday (beatyesterday.com) that you can still buy today to track this. Now before you start listing all of your computer programs that do this better, my question to you is: What do you do with your information? I’ll show you how I used mine, and then I’ll ask you this question again. The book features columns for six years displayed over two facing pages for each month, so that you can see at a glance how you’re doing, for example, in October 2015 against October 2010, or 2011 or 2012.
By writing in his Beat Yesterday journal, David Geller was able to easily monitor year-to-year store performance.Within the column for the current year, I would write the total of the charges for all job envelopes taken in that day (there were enough tabs in each column for an entire month). Next to that, I would write the total receipts, or money received that day (if you use the Edge it’s the “Activity Report” numbers). As a result, I knew at once how we were doing compared to last year in jobs taken in and total sales. Because job envelopes turned into sales four to six weeks later, if envelope intake was low I knew cash would be low a month later, so I’d ramp up some type of advertising. Furthermore, there was a very small amount of space next to the date. Here we would note something if we thought it was significant, such as “Rain — traffic slow” or “Sales high — made a big diamond sale”). I remember one October I looked at “Job envelope sales” and the figure was substantially lower than the year before. So I got off my duff and became an advertising/marketing maven and ramped it up big time. Within a week I had a sale postcard designed and printed and sent out to our customer list. We also placed ads in the newspaper (was good for us back then). The emphasis was for customers to get their Christmas/Hanukkah orders in that month for a 20-percent discount and availability for December delivery.
We also offered a 5 percent discount if you paid for your repair or custom job at take-in. (One client paid for a $3,500 custom job in full when we wrote up the envelope just to save 5 percent. She picked up the job two months later.) Store traffic boomed and we had one of our best Christmas seasons in a long time. (See our numbers from my last year owning the store in the table at right). So I want to ask you again, if you keep 100 percent of your information on a computer: What do you do with your information? I’m not talking about margins on diamonds, units sold, just “How are we doing today versus last year overall and how will it affect cash flow in the near future?” Over to you.
David Geller is a consultant to jewelers on store management. Email him at dgellerbellsouth.net.