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How to Recession-Proof Your Business

19 tips for ensuring that your store stays healthy during the next economic downturn.

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BEING A SMALL BUSINESS OWNER can necessitate looking foolish — such as when you tell your partners about your plan to let customers borrow replica diamond rings to make proposals, or you declare your intention to take advantage of the next downturn just as the economy racks up another month of unprecedented growth.

Yet, as with most unconventional business bets, should you persist and be proved correct, the rewards can be outsized. Businesses that prepare for the day the sky falls are not only much better positioned to survive but to take advantage of the downturn and enjoy accelerated growth when the economy finally rebounds.

It is often during recessions that the seeds for future success are sown. In a similar vein, the counter-cyclical nature of business success — the best times to advertise are when your rivals aren’t, the best time to ask for a loan is when you don’t need it, the best time to hire is when the economy is weak — supports launching initiatives or change programs when the outlook is least rosy.

To be sure, economic good times are well, great. Customers have cash to buy your goods, banks have abundant capital to lend at low cost, there’s money to invest in new inventory, take on new staff, maybe invest in a little vanity project. There’s no pressure to try new things — you don’t even have to be the best in your marketplace to make a healthy profit.

And that’s the problem with good times. You get sloppy. And when market conditions change — and when they do it is often abruptly — you’re in no shape to deal with them.

For anyone who ran a business during the Great Recession, the memories are unlikely to be pleasant. In 2009 alone, more than 1 million companies filed for bankruptcy. Recessions are particularly tough on small businesses, especially those selling luxury goods. But the other thing the survivors learned was that recessions don’t last forever.  They rarely persist past a year. If you can keep an eye on the horizon, there are always better times ahead.

Picking when a recession is going to happen is notoriously difficult. Downturns are rarely similar. While it’s true Wall Street always seems be involved somehow, the triggers are manifold: Sometimes they are the result of an external shock (a virus that emerges from a provincial Chinese market), and sometimes it is something homegrown (an asset bubble like the dot.com crash). The tipping point could be a surge in oil prices, a financial market panic, a geopolitical crisis. The only honest thing that can be said about the timing of the next recession is that we’re probably closer to it than we are to the last one.

To survive requires resilience. To thrive, optionality and agility. And to be prepared.

A natural response to a downturn is to “batten down the hatches” by focusing solely on the problems in front of you and waiting for things to turn around. But such inaction can often be the riskiest response. And it wastes the opportunities that emerge during economic disruption.

In the following pages, we offer tips collected from fellow jewelers, business books and business schools to allow you to take a rapid but measured approach that will put you in the best position to take advantage of an economic slowdown. The ideas start with suggestions on assessing the strengths and weaknesses of your business and then move on to the exciting part: how to get in shape to strike when everyone else is running around in panic.

That’s a view endorsed by Michael Kanoff, owner of Michael’s Jewelers in Yardley, PA, who said an agile approach based on preparation allowed them to emerge from the 2008 slump even stronger. “The main lesson I learned from the last recession was don’t ever get too high or too low based on how business is. Overall, the jewelry business is a rollercoaster. I do my best to keep an even keel.”

01
Act early / Jewelers who survived the last recession say reacting before rivals gave them an edge. “Identify the downward direction very early. Trust that you are correct and react and adjust accordingly,” says Bob Goodman, owner of Robert Goodman Jewelers in Zionsville, IN. It’s a viewpoint backed up by research. A 2019 analysis of over 5,000 companies across the last four business cycles found that those who acted early ahead of a recession enjoyed a 6 percentage point leap over their competitors as measured by total shareholder return. For smaller companies, the advantage is likely to be much bigger.

02
Assess the risks / Among the first steps for a company to take in a challenging economic environment—especially one that could significantly worsen—is to assess in a systematic manner its own vulnerabilities. ConsultancyRecession.com offers a free, 20-question “Recession Readiness Assessment” that allows you to see how your business is placed should a downturn happen. You can take it here: instoremag.com/recession

03
Don’t crash the company / Rebecca Henderson of Harvard Business School likes to remind her students, “Rule one is: Don’t crash the company.” That means, first and foremost, don’t run out of money. Small companies with high levels of debt are especially vulnerable in downturns. In a 2017 study, Xavier Giroud (of MIT’s Sloan School of Management) and Holger Mueller (of NYU’s Stern School of Business) found that the vast majority of businesses that were shuttered during the Great Recession had become highly leveraged in the run-up to the downturn. To keep up with payments, companies with more debt are forced to cut costs more aggressively, which can impair their productivity while also leaving them little room to act opportunistically. Worse, it can result in owners “borrowing” from the business to meet personal obligations — a usually disastrous path. Russell Criswell, owner of Vulcan’s Forge in Kansas City, MO, says high debt levels caused him great stress in the last recession. “There were times I nearly did not meet obligations because of poor cash flow. I would rather grow more slowly than ever worry about making payroll again,” he says.

04
Set up red flags / Have a way to measure for early warning signs that your business may be headed in the wrong direction. That might include slow-paying customers, vendors tightening credit terms, or a decline in average ticket. (See the results of our 2019 Big Survey for the red flags other jewelers use.)

05
Protect yourself legally / Be sure your business and its assets are protected. Becoming an LLC or S-Corp doesn’t automatically remove the risk. Keeping insufficient insurance can be a disaster, exposing your business to a range of legal issues. “Before you do anything else to recession-proof your business, focus on making sure your business is built on the best legal foundation possible. Consulting with a lawyer, accountant, adviser, and trusted bank are essential in keeping your business assets secure and airtight,” writes digital consultant John Boitnott in Inc. Magazine.

06
Shorten planning cycles / If you normally meet once a year or every six months with a board of advisors to assess strategy, aim to meet quarterly. If your small, nimble business already meets with advisors quarterly, aim to meet monthly. “Focused reporting and effective forecasting are critical to both effective planning and day-to-day management, particularly in a downturn,” notes the PricewaterhouseCoopers guidance sheet. In the short term, the consultancy recommends focusing on a limited number of key performance indicators. “These measures should be transparent, unambiguous and easily understood with a focus on cash generation.” Christine Matlack the owner of E.G. Landis Jewelers in Boyertown, PA, says the years 2008-10 were traumatic. She now runs reports at the end of every month and asks employees for more input into what they find easier to sell. “I have never looked at business the same. I view $500 opening orders now the way I looked at $5,000 openings then.”

07
Review your contracts / Maybe now isn’t the best time to lock into a 10-year lease if you believe a recession could happen soon. Take time to look over your contracts and agreements. Is there an “out” clause? Can you re-negotiate agreements into annual contracts? Even if it means paying a slightly higher rate or fee, you will appreciate the flexibility if the economy takes a turn for the worst. Similarly, review any plans for large-scale projects. New equipment, store renovations and new product lines all sound like smart investments when times are good. What is the return on your investment, and will the completed project enhance or diminish your ability to weather a financial downturn?

08
Bring in a pro / A qualified strategic planning consultant will do a full analysis of your business and help you identify and understand areas of weakness and opportunity, setting you up to take full advantage of any change in economic circumstances. A similar option is to “rent a CFO.” In addition to providing financial advice and business connections, an experienced CFO can help give your business a reality check without adding to your long-term payroll. These people are not cheap —in some cities, a part-time CFO can cost at least $1,000 a day, or about $180 an hour, so ask to do a quick interview with three and go with the one that you feel most comfortable with.

09
Secure capital early / The best time to apply for a bank loan or a new line of business credit is when you don’t actually need it. It may be counterintuitive, but it’s also the first rule of business financing. Now, with the economy strong and your business likely thriving, is the time to apply for new financing. During the last recession, banks all but stopped lending to small businesses. Obtain a business line of credit and begin building good payment behavior so you can continue to strengthen it.

10
Loop in your staff / While a recession can have a damaging impact on morale, you need your employees to be more productive than ever. The key is to accompany any major change with an explanation of what makes it necessary and what effect it will have—in as much detail as possible. This advice is rooted in psychological research: Human beings consistently react negatively to unexplained events. The effect is so strong that it is better to give an explanation they dislike than no explanation at all. When it comes to internal communications, your mantra should be “Simple, concrete, and repetitive.”

11
Build a war chest // In a recession, it’s pretty much a given that sales will taper off and cash flow will become strained or at least more irregular. “Bank all you can now so you have a cushion for when the market turns down,” advises James Doggett, owner of Doggett Jewelry in Kingston, NH. It will support both your peace of mind and provide opportunities. As a general rule, small businesses are advised to have a cash reserve that is equal to no less than three months of standard operating expenses, but more is better to be truly prepared. Charlene Foltz, who runs Pentaltha Jewelers in Tallahassee, FL, said “six months of capital” kept her store safe between 2008 and 2011. “You want a disproportionate amount of cash on hand so you can buy things on the cheap,” says Jonathan Slain, a business consultant who specializes in providing advice to entrepreneurs looking to “rock” the next recession.

12
Train for price objections / Train your staff in dealing with price-conscious buyers and their objections by doing the following.

  • Welcome them. Price objections show you the customer is interested, but that you haven’t answered all their concerns.
  • Build answers to objections into your presentation without identifying them explicitly. Focus on the value, the rarity, the romance, the extraordinary story of the stone or the designer. A price objection is an intellectual statement. It means you haven’t hit the emotional spot where the real buy trigger lies.
  • Be aware that a price really can be too high. Make sure you have price points that are friendly to those feeling the pinch. At the same time, never refrain from showing an item based on your perception that a customer can’t afford it.

Desperation can make salespeople pushy, and that only drives customers away. Tell your staff to take it easy, that slow times should be considered a relationship-building year, and that good times are on their way.

13
Examine tax planning / While still ensuring that your organization remains fully tax compliant, it should be possible to improve your cash flow position by reducing or deferring tax payments. Opportunities here would include making maximum use of losses in calculating Preliminary Tax Payments and ensuring that all available deductions are being claimed. At a more strategic level, falling asset values can also be taken advantage of for crystallizing losses and tax-effective succession planning.

14
Prep your emergency brake / This refers to the expenses and the people you will have to cut when — should worst come to worst — you’re just about to go under water. “You want to have an emergency brake created in the cold, rational light of day and hope you will never have to use it,” says Slain. As a general rule, layoffs should be an option of last resort, as productivity nearly always suffers when employees feel uncertain. Meg Rankin of J. Rankin Jewellers in Edmonds, WA, says she supported her staff by “allowing them to maintain hours, even if profit sharing diminished for a time.”

15
Manage inventory / One of the greatest hazards during a recession is being caught with extensive back stock. Now is the time to find ways of reducing slow-moving goods. If it’s not selling now, it will never sell in a recession. A leaner inventory will also give you greater flexibility, allowing you to respond to changes in the market quicker and with minimal loss of investment capital. David Blitt, owner of Troy Shoppe Jewellers in Calgary, AB, urges you keep in mind that the face value of your stock is fluid. “I learned a valuable point from the guys at Wilkerson’s, which was that stock is not worth what you paid if it doesn’t sell, but debt is worth the face amount. In simple terms, less debt is better than more inventory.”

16
Don’t cut advertising / It seems logical to reduce advertising and promotional expenditures during a downturn: People aren’t buying, so better to hunker down and wait for the good times to return. But such an approach leaves a void in the market, says Roy Williams, author of The Wizard Of Ads. If your competitors are cutting back, you can actually get a boost in the effectiveness of your advertising because your “share of voice” just got bigger, he says. Williams recommends monitoring your competitors’ advertising. If they’re cutting down, seriously consider increasing your ad budget and hitting harder. (Advertising also becomes cheaper during a recession).

17
Develop alternative revenue streams / “Have a service that everyone needs. When no one can afford to buy, they’ll always repair or buy estate,” recommends Lisa McConnell, owner of Lisa McConnell Design Studio in Fort Worth, TX. Without the additional revenue provided by gold buying during the last recession, a lot of small jewelers would have gone to the wall. While you don’t want a new line or service to take time and money away from what you do best and/or damage your brand and reputation, some form of diversification is important, especially into market sectors that are counter-cyclical, staples or otherwise escape the brunt of a recession. Buying off the street can go beyond gold, and new online channels mean you also have more options than selling scrap to a refinery.

18
See challenges, not threats / Shawn Achor, the Harvard professor-turned-consultant and author of The Happiness Advantage, did a study of bankers right after the 2007 crisis hit. He found most of them were incredibly stressed and their productivity slumped as a result. But a few were happy and resilient. What did those bankers have in common? They didn’t see problems — even industry collapse — as threats; they saw them as challenges to overcome. Such behavior can be taught. Achor’s work with the bankers resulted in a 23 percent drop in their stress-related symptoms and produced a dramatic improvement in their levels of engagement at work as well. To be sure, keeping a positive mindset is not always easy, says Brenda Newman, owner of The Jewelry Source in El Segundo, CA. “Left foot right foot, one day at a time, one step at a time. Think about what to do to create a lean monthly obligation, but just always remain positive.”

19
Have a shopping list / “History shows that the best deals are made in downturns,” write David Rhodes and Daniel Stelter, senior partners at Boston Consulting Group in their paper “Seize Advantage in a Downturn.” Liquidation sales of everything from equipment to inventory become more common. Great employees also become more available. Adds Sven Smit, a McKinsey senior partner, “If some other player moves a little oddly, that’s a time for you to snatch assets, snatch people, and take a proactive stance, which is that a crisis is truly an opportunity.”
To do so, stay in touch with banks. “When banks foreclose on your competitors and sell their assets for pennies on the dollar, unless you have relationships with banks, and you’re one of their first calls, the cheap assets will be sold to someone else,” says Recession.com’s Slain.

20
Know where you stand / Be it a good or bad economic period, you should have a thorough understanding of where you stand in terms of your current financial numbers as well as projections for the future. Expenses obviously need to be scrutinized and revenue flows should get priority. But it’s equally important to understand which areas of your business drive the most value, says Tim Raiswell, VP of Gartner’s Finance. “In the middle of a recession, you may find yourself forced to cut costs in smaller windows of time like days or weeks, instead of months or quarters,” he writes on a company blog. This may lead to hasty errors, many of which can be avoided if you start preparing now.

21
Have a playbook / “You need a playbook in the event a downturn happens, with some scenarios on how it might happen, and say, ‘OK, this is the script that we’re going to work off. We will modify it based on what really happens,’” Sven Smit, a McKinsey senior partner, told the McKinsey Podcast. In a set of guidelines for businesses dealing with a downturn, PricewaterhouseCoopers suggests posing these questions to yourself.

  • How will our customers behave? Will they trade down to the cheapest model in the range, purchase the same product less often, or seek a substitute product or service?
  • How will our competitors react? Will they change their product offerings, seek to maintain volumes by cutting prices, or seek alliances to reduce market competition?
  • What do we need to do well to minimize the impact of the downturn on us: play to the strength of our existing customer base rather than seek to expand, focus on those customers most likely to thrive in difficult times, revisit our pricing policies, seize this opportunity to grow?

22
Hope for the best, plan for the worst / Sketch out at least three scenarios: a modest downturn, a more severe recession, and a full-blown depression. Keep in mind that recessions hit different industries by different degrees. In the last recession, jewelry sales contracted by 10 percent, more than twice as much overall retail sales. “Be sure to confront head on what you see as the worst case,” say Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen in their article, “Roaring Out Of Recession” in the Harvard Business Review. For example, what effect would a 20 percent decline in sales volume and a 5 percent decline in prices have on your overall financial performance? “You may be surprised to find out that, even in the case of a still-healthy company with operating margins (before interest and taxes) of around 10 percent, such a decline in volume and prices could turn current profits into huge losses and send cash flow deep into the red,” they write.

23
The Stockdale Paradox / Business author Jim Collins coined the term “Stockdale Paradox” to describe the balancing act between blind faith and the acceptance of reality that is needed for a business to survive in harsh conditions. Optimism alone is fatal. Admiral James Stockdale, who endured seven years in a North Vietnamese POW camp, inspired the thought in Collins when he described to him how the first to perish in detention were those who clung too tightly to hopes of quick freedom. Ask yourself if there are problem areas of your business that you have been avoiding or that are out of your control or which have become outdated and which you are refusing to accept.

24
Consider the worst / Feeling anxious? Add some ancient perspective. Seneca’s Letters From A Stoic is essentially a training manual for answering one question: What’s the worst that could happen? The self-help author Tim Ferriss, a Seneca fan, calls this “negative visualization”: responding to anxiety not by trying to persuade oneself that all will be well, but by fleshing out, in detail, the worst-case scenario. This works partly because rendering fears specific, rather than nebulous, will always make them more manageable. But it also works simply by drawing attention to the fact that fearful thoughts about the future are just that: thoughts. Another lesson from the ancients: Worry only about what you can control. That worked for Patty Wedemeier, who operates Elegant Jewelers in Sugar Land, TX. “My lesson from the Great Recession was just to do what I can do inside my four walls; don’t listen to the outside noise.”

25
Keep tabs on your credit rating / A blemish on your credit rating can sometimes take years to correct and make borrowing much harder during an economic slump. With good personal credit, you’ll stand a much better chance of being able to borrow at good rates. This helps if you want to refinance when mortgage rates drop, which usually happens during economic downturns, or to take advantage of falling prices to finally buy a space for your business. At the same time, “review any personal guarantees on company debt and work actively to reduce them to zero,” say the advisors at Recession.com.

26
Think long term / Smit, the McKinsey executive, says the key thing to do when a complex, changing event like a downturn hits is to stay calibrated and keep an eye on the long term. “To date, there’s no recession—even the big ones— that has lasted longer than one or two years. So good times will come. In the recession, the response is, you go crazy. Cut, cut, cut. But don’t forget that the actions you take toward the future in the recession are as important as the actions that you take to respond to the unique event that will take place. Holding that calibration is very difficult. Profit margins of companies are not that big. So in a recession, it will look very ugly very quickly. Ugly makes you respond with ugly, while the beauty is ahead, or the prosperity is ahead.” Jim Muehlhausen, a CPA and author of The 51 Fatal Business Errors And How To Avoid Them agrees: “Certainly don’t throw the Hail Mary” he says. “Rather than lamenting bad times and wasting time on activities aimed at making things better right now, focus on one year from now while everyone else is short-term focused. This is a terrific time to tune up systems,” he says.

27
Adapt credit policies / As the economy slows, it’s wise to tweak your credit policies. Again there are opportunities; it was during the Great Depression, after all, that GE developed its innovative strategy of financing customers’ refrigerator purchases. But as during the last recession, keeping control over the credit by offering layaway is better than being overly generous on credit. “If you don’t collect receivables in a timely manner, you run the risk of ‘net 30’ becoming ‘net 60’ or even ‘net … whenever I can get a check from the insurance company,’” says Brian Moran, CEO of Small Business Edge.

28
Don’t waste the opportunity for change / Substantial competitive opportunities await the leaders who can also keep one eye on their long-term transformation agenda. As economist Paul Romer once said, “A crisis is a terrible thing to waste.” Downturns can shine a spotlight on the long-term health of a business, revealing vulnerabilities that might not have been as visible in good times. You should aim to use the downturn as an opportunity to create a sense of urgency within your store, to drive the large-scale change that will be necessary to succeed in the future. Keep in mind that an economic crisis often marks an inflection point: The world after it is unlikely to resemble the one before it. When you get a moment’s respite, you need to be thinking about how to remake your business to cope with the “new normal.” “During recessions, cash isn’t king; innovation is king, says marketing expert Roy Williams, author of THE WIZARD OF ADS, adding that the companies that adapt and shift resources the quickest will “crush” slower but more capitalized companies. “Trying new and different things is risky.” But not nearly as risky as maintaining the status quo, crossing your fingers, and hoping that the economy will turn around,” he says.

29
Show compassion / Jerald Greenberg, a management professor at The Ohio State University, found fascinating effects on employee theft rates at plants owned by the same big corporation when it came to announcing pay cuts during the last recession. At a plant where a curt explanation was given, the rate rose to more than 9 percent. But at a plant where management’s explanation was detailed and compassionate, it rose only to 6 percent. (At a third plant, where no pay cuts were made, the rate held steady at about 4 percent.) Greenberg’s interpretation is that employees stole more at the two plants where cuts were made to “get even” with their employer, and stole the most at the plant where managers exhibited a lack of compassion because they had more to get even for. This suggests that compassion from a boss adds corporate value—in good times and in bad. What’s more, it’s free.

30
Go for small wins / The organizational theorist Karl Weick showed in his classic article “Small Wins” that when an obstacle is framed as too big, too complex, or too difficult, people get overwhelmed and freeze in their tracks. Yet when the same challenge is broken down into less daunting components, people proceed with confidence to overcome it. As you lead your team through a stressful period, aim to give them a flurry of little things they can check as they make their way through their work. It dramatically lowers people’s collective anxiety, enhances their collective energy, and gives them confidence that the hard tasks, too, can be handled.

31
Focus on growth / A business truism is that you can’t cut your way to growth. In the Harvard study of the small minority of companies that achieved double-digit growth in downturns, the authors found that yes, they pursued efficiencies, but the most important driver was revenue growth, which accounted for nearly 50 percent of their increased shareholder return—twice as large as the impact of cost reductions. “Downturns make growth more difficult in the short term, but they should not undermine the potential for long-term growth—unless leaders starve their companies of the necessary investment,” they write. Even at the depth of a downturn, the vast majority of working-age Americans will still have a job, will still buy things and require services. “While you want to look for cost savings wherever possible, you can’t lose focus on business development. No matter what the economic conditions may be, there are always opportunities to grow sales,” says Rick Leibowitz, regional director of New York’s North Country SBDC. He advises business owners to always be looking at their business model to see if there are new ways to provide existing customers with more products/service lines; and keep striving to get new customers. Zdena Jiroutova, the owner of Z Folio Gallery in Solvang, CA, concurs. “My business grew every year through the so-called Great Recession due to location, a great team, and unique model. My focus has always been, and is right now, on daily improvement and innovation.”

32
Trust in something / Trust in something … be it God, your gut, destiny, life, karma, whatever. You need something to keep you going when times are tough and your brain is telling you: “This is nuts!” How? Just trust. Steve Jobs, who was no stranger to the lows of business life, claims this way of thinking was central to his success. “It has made all the difference in my life,” he said in his Stanford Commencement Address in 2005.

LESSONS LEARNED
Jewelers reveal the survival lessons they learned from the Great Recession

  • Looking back is as scary as when we were going through it. I have never put as much on the line as I did before that time. I buy tighter, I buy more conservatively. I negotiate phone, trash, etc. that may seem like little expenses, but they as a whole, add up. — Christine Matlack, E.G. Landis Jewelers, Boyertown, PA
  • We do a good amount of repair work. So when sales are slow, the shop keeps us very busy. — Tommy Thobe, The Village Gem, Perry Hall, MD
  • People always are getting married. Focus on bridal. That never goes away. Also repurposing clients’ jewelry — it’s an inexpensive way for them to get “new” jewelry and they are able to rationalize it. — Elizabeth Saba, Presley Co Fine Jewelers, San Diego, Ca
  • Must not be caught with too much money tied up in inventory. Need to be able to keep purchasing fast-turning product during leaner times. Must be able to adapt to consumer price point changes. — Rob Divinski, JB Hudson, Minneapolis, MN
  • The Internet has truly kept our business thriving and growing. Having a brick-and-mortar store is critical as it lends stability, but having an e-commerce site has proven to be a MUST! — Patty Gallun Hansen, Dorothy Gallun Fine Jewelry, Cedarburg, WI
  • I learned that you should not give up on advertising when things go south. You have to work smarter, be wiser in decision-making, but you can power through. — Jon Walp, Long Jewelers, Virginia Beach, VA
  • When, not if, the next slowdown occurs, I will be ready with no debt on my books. In 2008, I was fully leveraged with a line of credit from my bank. They were very understanding, but it was no fun for me. No debt! — Steven B. Goldfarb, Alvin Goldfarb Jeweler, Bellevue, WA
  • Switching from colored gems predominantly in my designs to commercial bridal. I looked at the business and thought one thing people are still doing is falling in love and getting married. Saved me. Now we are in both areas. I’m glad to see color trending again! — Kas Jacquot, Kas A Designs, Jefferson City, MO
  • Have reserves, a rainy day fund. Be prepared to offer those “bread and butter” pieces to keep afloat. Try new marketing strategies. Appeal to new markets. — Theresa Peregoy, Classic Facets, Edgewater, CO
  • Custom design! This allows us to be flexible and offer more price options. For example, when a customer has less to spend, they can remount an existing diamond rather than buying a new diamond for an engagement ring. And we can usually create a less expensive version of the ring style that they like by offering other gemstones and metal choices. — Dianna Rae High, Dianna Rae Jewelry, Lafayette, LA
  • Buy gold/silver and diamonds. Sell when you have a reasonable amount and do not wait for the metal market to rise. Hogs get slaughtered, pigs get fat. In other words, don’t wait till the market goes higher because you might be fooled and the market could drop suddenly because of the global economy/politics or just plain bad luck. — Ed Menk, E. L. Menk Jewelers, Brainerd, MN
  • I acted like we had just started a new business. Every minute and dollar counted. I did not take a paycheck (which was rough) so I could keep my associates. — Larry W. Hall, Baker & Baker Jewelers, Marietta, OH
  • Should the economy get worse, we would continue to cater to our client’s best interests. Twenty percent of our customer base makes up 80 percent of sales totals. — Joe Caron, Caron’s Jewelry, Bristol, RI
  • Repairs, repairs, more repairs and silver jewelry. — Karen Schmitt, Straith’s Jewelers, Centralia, IL
  • We are lucky enough to have no debt. When things slow down, we just cut down our buying and try to keep up on the fast sellers. I started buying off the street big time and it made me rich, so I will just keep doing that again … only bigger and better. — Sue Parker, Nyman Jewelers, Excanaba, MI
  • Adapt to market changes and try to stay relevant to clients by having products and price points that work for them, ensure that they are comfortable even if they are shopping at a different level, support staff by allowing them to maintain hours (even if profit sharing diminishes for a time), remain consistent in community presence and support of organizations. Even in an economy shift, people still get engaged, repair jewelry, and have milestones. It’s our duty to be there for them. — Heather Wahl, R.C. Wahl Jewelers, Des Plaines, IL
  • I thank God that I have an amazing shop with three of the most talented jewelers in the Midwest. Even if we may be slow in front, we always have repairs! — Kelli Reinbold, Vernon Jewelers, Salina, KS
  • We did struggle at first. But as a family, we decided to get our secondhand dealer’s permit. We were then able to buy from the public. And started the consignment part of our business. Still a small part of our business, but it really helped us through. — Sherrie Schilling Devaney, Sherries Jewelry Box, Tigard, OR
  • We are small enough to turn on a dime. So when things go down, we jig our inventory to lower price points, more illusion settings and keep people shopping with us for value. — Shahraz Kassam, Shamin Jewellers, Surrey, BC
  • The true and difficult tale of the next downturn is that there will not be a gold river to fall back on as before. The Boomers sold gold like it was going out of style, and smart jewelers all profited. With this coming hiccup, there will be national areas where it will be an all-out “GASP” — the younger generations do not have the gold collections or the general savings discipline that prior generations had, so a more severe downturn is likely. The most incredible thing in our favor is the fact so many stores are customer service-based, (i.e., they have a repair shop on premises). It is possible customers will not buy as much, but every one of them will be more likely to service what they have. — Denise Oros, Linnea Jewelers, La Grange, IL
  • I was just reflecting yesterday how the Great Recession still affects my business decisions all these years later. 2008 to 2011 were dark days. We cashed in our IRA to buy gold to keep our neighbors’ rents and mortgages paid. We became extremely frugal in our shop operations, and moved away from retail to a custom-based business. We were 12 years into our business when the recession hit, and now we are 12 years on the other side. How did we survive? Too stubborn to give up! — Jo Goralski, The Jewelry Mechanic, Oconomowoc, WI

Chris Burslem is Group Managing Editor at SmartWork Media.

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