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If you believe your chances of owning a million dollar store are one in a million, you may need an attitude adjustment.

Laurelle Giesbrecht’s French’s Jewellery is located in Wetaskiwin, a small prairie town of 14,000 people in Alberta, Canada, but she’s never viewed the store as a small-town establishment.

That kind of thinking would limit its potential.

“I look to what high-end luxury stores do in major cities, not what my closest competitor is doing,” she explains. “Kind of like an ‘aim for the moon, you might hit the stars’ type of philosophy.”

As a result, her annual revenues are on track to hit $2 million.

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“People often walk into our store and say that it looks like a store that should be in New York,” she says. “That’s exactly what I want. To have a place where people see that luxury is deserved and affordable.”

Arbitrary or not, hitting seven figures is something many business owners aspire to. “It’s that elusive barrier,” says David Brown of the Edge Retail Academy, “like the four minute mile.”

Growth is not to be feared, says Brown. So if you want to own a million-dollar store, you have to begin to think and even act as if you are already there. 

Likewise, Giesbrecht says that if you present your location as the million-dollar gem that it is, then it will be so. “If you are trying to achieve that next level, look and act like you are already there. Staff, clients and your operation as a whole will eventually fall into line with your vision.” 

There is more than one route to $1 million. So ask yourself, “What does my journey to $1 million look like?” Will you reinvent your business model, increase your average retail value, or appeal to a different sector of the market to get there?

Tom Duma, owner of Thom Duma Fine Jewelers in Warren, OH, says to break the $1 million mark, he built a better team and strengthened systems and policies after joining a performance group in 2009. His team includes a controller, an assistant controller, an inventory manager and a sales manager. He’s implemented a turnover system, a training and recruiting plan, an aged-inventory system and a fast-seller reorder system. His leadership team built advertising, operating and purchase budgets. He also weighed vendor performance against the amount of real estate the products occupied in case.

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These are issues everyone should be addressing because, frankly, Brown says, a business is either growing or dying.

Brown says you’ve got to make the investment in payroll before you see the return. Yes, that can be nerve-wracking, even counter-intuitive. Don’t think of it as boosting your payroll $50,000 a year; think of it in terms of how much revenue you need to generate by the week or the month to meet the larger payroll.

A growing business attracts enthusiastic applicants, too, as opposed to a stagnant business, where people go along for the ride.

One thing owners in a growth mode have in common is that they begin making decisions strategically rather than emotionally, particularly in hiring and buying. They develop more awareness and curiosity about what other people are doing, and rather than saying `I would never do that!’ they are open to new ideas, Brown says.

“Good growth is a natural evolution of a business,” Brown says. “Some businesses get stuck at a certain level, a certain mindset. But they need to have a mindset that growth is a good thing, not something to be feared. We live in very dynamic times and business owners have to think more dynamically.”

“Complacency is one of the most frightening states of mind you can find. It means people aren’t looking for ways to be better, and when you see that, you see that they often lose by default.”

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TURNING POINTS

What’s So Special About $1 Million?

hy aim for $1 million? In many ways, that goal is more psychological than practical.

A true financial milestone occurs at about $800,000, Brown says. Settle for less than $800,000 in revenue and you’re settling for a job with a salary. After that, the true benefits of being a business owner kick in.

You can monitor labor productivity more closely when you’re smaller, says Greg Crabtree, author of Simple Numbers, Straight Talk, Big Profits! When you’re growing, getting the required productivity for every dollar you spend on labor becomes your biggest challenge.

Vince Rath, owner of Optimum Retail Solutions, says that although there’s nothing wrong with being an owner-operator, it’s a trade-off. You can control your own hours, and working only with family can simplify some management issues. But there’s only so much money you can make when revenues hover around the $600,000 to $700,000 mark.

As your business grows, it is important to hire enough people to take responsibility for functional areas that you can no longer manage. A key talent is to know which tasks to reassign to new hires and which tasks to assign to current employees.

Structure is critical.

Define who is responsible for exactly what, Rath says. And create a consistent corporate culture. “Outline expectations and clearly define performance. Employees get confused when they are not able to interpret what expectations are.”

When you do reach $1 million, Rath says, guard against complacency, fatigue and adding too much expense or inventory too quickly.

Revolution Jewelry Works, which opened in 2014, will surpass $1 million in sales this year.

GOAL IN SIGHT

On the Way to $1 Million

ennifer Farnes of Revolution Jewelry Works in Colorado Springs, CO, expects to meet her goal of $1 million this year, far ahead of the schedule she initially set. She’s been on the fast track from the beginning. When she opened in 2014, she expected to do $200,000 in business, and instead hit $400,000.

Farnes, who has a background in the advertising business, attributes her success, at least in part, to allocating 18 percent of gross revenues to advertising. Of that budget, 95 percent is dedicated to traditional media including TV, radio, newspaper and movie theater, and only 5 percent to social media. “A lot of people would find that really intimidating, but if you’re not allocating money to advertising, the only way people will find you is word of mouth. I’ve found that’s not the most reliable way of staying in business.”

Farnes’ message is to “come in and get a feel for what handmade fine jewelry really is. A lot of people come in because they have heard our message enough that it piques their curiosity.”

Be consistent and think long-term, she suggests. Set an annual budget and begin advertising with a medium you know.

“We do some social media, but really social media should be there strictly to bolster a message you already have out there.”

Farnes has developed a niche in custom jewelry with a full-service shop. Still, she says, if she switched her business model tomorrow, she’d still thrive, through a combination of advertising and treating customers like gold.

“It doesn’t really matter what you’re selling, it’s how you’re selling it,” she says. “Business ethics go along with that. If a customer is just outside of warranty dates, do you flex the rules? Help them. Fix it. Don’t live by hard lines because there are a lot of gray areas in making people happy. Ask them, ‘How can I make this better for you?’”

Part of keeping people happy is keeping turn-around time on repairs at four days, a deadline she wants to maintain as she grows.

“We’re hitting the threshold of the work we can handle, and I still need to be at the bench,” she says.

Farnes is in the enviable position of going through growing pains now, just three years into her retail business. She thought she’d be in her current location for 10 or 15 years; instead, she has to decide whether she can make the space work for a couple more years or transition to a stand-alone store already.

“We’ve had to get creative with our workspace, our equipment and our people. We are going to have to take out a couple of walls here soon because it’s getting really tight.”

Hiring is also a challenge. Five people work for her now. Last spring she interviewed 25 people (one of whom showed up for the interview in swim trunks and a T-shirt) and bench-tested seven, with dismaying results. “It’s surprising how many people put down on paper that they have X numbers of years of experience who can’t do a simple sizing or a simple setting without breaking a stone or burning something,” she says.

Specific job descriptions, weekly training and monthly goal-checking have The Diamond Center headed toward $2 million.

ON THE WAY

Doing Even Better at What You Do Best

hen Ray Lantz joined his family’s business 10 years ago, staff turnover at The Diamond Center in Claremont, CA, was a significant problem.

To solve that, Lantz, who had taken over hiring and staff supervision duties from his parents, crafted job descriptions to ensure that 80 out of 100 people can succeed in any given job rather than the exceptional one in 100. Training is consistent now and Lantz meets with each staff member each week and just listens. Then once a month, he meets with each to say, “Here are the numbers and here are the expectations.”

To get to that point, Lantz and his parents had to get honest about what their strengths were.

For many years they’d been right around $1 million; now they’re at $1.5 million and Lantz has $2 million in his sights. Despite the growth, he’s maintained staff size to a tight group of four (outside of the family).

“The difference was choosing the right people and having those people stick around long enough to develop mastery and comfort and cultivate their own clients, and not just have performance that is so reliant on my sales or my mom’s sales.”

In the past year, they’ve also been reviewing how sales associates interact with customers, both when the sale is made and when it isn’t. “We ask, what did we do that could have gone smoother? Using case-by-case scenarios when it’s fresh, we are able to uncover something we could have improved on.”

To get to $1 million, they worked on having a stable, consistent and better-trained team, committed to education on a regular basis and practiced buying discipline when it came to understanding stock and replacing fast sellers, rather than falling in love with things that won’t move.

He’s gotten better at delegating, too.

A Valentine’s postcard from The Diamond Center features $125 necklaces and $1,150 designer stacking rings.

“What makes a lot of entrepreneurs good at what they do is the ability to adapt and put on whatever hat needs to be worn right now. But mixing in some discipline when it comes to training or buying or having procedures and protocols in place makes it easier to delegate.”

Lantz didn’t reinvent the business model to grow it. “The volume of repairs and percentage of diamond sales have stayed roughly the same. We’re trying to take the things we’ve done well through the years and better articulate what we can do to reach more people in our community.”

Lantz, at 38, has transitioned the business to a new, younger customer base he’s cultivated through community involvement. “You can’t overestimate the importance of looking people in the eye, of listening and connecting.”

On the journey to his $2 million goal, he’s been working harder on having great events and on networking. “I’m a golf nut and I was able to join a local golf club; over time, just by being myself and getting to know people, it’s turned into a place where I do a ton of business. There is almost never a day at the golf club when I’m not talking about an anniversary gift or a service on a Rolex.”

They make house calls, too, probably once every six weeks.

“We’re in a super-busy downtown. Parking is challenging for us because our customers will say they drove around for 30 minutes, couldn’t find a spot and so went home. So we routinely offer to deliver locally; also we will meet people at the crosswalk outside and deliver it to their car.

“Customers are impressed by our willingness to deliver a repair. It might be a $50 repair, but you never know when they will tell someone who needs a $10,000 ring how great we are.”

Another goal this year is to develop more discipline with buying and creating a better spread of price points. That includes cultivating relationships with vendors who can provide upscale merchandise. “That $50,000 sale can make a big difference,” Lantz says. “Of course, it’s equally important to be able to have something stylish and compelling for $150.” To that end, a Valentine’s Day postcard this year showed items for $125, along with $3,000 stacking bands and Hearts on Fire diamond studs, priced from $900 to $22,500 and beyond. “I like to highlight entry-level items and mix in the other stuff, too,” Lantz says.

Lantz has worked with Rath and embraces this piece of advice from his business mentor: “Success is good things repeated daily and failure is small mistakes repeated daily. Some of us are good at what we do because we can do a lot of different things. Identifying what only we can do and helping other people take other things on is a key for any business’s growth.”

FROM $2 MILLION BACK TO $1 MILLION

Working Smarter

hahraz Kassam of Shamin Jewellers in Burnaby, British Columbia, CO, says his business is more profitable now, at $1 million in revenues, than it was when he was bringing in more than $2 million.

Initially, to grow from half a million to $1 million, he expanded the store from 1,500 to 2,200 square feet and fine-tuned the product selection. When he opened three additional stores, revenues hit $2.2 million, but expenses grew by almost 500 percent. With a 4,500 square foot mega-store in a major mall, rent soared from $25,000 to $60,000 per month.

Now, he’s backtracked, concentrating on what he does best: bridal diamonds in a 1,000-square-foot store. Last year, he bought a space that he’s renovating. “This ensures our rental cost will be controlled, and we are also investing in ourselves by paying ourselves rent.

“In the end, the biggest lesson we learned is that being a $1 million store or a $5 million store doesn’t matter; it’s the bottom line that matters. As a $1 million store now, I earn more than when I was a $2.1 million operation, and I work less, making a happier me!”

 

Growth Tips: Where to Begin?

Where to begin if you’re feeling stuck or just starting out? Vince Rath of Optimum Retail Solutions advises clients to consider location first. “All other things being equal, if I have a better location, I’m probably going to do more volume,” Rath says. When searching for a location, consider visibility, access and traffic, be it pedestrian or vehicular. Placement within a shopping center makes a big difference, as does signage. Says Rath: “If signage is mixed in with all the rest of the signs, it doesn’t provide the kind of visibility required. Ideally, people can see you, they have easy access and there’s enough traffic passing by.”

Eileen McClelland is the Managing Editor of INSTORE. She believes that every jewelry store has the power of cool within them.

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Gene the Jeweler

When Gene the Jeweler Speaks, His Employees Listen

In this episode of Jimmy DeGroot’s Gene the Jeweler series, Gene has a simple request for his employees. The good news is that they follow his instructions. The bad news is that they follow a bit too literally.

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Talkin’ ‘Bout a Revolution

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What’s the value of a good idea?

In the rapidly changing landscape of jewelry retail, your good idea could revitalize your business, if you have the vision and courage to put it into action.

In 1998, it was a commonly held belief that by 2019 we’d be driving flying cars. Little did we know that the cars wouldn’t (yet) be flying, but rather that we wouldn’t be driving them. Autonomous cars — highlighted in recent Consumer Electronics Shows — are poised to disrupt an industry that hasn’t changed much since the first combustion engine was added to a push cart in 1808.

Our point is this: progress is inevitable. Change is a part of life, and our industry, much like the automobile industry, is on the verge of an evolution. The independent retail jeweler has the opportunity to be a self-driving car… or a horse-drawn buggy.

On the following pages, you’ll find examples of how innovators with a variety of different backgrounds are experimenting with their own good ideas to embrace change in jewelry retail. Read up. Be inspired. The (r)evolution is now.

CUSTOMERS COMMIT TO CATBIRD

Catbird — the Brooklyn, NY, jewelry boutique with the reputation for appealing to the coolest of celebrities (Meghan Markle, for one) and blowing up trends like stackable rings, multi-stud earrings and delicately layered necklaces — introduced an idea last year that appeals to its most loyal of followers: jewelry you can’t take off. Really.

The retailer is selling a Forever Bracelet, a barely there 14K gold chain bracelet for $94, that solders directly onto the wrist. The custom-size chains are available at Catbird’s Welding Annex in Brooklyn’s Williamsburg neighborhood.

It’s inspired by the idea that many women have favorite pieces they never want to remove. Rony Vardi, Catbird founder and creative director, told Elle Magazine that she never takes off her Catbird Greco Lariat, for example.

“For years, we had been playing with the concept of permanent jewelry,” says Sriya Karumanchi, manager of marketing and communications for Catbird. “Once we acquired a set of welders for our studio, we started to experiment. In the beginning, it was just our jewelers zapping each other and the rest of our staff. Now, almost all of us have a permanent chain on our wrist.”

The idea of offering the jewelry to Catbird’s customers was brewing for some time, Karumanchi says. “We tested it with a ‘one night only’ event a year ago — and that had a really big turnout. Seeing that this was something people wanted from us, we were able to build out a welding annex space that’s open Friday through Sunday.” During the soft opening, they welded about 30 bracelets within a few hours.

“The jewelers who weld the bracelets are also in-house bench jewelers, so they really merge that piece for us: a behind-the-scenes process that is now part of a customer-facing experience.”

Catbird is ethically minded, and boasts cool brick-and-mortar locations and seamless online shopping. Everything a millennial (and her younger sister, too) dreams of.

PROFIT SHARING SPARKS JEWELRY REVOLUTION JEWELRY WORKS

Jennifer Farnes, founder of Revolution Jewelry Works in Colorado Springs, CO, is an innovator across the board — in operations, marketing and customer service. But she points to profit-sharing as the best idea she’s implemented. “It’s shocking to me that businesses (of any kind) are still operating on a commission basis. Profit sharing makes the dynamic of my business completely about the end-goal for everyone under my roof. We celebrate wins together, joke about weird situations, feel loss, and work as a complete unit for each client that comes through the door. If we make the clients happy, and make money, then at the end of the year we all reap the benefit of doing good work.”

“Other business owners look at me like I have a third eye when I explain our profit-sharing structure, except one local restauranteur who adopted my model exactly. He is opening his third restaurant in five years, solely with the profits from the businesses he already is running under my model.”

Revolution Jewelry Works specializes in custom design with an average sale of $1,200. Farnes believes strongly in spending 15 percent of gross income on advertising — with a priority on movie theater advertising as well as radio and TV, but only stations her team listens to. She also runs a business that is completely transparent to her staff, and treats them well — offering paid time off, a 401K plan and competitive salaries, which, not too surprisingly, keeps them around. “We have lost only one employee to a job change,” she says.

Those strategies are working for Farnes, who reports that in 2016, 2017 and 2018, Revolution Jewelry Works was recognized as one of the fastest-growing companies in Colorado. While only six years old, the company has exceeded $1 million annually in revenue and so far is realizing sales that are 45 percent up over last year. ”My opinion is; if you’re not succeeding, you’re doing it wrong,” she says.

SOHA IS A DIFFERENT WAY TO DIAMOND

Retailers Soha and Aubree Javaherian are not working in a huge market in Madison, WI. On the other hand, Madison’s residents tend to be young and open to new ideas, such as the ideas that propel Soha Diamond Co., a self-funded startup with no employees.

Soha Diamond Co. is a click-and-mortar design studio that sells only laboratory-grown diamonds. It’s opposite, Soha says, from what most other jewelers do: “Usually they build a beautiful store and take a lot of pride in it — and the website is an afterthought.”

To build their company, though, Soha and Aubree launched their website first. Although it was up and running by the fall of 2017, it took 18 months to build their e-commerce site to the point that they considered it to be polished, presentable and functional enough to begin building credibility.

Then came the appointment-only design studio, which they opened in an office building. “We find about 50 percent of sales comes from each — half from the design studio and half from online sales. The biggest challenge we have in Madison is that it’s not very common to find a jeweler in an office building. It’s a brand-new building in a nice new part of downtown, but our name is not on the outside of the building. So we are really reliant on the web.”

Soha is a graduate gemologist and a 10th-generation jeweler whose last name means “family of jewelers.” Aubree has a background in wedding planning. They’ve also found success getting out of the office to meet potential clients at wedding trade shows and expos.

When they meet customers in their office, Soha and Aubree can tell from their body language if they are a little hesitant. “We don’t put any pressure on them,” Soha says. “There are no physical products they can buy and walk away with. Everything we do, no matter how nominal, we are making it to order. Generally, our clients are relieved.”

An integral part of their strategy was to sell only lab-grown diamonds, moissanite and lab-grown colored gems. “For us, it’s a very technical sale. We have to go out of our way to describe what these items are, and what their value is. We didn’t want to be a jack-of-all-trades.”

THIRD-GEN JEWELER MODERNIZES APPRAISAL PROCESS

Dustin Lemick is a third-generation jeweler who became frustrated by what he sees as a lack of in-store technology in the jewelry business. After he earned his graduate gemologist certification, he found himself in charge of appraisals and claim replacements for insurance companies. “I realized there are some serious issues here. Communication between the insurance companies and customers was horrible.”

After talking with other jewelers, he came to believe it was an industry-wide problem. “Appraisals haven’t changed in forever, and retail jewelers are getting left behind on the technology front,” Lemick says.

So, together with partners, he launched Briteco, a business concept wherein a new type of personal-jewelry insurance is tied to a user-friendly appraisal software program. He began his efforts by moonlighting after hours, but after a few months, it became clear he had to either make it a full-time enterprise or let it go. He considers his decision to go for it to be one of the best he’s made in his career. “We built a full-fledged insurance company with notable investors and an incredible insurance partner in 48 states and D.C. I hope to launch with approval in every single state.”

The software is intuitive, fast, and it really works, he says. “It’s designed by jewelers, so we completely understand how this needs to function.”

It’s free to qualified jewelers. Algorithms will give jewelers guides for what the pricing of the appraisal should be. Once jewelers complete the appraisal with an easy-to-use online form, the consumer is sent a text message and an email saying, “Don’t forget you need insurance.” They click on a link to get insurance, go through four short screens answering questions that take two to three minutes, and they then have A-rated insurance.

“I believe that millennials and gen Zs still want to go into stores,” Lemick says. “They just want technology to help assist in the process.”

MARKETTE SIX CREATES ONLINE STORE FOR DESIGNERS

Justin and Heather Knapp worked for Apple for years, traveling to launch iPhones in 60 countries. That globe-hopping led them to begin a treasure hunting habit, bringing home collectible souvenirs, which often took the form of gems and jewelry.

Inspired, they decided to strike out on their own to create an online treasure-hunting experience of their own, and recently launched Markette Six, a secure marketplace to sell one-of-a-kind pieces, including jewelry, watches and gemstones. The platform aims to support jewelry designers in telling their brand stories, while being supported by the Knapps, who bring their branding knowledge to the jewelry industry. The site is clean, structured and replete with layered storytelling. “Jewelry is a personal reflection of who you are, whereas online is impersonal. It’s hard to have people trust you,” Justin says. “Storytelling can make all the difference.”

The goal is to let the pieces speak for themselves. Navigation and design are inspired by the aesthetic of sites like Design Within Reach and Lonely Planet.
Markette Six is targeting small- to medium-sized designers for its platform. “We’re looking for originality,” Justin says. “They’ve created a brand and stories about why they have designed what they have designed. Sometimes, they are one of a kind, but always they are things that have stories and will speak in an online setting. You become more emotionally invested when you know the designer and the story behind the piece itself.”

Markette Six holds the funds on behalf of the buyer, notifies the designer of the purchase, and the designer sends the piece to Markette Six. Every piece is received by Markette Six and evaluated by an independent lab in Portland, OR, for authenticity. “That’s a very important step for us to make sure they feel comfortable buying online,” Heather says. “Designers can decide if they allow for returns, and if a client does return it, it is sent back to the lab to make sure it is still authentic and not damaged. We’re never going to hand a customer over to the designer to deal with or vice versa.”

They launched in November 2018, about 19 months after devising a business plan. “Our biggest focus is building the relationships, finding the right partners and building those partnerships that will grow with us,” Heather says.

COOL STORE WINNER PACKS HIS BAG AND GOES HOME

In 2018, Thomas Mann sold his Magazine Street buildings, closing the New Orleans location that landed him on the cover of INSTORE with a 2016 America’s Coolest Stores win. The next step in his revolutionary jewelry career was to regroup into his own home, which contains his shop, gallery and party space. He even shares his kitchen with gallery guests.

He has created an interactive experience where jewelry display and artwork are integrated into living and dining areas. “Because the gallery space is tiny, we’re going to turn every space into exhibition space. Even the decor is for sale,” he says. Every detail of his gallery is an expression of his design aesthetic, from the jewelry furniture and displays he designed and built himself, to the work of other jewelry artists he selectively curates.

His staff comes and goes, often arriving while Mann is still asleep. “People bring their dogs. It has a homey feel. This is where we live and work. There’s no curtain between the two.”

Angele Seiley, who runs the business and marketing side of the operation, says visitors are delighted when Mann comes out of his workshop, meets them in the gallery and then shows them around the space.

Before he moved, he had watched foot traffic decline in his former Magazine Street location. Now, an estimated 10,000 cars a day pass by on busy Tchoupitoulas Street, which connects the Central Business District with Uptown New Orleans.

Mann, a jewelry artist, sculptor and painter, has operated on the cutting edge of art-jewelry design for decades, inventing a distinctive style that initially incorporated found objects into his designs. “I came up with a peculiar look at the right time and the right place for an audience that was ready to receive it,” Mann says. “I wanted to make it as technically fulfilling as possible at a price that most people could afford.”

MORE REVOLUTIONARY IDEAS FROM RETAILERS ON THE CUTTING EDGE

Clicks, bricks and custom keep Green Lake growing

Green Lake Jewelry Works’ entire business model represents a retail revolution. Owner Jim Tuttle replaced traditional sales staff with artists who consult with clients to create custom engagement rings in colorful stores with bench jewelers visible behind walls of glass. That design conversation sometimes begins and often continues online, where shoppers are invited to use a personal design page with a collection of notes, quotes, inspiration ideas and contact information for the designer with whom they worked. They can pick up where they left off the following week or even in the next year. They incorporate live chat, reviews, engagement stories, video-sharing services and a thorough explanation of the custom process into a digital presentation optimized for mobile display. The next step is to engage the customer through a design blog staffed by artists. Both locations, in Seattle and Bellevue, WA, also employ full-time photographers to shoot finished goods, loose gems, wax models, sketches and stages of work, which can be shown to online and in-store clients. Whether online or in-store, design is a carefully considered process. Most in-store customers visit five times.

For D&H Jewelers, seeing is believing

Partners Shawn Higgins and Lindsay Daunell founded D&H Jewelers in San Francisco in 2011 on a commitment to sustainability and responsible sourcing. For the building, they used LED lighting, bamboo walls and recycled doors, restored the wood floors and made displays from discarded material. The sycamore bar top was salvaged from a construction site. Sourcing presented more of a challenge. Higgins and Daunell personally verify every source of jewelry, gold or gemstones. They have traveled to mines in Botswana and Sri Lanka and manufacturers in Canada to verify ethical claims. Ninety percent of their gold is reclaimed from consumer electronics.

At Cut Fine,the emphasis is on quality and yes, cut

Matthew Patton and his wife, Evan, set out to appeal to the youthful bridal market of Baton Rouge, LA. Their goal from the beginning was to sell the best-cut diamonds and gemstones they could find and showcase them in the highest quality settings they could buy or manufacture. The name of the store offers the opportunity to educate customers about the importance of cut when assessing a diamond’s quality. About 80 percent of the business is custom engagement rings. Now Matthew, a pocket knife collector, has started a second brand, a business called Slice, to sell high-end custom pocket knives almost entirely online. They sell for $1,500 to $16,000 and are made to order by expert knife makers all around the world. “There are only a few countries we haven’t shipped knives to,” Matthew says.

Marks Jewelers turns store design upside down

Marks Jewelers in Montgomeryville, PA, completely reimagined the layout of the traditional large jewelry store with the location it designed and debuted in 2016. Each unusual feature of the 15,000 square foot store is designed with a practical reason behind it. The Diamond Diner, for example, affords couples a comfortable, intimate way of choosing a ring at the same time it creates a more effective selling environment. Shoppers are seated in booths, and diamonds are both safe and easily accessible for showing. The gem lab is on a “stage” that is three steps taller than the booths, so the diamond manager can keep tabs on what’s happening in the booths, keep an eye on the movement of diamonds and assist in the sale as needed. It’s resulted in a higher closing ratio, say owners Jim and Dareen Brusilovsky. Also innovative are the spacious fashion lounge, where shoppers can relax and enjoy a drink, and multi-purpose modular cases that can be reconfigured for trunk shows and other events.

Embedded consultant shares what he learned at Mucklow’s

Rod Worley manages Peachtree City, GA’s Mucklow’s Fine Jewelry as a successful business for owner Robert Mucklow, who has retired from the day-to-day business. But Mucklow’s is also a laboratory for Worley, who has used the store to test innovations in marketing, merchandising and management and now shares his insights with other retailers on a contract basis.

Worley is president of consulting company Four Grainer LLC and host of “Inside the Jewelry Trade Radio Show”.

Worley developed a community-outreach program based on charitable giving, through which all marketing funds are channeled with the goal of getting people in the door. It’s worked so well that Worley wrote a book about it — A Reason To Chant — and created a portfolio of marketing and management options that he shares with other retailers on a contract basis. Four Grainer sets up the program, trains the staff and contacts local 501(c)3 charities. Worley’s company also drives traffic to clients’ websites by establishing retailers as the thought leader for jewelry, bridal planning, women’s health, fashion and beauty. The ultimate service is total store management, which allows the owner to retire within 90 days while retaining complete ownership and drawing their salary. “We put a leader in place that has the skill set needed to grow the business and support that leader through continued training and supervision,” Worley says.

Bitcoin on the bayou

David’s Antiques & Jewelry, owned and managed by Sharona Edly and her mother, Ester, in New Orleans, decided to start accepting Bitcoin as a means of payment in 2013. “We think it’s a revolution,” Ester says. “It’s a new, global currency, there’s no government behind it; it’s run by the people. We believe in the system and the idea behind it.” The store deals with people from all over the world, adds Sharona. “It’s pretty much like accepting cash, but even better because it cannot be counterfeited. It has low transaction fees and we enjoy the playfulness of it. Our first Bitcoin purchase was by someone who traveled from Austin, TX, specifically to buy his wife something using Bitcoin, an amber necklace for his wife.”

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Cover Stories

Virginia Jeweler Overcomes Heart Attack, Bankruptcy and Divorce in Personal Triumph

Jeweler David Nygaard recently won — then lost on a technicality — a city council seat, yet he remains upbeat about the future.

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David Nygaard’s 2018 win of a Virginia Beach City Council seat represented the closest race ever in the city’s history. He won by 163 votes, a margin so slim it triggered a recount. It also represented a new direction after Nygaard had a heart attack two years ago. “I coded in the ambulance and decided, after a time of reflection, that I wanted to have a greater purpose, and I’ve always been passionate about issues and politics,” he says. “I want to spend the last years of my life on social justice.”

He had hoped to run for a U.S. Congress seat, but when he didn’t qualify for the primary ballot, he shifted his focus to city council, running as a Democrat, another change. The final straw for his conversion from Republican to Democrat came with President Donald Trump’s tax bill, which Nygaard says hurt small businesses and people who were already struggling economically.

He also sought to live a more authentic personal life, and so he publicly came out as gay.

It’s just the latest chapter in the life of a jeweler that has taken a roller-coaster route in the past decade.

In 2008, Nygaard had already been a public figure in Virginia Beach, running a high profile multi-million dollar business. So when the bank seized his home and his seven jewelry stores, along with his inventory, it was big news in the community. He also went through a difficult divorce at the time.

But because he was well regarded, his fall from grace wasn’t as debilitating as it might have been. “Because we did a lot of charitable work in the community, a lot of people supported us,” he recalls. “The local media for the most part was supportive and helpful. And most customers were, too.”

“You have to be upfront and own whatever problems you bring to the table,” Nygaard says. “One of the first things we did was work to protect the interests of our clients.” He refused to turn over any inventory belonging to his clients, if it had been paid for or if it was in his possession for repair. “We stood firm when they demanded customers’ items.” He brought those items to the one store he was able to reopen and gave refunds to anyone who was unhappy. “Things we were able to deliver, we delivered,” he says. “We took care of our responsibility and they supported us.”

The next thing he did was devise a new business model.

“When the inventory was seized, all I had was two software keys of Matrix and some old brass and glass samples, and I used those two pieces to create a new business model. I rebuilt a supply chain, and in some cases, we were able to work on the relationships with the same suppliers to do business again.”

Nygaard, who has an MBA and is also a certified gemologist appraiser, rebuilt his local reputation with one custom job after another and specialized in engagement rings, using 3D printing and CAD modeling.

After losing his multi-store business, David Nygaard rebuilt as a personal jeweler.

“Whenever you have death, you have life,” he says. “Bankruptcy was a death of sorts, but it forced me to come into a new business model that focused on new technology, 3D printing and CAD design. Virtual inventory without the high investment in inventory. We can make exactly what the client asks for with surprisingly affordable pricing. We make one ring for one person one at a time, but exactly the ring that they want so they don’t have to sacrifice in style or design things that they don’t like.”

So, by 2016, he felt his life had stabilized when he was rocked to his foundation again by the heart attack.

He changed business models again when he began to seek public office, giving up his store in February 2018 and becoming an appointment-only jeweler. “I go to people’s houses, or they can come into my office in my home.” Ultimately, he plans to spend about a third of his time on his jewelry business, but currently his role as councilman is eating up most of his time.

Nygaard ran on a platform of creating local jobs, incubating small businesses and giving opportunities to small minority-owned businesses. “I’m an entrepreneur at heart, and I’m looking for creative solutions.”

As for the jewelry business, Nygaard’s advice to retailers is to be nimble and flexible. “I would be careful not to be too tied up with a business model that may be on the way out,” he says. “It seems to me that many aspects of a traditional jewelry business model are becoming obsolete. We must find new ways to bring value to our clients.”

And when it comes to his own experience, he says he had no choice but to keep trying.

“At the end of the day, you have to keep going,” he says. “The only time you fail is when you stop trying. I learned to see beauty in each aspect of life, whether it’s failure, or great success, or everything in between.”

If his life hadn’t turned some unexpected corners, in some ways Nygaard says he would’ve been more comfortable. “But perhaps comfort is overrated. I certainly have had a much more exciting life.”

UPDATE: Unfortunately, Nygaard’s ups and downs continue. Just before press time, it was announced that his city council win was overturned as judges ruled he did not live in the district he represented. Nygaard is asking the city council to appoint him to the seat until a special election can be held. “I followed the rules the registrar gave me,” Nygaard told Norfolk’s WTKR.

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Failure 2.0: Learn More, Hurt Less

Why failing spectacularly can be the best thing that’s ever happened to your business.

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WHERE ONCE FAILURE WAS the domain of losers, it’s now a cause célèbre, a hard-earned badge of redemption and authenticity. In ads for sports shoes, athletes relish recalling how many times they missed the winning shot; in magazine articles, CEOs take pride in recalling their blunders, politicians and celebrities their lowest moments, even their disgraces. The benefits of failure shouldn’t be news to us. Toddlers develop into autonomous, well-functioning selves by testing boundaries. Fall over, pick yourself up, fall over with a little less pain the next time.

The wisdom of learning from failure is incontrovertible, and the benefits manifold. From preventing recurring mistakes, to spurring innovation, to helping you find your true course, to uncovering opportunities, it often begins with failure. Yet for most of us mortals, this advice is still hard to take: failure is painful, disappointment cuts deep, and we stake so much psychologically on being right that denial and blame-shifting remain our default responses when things go wrong.

Failure also involves some very real costs — it wastes money and can destroy morale, infuriate customers, damage reputations, and sometimes lead to legal trouble and even tragedy. For small business owners, there is the legitimate risk that a major failure — choosing a wrong location, expanding to a new market, or opting not to adopt a new technology — could mean the end of their business.

As a result, despite all the good talk about failure, most businesses continue to do the opposite. They punish mistakes, shoot the messenger bearing cautionary news, deny errors, blame others, make no systematic effort to study it and basically ignore whatever messages failure has to teach them.

And in doing so, they double down on their errant course of action, stifle risk-taking and take a step toward creating the very thing they are trying to avoid — a terminal misstep.

As the business world becomes more complex and uncertain, the issue is becoming more critical. In 2019, leading a business organization is not so much about good management. It’s about how you respond to new threats, new trends, new technologies. Nobody gets it right the first time anymore.

Adapt: Why Success Always Starts With Failure by Tim Harford


“It’s not about effective planning. It’s about trial and error,” Tim Harford, a Financial Times columnist writes in his book, Adapt: Why Success Always Starts With Failure. “Those who can afford to fail more times will succeed in the long run,” he says, echoing the famous quote of IBM’s Thomas Watson, Sr: “The fastest way to succeed is to double your failure rate.”

There is a quote often attributed to the German statesman Otto von Bismarck that “Only a fool learns from his own mistakes. The wise man learns from the mistakes of others.” But recent research indicates it actually helps to know the hurt firsthand.

“All the advice tells you not to dwell on your mistakes, to not feel bad,” says Selin Malkoc, co-author of the study and a professor of marketing at Ohio State University’s Fisher College of Business. “But we found the opposite. When people concentrate on how bad they feel and how they don’t want to experience these feelings again, they are more likely to try harder the next time.”

In the following pages, we provide some tips to help you prepare for when things go wrong and to get the best out of situations when they do go awry.

There is, however, no way to take the pain out of failure. At times like that, it helps to take a philosophical view. On top of trying to tell yourself the feeling of disappointment is salutary, keep in mind that in some mysterious way, the possibility of failure is what makes games worth playing, business pursuing, and ultimately life worth living. When there is no challenge, the joy evaporates (try playing a video game designed for four-year-olds and see how long that stays fun!).

The poet Rainer Maria Rilke summed it up nicely: “The purpose of life is to be defeated by ever greater things.”

In business, those challenges are waiting every day. Go down valiantly.

20 Ways to Make the Most of Failure

“Failure is like laying a rotten egg,” notes James Gattas, owner of James Gattas Jewelers in Memphis, TN. “The smell never goes away, but you are a lot more careful not to lay another one.” Too true. Here are 20 tips to help you navigate those foul-smelling waters.

Contain the downside

1There is a key caveat underlying all failure literature, and that is to be able to enjoy the benefits, you’ve got to be able to survive the experience, thus the advice to fail small and cheaply. Always ask, “What is the minimum viable experiment?” says Roy H. Williams, author of The Wizard Of Ads. It also helps to stick to “adjacencies,” or areas where you have some related business experience. The business world is littered with the dead projects of companies that strayed too far from their core competence. Even a small failure can be expensive, but in the long run, ignorance tends to be even more costly.

Fail fast

2Joel Wiland, owner of J. David’s Jewelry in Broken Arrow, OK, says that after 25 years in the business, he has learned that one of the most valuable skills one can possess is how to fail efficiently. “Most people wait too long, and hang on too long, which is the worst part of failure. When you learn how to fail faster, it is not nearly as costly and at that point (the experience) can actually be profitable from the knowledge gained.” Launch quickly, measure the data, view all feedback — both negative and positive — as a gift. Revise, evolve.

Have Plan B, C and D ready

3“Expose yourself to lots of different ideas and try lots of different approaches on the grounds that failure is common,” says Tim Harford in his book Adapt: Why Success Always Starts With Failure. “This approach is far less intimidating than trying to come up with the best idea ever. You need Plan B, Plan C, Plan D. You need a full quiver of arrows.” Not only does a fallback position make it easier psychologically to be wrong, but it enables you to take away a wider range of lessons from each mistake, he says. Ideally, you want to try a mix of off-the-wall ideas and by-the-book practices.

Debrief

Rebel Talent: Why It Pays To Break The Rules At Work And In Life by Francesca Gino

4When a business venture fails, sure, it sucks. But when a military expedition fails, people die. The life-or-death nature explains the military’s relentless review system, known as “after-action reviews” (AARs) of each combat encounter and combat-training exercise. “As in business, the reasons for success or failure in combat often are not clear,” writes behavioral scientist Francesca Gino, author of Rebel Talent: Why It Pays To Break The Rules At Work And In Life. “AAR participants discuss four key questions: What did we set out to do? What actually happened? Why did it happen? What are we going to do next time?” To be sure, failure reviews aren’t much fun. Most people would rather sweep the little disaster under the carpet and look forward. But then the learning opportunity is lost. Such “reviews work best when they are fast and to the point; take place frequently, through good times and bad; and are forward-looking, with an emphasis on learning, not assigning blame,” write Julian Birkinshaw and Martine Haas in Increase Your Return On Failure.

Dig deep

5When Amy Edmondson, a professor in leadership and management at Harvard Business School, discusses failure with executives, she often asks them to consider her Spectrum of Reasons for Failure, which lists causes ranging from deliberate deviation to thoughtful experimentation. “When I ask executives to estimate how many of the failures in their organizations are truly blameworthy, their answers are usually in single digits—perhaps 2 percent to 5 percent. But when I ask how many are treated as blameworthy, they say (after a pause or a laugh) 70 to 90 percent. The unfortunate consequence is that many failures go unreported and their lessons are lost.” To be sure, managers need to make a distinction between excusable and inexcusable mistakes, but often by probing deeper, one can discover underlying causes that are more important. Was the cause of an error carelessness, lack of training, fatigue or some other issue?

Donnie Blanton recalls such an instance at his store, Brittany’s Fine Jewelry in Gainesville, FL: “Many, many years ago, we ran a vendor flyer in November. We were hoping to encourage our customers to shop early and put Christmas gifts on layaway. It was a complete failure. We have never attempted to promote a flyer since. Looking back on it, the merchandise eventually sold, so our real mistake was in thinking that we were going to change our clients’ buying patterns.” As the line goes, good judgment comes from experience. Experience comes from bad judgment.

Fail differently each time

6A crucial question to ask yourself about your mistakes is, “Am I failing differently each time?” says Steven Levitt, author of the business bestseller Freakonomics. For all our talk here about failure, what we are actually talking about is learning. Fail the same way over and over, and you’re clearly not learning.

Keep a Failure Résumé

7A failure résumé — or Anti-Portfolio or CV of Failures or whatever name you give it — is a simple idea: when you fail, write it down. But instead of focusing on how that failure makes you feel, take the time to step back and analyze the practical, operational reasons that you failed. What’s the point of such self-flagellation, asks Tim Herrera in his Smarter Living column for the New York Times? “Because honestly analyzing one’s failures can lead to the type of introspection that helps us grow — as well as show that the path to success isn’t a straight line.” It can also be a good reminder of how much you’ve tried, said Melanie Stefan, a lecturer at Edinburgh Medical School. “Sometimes I look back on them and see how much I’ve actually struggled to be where I am. That’s a powerful reminder that I deserve to be here,” she said.

Beware your biases

8The human capacity for self-deception is profound. It thus helps to be aware of the kinds of biases that can undermine a proper evaluation of a project. Among the most common psychological blind spots related to failure are the “God complex” (feelings of infallibility), chasing your losses (taking bigger risks to win back lost money), or hedonic editing (when we try to convince ourselves that a mistake doesn’t matter, or finding some way to reinterpret our failures as successes). Few of us can make purely rational decisions. Beware of your biases.

Know what failure looks like

9Recognizing failure can be surprisingly difficult. We’ve been trained that “persistence pays off,” so it feels wrong to cut our losses and label an idea a failure. “Decide what success and failure would look like before you launch an initiative, “ says Columbia Business School’s Rita Gunther McGrath, noting that some big corporations build exit strategies into their projects to ensure that doomed or resource-sucking efforts do not drag on. “Being able to recognize a failure just means that you’ll be able to re-cast it into something more likely to succeed,” adds Harford. In such instances, feedback — either in the form of data or third-party reviews — is essential for determining which experiments have succeeded and which have failed. “Get advice, not just from one person, but from several,” he says.

Use symbolic rituals

10Heroic Failure Awards, Failure Walls (a space in your back room where you and staff can share your “growth lessons”), or a Failure Hour (a weekly meeting devoted to things that went wrong and can be improved) can help create an environment in which failures are openly and seriously discussed. “Something magical happens to failure when it’s openly acknowledged,” writes business author Jeff Stibel in a column for Bizjournals.com. “Paradoxically, it becomes less of a big deal.”

Celebrate intelligent failure

11As 3M’s legendary chairman William McKnight once said, “The best and hardest work is done in the spirit of adventure and challenge … Mistakes will be made.” A risk-averse culture, on the other hand, is dangerous. Once you quit innovating and become guardians of the status quo, the end is only a matter of time away. “One division head I worked with would say to his team members during their performance reviews, ‘Show me your scrap heap,’” recalls Columbia’s Gunther McGrath. “The request perfectly conveys the idea that high achievers will, of necessity, try some things that don’t work out.” Tom Peters sums it up another way: “Reward excellent failures. Punish mediocre successes.”

Fail from the front

Whoever Makes The Most Mistakes Wins by Richard Farson and Ralph Keyes

12The example set by owners and management is crucial. Far from revealing weakness, admitting mistakes shows a leader’s self-confidence and helps forge closer ties with employees. “A blunder admitted is empathy earned,” write Richard Farson and Ralph Keyes in Whoever Makes The Most Mistakes Wins. “Leaders who don’t cover up their errors reveal themselves as human—they become people whom others can admire and identify with.” Adds Edmonson: “Only leaders can create and reinforce a culture that counteracts the blame game and makes people feel both comfortable with and responsible for exposing and learning from failures.”

Share what you learn

13While it’s useful to reflect on individual failures, the real payoff comes when the lessons are shared across the organization or even better, they become part of institutional memory. At Coca-Cola, stories about the failure of New Coke are still told 30 years on. Former CEO Roberto Goizueta got years of one-liners from the fiasco. “Admitting his mistake conveyed to his employees better than a hundred speeches or a thousand memos that ‘learning failures,’ even on a grand scale, were tolerated,” says Farson. Today, traditional soft drinks now account for less than two-thirds of Coke’s business. “They saw the handwriting on the wall, and they evolved into ready-to-drink teas and coffees and juices and dairy products. Coca-Cola knew it was time to reinvent themselves; to transform from one thing into another. This is why — after a continuing series of mistakes, failures, and course corrections — they will continue to thrive,” says Roy Williams.

Hail the bad-news messenger

14“The biggest mistake you can make as a leader is to shoot the messenger and bury the bad news,” write Birkinshaw and Haas. “Big, painful, expensive failures are easy to spot. But in many organizations, any failure that can be hidden is hidden as long as it’s unlikely to cause immediate or obvious harm.” The goal should be to identify it early, before it has mushroomed into disaster. Among the ways to do this: creating a shared understanding around the types of failures that employees can expect to happen at work, being accessible as a leader both in terms of personality and physically, and rewarding the messenger who brings up bad news.

Use checklists

The Checklist Manifesto by Dr. Atul Gawande

15In his book The Checklist Manifesto, Dr. Atul Gawande argues that in our complex modern world, failure results not so much from ignorance (not knowing enough about what works) as from ineptitude (not properly applying what we know works). His solution — checklists. In medicine, a field where the available well of learning expands exponentially every year, the problem is “making sure we apply the knowledge we have consistently and correctly,” says Gawande. A recent study in UK hospitals suggested that wider use of checklists might prevent a staggering 40 percent of deaths during treatment. If surgeons can fill out checklists, the rest of us should probably be willing to run our expertise by the numbers as well.

Give back the pen

16It’s not just at the organizational level that failure can be “a gift.” Individuals, likely including your employees, can benefit from its didactic embrace. The problem is that many managers are what psychologists call “over-functioners” — faced with a challenge in the store, they spring into fixing mode, taking control, attacking the issue, offering instructions and dealing with it. As with raising kids, it often helps to let your underlings fail to allow them to develop, even if it creates some short-term anxiety or uncertainty. When a person is stuck or struggling, ask them, “What do you think you should do? Go try it and I’ll give you some ideas and then you see how it goes.”

Revisit and reboot

17Jill Keith, owner of Enchanted Jewelry, Danielson, CT, says she felt like a failure when she closed the family store and then tried to resurrect it in a new location. “Fast forward a year later and we see nothing but blessings,” she says. The episode gave her an understanding that failure is complicated. “Ultimately, it’s just a dot on a timeline. Perspective on it varies with time and distance.” Revisit your old ideas regularly. Not only will the lessons still be relevant, but their time may have arrived.

You are not your failure

18A lot of us look to athletes for inspiration, especially when it comes to taking on a daunting challenge. But according to British sports psychologist James Hamilton, many elite athletes have a pretty unhealthy view of success and failure, associating defeat with an all-round failure of the self. To be sure, it can fuel a heightened drive, leading them to put up with huge levels of discomfort and deprivation, but it can also result in risk-avoidance and self-blame when things don’t pan out as they had hoped. A much healthier view, he says, is to remember that any failure “stands separate” from you.

Educate your subconscious

19The pioneering behavioral psychologist Daniel Kahneman changed the standard view that humans are rational economic actors. The Soviet Union proved something similar for economies — what looks to be efficient rationalization is often a system that can’t learn or adapt. It’s the same for just about any business. British advertising great David Ogilvy had an interesting take on this: “The beginning of greatness is to be different. And the beginning of failure is to be orthodox. Big ideas come from the unconscious. Stuff your conscious mind with information, then unhook your rational thought process.” Go expose yourself to ideas and experiences.

Share your failures

20Look for opportunities to share your mistakes, be it at a lunch, an industry peer group or some other professional gathering. “If you’re having lunch with some of your peers, then revealing failure is a great strategy to induce levels of liking by reducing malicious envy,” Amy Edmondson says. Adds Roy Williams: “When people share their experiences in an atmosphere of respect and mutual trust, a special kind of magic occurs: smart people become wise and their businesses begin to grow.”

FAILURE TEACHES THE BEST LESSONS

By Bruce Goodheart, co-owner, Goodheart’s Jewelry, Overland Park, KS

Say the word “failure” to a group of people and watch their expressions. Most will cringe. Some will say, “Everyone fails at one point in their life.” Among the group will be one person who will smile and not say anything. He knows what failure is, because he has been through it, maybe more than once.
Personally, I believe failure is not having an honest working plan.

October 15th, 1988. Los Angeles Dodgers: 3, Oakland A’s: 4. Bottom of the ninth inning, one man on second. An injured Kirk Gibson limps to the plate. Dennis Eckersley throws a fastball, Gibson hits a home run, and the Dodgers win, 5-4. That one pitch, that one fastball changed the next evening, October 16th, for me.

My brother and I had planned a jewelry fashion show with a high-end women’s dress shop. 12 people showed up. Thanks to Kirk Gibson’s home run, everyone stayed home to watch the next World Series game. Vin Scully, the announcer for the LA Dodgers, said, “Kirk Gibson made the impossible happen.” He sure did, and I learned a big lesson.

I don’t consider my fashion show a failure; I do call it poor planning.

Bill Gates said it best: “I failed my exam in some subjects, but my friend passed. Now he’s an engineer at Microsoft, and I am the owner.”

As a jeweler, if you work diligently, ask many questions when you don’t know the answers, and read as much as you can about the jewelry industry, you will succeed.

And don’t be afraid to fail; just be sure to get back up out of the dirt. Remember, you’re one swing away from making the impossible happen.

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