AS OWNERS OF a jewelry business, all the responsibility lies on our shoulders. Many may be like me when I started back in 2002: The owner does it all! Sales and admin duties with everything in-between, from being the one who cleans up, stocks the cases, buys and receives inventory, sets the diamonds, and pays the bills to sitting with the accountant at the end of the year to review the results of all that hard work.
Building the team and setting processes in place can relieve one of doing all the work. Delegating and trusting others can be a hard proposition for some, especially those control freaks out there!
If we look at breaking the business down into three major areas — sales, administration, and repair — we can begin to tackle the art of building the team. Let’s start with sales. Hiring the team starts with personality. Warm, friendly, outgoing types are the best. We use personality profiles in the hiring process to help us find that type of individual. But having the personnel is just not enough; you must have the processes in place to manage the team. A track to run, goals to achieve, and measuring tools to see the progress along the way.
We start our year by establishing sales goals for each team member that tie to our yearly sales target. We have five KPIs (key performance indicators) established for each member of the sales team. Understanding the weakness of each salesperson and then training to help them overcome that weakness is essential to growth. We break down our training in three areas: sales techniques, product knowledge, and policy and procedures.
These are the KPIs we check for each member of our sales team each month and coach each week:
- Total sales revenue
- Gross profit margin
- Closing ratio
- CRM (customer relationship management)
- Wildcard (we structure this last KPI unique to each team member to drive the desired behavior)
When KPIs are achieved, the employee has an opportunity to make more income. You should structure your sales team with an hourly rate (or salary base) plus commission on their gross sales. That way, they have an incentive to sell as well as a no-ceiling potential on their yearly income. We do not tie their performance to meeting store sales goals, as we don’t want to penalize individual performance.
As you work to establish processes in the sales department, you will find yourself spending little to no time behind the sales counter. This allows you to work ON the business instead of IN the business.
For us, administration covers our financial department and inventory department. The financial department for us is outsourced. We had an in-house accountant do all the functions related to our daily, monthly and yearly financials, but found that outsourcing works best for us. Either way, unless you are an accountant turned jeweler, why shouldn’t you have someone else doing all those financial chores? Of course, that doesn’t mean to totally disconnect. It is your responsibility to know your numbers! With today’s technology, it is easy to stay in touch and look over those that you have entrusted to run your business. If you don’t operate with budgets, start! This way you can see where you are at any point in the calendar by comparing your performance to your budget. You should focus on your profit dollars generated by sales revenue and manage your expenses to hit your desired budgeted monthly net profit, then adjust accordingly going forward. Manage your payables based upon your inventory budget’s open-to-buy so you don’t overbuy.
The other key area of administration is your inventory department. Get someone in that seat who can provide you with the analytics of how your inventory is performing, manage fast sellers, move your aged inventory out and identify opportunities to make more sales. This person will receive, price and merchandise your inventory to meet your goals.
Rome wasn’t built in a day. But if you are doing instead of managing as an owner, then perhaps it is time to start building your team!