TWO PLACES TO KNOW HOW THE SHOP IS DOING
I love computers. I'm on mine 12 hours a day. Busy:
- Doing my own accounting with QuickBooks and for home=Quicken.
- Emailing friends & clients.
- Polygon/Facebook/stock sites
- Connecting to clients computers to help them with QuickBooks
and point of sale support (i.e. The Edge; Jewelry Shopkeeper, etc)
- Updating my 300+ page price book for repairs in Excel.
Have I convinced you I'm probably pretty good getting around computers? I have 3 desktops, one tablet, 2 laptops and a Samsung Galaxy S5.
A programmer? No but I can get'r done. :-)
But not everything is done better with a computer. When I had my store I kept a paper journal of daily activity and I tracked 3 things.
- Sales and pickups at the cash register. This would be products sold/layaway's picked up, repairs & custom work picked up. In other words the amount of money received in sales. Didn't track deposits received.
- Dollar value of job envelopes taken in today. Work we sold to customers and the selling price of the job they left with us.
- Special weather conditions or unusual dollar activity
I used a paper journal that you can buy today to track this. Now before you start listing all of your computer programs that do this better, my question to you is:
"WHAT DO YOU DO WITH YOUR INFORMATION?"
I'll show you how I used mine and then I'll ask you this question again.
You can still buy this journal and yes they have a computerized version.
The book has 6 years on two facing pages per month. So you can visually see how we're doing against last year in September or even going back many years. This picture is not from my store but a sample from their website.
Look at "1999". There are 2 columns. I used the first column to write in the total of the charges on ALL job envelopes taken in today. The job envelope itself had an extra copy for company. We put those in a cigar box every day and add the end of the night just added them up. That was the total dollar value of jobs taken in today.
The next column was where I wrote the total receipts or money received today. If you use the Edge it's the "Activity Report" numbers. Total money received.
I knew at a glance how we compared to last year in jobs taken in and total sales. Because job envelopes turned into sales 4-6 weeks later, if envelope intake was low I knew cash would be low a month later so I'd ramp up some type of advertising.
In addition there is a very small amount of space next to the date. Here we would write down something unusual. As an example we would notate if it rained that day (why traffic was slow) or why sales were unusually high that day (made a big diamond sale).
I remember one October I looked at the job envelope sales for this year's month and saw it was lower than the year before, same month (it was only 3 columns to the left). It was obvious that job envelope charges in one column turned into cash pickup sales 6 weeks later in another column. (Repairs turned into cash 2-3 weeks later and custom work turned into cash 6-8 weeks later).
So I got off my duff and became an advertising/marketing maven and ramped it up big time.
- Within a week had a sale postcard designed and printed and sent it out to our customer list.
- Placed ads in the newspaper (was good for us back then)
- The emphasis was to get your Christmas/Chanukah orders in this month for a 20% discount and availability to be delivered on time for December delivery.
- We also offered a 5% discount if you paid for your repair or custom job at take-in. I remember one customer paid for a $3500 custom job in full when we wrote up the envelope just to save 5%. She picked up the job 2 months later.
Store traffic boomed and we had one of the best Christmas seasons in a long time. We pushed custom design and also discounted older merchandise. Why push custom? That's what differentiated us from the competition.
Here were our numbers from my last year owning the store:
TOTAL STORE SALES
Gross Profit Margin
Shop Sales (repair & custom design)
Average Repair Sale
Average custom design sale
$750 to $1550
Using customers gold, average was $750
using our gold was $1550
So I want to ask you again, if you keep 100% of your information on a computer:
"WHAT DO YOU DO WITH YOUR INFORMATION?"
I'm not talking about margins on diamonds, units sold, just "How are we doing today versus last year overall and how will it affect cash flow in the near future?
Director of Shops Profits
P.S. Where is the 2nd place to know how the shop is doing? QuickBooks where you can see overall shop profits. See below.
Gross profit in this store for the shop is $139,790.01.
39% I strive for stores to make 50% gross margin from the shop, easy to see how we are doing, isn't it?
P.P.S. Want to know your "average repair or custom sale?"
You could take the copy of repair tickets for one week and divide by number of job envelopes to get your average repair sale.
Do the same with custom jobs for average custom sale.
Keep a rolling number to take out peaks and valleys.
Stores not using our repair price book typically have an average repair sale of $65 to $100.
Stores that do use our price book have an average repair sale of $125 to $175.
Average custom design sale ranges from $750 to $3000, most above $1500.