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Merrick, NY—Our sixth and last installment of One Smart Thing features Rodney Roberts of ARMS. ARMS offers business development consultation and specialized, easy-to-use software. Rodney's topic is Using Reports to Increase Sales and Gross Profits.

The Centurion: What's ONE smart thing a prestige jeweler can/should do to start off the year right? 

Rodney Roberts: Now is the time to evaluate 2014 and make plans for 2015. It is a very smart idea to run reports that show your total sales and gross profit for the entire year, and also for each month individually. You can use these figures to set targets for 2015 so that throughout the year you are consistently monitoring your progress towards your goals. There are three factors that control the profitability of your business: average retail Sale, average Retail margin achieved, and quantity of sales.  By carefully monitoring and comparing these figures to previous years you can make sure that 2015 is a very profitable year for you.

The first step is to compile your data. You may have an inventory control system that can produce these reports for you. If not, you may need to gather the information and input it into something like Excel to get an overview of your business. Reports you will require are total sales for the entire year and sales for each individual month. These reports should include the total sale, gross profit, and an average retail sale figure each month. Once you have this information organized you can begin to make your financial plans for 2015.

Taking your average retail sale figure from all of 2014, you should aim to increase this value by 10%. So if your current average retail sale figure for 2014 was $1,000, the target for 2015 should be $1,100.00. To get an idea of what this would be worth to you, multiply the total number of items sold in 2014 by 100 and you will see your goal. A 10% increase in your average retail sale will require 12 months of dedication to achieve. Discuss with your team strategies for overcoming price objections and avoiding discounts so you maintain your margins.

If you take your average margin for 2014 and increase it by 10% you will increase your earnings in the business tremendously. This additional margin achieved is money directly into the bank of the owners of a business. To achieve this, your team member/s who price your inventory must be aware of your margin structure so your expected margin is always achieved.

The last and most difficult item to monitor and increase will be the quantity of sales made. This is a bit trickier as it requires additional marketing efforts to bring customers through your doors. We all know that marketing is a bit of a gamble and spending more on marketing does not guarantee a better return. It is important to use a good customer management system to allow you to pinpoint market to your customer base at the times of year that are most important to them. If you commit to gathering customer information and using it to market to customers at a time when they are interested in what you have to offer, you will be able to watch your sales quantities steadily increase.

Every day of every month is special to one of your clients; don't let a day go by that you are not marketing to a client with something to celebrate!

Missed the previous installments? Click here for The Edge Retail Academy on Merchandising Strategy and Business Assessment, for Matthew Perosi on Marketing Bridal Jewelry Online and Jon Parker on Personnel and Ellen Fruchtman on Marketing and Dan and Lori Askew on Inventory Management.