Unfortunately, many businesses did not survive this challenging year. There are a lot of lessons here for everyone in the diamond pipeline and the jewelry industry – lessons that hold true for most businesses no matter what they are.
To respect your time, instead of a scholarly analysis, here is a brief summary of the results of analyzing the activities of those businesses that succeeded in 2020 and those that did not.
It is not enough to have just one of the following characteristics to survive. Those that survived met several of the following conditions.
- Those that shifted into a battle mode at the outset of the crisis
- Those that planned long term
- Those that had an online strategy (not just retailers, but wholesalers too)
- Those that decided in 2019 to rely mainly on self-financing and ceased deep dependence on bank financing
- Those that took a long hard look at the changes around them and studied them
- Those that were agile
- Those that regularly and carefully managed relationships with clients, suppliers, financiers, and staff
- Those that offered a needed product and knew how to get the word out that they had it
- Those that had deep pockets
- Those that managed their finances wisely
- Those that had a niche activity
- Those that made themselves needed
- Those that were good at marketing themselves
- Those that had few competitors
- Those that focused on business, necessities, learning, and creativity
- Those that took market data seriously
- Those that sought expert advice
- Those that understood the importance of research, analytics, and putting data in context
- Those that had a near monopolistic position survived against an opposition that even crusaded against them
Who did not survive?
The following are serious mistakes for any retailer and wholesaler to make in the diamond and jewelry industry and elsewhere. Individually, each mistake is survivable. Collectively, they are business killers.
- Those that were on their way out anyway
- Those that operated haphazardly
- Those that neglected their finances
- Those that were over-leveraged
- Those that did not cater to their clients
- Those that failed to manage 360 degrees
- Those that did not add value
- Those that focused mainly on their store and less on their clients
- Those that could not handle large returns from clients
- Those that lacked an online strategy
- Those that needed a lot of financing
- Those that had high financing costs
- Those that poorly managed their inventories
- Those that poorly managed their time
- Those that thought that they already knew everything about the market and didn’t need to learn more
The important conclusion here is that most of the survival points can easily be learned, adopted, developed, or resolved. All that is needed is attention.
Running a business does not end with going to work and selling a product. Selling is a process and so is running a business. To succeed, you must put in the daily effort of reading, paying attention to input, studying the numbers, hiring good people who can do what you cannot, and asking for advice.
As a wise mentor once told me: “Some are in the jewelry business, and some are in the business of jewelry. The first are there because they simply love jewelry. The second also manage a business.”
If you belong to the first group, you will not survive. You must learn how to manage a business, and you must do so thoughtfully.
Have a wonderful holiday and a fantastic New Year!