How to use SWOT to strengthen and grow your store
My 30-plus years in sales has led me to implement several processes to help business owners. My favorite by far is the SWOT (Strength, Weakness, Opportunity, Threat) analysis.
This approach prompts owners to take an internal look at their business model. Afterward, they can easily identify their strengths, weaknesses, opportunities and threats. Most importantly, a SWOT analysis lays a foundation to help owners change the course of their businesses from shrinking to growing; from weak to strong; and from lower to higher profits.
4 Steps to a SWOT Plan
- Create a mission statement for your business.
- Fill out each section, being honest about the positives and negatives.
- Ask yourself: How can I capitalize on my strengths to overcome my weaknesses?
- Focus on ways you can use opportunities to capitalize on identified threats.
Then consider the SWOT sections below, examining how each team member fits into and affects your business. Open discussion afterward with your staff is key!
- Staff: Look for your staff members’ strengths. For instance, how well do they know the product line?
- Customer base: How many repeat customers do you have? What are their buying patterns?
- Community position: Is your store a destination point? If so, how do you grow it beyond where it is now?
- Finances: What is the cost of opening your doors? How fluid are your finances?
- Store sections: Examine each section of your store to identify its strengths. Are your min/max levels correct, are you missing key titles, and what is your revenue per square foot for each product section?
- Product/services: Which products or services stand out to your customer base?
- Profitability: What are your profit margins? How have you cut overhead?
- Growth: In what areas have you grown in the last year or two years?
- Staff: Look for negatives. How well do your team members know your products?
- Profit margins: Are profit margins too low? Where can you increase margins without hurting your overall business?
- Financial resources: In what areas is your store weak? Where do you seek growth opportunities?
- Competitive vulnerabilities: Where are you weak compared with your competitors?
- Market position: Where are you weak in making your store a destination point?
- Lack of new products/services: Where are you vulnerable? How can you set your store apart from the competition?
- Store sections: What are your weaknesses in each section of your store?
- New complimentary market: Are there nonprofits you can partner with or community businesses with which you have a natural connection?
- Strategic alliance: Partner with the publishers you work with, asking questions such as: How can I grow my custom product business? How can I increase sales without strangling my open-to-buy dollars? Look for NYP (Not Yet Published) titles and “Hot” authors. What seasonal offers can serve as add-ons at your cash wrap?
- Economy: Be sure to focus on your own community instead of the national economy. For example, downtown Nashville is booming with growth, while other sections of the city are still in a slump.
- Loss of key staff: What key staff members are gone? Which ones do you need to replace or train?
- Cash flow: What is your store’s open-to-buy status? What actions—for instance, returns or markdowns—can you take to free up some dollars? In what areas do you lack needed financial resources?
- New technology: Is your POS system up to date? Does your store still use a fax machine or are you only using email? What Windows system are you using? (I suggest you use Microsoft Office 2013.)
- Increased competition: What stores have opened near your location that are attracting your customers?
- Government regulations: In what ways have new regulations negatively affected your business?
- Falling sales: Break this down into individual product categories.
- Decreasing profits: What is cutting into your profit margins?
Remember, if you focus solely on your employees’ weakness and threats, you will miss the strengths and opportunities you already have available.
Scott Etheridge serves as manager of sales development at HarperCollins Christian Publishing and is responsible for promotions and sales analysis. Connect with him on Twitter @scottetheridge.