Owning or operating any business requires a moment of stepping back and looking at the big picture. Awareness and strategy are critical for success -- especially for a small business like a jewellery store. One popular analysis and planning tool is the Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis.
For someone who has been operating a jewellery store for a while, a SWOT might be a quick exercise. For those entering the business or considering acquiring a jewellery store, it might take some time to research and review the local market to get the best results from a SWOT analysis.
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Draw four quadrants on a pad of paper or poster-size paper. Label the quadrants Strengths, Weaknesses, Opportunities and Threats.
List the strengths of your business in the first quadrant. Strengths can include location, pricing, quality of gems and other precious materials, selection of both styles and types of pieces, quality of service, hours, financial strength, client base and speciality items you might carry.
Do you have an extensive selection of engagement rings? Are your pearls and jade of particular note? Do you have the cash reserves to make larger purchases and take advantage of better deals from wholesalers? Is your name and reputation in the community more long-standing or better than other jewellers?
You might think of more. List as many as you can.
Outline where your business might not live up to its potential or where it has disadvantages in the Weaknesses quadrant. These can include lack of financial resources, poor performance, location, newness of business, antiquated image or branding, excess inventory, cash flow problems, subpar employees and security problems.
Do you lack the cash to survive if sales stagnate given your inventory is very expensive? Are you able to buy high-end diamonds? Do you have the security to protect your inventory? Can you trust your employees? Is your insurance sufficient to cover loss or theft?
Be honest with yourself even if it's difficult or painful.
Record areas of possibility for your business in the Opportunities section. These can include not only areas where you believe you can overcome weaknesses, but also strategic options in your market. If a nearby jeweller is going out of business, taking that market share might be an opportunity.
Other options can include but are not limited to changing location, other new businesses drawing customers to the area, economic recovery, tax breaks or incentives, discounts available from suppliers and surmounting the weaknesses discussed.
Write the potential difficulties or problems you foresee in the Threats quadrant. These mostly will relate to your market. Perhaps another jeweller is moving into the area. Or perhaps your neighbourhood has changed demographics or levels of safety. It also could be that your customers or potential customers don't have the expendable income they once did. Maybe tastes have changed.
You will know best. Think about your competition and changing economics or logistics.
Tips and warnings
- Challenge yourself to really look at all the factors in your environment. Sometimes when running a business, it's easy to get caught up in the day-to-day and forget to stay competitive by looking around. You can use newspapers, chamber of commerce information, industry associations, industry specific publications and networking within your community to help you get more information.
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