SWAP GROUPS

What is a SWAP Group?

SWAP stands for Share With A Peer. It is a peer group of similar retailers from non-competing areas (at least 100 miles apart).

During the meeting we share merchandising and financial information and discuss issues of importance to each member, as well as giving constructive suggestions to the host on how to make his or her store better. No one knows all the answers but by sharing knowledge with each other every one in the group can learn, benefit and become a better retailer. By being a better retailer, you will be more profitable.

What is the Purpose of the SWAP Group?

The purpose of the SWAP Group is to help yourself, and the others in the group, do a better job of being improved, more profitable retailers.

The retailer who is a good candidate for membership is one who wants to do better, who knows that no retailer can be great at everything and who is willing and eager to learn from her peers.

There are NO PERFECT retailers!

The great thing about independent retailers is that they are independent. The bad thing about independent retailers is that they are independent. Many think that no one else can run their business as well as they can - - and they are right - - each store is as individual as it’s owner. However, there are always different and even better ways to do things. It really does help to get some outside perspective to the challenges you face as an independent retailer. This is what a SWAP Group is all about.

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No One Knows Everything!

Individually, we all have strengths... and undeniable weaknesses. Everyone has their own "blind spots" -- it's just a fact of life. But together, we can harness the power of collective thinking and combine our strengths, so you can learn how to exceed your goals... and more. Leveraging the support and fresh perspectives of the group, you will thrive in an environment of challenge and growth. You'll acquire the experience, skills, and confidence needed to achieve real progress in your business. And, with an instant and highly valuable support network, you can rest assured that the answers are always there for you.

However, to get the most benefit from you membership, you need to be prepared to be completely open and frank with your Swap Group members, sharing both your hopes and your fears. They won't be able to advise you properly or well if you hold back. This can be difficult for a retailer who is the owner of a business. You are used to making all the decisions about your store. Being part of a group like this means you must be willing to listen to the input of the other members as well as to give your input to other’s problems and issues.

Independent retailers operate in isolation without anyone around who can give their honest, unbiased opinion about a problem, issue, challenge, possible advertising program, etc. It is OK to ask employees but do you really think they will give you an honest answer when you are the one signing their paycheck? You will most likely get positive feedback from them even if they do not think it is a good idea. After all “you are the boss”. This will not happen at a SWAP meeting ! The other members do not have a private agenda with your store and will be open and honest with their opinions. They may have had the same issue and can give you valuable feedback about what works, and just as importantly, about what does not work so you do not waste valuable resources.

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Your membership in the SWAP Group will be personally and financially rewarding. Some benefits are listed below:

• Reduce Costs: You do not have the deep financial pockets of big business to "re-invent the wheel". By learning what other similar companies have successfully done, you can save money without testing new ideas.
  
  
• Avoid Mistakes: Solving business problems on your own can result in costly errors. Learning what others have done can keep your business in business. Learn from other members mistakes and successes. Their role is to share with you lessons from their experience in the hopes that you can learn them a bit more quickly and easily.
  
  
• Find New Ideas: Learn to borrow the best from beyond your company.
  
  
• Handle Personal Issues: Small business owners are limited in sharing personal issues. With a SWAP Group your peers are in the same situation and have a high degree of empathy.
  
  
• Sounding Board: A SWAP Group acts as an informal board of directors and an opportunity for real-world experience sharing.
  
  
• Overcome Isolation: It can be a very lonely being the owner of a small business. Your friends and family do not understand the issues you face. You cannot confide in your employees. However, every business owner in your SWAP Group has the same sense of isolation and can offer support to each other.
  
  
• Improve Performance: When you look for best practices outside your business, a wonderful thing happens. You raise the bar of performance and set new standards of excellence to propel your company forward.
  
  
• Improve Odds of Success: Business success takes vision and insight. Your SWAP Group can help you turn your focus away from the day-to-day issues and look at the bigger picture that can have a major impact on your company.
  
  
• Where else are you going to turn? There's no boss to turn to for advice or direction. You're flying solo. But you don't have to. Everybody needs a good reliable sounding board, second opinions, and sometimes just emotional support.
  
  
• A trusted, long-term relationship. Your mentors have no ulterior motive—no service or product to sell you. That, combined with their experience, creates a good foundation for trust. And as the relationships develop over time, that trust can grow even stronger.

As you can see, the rewards are many, and the risk is non-existent. You have nothing to lose and everything to gain by finding a good group of mentors. Every retailer should have one.

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What happens at a SWAP Meeting?

At a SWAP meeting we go over all the comparisons to see how you do when compared to the others in the group and to yourself a year ago. At the class level we look at sales, initial markup, markdowns, gross margin stock turn rate and CGM. We will also discuss advertising. At the financial level we look at various individual expenses with the same type of analysis looking at this year compared to last year and to each other. Since expenses will be reported as a percentage of sales you can easily compare yourself to the other member retailers without having to worry about the different sales volumes each member may have.

Each member is assigned their own unique number. All data is presented and ranked identified only by numbers so even if the reports should ever get into anyone else’s hands there would be no way to identify who the data belongs to.

To get a sample merchandising report to review, email:

Sales: Since each member has different sales levels we look only at the variance when compared to last year.

Questions for the member with the highest sales increase could be: What have you done differently this year than last year to get that large increase? New vendors? New salespeople? Better salesperson training? Advertising? Etc.

Questions for the member with the largest decline in sales could be: When did you see that sales were doing poorly? At that point, what did you do to try to turn the situation around? What were the results of each of your attempts? Does anyone here have anything they would like to say to this member to help her? Perhaps you have tried something that worked very well and she could try it.

We then continue to go through the report for this classification and then for all the other classifications with the same type of questioning and sharing of information.

A sample report showing financial data it shown below.

A couple possible questions could be:

#6 – What happened to cause your profit to drop from 8.86% to 8.62%? And, what steps have you taken to turn this around?

#8 – What steps did you take to achieve the nice increase in Net Profit from last year?

Aren’t You Curious?

Retailers who have joined these types of groups are glad they did. At first you may find it difficult to open up your numbers and operation to outside scrutiny but it will be more than worth it for you and your store.

Following is a quote from a retailer who is a member of a group similar to this:

From Mike G who has a Men’s Big and Tall Store:

“We have been involved with our “Retail Community” for the last 5 years. It is a great way to learn and improve our business. We all review how each vendor did in each major classification of merchandise and the store that did the best job gets to explain what he did and why. That includes sales, markdowns, stock turn rate, gross margin and which vendors performed the best for each classification. We do go over our financial information once a year to see how everybody is doing compared to each other. We all share our advertising for the previous season in a round table discussion and we usually come away with lots of great ideas. We are usually the star performer on stock turn rate. We also visit each company and evaluate the store for lighting and presentation. It is always an eye opener.”

To sign up,email:

The Purpose Is To Help You Improve

The main thing to remember is that the purpose of the SWAP Group is for every member to do better. If that means an 8% loss instead of the 10% loss that you had last year, you are improving. That is the important thing - - to improve. The goal is for everyone in the group to improve. If everyone starts out with a loss, then next year we want everyone to show less of a loss, and the next year less of a loss, and so on, until everyone is showing a profit. On the other hand, if you are operating at a profit, being part of the group can give you the knowledge and support you need to do even better.

We Will Make Sure You Are in A Compatible Group

You will not be put into a group with someone you do not want to be with. There will be a lot of communication between myself and the prospective members before the group is set. We will try to schedule one or more conference calls if needed just to be sure. It is extremely important that the group be made up of compatible members so you can build your trust and rapport with each other.

It Will Take Some Courage

It can be very difficult to admit to others that you are not doing great and making a nice profit every year. It is easy when you are at market to reply “fine” or “OK” if someone asks how your business is doing. It is another thing to show your actual numbers to the other group members and let them see how you are really doing. While that may be difficult you need to keep in mind that the purpose of the group is to help each other do better. You do not want to wait until you are really struggling as it may be too late to turn it around. The retail business is always tough. So, if you are not doing well, you are probably not the only one. Remember, the purpose of the SWAP Group is to come together and help each other.

Confidentiality Is Always Important

You may be concerned that others may gain access to your numbers. Many retailers are concerned with the confidentiality issue. No one wants their numbers leaked out to others. There is a confidentiality clause in the agreement to cover this. It states:

4.1 Confidentiality. Participant agrees that confidentiality is of the utmost importance to the achievement of the purpose as stated in Article 2. In executing this Agreement with TRMA, Participant agrees to accurately share its own merchandising and financial data and experience, and to keep confidential from non-participants the data exchanged between Group members, both in the reports generated by TRMA and through direct communications of any kind between Group members. If more than one person from your store attends a meeting they must also keep all information confidential. Participant further agrees, in this regards to hold TRMA harmless from and indemnify TRMA completely against any breach of this promise by Participant. (Note: This of course means that you can bring a suit against any member that is known to have leaked your numbers.)

4.2 Removal From Group. If there is a breach of confidentiality by a member, that member will be immediately removed from The Group and will not be allowed to join any existing or future SWAP Groups.

Another thing that will be done to protect the confidentiality of each member’s data is that none of the reports have names on them. Each member is assigned a number and all data is shown on the reports identified only by number. That way, even though I know you will be careful not to leave these reports lying around where others can see them, if something like that accidentally happens, no one would have any way of knowing whose numbers they are.

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There is No Need To Change The Way You Do Business

What if I do not report my merchandise information and expenses in the same manner as shown on the participation agreement? Will I have to change the way I do business? It will be important to report all our numbers in a consistent manner. To that end the participation agreement details what will be reviewed. However, you do not have to change all your records. You may describe an expense differently or have your expenses in a different sequence than shown. That is OK. For example, everyone has payroll. Some may call it Salaries. Some may have just one expense account for all Payroll. Some may break it out by Selling Payroll and Other Payroll, or Owner’s Salary and Other Employee Salaries. That is alright. I will review everyone’s General Ledger Chart of Accounts so we can determine exactly what to review during the meetings.

In the same way, you all have Pants but some may have just one classification for Pants and others may have separated Pants into Casual Pants and Dress Pants. Again, I will review everyone’s classification list so we can all report the numbers the same.

What happens at a meeting?

SAMPLE

Swap Meeting Agenda

¼ merchandising, ¼ financial , ¼ open forum questions, ¼ store critique

SUNDAY (or Monday) - - 9 hours

MONDAY (or Tuesday) --7 hours

Note: last 1/4 hour of meeting will be a short business discussion to decide who will host the next meeting and set the date of that meeting (so bring your calendars).

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How Much Will It Cost To Be A Member?

SWAP Group Fees

1. One-time set-up fee. This is due when the store joins a group.

$200 for Charter members (a member is a store, not a person so if there is more than one person coming from your store it is still the same fee)

$500 for members joining after the Charter group has been set

2. Meeting fee for consultant to prepare all data tables and lead meeting. This is to be paid when data is sent in to TRMA for analysis and preparation of reports.

$750 per member for each of the two semi-annual meetings

3. Share of direct expenses. This will be billed after the meeting with payment due in 10 days.

Travel cost of consultant (airfare, hotel, parking, etc.)

Printing & postage for books (to be shared on a prorated basis instead of by store to make it equitable if a store has several people participating.)

Shared meals (to be shared on a prorated basis instead of by store to make it equitable if a store has several people participating.)

Meeting Room

All audio / visual equipment for meeting

4. Your personal expense for travel and room

TOTAL ESTIMATED ANNUAL COST

The estimated annual cost is approximately $2,500 per member. This is a bargain when compared to the $7,000 to $8,000 it would cost to have a management consultant come to your store for 2, two-day visits a year.

NEW MEMBERS: New members can join only upon a positive majority vote of the existing members. So, those who do not join at the beginning will have to request to be allowed to join and the existing members will vote on their admission.

I Want To Join – Now What?

If you want to improve your store and make more money, send an email requesting an application form, complete it and send it in, along with your merchandise classification list and General Ledger Chart of Accounts.

Completing and sending back the Application/Information form in no way obligates you to actually join a group. It is a way to let us know you are interested. That way we can keep in touch with you as the SWAP Group formation progresses.

This is a wonderful opportunity for you to have your own set of personal mentors to help you be more successful.

Do not wait another day. Complete the form and send it back so we can keep you informed of the progress of the groups.

Don't miss out on this great OPPORTUNITY.

Complete the form and send in today along with the other requested information. You will be sent a Participation Agreement to sign to formally join a group.

Again, to start the process of joining, send back the following:

1. Application form

2. Merchandise classification list

3. General Ledger Chart of Accounts

To sign up,email:

Questions?

Call toll-free: 1-877-206-1299 or email:

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