Bookstores are the favorite place of more than one generation. The elders love to see and buy books. Youngsters go for their course books and fiction of their choice. The middle-aged persons visit the bookstore for buying books of their interest and also for their kids. With so much traffic in the bookstore, you can start a bookstore business and earn good profits.
Furthermore, you need not have prior experience of owning or working in a bookstore. However, you need good research and survey before starting your bookstore business.
Despite the digital revolution, printed books have their market and dedicated buyers. According to Statista, printed book sales in the USA witnessed a growth of 8.2% in the time period of 2004-2020. Furthermore, if you are from countries like the Philippines and India, running a book shop can fetch you good profit returns.
Hence bookstore business is a prospective one and you can start this business and expect a good return. If you are a book-lover, you will find great pleasure in this business.
Here are the 15 Steps to Start a Bookstore Business
You need to follow certain steps one after another to start your bookstore business and run it successfully. Let us go through the steps.
1. Location and Research
The success of your bookstore business largely depends on its location. Again, you have to research exhaustively before finalizing the location. Study the demographic profile of the area of your choice.
Find out the demand for books in the area and what kind of books have the most demand. This research will help you in building the niche of your bookstore.
Read: Ways to do Market Research with Low Budget
2. Find the Place
After deciding on the location, you have to find a suitable place for your bookstore. If you are a resident of that area you can start from your home. Otherwise, you have to find a place on rent or lease.
The ground floor is the preferred place for bookstores. Malls or shopping centers are also good places to start your bookstore business. Proximity to schools or colleges is convenient too.
3. Make a Business Plan for your Bookstore Business
Making a proper and well-organized business plan is the key to the success of your bookstore business. If needed, you can take the help of an expert.
The business plan should have the details of capital required to start the business, source of funding, the heads of expense including cost of books, rent or lease, cost of furniture and fixture, salaries of staffs, marketing, and publicity expense, etc.
Along with expenses, the business plan should also contain the details of revenue earnings and projected income for a specific period. Some of the essential topics that must be included in your bookshop business plan document are the following:
- Initial and recurring costs
- Target customers
- Pricing strategy
- How do you plan to sell books?
4. Select your Niche
Before starting your bookstore business you must decide on the type of books you are going to sell. A bookstore having textbooks for school and college students is a profitable option as textbooks have a steady demand.
You can also stock up non-text books like fiction, biography, DIY books, or research-based books for serious readers. Your niche will depend largely on the demographic research of the location.
5. Name Your Bookshop
Choosing a suitable name for your bookstore is very important as it is the identity of your business. Choose a suitable name for your bookstore. However, consider the niche of your bookstore while naming it. If it is a children’s or students’ bookstore, the name should be funny and joyful. While a bookstore for serious readers should have a serious name.
Book a domain name in your bookstore’s name because you will need it for the website.
6. Register Your Bookstore
In the next step, you have to register your bookstore business. If you are from the United States, you can opt for Proprietorship, an LLC, or Corporation according to your convenience.
7. Tax, License, and Permits
Register your business for the necessary taxes and apply for EIN (Employer Identification Number). You also need the Federal and state-level licenses and permits needed to operate your bookstore business hassle-free.
8. Buy Business Insurance
Insurance is another important factor in running your business. Go for General Liability Insurance as well as Workers’ Compensation insurance for the protection of your bookstore and the employees.
9. Open a Business Bank Account
Once you have registered the name of your bookstore, you have to open a bank account in the name of your bookstore. This is very important for the financial aspect of the bookstore business.
10 Set up Accounting System
Along with a bank account, you have to build up a skilled accounting system. You can do it yourself if you know. Otherwise, hire an experienced accountant. Furthermore, select proper accounting software that fits your best.
11. Arrange Funds
If you have savings you can start the bookstore business with your money. Otherwise, you can apply for business loans from banks or other financial institutions. You will need a good business plan report for the loan application.
Along with the bank account apply for a business credit card. This will help you in getting a credit line and provide convenience in the purchase.
12. Estimate the Costs of Starting your Bookshop
To open your bookstore business, you will need between $ 40,000-50,000. It includes the fixed costs like the inventory, furniture, taxes, insurance, license fees, rent, etc, and the variable costs like wages, marketing, publicity costs, etc.
13. Evaluate the Expenses of your Bookshop
There are different heads of expenses in your bookstore business. On one hand, there are expenses on
- Inventory or stock of the books
- Furniture including bookracks and chairs, tables
- Lights and other electrical fittings
- Computer, printer, and other machinery
- Tax, License fee, Insurance premium
On the other hand, there are expenses like
- Salaries and Wages
- Marketing and publicity
- Electricity, movement, and other expenses
14. Profit Margin of Bookstore Business
Publishers offer a commission of 40% to the booksellers. That is the main source of profit for you. However, you can sell second-hand books along with the new ones for more profit.
15. Create a Marketing Plan Increase the Customer Base and Profit
You need a good marketing strategy for increasing your customer base and profit percentage. The effective strategies include:
- Publicity of your bookstore through posters, pamphlets, flyers, and banners in the neighboring areas are important strategies for letting people know about your bookstore.
- Advertisements in newspapers, TV, Radio, and magazines are also effective.
- Social media marketing is an effective way of reaching many people. Share the link of the website of your bookstore on your social media pages. Also, create separate pages in the name of your bookstore on social media.
- Website is an essential weapon for publicity. Make your website informative and easy to navigate. Enable online selling of books through the website.
- Organize different events like book launching, book promotion, or storytelling in your bookstore to attract more people.
- Offer special discounts during festivals or the beginning of academic sessions etc.
Frequently Asked Questions
How to Start an Online Bookstore?
More and more people are seen to be interested in buying books online nowadays. Hence, starting an online book store can be profitable. Some of the basic steps to launch an online book shop are the following:
- Research on book-buying trends in the online space.
- Create a business plan.
- Build the online store.
- Promote your online book store extensively online.
How can I get funds for my bookstore business?
You can get bank loans. SBA offers a loan guarantee that will help you to get loans from banks.
What other things can I sell in my bookshop?
For more profit, you can sell office stationery, toys, gift items, T-shirts, greetings cards, coffee mugs, pen-holders, etc. If you have space, you can also arrange for a separate counter for these items.
What are the wages of the workers to run a bookstore?
The hourly payment for salespersons or clerks ranges between $12 and 14. For a full-time accountant, you have to pay between $3000 and 4000 per month.
Books give us knowledge and entertain us with a variety of subjects. Books can also be a good business idea for you. All you need are thorough research, hard work, and strategic marketing.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.