What makes a bookstore successful? If you think passion and an extensive collection of books are enough to guarantee a grand opening and booming sales, think again. Like an edge-of-the-seat suspense novel, you need the right ingredients to achieve success. In this blog, we are going to guide you through that how to open a bookstore.
Pay attention to every minute detail, starting with the location, acquiring the necessary licenses & permits, and stocking the right set of books to an alluring ambiance. On top of that, you need to spread the word about your business to generate curiosity and draw people to your bookstore.
The book segment’s revenue is expected to touch US$126,956m by the end of 2022 and US$134,720m by 2026. People love to read books; there is no doubt about it. However, many do not understand that consumer behavior has changed drastically in the last few years.
In 2022, people prioritize convenience and safety over reading pleasure. Know that your competition is not just with small & large bookstores. Online bookstores have emerged as a threat to independent bookstores in recent years. How can you manage customer satisfaction & profitability in the changing world?
The first section of this blog will discuss how to open a bookstore, and the next section will talk about how to run a bookstore profitably.
Sometimes, taking the first step can be the hardest. You may have your heart in the right place, but you need a proper strategy to open a bookstore. Apart from a systematic approach, it would help if you had proper registration and compliance with other legal requirements.
We will focus on simple points on how to open a bookstore in 2022.
Proper planning is essential to starting any business. The same applies to a bookstore. Understand your business requirements and the peculiarities of the bookstore industry. What aspects do you need to keep in mind while opening a bookstore? They are cost, target audience, product prices, and business name.
The cost of opening a bookstore depends on the location. Then you must think about overheads like rent, electricity, insurance premiums, and buying books. On average, you might want to set aside $8,000 to $25,000 for the first month, and this includes expenses for inventory and other overheads.
When you think about how to open a bookstore cafe, you also need to think about two other things. Who is your target market? Where will you open a bookstore? Your target market would be people who love reading books. Find out what people like these days, which genre sells well, and the people’s preferences in the bookstore’s vicinity. Understand that you need to invest in the right kind of books; otherwise, they will gather dust on the shelves.
Fix the book prices. Do not charge too much or too little. Profits are essential, but you also need to have a long-term strategy. Study your competitors and their strategies. Pay attention to your costs and aim for a 40% profit margin. Think about this when trying to figure out how to open a bookstore. You need to be clear right from the first day.
Choosing the right name for your bookstore is crucial because that is what people will identify with, plus it is what you will use in advertising/marketing campaigns. When your brand name is out there for everyone to see, you want to make a positive impression. If you need a unique name for your bookstore, you can consider using a business name generator. Check that the name is not taken by someone else and claim it before others do.
You need to find the ideal location for your bookstore. Does the neighborhood need a bookstore? If it already has a bookstore/s, look for other locations. A location without a bookstore will provide you with a thriving community to whom your business will provide some value.
Check if the neighborhood can support a bookstore. Along with passionate book lovers, you also need people who can give your bookstore the initial momentum. Look for all-purpose stores, farmer’s markets, and other small businesses in the area. It is an excellent place to set up your bookstore if you see them.
Ascertain your business’s strengths, weaknesses, opportunities, and threats before you think about how to open a bookstore. Would you make maximum profit by selling academic books, biographies, fiction, encyclopedias, or others?
Note that you cannot run a bookstore with selected genres because every reader is different. Find what works for you. Your primary focus should be on customer satisfaction and profitability with the help of bookstore POS.
An integral part of knowing how to open a bookstore also involves choosing an appropriate business structure. The most favored structures for bookstores are LLC, partnership, and sole proprietorship. For instance, LLC or limited liability company is an American private limited company that combines the characteristics of a corporation, partnership, and a sole proprietorship.
With an LLC or corporation structure, you can protect your assets increase tax benefits and business credibility. You can create an LLC bookstore or hire an LLC service provider for a nominal fee. Find the ideal business structure for your bookstore, depending on your geographical location.
Bookstores can be subject to taxes like sales tax and others. Know what taxes apply in your jurisdiction. Research the formalities for the same or consult a lawyer for the same.
After figuring out how to open a bookstore, you need to plan a strategy to manage your finances. Keep your personal & business accounts separate. You may lose your private assets in case of a legal issue. Build business credit and reputation by acquiring credit cards/finances against your business name. Moreover, you can also avail yourself of better interest rates and a line of credit.
Bookstores in the USA require licenses like a general business license, federal employer identification number, sales tax permit, resale certificate, certificate of occupancy, DBA, etc. Research the necessary permits and licenses to operate a bookstore in your city/country.
Failing to do so may result in costly fines, and your business may have to shut down. Do not take any chances. If you are unsure about the process, consult a lawyer or a legal expert.
Even if you are not an eCommerce giant like Amazon, you need to have an online presence. People search for everything online these days, and 97% of people who conduct online searches look for local businesses.
Based on online searches and reviews, people make purchasing decisions. With an online presence, you can do so much more. Of course, there is a risk because one negative review could change the entire game.
However, the positives outweigh the negatives. A robust online presence could increase your research and boost your reputation. Apart from a Google my business page, you also need to claim your profile on TripAdvisor, Yelp, and other websites.
Now that you know how to open a bookstore, let us move on to the next section i.e., – How to run a bookstore in 2022.
Is running a bookstore profitable? Too late to think about when you have already opened a bookstore. In the words of Michael Kaplan, your bookstore must have a margin of 40% to be profitable. At the same time, you also need to meet customer expectations. The trick is to strike a balance between the two.
Your bookstore business plan must focus primarily on inventory management. In a bookstore, you cannot have junk lying around, and you need to make optimal use of space. Tracking sales is also a key aspect of inventory management. What do you do to ensure the same?
Keep up with the changing times and stock only those books that people want to read. Be it marketing, promotions, or book circulation; everything will fall into place once you sort out the inventory management aspect. In this section, we will discuss points on how to run a bookstore profitably.
It is common knowledge that customers like gifts and exclusive offers. Create gift packages during holidays and festive occasions like Christmas, New Year’s Eve, and Valentine’s Day because it will get people’s attention quickly.
The trick is to push a slow-moving book with a bestseller. Combine different genres and target multiple age groups. Usually, customers will only purchase specific items, but bundled deals/packages allow you to sell extra items like toys and souvenirs alongside books.
Although bundled deals/packages are a fantastic way to boost sales, it can be tricky to record & monitor inventory. Track the inventory accurately (each item) through an inventory management system (IMS). Along with inventory tracking, an IMS also helps apply promotions to items.
In point number one, we mentioned an inventory management system. Investing in separate software for each business function is impractical and expensive. Get a customized bookstore POS system that helps manage accounting, inventory, sales/purchases, reporting, and other business functions.
In addition to handling inventory, a bookstore POS system also optimizes its structure using analytics, POS metrics, and reporting features. It is critical that you clearly understand your inventory to manage sales purchases and implement promotions, loyalty programs, etc.
Never settle for a generic POS, thinking it is enough to manage your bookstore. It may be enough in the initial stages, but you will realize that you made the wrong decision with time. Experienced individuals who know how to run a bookstore will tell you how important it is to invest in good POS software.
How do you attract customers to your bookstore? Expecting customers to walk in and purchase many products is not a promising strategy to run your bookstore. Customers need a little push. Entice customers with attractive outdoor signage, place flyers in hot locations in your city, and co-ordinate with bloggers & print media houses while conducting events.
Once customers enter your bookstore, you can encourage impulse purchases through thoughtful product placement and selection. Place cheaper products near the checkout counter and higher-priced products around hot-selling products. Convey the message with attractive signage, lighting, and color while using the words customers want to hear. Highlight seasonal products and train your staff to make complimentary suggestions.
Covid-19 has adversely affected many industries, retail, and hospitality being the worst hit. How to run a bookstore profitably under such circumstances? The key lies in learning from the successful players. Develop a seasonal strategy to increase product sales.
Programming book sales are down during summer. In North America, book sales are higher around Black Friday and Christmas. Stay on top of trends in your geographical location and sell more products. Never run out of stock for hot-selling products.
Classics and bestsellers make excellent gifts, and they should fly off your shelves between November and December. Use analytics in your bookstore POS system and integrate it with other apps if necessary. With the right strategies, sales will happen.
Apart from knowing how to run a bookstore, you should also know how to stay abreast with the current times. Small and medium-sized bookstores cannot invest millions of dollars, so they cannot compete with Barnes & Noble or Amazon. However, they can step their game up by including a separate section for eCommerce and used books.
You will find many customers wanting to buy used books because of their lower prices. Reserve a separate section at your bookstore for used books and eCommerce. While implementing this strategy, bear in mind your bookstore’s brand image.
Invite authors and organize book signing events at your bookstore premises. With this strategy, you can pull massive crowds because fans and book lovers would not want to miss the event. Additionally, book signing events are great for word-of-mouth marketing and publicity.
Support local authors by hosting open mic nights and book readings. These authors can get an excellent platform to showcase their work while providing you with a golden opportunity to involve the local community. The more people know about your bookstore, the more visitors you get, resulting in more sales and revenue.
Businesspeople who know how to run a bookstore will understand the importance of bookstore employees. Do not compromise on quality by hiring employees for lower wages/salaries. Apart from effective communication skills, your staff should have good knowledge and be passionate about books.
Gone are the days when a radiant smile and receiving proper directions to sections were enough to crack sales. If customers fail to get the information they want; they will shop online or buy from your competitors.
Include a staff-picks section to enhance the customer shopping experience. Moreover, you can also use this section to push slow-moving items. Why is hiring enthusiastic staff so important? Hiring enthusiastic people and voracious book readers will infuse new knowledge & fresh perspective that can do wonders for your bookstore.
In 2022, it is unimaginable for businesses not to have an online presence. 90% of social media users have already connected with a business/brand through their preferred platform. Furthermore, 71% of small and mid-sized businesses use social media for advertising their business, and 52% post at least once a day. This gives us an idea of how crucial social media retailing is to push your bookstore into the limelight.
What can you do to get noticed on social media?
These are just a few examples. With unique bookstore ideas (you need to brainstorm with your employees) and powerful business strategies, you can do much more. Want to build customer engagement? Hold contests and reward people for boosting engagement.
Opening and running a successful bookstore requires more than passion, books, and money. Your bookstore needs a robust business strategy that takes care of all aspects of a bookstore from start to finish. Find a checklist for opening a bookstore below.
On the other hand, running a bookstore requires you to invest in a customized bookstore POS system and create a robust sales strategy that includes online selling while hiring the right people.
Most importantly, do not underestimate the power of social media to highlight your bookstore. Now, that you know how to open a bookstore and how to run a bookstore, go out there and hit it out of the park.