Against this background, you might wonder if it’s worth opening up a book shop — the good news is that with some careful planning and research, you could create a successful store that spreads information, entertainment and delight.
Of course it might not be easy, but entrepreneurs with the right approach can turn a passion for literature and manuscripts into a center of knowledge that your customers will love.
We’ve supported over 1,000,000 people to form their business and provided answers, guidance and support to transform them into entrepreneurs. We’ll guide you through what you need to know to start your bookstore business and get it off the ground.
Read on for some insight into creating your own bookstore business and becoming an entrepreneur. In this guide we will cover:
Statistics on why you should start a bookstore business
Choose the right business structure for your bookstore company
How to find out if a bookstore business is right for you
Useful online tools for bookstore business owners
Ideas for the type of bookstore business that you could form
How to validate your bookstore business idea
Setting up your bookstore business (including location, equipment, employees, taxes, finances, licenses and more)
Bookstore business planning
There are some great reasons to start a new bookstore business in the U.S. Aside from giving life to your interest in great writing, it’s also a good opportunity to build a community around literature and make some money. Here are some of the facts around bookshops:
Approximate sales of books per year
More than this number are the books sold in the U.S. each year
Number of independent bookstores
This might be surprising given the size and influence of Amazon and digital media, but people are moving away from their screens to the comfort of the pages of a good story.
Although it can be exciting to form a bookstore business, there will be significant demands on you as a small business owner. Here are some of the things you can expect.
Here are some of the typical tasks you’ll be performing for your bookstore business on a daily basis.
Understanding the types of books that your customers want and ordering them
Keeping up with the newest releases
Reordering stock that you’ve sold and making arrangements with book distributors
Selling books to people and managing staff
Building a sense of community around your bookstore
Maintaining the look and feel of your store
Dealing with administration like financial management
The following skills will be very useful in your role as a bookstore small business owner.
Good interpersonal skills for dealing with employees and customers
Insight into what your customers want
Excellent recordkeeping skills to stay on top of your inventory and your finances
Attention to detail of how you present and market your bookstore business
Great networking skills to build your presence in the local community
The secret to running a successful bookstore is to create an excellent customer experience. One of the reasons independent bookshops are growing is that buying online doesn’t provide a sense of personal service or community. Bookstores that can meet those needs by understanding and providing what customers want are the most likely to succeed.
Here are some ideas for creating personal connections with customers and building a sense of community:
Specialize in a particular niche of books and provide deep insight into those areas — for example, you might focus on first editions, foreign language manuscripts or books on particular topics
Hire expert staff or become a subject matter expert yourself so you can share useful recommendations and information on the books you’re selling
Create personal relationships with regular customers and ask them what types of books they would like you to carry
Provide a comfortable ambiance and atmosphere (for example, with comfortable well-lit areas where people can browse books)
Think about adding a small cafe or coffee services to your bookstore, both to help people relax and as an additional revenue stream
Hold community events and meetups in a friendly space
Create book clubs, discussion groups and reading goals for your customers
Host special events like author readings
Get people to share information about your bookstore on social media
Partner with other businesses in your city to hold “pop up” events
You don’t need to limit yourself to just selling books over the counter. You can expand into wider markets by creating an online presence. Whether you sell through a third-party marketplace like Amazon or you have your own ecommerce site, you can create a useful additional revenue stream.
Remember, the ideas above are just a starting point. You can define and tweak exactly how you’re going to run your bookstore business through conducting your own research.
Marketing will be crucial to your success, and that means identifying the unique things your bookstore does well and promoting those into your local community.
Look at what your competitors are doing and think of a way to set your bookstore apart. Don’t try to compete with online businesses — you’re offering a different kind of service, so play to those strengths.
Clearly identify exactly who your customers are likely to be, where they hang out and how you’re going to reach them. Although you can rely on some local footfall, if you can learn who is interested in your bookselling niche, you’re more likely to be a success.
Speak with potential customers to understand what they want from your bookstore. Try, tweak and test what you’re selling to see what does well.
The thing to learn here is that it’s okay to say “no” to your first, second or third bookstore business ideas. Very few entrepreneurs get it right first time. In fact, getting it wrong is often a badge of honor! Still, you don’t want to waste too much time, energy or money on the wrong initiatives, so ask and answer these questions honestly to find the right way forward.
You will need to clearly define how you’re going to run your bookstore business, market yourself, get sales, make a profit and grow. This can only come about through creating a watertight business plan. It will help you get your thinking in order and show your commitment to your bookstore business.
You will also need to look at financial projections for your bookstore business.
What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others?
Business plans do vary slightly, but they should all cover the following areas:
An executive summary with the most important points from your business plan
Your goals and what you hope to achieve with your bookstore business
A description of your bookstore business, background information and context
A market analysis and likely demand
An overview of how your bookstore business is structured
Your business model
How you will market and sell your offerings
Financial projections, revenue and profitability
Appendices
We’ve got the perfect guide to writing your business plan.
Now that you have all the background information for your bookstore, it’s time to make it into a reality. That starts by choosing the right structure or “legal entity” for your business. In the U.S., there are five main business structures. They are:
If you don’t choose to form a legal business entity for your bookstore business, you will be a sole proprietor by default. This won’t give you the legal protections you need, so we do not recommend this.
Similar to a sole proprietorship, if you go into business with someone else without forming a legal business entity, you will be treated as a partnership. This doesn’t give you limited liability protections, so we don’t recommend it for your bookstore business.
This is the most common type of business entity. An LLC is fast, simple and inexpensive to set up and maintain. It protects your personal finances and assets and is a great way to start your bookstore business.
This is a more complex type of business that isn't generally recommended for smaller organizations, though you might explore the benefits if your bookstore business grows.
These are the largest and most complex types of businesses and are typically far more than the average entrepreneur or bookstore owner will need.
For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your bookstore business.
In most cases, our recommendation for your bookstore business would be to create an LLC. We’ve got a complete guide to everything you need to do. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.
Once you've legally created your bookstore business, you’ll need to get some other things in place.
The location of your bookstore will be vital. You’ll need somewhere that has good passing traffic with enough space so you can display a decent selection of books. You’ll also need storage space for your inventory. Talk to other local business owners to establish the best places in your city and inquire with commercial real estate agents so you can figure your lease and rental costs into your business plan.
Marketing will be a huge part of your bookstore business. Naturally, you will need an awesome website, but you'll also need to get branding, newsletters, digital ads, social media accounts and other channels in place. You should leverage your local community offerings in your marketing to make your bookstore attractive to your niche customers.
You may not need employees to begin with, especially if you’re operating on a low budget. As your bookstore expands and becomes more popular, consider taking on some part-time help to cover busy periods. You may also hire temporary employees during busy times of year like the holidays.
You will need a separate business bank account for your bookstore business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records and file business and personal taxes. Here at Incfile we can even help you file your taxes.
You will need a fair amount of fixtures, fittings, equipment and inventory to get going. You’ll need to furnish your store, including bookshelves and displays. You’ll also need a cash register and a counter for taking payment. You may need to carpet and paint the space, and you will also need a good stock of books.
Bookstore entrepreneurs make extensive use of software; see our great list of the top apps at the end of this guide.
A Clear and Comprehensive Guide to Starting Your Business the Right Way
Your bookstore business will need to be compliant with licenses, permits and regulations. You will need to explore local, state and federal licenses and permits, and we can also help out with researching your business licensing needs
Taxes are a fact of life if you’re in business, and there are various ways you will need to file and pay them. This can include self-employment tax, state income tax and federal income tax. It’s also likely that your book sales will be subject to sales and use tax.
As a rule of thumb, we recommend holding back around a third of your earnings to pay your taxes. We can also prepare and file your tax returns for you.
Most bookstore businesses should have comprehensive business insurance. There are various types.
Workers’ compensation insurance provides coverage for job-related illnesses, disabilities or injuries that affect employees. Regulations for this insurance vary from state to state. It typically covers areas like medical costs, loss of earnings, compensation and retraining.
This insurance protects your bookstore business from claims due to being sued. This may include injury to members of the public, property damage, personal liabilities, legal defense and more. It can help protect your business from financial penalties and bankruptcy. This type of insurance could be essential to your bookstore business, since you have customers on the premises and will want to be insured against possible injuries.
If you are working from home on the administration of your bookstore business or driving a vehicle for work, check whether your existing home and auto policies cover you for work use of your home or car. If not, you should either expand your policy so you’re covered or get dedicated business insurance.
There are certain forms and legalities you need to follow to keep your bookstore business in good standing.
Most states require all businesses to file a report once a year. This report has details of any major changes to who owns a business and other major impacts on a business’ legal status. We can file your Annual Report on your behalf.
You will be expected to pay estimated taxes on what you plan to earn in the current business year. Typically, you will need to pay estimated taxes in April, June, September and January (of the following year).
Your business will probably have several licenses, permits and other regulations. These typically need to be renewed every year.
You will need to work with your accountant to prepare all the taxes you need to pay.
You will need to file your taxes once a year.
If applicable, you will need to make payroll and sales tax payments on a regular basis.
The right software and apps will make it much easier to run your bookstore business. Here are our recommendations for some of the best tools out there to make business operations a breeze.
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With the right approach and customer relationships, your bookstore could be a huge success. Identify your niche, build your community, provide an excellent service and get your marketing right - that way you’ll get noticed and can share your love of books with everyone. Good luck!