If you are a book lover, you may have dreamed of opening your own bookstore. However, running a successful bookstore requires more than just a passion for reading. To open a bookstore, you need knowledge and understanding of business operations, management, and the retail industry. The bookstore sector is a challenging industry with low profit margins. However, with willpower and commitment, your bookstore can be a success.
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Method 1 of 4: Narrowing the Focus
Step 1. Identify your uniqueness
There are many general bookstores available in the market. Focusing on a particular genre or type of book will help you succeed as a small independent bookstore. Consider your interests and the community in the neighborhood. The uniqueness of the store should be in an area that you enjoy and know well.
- For example, maybe you could open a women's bookstore, which contains both fiction and non-fiction books about women's equality.
- You can also specify a specific genre, such as a bookstore that specializes in comics or graphic novels, or a bookstore that specializes in children's books.
Step 2. Find the right environment
When narrowing your search for locations, look for areas that have other successful independent businesses and are frequented by pedestrians. The area around a campus or university is often a great location for a bookstore.
If you live in a small town, look for a location in the city center or town hall area. Court or government offices are also frequented by pedestrians so people waiting for appointments can stop by to have a look
Step 3. Draft a business plan
Your business plan will help determine how much capital is needed to start a business. Financial projections will give you a better understanding of how long it will take for a store to turn a profit.
- You will need to show this business plan to a bank or other investor in order to obtain the funds needed to run a bookstore.
- If you've never made a business plan before, don't worry! There are various references on the internet that can be used. You can use the Google search engine and enter the keyword “business planning” to find free resources on the internet that can help you.
- You can also take business operations classes, either online or at the nearest campus.
Step 4. Build an online presence/presence
Even before opening the doors of the store, you still need to create a website and social media accounts for your bookstore to make people in the neighborhood wait for your bookstore.
- For example, you could start a business page on Facebook and invite all your friends to tap the “like” button there and share it with others. Use this page for breaking news regarding store planning and opening.
- You do not need to use the services of a web developer to create a site. Use a simple program, such as Wix to build a simple site that's easy to browse. Add pages to display announcements, special events, and store policies.
Step 5. Choose your domain
You will need to find commercial space available on the internet, or hire a real estate agent to help. If you have already drafted a business plan, then you should have prepared a budget.
- It will take approximately 4-6 months before bookstores turn a profit. Make sure you can pay the rent for the property within that time.
- You can also start small by putting a few shelves in an already running business. You can also buy or rent a truck or van and operate a mobile bookstore on a temporary basis.
Method 2 of 4: Building a Business
Step 1. Choose a business structure
The business structure you choose can impact your business growth as well as your ability to raise opening funds. Evaluate options carefully. Consult a business attorney if you need help determining the best structure for a bookstore.
- Usually if you don't choose a certain business structure, you will be immediately considered the sole owner. The biggest danger of this type of structure is that business finances are not separate from personal finances and all business debt will be passed on to you.
- The Limited Liability Company (PT) form of business has some formalities but will protect you from personal liability. You don't need a partner to form a PT. While there are some legal requirements and fees that need to be complied with, they are quite minimal.
- A company will provide the best protection, but it is quite complicated to obtain. You will have regular reports to file and will need several business partners to form a board of directors.
Step 2. Register a business name
You don't need to trademark a bookstore name, which is a complicated and expensive process. However, obtaining a trademark from the government will protect the store name from being used by others.
- Depending on the business structure you choose, the government may require you to register a business name.
- Brainstorm for a good name, and check databases of other business names and brands to make sure they haven't been picked up by someone else. You can use the services of a small business consultant or lawyer to help you.
Step 3. Get the Taxpayer Identification Number (NPWP)
You must pay taxes on books and other products sold. TIN is also required to open a bank account and order books.
For example, if you live in the US, you can get an employer identification number (EIN) quickly and easily through the IRS website. You should also provide basic information about yourself and your business. In Indonesia, this number is NPPKP (Taxable Entrepreneur Confirmation Number)
Step 4. Open a business bank account
After obtaining a TIN, you can open a bank account and prepare for bookstore funding. Even if you're opening a bookstore as an individual, it's best to keep your business finances separate from your personal finances.
Step 5. Obtain all necessary permits and licenses
The permits and licenses required to open a bookstore may vary depending on your location. Simple bookstores usually only require a Business License (SIU).
- If you plan to include a cafe in a bookstore, you will need a site-related health and sanitation inspection. You may need additional permissions if you wish to host a musical stage or other event.
- Check the office of the Indonesian Chamber of Commerce and Industry (KADIN) or the International Chamber of Commerce (KDI) in your city for permits and licenses that need to be obtained.
Step 6. Get business insurance
Business insurance protects you and your business from accidents, natural disasters, and lawsuits. If you rent a shop, the landlord may have minimal requirements regarding liability insurance.
Step 7. Raise the opening funds
It takes a minimum of IDR 700,000,000 to start a bookstore and maintain its continuity during the first month of operation. Unless you have huge savings, it's best to mix loans and investments from public and private sources.
- If you don't have a background as a successful small entrepreneur, it may be difficult to get funding from traditional sources, such as banks.
- You can use credit cards and personal loans, but be careful not to start your business with a lot of debt.
- Crowdfunding on sites like Indiegogo or Kickstarter not only helps raise funds, but also builds support within the community. Someone who invests, even a small amount, in opening your store will most likely shop there.
Step 8. Join a professional association
Professional associations provide opportunities to network with other publishers and booksellers. You will also have access to resources and opportunities to attend trade conventions and events.
For example, in the US you can join the American Booksellers Association (ABA) as a permanent member even before your bookstore opens. ABA has a digital toolkit with information on how to open a bookstore
Method 3 of 4: Preparing the Shop
Step 1. Purchase furniture and appliances
If you want to sell a book, prepare a place to display it. This means that you will need a lot of bookshelves, unless you can find a space that already has shelves.
- If you're on a budget, consider hiring a carpenter or professional craftsman to build the shelves and fixtures. Potential customers will appreciate your efforts to hire local professionals, and the quality of equipment on hand will be consistent.
- You can also hire a professional designer to create the store's style and vision. Even on a tight budget, your store should be a welcoming and comfortable place for customers to visit.
Step 2. Set up a point of sale and inventory management system
In essence a bookstore is a retail business. Abandon old manual counting inventory and cash registers. A single cloud-based system that works via a tablet can be the most efficient option.
Chat with other business owners, especially booksellers, and learn about the systems they use. Ask them what they like and don't like about the system, and if they recommend it
Step 3. Hire employees
Even if you're building a super small bookstore, it's impossible for you to do it all alone. Start with part-time workers who love to read and have a passion for books and literature.
Find someone who has experience in retail and will provide good service. Knowledgeable and conscientious employees will differentiate your store from others and continue to bring in customers
Step 4. Order the book
How you build your initial inventory will depend on the uniqueness level you choose. You can contact the publisher directly, or contract with a large wholesaler.
Usually you are required to pay up front for initial inventory. It's best not to buy a lot of stock because you can't predict the sales yet
Step 5. Consider additional products
Books have low profit margins, but customers who come to independent bookstores usually don't bid. Provide the customer experience and offer other products to enhance the experience.
- For example, maybe you could include a small cafe. Food and beverages usually have high profit margins and will help the store to survive.
- Selling branded cups, t-shirts, and jackets can also help make money while promoting your store.
Method 4 of 4: Attract Local Readers
Step 1. Hold a grand opening event
A strong grand opening is a great way to get positive media coverage for your bookstore. Set up free meals and drinks, contests and giveaways to stimulate enthusiastic supporters.
- Start planning the opening 2-3 months before the D-Day so that everything goes smoothly.
- Send out coverage invitations to local newspapers and television news. You can also send out invitations to book bloggers in your neighborhood.
- If there are many famous writers in your area, invite them to a grand opening or have a book autograph event.
Step 2. Connect with local artists and craftspeople
If you have a blank wall in a bookstore, get in touch with a local artist and rent a space to show off his art. You can also invite a local band to play in the store.
Open mic shows (for comedy fans) and writer nights (for literature fans) are also great for building a supportive community for your store
Step 3. Become a sponsor for a local event
Work with other small businesses or local libraries to invite new readers and make the bookstore an active part of the neighborhood.
- Schools offer other opportunities for collaboration. For example, you could work with a local school and give a discount to a parent who buys a book at your store to complete their school holiday homework project.
- Give gift cards as incentives at charity events.
Step 4. Stay active on social media
Keep a quick response to all comments on social media pages, and use this platform to keep readers informed of the latest books and upcoming events.
- Try to keep the main site up to date. When you have an event or host a writer, take lots of photos and post them on sites and social media.
- Support regular customers to provide reviews and book recommendations for display on the store site.
Step 5. Give back to the community
Charity events and book distributions can make a good impression on the local community and help build strong relationships relatively quickly. People will be reluctant to criticize the store if you show concern for the environment and the people in it.
- For example, you could run a promotion to donate books to underprivileged children for every purchase over a certain amount.
- Provide opportunities and support employees to volunteer at charities and nonprofits. You can even attribute it to the uniqueness of the store. If you're opening a women's bookstore, organize a charity event in partnership with women's organizations.
