Barnes and Noble and Borders are major bookstore chains with a global footprint. When it comes to an online presence, Amazon, which reported 2008 fourth-quarter sales of $6.70 billion, leads the pack. However, local and independent bookstores, such as Robin's Bookstore, Hue Man, the Strand, Rare and Classic Books, Three Lives & Company and A Novel Adventure, continue to thrive and provide communities with hard to find titles and a rare and valued personal touch. If you are thinking about opening and running your own bookstore, there are several steps you will need to take.
Identify the type of business you will operate. Visit the Internal Revenue Service website. See the Resources section for a link. Identify whether your bookstore will be a sole proprietorship, owned solely by you, or whether your bookstore will be a partnership and owned by two or more people. Create your bookstore as a limited liability company (LLC) if the owners of the business will have limited personal liability for losses and other liabilities. Choose whether your bookstore will be a corporation, as most large bookstore chains are structured that way. Keep in mind that incorporated businesses have shareholders who can exchange money for your corporation's capital stock.
Apply for your EIN number online by completing Form SS-4 through the Internal Revenue Service website. See the Resources section below ofr a link. Keep in mind that if you prefer you can also apply for your EIN over the telephone by calling the Business and Specialty Tax Line at (800) 829-4933 or by faxing your form to your state IRS office. Refer to the link titled "Apply for an EIN" in the Resources section of this article. Click "Apply by Fax" and locate your state's fax-in number and submit your completed form.
Contact your state's Department of Revenue to apply to collect sales and use tax. Locate your state's revenue office by clicking "State Links" in the Resources section of this article. Keep in mind that many states allow you to complete forms and file your taxes directly online.
Create a business plan. Write out detailed steps including budget line item expenses for areas such as marketing, promotion and inventory. Include an in-depth description of your bookstore in the plan. Ask yourself questions, such as what type of books are you going to carry, what days and hours will your bookstore be open to the public and what other bookstores like yours are nearby? See the link titled "Small Business Administration, Write a Business Plan" to review step-by-step instructions on creating your business plan.
Identify real estate and finalize lease arrangements. Contact a local real estate agent, such as Re/Max or Century 21. Locate a building for your bookstore.
Make sure that your bookstore location is in a high traffic area so that passersby can easily stop in and look through and purchase books from you. Compare property taxes and monthly lease payments for vacant stores in the area where you want to establish your business.
Reach out to your insurance agent. Ask about liability and property insurance. Ensure you have adequate coverage for your bookstore, including fire, flood and theft coverage. Should you hire employees, speak with your insurance agent about worker's compensation, unemployment, health and disability insurance.
Create a customer account with book wholesalers and distributors including Ingram Book Group and Baker & Taylor. Know that Ingram Book Group has access to nearly 1 million different books and provides books to stores worldwide. Keep in mind that Baker & Taylor has been in existence since 1828 and provides full-service distribution for bookstores around the United States. Research other bookstore wholesalers and distributors such as Brodart.
Establish a book return agreement with the wholesalers and distributors. Set a specific number of days after which you will return books to the wholesaler or distributor if the books do not sell. Stick to this schedule and avoid having an over flow of remainder books in your store.
Sign up to receive electronic catalogs from wholesalers, distributors and publishers so you can spot books you want to include in your inventory. Create accounts with publishers including major, independent and print on demand publishers. Purchase books directly from publishers, wholesalers and distributors. Keep in mind that the typical discount bookstores receive for books purchased directly from publishers is about 55 percent to 60 percent. Set up a program that allows customers to drop off used books. Pay for the books with gift cards or in-store discounts.
Construct an accurate accounting system. Use software applications, such as Cash Register Express, Intuit Quick Books, Intuit Cash Register Plus and Pro Data Doctor to track incoming, sold and remaining inventory. Connect the software to your cash register's tracking system. Keep in mind that you can purchase cash registers, such as Casio QT-6000 that allow you to access advanced networks using an Ethernet cable. Include books by genre, magazines, newspapers and all products sold at your bookstore in the accounting system.
Review inventory every seven to 10 days to know which books are selling, whether book sales increase following author in-store appearances and the impact of current events covered in the news on book sales. Keep detailed records as you will need this information when you file your annual business taxes.
Build a website to create an online presence. Post the offline street address for your bookstore on your website. Include pictures of author book readings and signings at your website. Contract with a copy writer and create marketing brochures and direct mail campaign letters for you. Distribute marketing materials to residents who live in the city where your bookstore is located. Write and distribute press releases to your local newspapers, magazines, radio and television stations to spread the word about special events taking place at your bookstore.
Schedule author events. Use directories, such as Literary Market Place (LMP) and social networks, such as Tweeter and Linkedin, to connect with professional independent writers who often can schedule in-store book signings quickly. Create an area at your website writers can click to email you and request to appear at your bookstore. Encourage all writers you schedule to appear at your store to promote the event to colleagues, family and friends so that more people will learn about your bookstore. Make the signings interactive. For example, Hue Man Bookstore in New York City hosts regular monthly evenings, such as film screenings, awards ceremonies, book club meetings, children's hour, musical performances, spoken word, celebrity meet and greets with people such as the NBA's Magic Johnson and bestselling authors Toni Morrison and Nelson George.
Connect with the community. Set aside a section of your bookstore to allow organizations to meet and discuss relevant events impacting the community. Provide free handouts related to important current issues, such as educational initiatives in the city where your bookstore is located, potential arts program budget cuts and history facts about your city. Stamp the name, address, telephone number and website of your bookstore on the back of each handout. For example, Robin's bookstore, the oldest independent bookstore in Philadelphia, Pennsylvania, allows local artists to perform at a poetic art and variety show. Note that to continue its ongoing connection with the city of Philadelphia, Robin's also has in-store discussions between local media and business leaders, such as "The End of Journalism" which is covered by journalist Robert Moran and attorney Carl Solano.
Join organizations, such as the American Booksellers Association and the Small Business Association. See the Resources section below for a link. Attend events, such as the Book Expo America, which is held annually in May. Pass out your contact information and introduce yourself to authors and publishers whose titles you would like to carry in your store. Attend conferences and gain valuable insight on current trends and changes in the book industry.
Rhonda Campbell is an entrepreneur, radio host and author. She has more than 17 years of business, human resources and project management experience and decades of book, newspaper, magazine, radio and business writing experience. Her works have appeared in leading periodicals like "Madame Noire," "Halogen TV," "The Network Journal," "Essence," "Your Church Magazine," "The Trenton Times," "Pittsburgh Quarterly" and "New Citizens Press."