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Non-chain bookshops seemed to be extinct for a while. Electronic reading devices made e-books more accessible, big-box stores went out of business or cut down their operations, and Amazon ate the lion’s share of the reading population. Then, one by one, smaller, independent bookshops went out of business.


But all of that has changed as passionate readers have gone too long without access to physical bookshops, desiring the print edition of their favourite works. Indie bookshops are sprouting up or regaining popularity around the United States. Furthermore, the “buy local” trend has given fresh life to the neighbourhood bookshop. This article highlights some of the emerging dynamics in the sector.

Start your own bookshop by following these ten steps:

Prepare your Bookstore

Create a legal entity for your bookstore.

Fill out a tax registration form for your bookstore.

Create a Business Bank Account and a Credit Card

Establish Accounting for Your Bookstore

Obtain the Required Permits and Licenses for Your Bookstore

Purchase Bookstore Insurance

Create a Bookstore Brand

Create a Website for Your Bookstore

Configure your Business Phone System

Starting a company entails more than just registering it with the state. This basic guide to opening your bookshop has been put together by us. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.

STEP 1: Make a business plan.

A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:

What are the initial and continuing expenses?

Who is your intended audience?

How much money may you charge your customers?

Fortunately, we have done a lot of the legwork for you.

What are the expenses of starting a bookstore?

Your beginning costs will vary greatly depending on your location, space footage, local labour rates, buildout costs, and a variety of other considerations.

$2,000 for the first month’s rent and utilities

$4,000 for fixtures

Inventory management system – $7,500

$5,500 for external and inside signs and decor

$600 for a logo and business cards

$500 for construction

$1,000 grand opening promotion

Operating expenditures for one month – $3,500

In your instance, this may just be general advise since your rent and early inventory expenditures may be significantly greater. However, it does provide an indication of some of the expenditures you’ll have to consider. Also, how long do you think you can go without paying yourself a salary? Finally, if you want to sell coffee, postcards, t-shirts, or other products, consider auxiliary expenditures.

In your instance, this may just be general guideline since your rent, starting inventory, and other expenditures may be significantly greater. However, it does give you an idea of some of the costs you’ll have to consider. Also, how long do you think you can go without paying yourself a salary? Take it into account as well. Consider additional charges if you want to sell coffee, postcards, t-shirts, or other products.

As with any kind of company, you must first create a viable business strategy. Then, using your per-unit profit margin, calculate how many books you’ll need to sell each day to break even. Is it a reasonable figure? Ask yourself difficult questions like that.

What are the continuing costs of running a bookstore?

Your two biggest continuing costs will be rent and inventory. Rent is straightforward to forecast, but inventory levels may fluctuate based on sales. Employee expenditures may also be significant if you’ve employed workers, so don’t make that investment until absolutely necessary.

Who is the intended audience?

Your audience will be defined by your market specialty. Children’s literature, for example, appeals to parents, while travel writing entices readers with a desire to travel. Regardless of subject, your consumers will be keen readers, or at the very least intrigued about your chosen topic. If you’ve picked your core genre correctly, it’s likely that you have a strong awareness of your target audience and their preferences.

What is the business model of a bookstore?

Publishers often give small merchants a 40% reduction on book cover costs, so that’s your maximum profit margin on new publications. If you acquire and sell secondhand books, your profit margins might be significantly larger. Perhaps you’ll purchase a good-condition book for fifty cents and sell it for $2.50. It is also feasible to purchase big collections of books for resale on eBay, Amazon, or other sites for a cheap per-unit cost.

In addition to books, you might offer other goods that are at least roughly related to the concept of your bookshop. Coffee, postcards, stationery, music, posters, mugs, or muffins—whatever fits your location and your clients’ likes while maintaining a respectable profit margin.

How much money may you charge your customers?

You won’t have the purchasing power of Amazon or the huge national chains, therefore you won’t be able to compete on pricing. You can’t charge more than the recommended retail price since book publishers put it on their books (and you wouldn’t have any clients if you did).

If you own a secondhand bookshop, you’ll have greater freedom. Consider pricing your inventory at around half the cover price of a book, with discounts for subsequent orders. Because the majority of your clients read a lot, both quality and quantity are important.

What kind of profit can a bookshop make?

If you’re selling new books, your profit margin should be about 40%.

How can you increase the profitability of your company?

Investigate supplementary services that might provide value for your customers, and think about extending your firm into the digital realm. Create an ecommerce website and promote online orders. Some successful independent bookshops anticipate that internet purchases will account for roughly 30% of their yearly sales in the future years.

STEP 2: Establish a legal entity

Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.

Creating a formal company organisation, such as an LLC or corporation, shields you from personal liability if your bookshop is sued.

STEP 3: File your taxes

Before you can begin for business, you must register for a number of state and federal taxes.

To register for taxes, you will need to get an EIN. It’s really simple and completely free!

Taxes on Small Businesses

Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).

These guides will teach you more about small company taxes:

Taxes on LLCs

LLC vs. sole proprietorship

Corporation vs. LLC

S Corp vs. LLC

How to Form a S Corporation

S Corporation vs. C Corporation

There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.

STEP 4: Establish a company bank account and credit card

Personal asset protection requires the use of distinct business banking and credit accounts.

When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.

Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.

Establish a business bank account.

Opening a business bank account is not only required when asking for business financing, but it also:

Separates your personal assets from the assets of your firm, which is required for personal asset protection.

It simplifies bookkeeping and tax reporting.

Create a net 30 account.

Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.

Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.

Apply for a business credit card.

Obtaining a business credit card benefits you in the following ways:

Put all of your company’s costs in one location to separate personal and business spending.

Build your company’s credit history, which will be important for raising funds in the future.

STEP 5: Establish business accounting

Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.

STEP 6: Obtain all required permissions and licences

Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.

Requirements for State and Local Business Licensing

Certain state permissions and licences may be required to run a bookshop. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.

Certain licencing or regulatory requirements may apply on a local level. For additional information on local licences and permissions, please visit:

Check with the clerk’s office in your town, city, or county.

Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.

Occupancy Certificate

A bookshop is often operated from a modest retail space. A Certificate of Occupancy is often required for businesses that operate from a physical site (CO). A certificate of occupancy certifies that all building rules, zoning laws, and government requirements have been satisfied.

If you intend to rent a space:

In most cases, it is the landlord’s obligation to get a CO.

Before leasing, ensure that your landlord has or can receive a valid CO for a bookshop.

A new CO is often required after a big remodelling. If your location will be refurbished before opening, incorporate wording in your leasing agreement saying that lease payments would not begin until a valid CO is given.

If you intend to buy or develop a bookstore:

It is your responsibility to secure a valid CO from a local government entity.

Examine all building rules and zoning standards for your bookstore’s location to verify compliance and the ability to receive a CO.

STEP 7: Obtain commercial insurance.

Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.

There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.

Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.

STEP 8: Establish your brand

Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.

How to Market and Promote a Bookstore

Prospective clients for any bookshop, regardless of its major concentration, like reading. They will be compelled to read about your shop and communicate with you as the owner if you connect with them on social media.

In addition, despite the near-death of bookshops, the opening of a new one is still noteworthy in many towns. If this is the case in your area, media coverage should be simple to get by. Then, to enhance the value of this great free exposure, connect it to your social network accounts.

Hire a graphic designer to create an eye-catching logo, and invest on signage. If you’ve picked a good storefront position, your signage and friendly interior will attract customers.

How to Keep Customers Returning

Engage your audience. Show them that your business is a location where they can converse about books and that you share their enthusiasm for reading. If you own a café or arrange book club meetings, this may provide extra opportunity to attract like-minded clients.

Make sure your shop has a Facebook profile, and engage with them on other social media platforms as well. Include images of your store’s inside and outside, as well as book racks. Instead of continually self-promoting, discuss books and writers on social media. Pose questions and get involved in the themes of your readers.

Consider sending out a monthly email that includes book trivia, author biographies, upcoming releases, and other relevant info. Remember, these individuals like reading.

STEP 9: Create your company’s website.

After you’ve defined your brand and designed your logo, the next step is to build a website for your company.

While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.

The following are the primary reasons why you should not put off developing your website:

Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.

Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.

STEP 10: Install your company phone system.

Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.