| To be brutally honest, no-one buys a bookshop purely to make money. Almost every other High Street sector is a more lucrative option, if the bottom line is all that concerns you. Yet running an independent bookstore remains a dream for many. Books can inspire a dedication like almost no other commodity. Bookshop owners have often made big sacrifices in order to enjoy day after day surrounded by paperbacks and hardbacks. That’s not to say that money can’t still be made out of the printed word. More, perhaps, than many would initially guess. To do so however, you must be able to deal with the more mundane aspects of running a business.  | | THE BOOKSHOP IS THE DREAM OF MANY | As the Booksellers Association says: “Your love and knowledge have to be combined with business acumen if your bookshop is to succeed.” This is even truer in a High Street climate which is less conducive than ever to the independent trader. The home computer has removed many of the reasons people might once have had to read, while a host of other electronic entertainment media are providing more options when it comes to what to do with leisure time. Traditional retail outlets are threatened by the rise of internet shopping, which, with the likes of Amazon, has taken off in this sector like no other. Nevertheless, book sales are continuing to increase at a steady 6% per annum and stood at £2.4 billion in 2003 – a figure that might surprise the casual reader. High Street chains make up half the market Unfortunately, High Street chains like Waterstones and Ottakar’s account for more and more of the market each year. In 1993, those two companies together with Borders and WH Smith occupied 1.3m sq ft of Britain’s retail space; that figure had grown to 5.6m sq ft by 2002. Together, they have almost a 50% share of the UK’s book market – a total sales value of £1.1 billion. The abolition of the net book agreement in 1997 was the major catalyst for the rise of the chains. Suddenly, shops could sell stock at below cover price – enabling the bigger enterprises to take advantage of economies of scale and undercut the smaller operator, often through a variety of special offers and deals. This is very bad news for anyone considering entering the trade as an independent business person, particularly because you are unlikely to be able to gain access to the supply networks of the major retailers. Even when large regional booksellers such as James Thin or Foyle’s are taken into account, independent ventures still account for a substantial chunk of the market – around a quarter of all book sales. This represents a total market of just under £284m – demonstrating that the local bookshop is still a force to be reckoned with, no matter how hard the financial realities might seem. Wholesalers typically give a discount of around 35% to bookshops – but 30%-33% of the cover price is usually swallowed up by rent, rates, utilities, staff costs, shop fitting and advertising, leaving only 2-5% of that figure as actual net profit. So to earn profits of, say, £20,000, a shop would have to sell at least £400,000 worth of stock – that’s over 40,000 paperbacks. Hard, but not impossible, given that on average a branch of Ottakar’s, the smallest of the chains in scale, turns over about £1m of stock per year. However, it’s important to bear in mind that very few independent booksellers can afford the same prime locations as the chains. Specialism can boost sales That’s why the vast majority of new entrants to this type of business tend to specialise in one particular area – art or education, for example. This allows you to gain extensive knowledge of one particular specialism and trump the multiples in the one area in which they’re vulnerable – understanding the needs of a very specific customer. As the Booksellers Association say: “Try to think of a special niche to fill, sell something different, or in today’s business jargon, come up with a unique selling proposition.” The association also advises that, like any business: “You need to make sure you have the necessary knowledge and experience, have the right financial backing, and are prepared to work hard.” It believes that there is no substitute for actual, hands-on experience: “Even a week or two can give you a sense of the day-to-day realities of the trade, such as dealing with all those unfamiliar faces and demands, working on a till, ordering stock., handling invoices – an experience otherwise impossible to achieve.” You might not be lucky enough to found a new bookshop chain, but it seems that it’s still possible to run your own business, surround yourself with books and make enough money to survive. For some people, that is all that they have ever wanted.
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