JBM22 --
There are a number of good resources for helping assemble a business
plan for a bookstore. You can pick through them, depending on where
you want to start:
Looking at purchasing issues?
Considering a marketing plan?
What are the operational considerations?
What are the financial aspects and measurements?
FINANCIAL MEASURES
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An excellent source for all kinds of retail measure, from
sales-per-square-foot or average gross margins is the BizStats site:
BizStats
http://www.bizstats.com/
You want to select your category, then enter an annual sales amount
(don't worry too much about that -- BizStats uses average industry
numbers to computer ratios, so it won't matter if you sell $200,000 or
$1 million per year). You'll see that this retail sector has product
costs of about 60 cents for each $1 worth of books sold; that
advertising costs are relatively low (1.3%).
You can also see the average size of the major retailers and their
sales-per-square foot. Even if you're unlikely to match their size,
you'll want to aim for sales-per-square foot that's competitive:
Bizstats
"Sales per foot & Sales per Store - Retail Stores" (undated)
http://www.bizstats.com/spf1.htm
There's also lots of other comparison measures on the site, including
the number of bookstores.
And don't hesitate to look at the publicly-traded booksellers' annual
reports and financial information. For a recent Google Answers
question, I was surprised how poor the inventory turns were for the
major booksellers (Barnes & Noble, Borders), who I'd expected to have
developed models and return policies that would give them more
strength with publishers:
Retail Turn Analysis (Omnivorous-GA, Aug. 20, 2003)
http://www.mooneyevents.com/retailers.xls
Looking at the major chains will also tell you how they try to gain
economies from both on-line and store-front sites; why they're
partnering with companies like Starbucks to put cafes and Wi-Fi
hotspots in stores; and dozens of other marketing issues.
MARKETING INFORMATION
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There are two types of marketing information readily available:
planning information from the Small Business Administration (SBA) and
Census Data.
The SBA manuals tend to be detailed and include checklists and
examples. Having been involved in large corporations throughout my
career, the only difference is between the issues brought up in
manuals like the SBA's "Business Plan for the Small Retailer" is that
you get to do the site selection, advertising, retail design all by
yourself instead of having a specialist handle it:
Small Business Administration
"Business Plan for the Small Retailer
http://www.sba.gov/library/pubs.html#mp-9
Here's a complete list of SBA publications. The information on
researching a market in the "Marketing Series" is highly recommended,
as it will help you segment your potential customers and identify the
most-profitable 20%:
Publications
http://www.sba.gov/library/pubs.html#mp-9
Probably one of the most-valuable analyses that you can make is to
determine who in your area is potential competition, including schools
that might be selling textbooks; stores selling magazines or CDs; even
reading clubs.
You may find the 1997 Economic Census to be value in looking at retail
bookstores in Alabama to see what their characteristics are. The
Economic Census material is extremely detailed, including sales,
margins, numbers of establishments by state, square footage, etc.
You'll find what you need in the "Retail Trade" reports. As there are
pages of data, you'll want to be looking for NAICS code 0420 -- book
retailers:
U.S. Census Bureau
"1997 Economic Census"
http://www.census.gov/epcd/www/ec97stat.htm
The 1997 data was actually published in the past 3-4 years, as it took
that long to analyze and total all of the economic data.
TRADE ASSOCIATIONS
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A good source of information on dealing with suppliers in any industry
is always the trade associations, which will collect data on important
issues like return privileges and financing. They also often offer
low-cost credit card processing services for small retailers. There
are national associations like the American Booksellers Association,
which represents the independent stores:
http://www.ambook.org/
But there are so many retail booksellers that there are regional groups as well:
Google Directory
"Retail Associations"
http://directory.google.com/Top/Business/Publishing_and_Printing/Retail/Associations/
DISTRIBUTION
----------------------
Business.com has a large list of book distributors but as you can
imagine, an industry as old as publishing will be consolidated and
have a number of specialists (rack jobbers who handle low-cost items;
textbook distributors; magazine/newspaper distributors; etc.):
Business.com
"Book Distributors & Wholesalers"
http://www.business.com/directory/media_and_entertainment/publishing/books/distributors_and_wholesalers/
That said, there are some firms that are fairly dominant, including
Ingram Book Group:
Ingram Book Group
http://www.ingrambookgroup.com/
Ingram has taken its position in distribution and moved into other
areas, including providing a wide range of computer products after its
purchase of Micro D:
Computer Reseller News
"Bronson Ingram: King of Global Distribution Empire" (undated)
http://www.crn.com/sections/special/supplement/816/816p39_hof.asp
VARIOUS MODELS
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With the advent of the Internet, e-Bay and even Amazon.com re-sale
capabilities, the cost of finding used items has dropped dramatically.
Some stores, including Half Price Books, a Seattle-based chain, make
it a major part of their retail offering. The books are typically
acquired from customers, so offerings will often match the tastes of
the community well:
Half Price Books
http://www.halfpricebooks.com/
Google search strategy:
bookstores + "trade association"
"book distributors"
There's a ton of material about book retailing available on the
Internet, much of it analyzing the impact of Amazon.com on the
standard bookstore retailing model. I'd suggest the following search
string to find additional analytical information:
Bookstores + "case history"
Best regards,
Omnivorous-GA |
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