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Have a business question for any business-savvy GLPers out there...

 
Kristina
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User ID: 6623797
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07/08/2012 06:30 PM

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Have a business question for any business-savvy GLPers out there...
My best friend and I have a goal of opening a used bookstore in our small town. We know that we need a business plan and all of that. We are just trying to figure out about how much capital we will need to start this. Anybody got any good ideas on this? Thanks!
DOOM better not interrupt my Walking Dead!!
Anonymous Coward
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07/08/2012 06:39 PM
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Re: Have a business question for any business-savvy GLPers out there...
There's a program called pro plan it helps you write a business plan.
The cost will vary depending on how much rent, do you have books already? are you going to sell coffee?

A business plan will lay it all out for you.
milehighmike

User ID: 339344
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07/08/2012 06:41 PM

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Re: Have a business question for any business-savvy GLPers out there...
NOT enough info to even offer a suggestion of your possible capital requirements.

How big a space will you need?

What is your monthly rent going to be?

Term (length) of your lease?

Wages? Employees?

Purchase all of your inventory, or accept consignment, or both?

Have you done any market research to determine if your local market can support your venture?

Is there existing "competition" in your local market?

If so, are they "well established"?

Are they prospering or struggling currently?

"Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, 'What's in it for me?'" — Brian Tracy: Personal and business training author, speaker, and consultant

"We are all, right now, living the life we choose." -- Peter McWilliams, Author

"The bad news is time flies. The good news is you're the pilot." -- Michael Altshuler
TruthAddict
User ID: 18260726
Malta
07/08/2012 06:41 PM
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Re: Have a business question for any business-savvy GLPers out there...
Aaaaha!,I buy used books myself!!

They're pretty cheap to buy aren't they?!...I get really good copies for just $1.20!!!

Shouldn't cost much to open/run the shop,you don't need anything except good bookshelves,cheerfull wall posters and someone to keep everything in order/sell the books—depending on size of operation,that should be no more than one-two people.

You'll need decent lighting in there though;I HIGHLY recommend installing LED lights—very cheap to power.

All the best.
Anonymous Coward
User ID: 6365630
United States
07/08/2012 06:44 PM
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Re: Have a business question for any business-savvy GLPers out there...
Bookstores are a guarantee fail.

Sorry but do some more research if you don't believe me.

E-readers have put a big hurt on bookstores.
kingbirdfivezero

User ID: 19347796
United States
07/08/2012 06:51 PM
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Re: Have a business question for any business-savvy GLPers out there...
Try to find out if there is a market for what you are trying to sell. Although most books can be had in electronic form -- a used book business could work as a niche business. Other things to consider are a location for your business, whether or not you want an Internet presence and the methodology used for marketing your business.

After doing your research on your business, then develop a strong business plan. This is particularly if you are considering going to a bank to help with startup costs.

Also consider forming an LLC for your business, cause it can be helpful in terms of taxes, liabities, etc.

A good book to read concerning small business startup is Start Run & Grow.

Hope this helps.
Kristina (OP)

User ID: 6623797
United States
07/08/2012 06:53 PM

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Re: Have a business question for any business-savvy GLPers out there...
NOT enough info to even offer a suggestion of your possible capital requirements.

How big a space will you need? Not sure yet

What is your monthly rent going to be? Not sure

Term (length) of your lease? Not sure

Wages? Employees? My friend and I would have modest wages for ourselves to begin with and hire a few part-time employees

Purchase all of your inventory, or accept consignment, or both? Both

Have you done any market research to determine if your local market can support your venture? Yes, it can

Is there existing "competition" in your local market? Yes, there is a Books-a-Million, another used bookstore in the city and one in the county

If so, are they "well established"? The one in the county used to be in the city but since they moved they're not doing well and the other used bookstore in the city is over-priced

Are they prospering or struggling currently? See above answer

 Quoting: milehighmike

DOOM better not interrupt my Walking Dead!!
Kristina (OP)

User ID: 6623797
United States
07/08/2012 06:55 PM

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Re: Have a business question for any business-savvy GLPers out there...
We have done some research on this and are probably going to go with an LLC. And I realize that e-readers are the "thing" now, but there will always be people like ourselves that like to have a paper copy of a book. I'm just trying to find a ball-park figure like $10,000, $20,000? But I guess we need to do our business plan to figure that out.
DOOM better not interrupt my Walking Dead!!
Kristina (OP)

User ID: 6623797
United States
07/08/2012 06:57 PM

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Re: Have a business question for any business-savvy GLPers out there...
There's a program called pro plan it helps you write a business plan.
The cost will vary depending on how much rent, do you have books already? are you going to sell coffee?

A business plan will lay it all out for you.
 Quoting: seasidedaisy


We do have some books already, but will need to acquire many more. Don't know about the rent yet, and at first we're not selling coffee.
DOOM better not interrupt my Walking Dead!!
milehighmike

User ID: 339344
United States
07/08/2012 07:22 PM

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Re: Have a business question for any business-savvy GLPers out there...
Plan on having access to enough capital to get you through the first 9-12 months (determined by your business plan).

By saying that you're planning on paying yourself "reasonable" wages, understand that you will be in a "start-up" environment for quite a while and that most, if not ALL, businesses have good months & bad months, even well-established ones. As part of the process, you MUST define "reasonable" and understand investors typically will be more likely to invest in assets (capital equipment & inventory) than they will be to fund your lifestyle 9wages).

If you're going to try & raise money to fund this venture ("family & friends" or outside money), a business plan is a must have.

Be extremely conservative in your business plan cash flow forecasts and be willing & able to make the necessary adjustments on the fly.

Understand also that in addition to wages for you & your employees you'll have additional costs (unemployment insurance, payroll taxes, etc., as well as possible state & local related fees/licenses, etc.), hire a good accountant & lawyer right off the bat!

"Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, 'What's in it for me?'" — Brian Tracy: Personal and business training author, speaker, and consultant

"We are all, right now, living the life we choose." -- Peter McWilliams, Author

"The bad news is time flies. The good news is you're the pilot." -- Michael Altshuler
Anonymous Coward
User ID: 6365630
United States
07/08/2012 07:23 PM
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Re: Have a business question for any business-savvy GLPers out there...
OP you will have a limited market if you plan to open a brick and mortar store in you area. Your customers would be limited to those that live within the proximity. I would suggest selling your books on Ebay. You would have a much broader market and if the business does not work out for you your losses will be minimal.

A brick and mortar store would involve signing a long time lease. If your business fails you will be liable for the remaining time on the lease.

Good luck!
Kayak Pulling Kayak
Redneck Yacht Club

User ID: 1544142
United States
07/08/2012 07:28 PM

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Re: Have a business question for any business-savvy GLPers out there...
Sorry to be a downer but I think this is a terrible idea

How many books are you expecting to sell everyday?

I doubt this would generate enough income to pay the electric bill.

Please reconsider

1doh1
Doom on!
January Wolves

User ID: 18833039
United States
07/08/2012 07:36 PM

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Re: Have a business question for any business-savvy GLPers out there...
Store fronts are expensive so if there's any way to start out selling at street fairs and internet may be a better way to go at first.

If you do go store front then your start-up costs could be (based on my area's going rates - could be more or less in yours):

-first month rent $2000 (small store)
-deposit $2000
-utility deposits $ 200 (businesses usually charged deposit)
-city/county license $100

Add to that your equipment & leasehold:
-cash register $500
-shelving $1000 if you make yourself
-computer $1000 for accounting & if you offer new book
ordering for customers
-sales counter $500 if not one there already
-business insurance $1000 (yr. premium)
-grand opening advertising & phone book adv. ($1000?)
Add cost of your inventory (2000 maybe?)

I'm guessing 10K or more start-up. Plus you should count on not having a draw (salaries) for a minimum of a year, and maybe two years, as business builds. You may get lucky depending on demand for a used book store in your area but don't count on it. I would guess your monthly operating expenses will be a minimum of $3000 to $3500 per month depending on your area. And that does not count inventory purchases. At first you may have to cover all or part of the monthly expenses so start with a reserve.

And usually leases are for 5 years. If you stop your lease you are still liable for it for that term until owner is able to lease it out again.

I'm in a tourist trap town so the leases are high for a rural area.

And remember location, location, location.

I would also guess book stores are struggling because of internet so would suggest not putting your eggs in one basket and consider carrying something else besides books - gifts, handmade items, antiques, etc?

My husband & I had 5 video rental stores, 3 restaurants & a subshop/minimart. It's a lot of work. Don't mean to be negative but just think you should think it out carefully. Self-employment definitely has it's rewards but if I did it again it would be an internet business or a service business with no store front.

Good luck to you.
Anonymous Coward
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07/08/2012 07:41 PM
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Re: Have a business question for any business-savvy GLPers out there...
Awesome that you want to work for yourself but I'd really try and avoid a partnership.

In a partnership you have to remember you won't be able to make major decisions without the approval of your partner. You can only hope they act the same and get your approval for what they want to do. It is going to make for some uncomfortable situations when you don't agree. They may even go rogue on you and decide they know better, and start doing things 'their way'!

I know when you're in this stage you don't want to hear any negative critiques that will put a damper on your excitement but really think it through... Believe it or not, it is a lot easier being a sole proprietor than it is working in a partnership-Instead, maybe hire them to work for you.

Just my opinion based on my own experience and that of others.
Good luck though!
Anonymous Coward
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07/08/2012 08:00 PM
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Re: Have a business question for any business-savvy GLPers out there...
Kristina (OP)

User ID: 6623797
United States
07/09/2012 04:16 PM

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Re: Have a business question for any business-savvy GLPers out there...
Well, I've done some research and my friend and I have talked about it and we have decided to try and sell used books online before we open a brick and mortar store.
DOOM better not interrupt my Walking Dead!!
Anonymous Coward
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United States
07/15/2012 12:53 PM
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Re: Have a business question for any business-savvy GLPers out there...
My best friend and I have a goal of opening a used bookstore in our small town. We know that we need a business plan and all of that. We are just trying to figure out about how much capital we will need to start this. Anybody got any good ideas on this? Thanks!
 Quoting: Kristina


I found out personally it is very difficult to get a business loan, and I think it's worst now than before. I raised funds by loaning $$$ from family members. The best idea is to start small with little overhead in order to make sure it works, that you want to do it, etc. I would suggest selling books at first on maybe ebay or cl. The problem too is that it seems like there really isn't a huge demand for books nowadays because everything is digital, hence why a lot of large bookstores went out of business recently. I think barnes and noble was having problems for awhile. You have to get into a business that makes sense or else you won't be able to keep up with the times. A great/easy non-risky start up business is flipping used items. Sometimes you could have a buyer before you have even bought the item. That's the beauty of the internet. I do this all the time with my business but in a service fashion.
Anonymous Coward
User ID: 1560850
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07/15/2012 01:23 PM
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Re: Have a business question for any business-savvy GLPers out there...
My best friend and I have a goal of opening a used bookstore in our small town. We know that we need a business plan and all of that. We are just trying to figure out about how much capital we will need to start this. Anybody got any good ideas on this? Thanks!
 Quoting: Kristina


Before you go out and rent space that you can't afford, consider selling at eBay first.

Later on [ when the money is there] you might consider renting a small place someone close to a campus or a big apartment complex.

I sell online, that's all I do. I could never afford even a tiny "hole in the wall" place to rent.

Do your homework first, and then proceed with your plans.
Anonymous Coward
User ID: 1560850
United States
07/15/2012 01:27 PM
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Re: Have a business question for any business-savvy GLPers out there...
My best friend and I have a goal of opening a used bookstore in our small town. We know that we need a business plan and all of that. We are just trying to figure out about how much capital we will need to start this. Anybody got any good ideas on this? Thanks!
 Quoting: Kristina


Before you go out and rent space that you can't afford, consider selling at eBay first.

Later on [ when the money is there] you might consider renting a small place someone close to a campus or a big apartment complex.

I sell online, that's all I do. I could never afford even a tiny "hole in the wall" place to rent.

Do your homework first, and then proceed with your plans.
 Quoting: Anonymous Coward 1560850


Excuse me, I meant to say a small place somewhere close to a campus or big apartment complex.
rockhuff

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07/15/2012 01:30 PM
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Re: Have a business question for any business-savvy GLPers out there...
Bookstore? That is a diminishing industry. I wouldn't recommend sinking money into that kind of start up. Now, if you want to add a coffee house, or some other type of diversification that would work better. You'll really need to have more than one revenue stream if you are going to sell books. Just my opinion.
page8844
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07/15/2012 01:36 PM
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Re: Have a business question for any business-savvy GLPers out there...
Also you need to really know how your friend is with money. By that I mean when I went full time into one business and sold my other business to our really good friends, because of his bad spending habits he got that business in trouble in 6 months. It took that long to straighten everything out and on top of that they still owe us several thousand which I know we will never see. Needless to say it has really hurt our relationship. My wife and I really like this couple, but because of him, it has hurt our relationship with them. Just saying.
Anonymous Coward
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Australia
07/15/2012 02:46 PM
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Re: Have a business question for any business-savvy GLPers out there...
Bookstore? That is a diminishing industry. I wouldn't recommend sinking money into that kind of start up. Now, if you want to add a coffee house, or some other type of diversification that would work better. You'll really need to have more than one revenue stream if you are going to sell books. Just my opinion.
 Quoting: rockhuff


Very cool idea.
OP if you're fired up go for it!
Just be ready for the grind.
People on salaries always assume a business is easy.
It's the toughest thing you can do in life ... bar none.
The only reason business people don't mention that is that unless you've started a business you wouldn't understand - and if you have, there's no need to talk about it.

I'd recommend neither of you give up your jobs for this.
That is the number one business mistake - start up a business to give you a job you think you'll enjoy (as opposed to the annoying job you have now).

Work in a salaried position to cover your living expenses - then work to build the business.

Think long term. You're aiming to be successful in 5 years time.

The coffee house / second hand bookstore is an awesome idea! A coffee house with charm - so rare these days.
Anonymous Coward
User ID: 5546541
United Kingdom
07/15/2012 03:04 PM
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Re: Have a business question for any business-savvy GLPers out there...
OP, people have made many good points already, but I have a few more.

I currently live in England, but I have also spent time living in the US, and something is very apparent when it comes to used book stores and business such as art galleries, specialist niche shops etc. This is that for them to prosper you need to be located in an area full of such businesses. It may sound stupid to start with but its true. Here in England there are places like Hay-on-Wye and Canterbury (where I have lived) where there are many book stores and other niche shops and ventures. Because there are concentrations of such places you get a lot of people who make day trips to them - they will spend all day exploring the old book shops. They also hold book festivals and other tourist attracting events.

Think about it. Travel is expensive and takes effort. If you are in a town with lots of book shops then people are likely to think the cost and effort is worth it as they can make a proper day trip of it. That means they will also come with spending money. Also there is a good chance of local events and marketing efforts which you can benefit from.

However, if you open a used book store in an area where there are few or no other 'attractions' for book-minded people, then it is not very likely that many people will make the effort to come and visit just your shop. Instead you will probably just become a hang-out for local students or book worms - which is nice, but it won't result in much spending.

As for eBay, forget it unless you have very high value, super-rare books. It is impossible to make selling low-value books pay on eBay. Books are heavy and cost a lot to ship, and writing good listings takes time. When you add in the fees and time taken it won't do you any good at all.

If you ask me you are setting yourself up for a huge loss unless you are in the right place - but I doubt you are because the rents in 'the right place' would be prohibitive anyway. If you love books and want to sell them I would say start off by selling at book fairs or local markets - the overheads would be much lower, you can attract customers using the power of cross-attraction with other sellers, and you won't be risking as much.

If you want to see the formula for successful book shops Google 'Hay-on-Wye'.
Anonymous Coward
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07/15/2012 05:11 PM
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Re: Have a business question for any business-savvy GLPers out there...
OP, people have made many good points already, but I have a few more.

I currently live in England, but I have also spent time living in the US, and something is very apparent when it comes to used book stores and business such as art galleries, specialist niche shops etc. This is that for them to prosper you need to be located in an area full of such businesses. It may sound stupid to start with but its true. Here in England there are places like Hay-on-Wye and Canterbury (where I have lived) where there are many book stores and other niche shops and ventures. Because there are concentrations of such places you get a lot of people who make day trips to them - they will spend all day exploring the old book shops. They also hold book festivals and other tourist attracting events.

Think about it. Travel is expensive and takes effort. If you are in a town with lots of book shops then people are likely to think the cost and effort is worth it as they can make a proper day trip of it. That means they will also come with spending money. Also there is a good chance of local events and marketing efforts which you can benefit from.

However, if you open a used book store in an area where there are few or no other 'attractions' for book-minded people, then it is not very likely that many people will make the effort to come and visit just your shop. Instead you will probably just become a hang-out for local students or book worms - which is nice, but it won't result in much spending.

As for eBay, forget it unless you have very high value, super-rare books. It is impossible to make selling low-value books pay on eBay. Books are heavy and cost a lot to ship, and writing good listings takes time. When you add in the fees and time taken it won't do you any good at all.

If you ask me you are setting yourself up for a huge loss unless you are in the right place - but I doubt you are because the rents in 'the right place' would be prohibitive anyway. If you love books and want to sell them I would say start off by selling at book fairs or local markets - the overheads would be much lower, you can attract customers using the power of cross-attraction with other sellers, and you won't be risking as much.

If you want to see the formula for successful book shops Google 'Hay-on-Wye'.
 Quoting: Anonymous Coward 5546541


Good points made. I only suggested ebay myself because I thought it might help OP to understand the business aspect of it. If you can do it on ebay then the cross-over into a physical store might be easier. I don't know the book market on ebay though. I know amazon is all about the books, but I really don't see a lot of money in paper bound books unless like this AC said, you are in an area where books are in. There are knitch communities for all sorts of merchandise and service. The key is finding the RIGHT Knitch.
Anonymous Coward
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07/15/2012 05:15 PM
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Re: Have a business question for any business-savvy GLPers out there...
My best friend and I have a goal of opening a used bookstore in our small town. We know that we need a business plan and all of that. We are just trying to figure out about how much capital we will need to start this. Anybody got any good ideas on this? Thanks!
 Quoting: Kristina


used bookstores are not doing well as the majority of people get info off the internet for free these days.

why buy a book when you can read it for free online.
Anonymous Coward
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07/15/2012 05:17 PM
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Re: Have a business question for any business-savvy GLPers out there...
you are better off opening a survival gear & sporting goods store as people are buying survival supplies by the truckload.
Anonymous Coward
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07/15/2012 05:31 PM
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Re: Have a business question for any business-savvy GLPers out there...
I would suggest seeing what is available in your community and think of a niche that isn't being served. This is one of the pitfalls of selling online. There is a lot of competition, as the available niche markets are few and far between. Online, there is always someone else that has been doing whatever you're wanting to do, and they've been doing it for longer and hopefully better to have survived that long.

Brick and mortar would be the better way to go, if you look at it the right way. Are there other bookstores around? What other amenities do they have? Regardless of whether you earn the bulk of your revenue selling books, you should have a shelf of paperbacks or other slow-moving titles that people can swap out as they see fit. I saw a picture of a place that did this circulate around another website, and people were applauding the community and "nice" factor of the place in question.

Add to that "location, location, location." There are several people within the city of the small town I live in who walk to work, walk to shop, and have voted with their wallets to revitalize our downtown area. Ten years ago, half the storefronts were empty. You want to put yourself in the best position to capitalize on local traffic, and foot traffic is one of the best supporters of local mom and pops.

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