Table of Content

    Bookstore business plan for starting your own business

    Are you thinking of how to open a bookstore? Even though the digital era has popularized the use of electronic and audio books, there is a considerable size of the population that still prefers to read printed books. With the right plan and strategy in place, it is possible to open a bookstore that will transform into a profitable venture with good returns. There are different approaches of starting a bookstore considering you can either open an all-inclusive bookshop or concentrate on a specific niche. The book reading culture is still alive and becoming a bookstore entrepreneur is definitely a smart idea.

    Executive Summary

    2.1 The Business

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    The bookstore will be registered as ZemBook Store in downtown Santa Monica, California. ZemBook Store will be owned and managed by Christine Jenns who is an accomplished author. The bookstore will offer a variety of exciting books cutting across various genres and categories. Christine has written several fiction and non-fiction books with some having won awards in various competitions.

    2.2 Management Team

    ZemBook is managed by Christine Jenns who has worked in the book industry for more than thirty years. Given her experience in the industry, Christine has always wanted to open her own bookstore, and her in-depth knowledge of the book business including operations makers her qualified to run the business. Given her experience, Jenns understands how to start a bookstore and keep high standards of professionalism and offer quality books. But even she needs a bookstore business plan sample.

    2.3 Customer Focus

    ZemBook will primarily serve Santa Monica book lovers who live within the city. Customer demographics will be vast and cut across a wide age gap as both children and adults will find ZemBook a favorite place to grab their favorite books.

    2.4 Business Target

    ZemBook aims to sell various types of books that will appeal to readers of different age groups. The bookstore intends to offer a wide range of fresh and exciting books that meet customer expectations.
    Bookstore Business Plan - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Christine Jenns is an expert author who has written many books in areas of psychology, marriage and other key society niches. Jenns has previously worked for major magazine and publication companies across the United States. During her thirty year career, Christine has written numerous award winning books, participated and recognized in various global events.

    3.2 Aim of Starting the Business

    Due to her immense passion for books, Christine was keen on becoming an entrepreneur and continue her passion in a highly dynamic business environment. The bookstore will be a perfect platform to continue developing her writing career as she intends to sell her own books, as well as sell feature books from other authors. Her business plan for book store is aimed at starting an enterprise that will help boost a reading culture and equip her customers with useful knowledge.

    3.3 How the Business will be started

    To ensure the bookstore achieves its targets, Christine with the help of experts has formulated a comprehensive business plan for book store that will attend all aspects of financing and forecast sales. The plan captures key aspects such as expenses, investment, assets and loans. Below is a breakdown of key financial aspects which include; capital and liabilities, total planned investment, start-up funding, total assets, capital required, start-up expenses and total liabilities.

    Bookstore Business Plan - Startup Cost

    Start-up Expenses  
    Legal $1,200
    Consultants $2,000
    Insurance $20,000
    Rent $10,000
    Research and Development $12,000
    Expensed Equipment $10,000
    Signs $2,000
    Start-up Assets $0
    Cash Required $100,000
    Start-up Inventory $40,000
    Other Current Assets $20,000
    Long-term Assets $6,000
    TOTAL ASSETS $20,000
    Total Requirements $22,000
    START-UP FUNDING $80,000
    Start-up Expenses to Fund $35,000
    Start-up Assets to Fund $25,000
    Assets $15,000
    Non-cash Assets from Start-up $10,000
    Cash Requirements from Start-up $0
    Additional Cash Raised $40,000
    Cash Balance on Starting Date $15,000
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    Capital $0
    Planned Investment $0
    Investor 1 $12,000
    Investor 2 $16,000
    Other $0
    Additional Investment Requirement $0
    Loss at Start-up (Start-up Expenses) $45,000
    TOTAL CAPITAL $50,000
    Total Funding $80,000
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    Services for Customers

    ZemBook bookstore will offer different types of books for its customers. The main products and services offered will include;

    • Vast selection of books i.e. fiction, non-fiction, children’s books, cookbooks, artbooks and foreign language titles among others.
    • Stationery items such as binders, paper notebooks, file folders, staplers and report covers among others.
    • Art Supplies such as brushes, canvas, kits, art papers and paints.
    • Electronics i.e. flash drives, headphones and calculators.
    • Gift wrapping service for customers buying books as gifts for their loved ones.


    When planning how to start a bookstore business, it is important to know products and services that shall be offered by the bookstore.

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    Marketing Analysis of a Bookstore

    To ensure the business starts and remains profitable throughout, ZemBook has carried out a comprehensive market analysis. This detailed bookstore business plan template is aimed at implementing a working strategy that will be rolled into action after the bookstore has been opened. The marketing analysis is meant to elaborate the plans ZemBook has in order to successfully operate in a highly competitive environment. Christine has been assisted by experts to draft a performance-oriented marketing plan that will support her bookstore operations.

    Even though technology has largely influenced reading patterns, there are many people who still prefer to read traditional printed books. The management of the bookstore has done extensive analysis of the market especially to know the target audience. With information in this example of a business plan for bookstore, ZemBook knows what it should do to attain high levels of success.

    5.1 Market Segmentation

    After doing market research, ZemBook Bookstore has identified the following groups of people as target audiences, and therefore potential bookstore clients.

    Bookstore Business Plan - Market Segmentation

    5.1.1 Parents / Adults

    The bookstore has a wide variety of books written for mature audiences and therefore, any adult is a potential target customer. Adults including parents find joy in reading their favorite books especially while relaxing. This category includes any adult who is an avid book reader constantly looking for exciting books to add to their collection.

    Book lovers in Santa Monica and the surrounding areas will have a bookstore located in a prime central location to serve their needs. Customers are expected to be drawn from various cultural, religious and social backgrounds who love to read. Given that they earn a steady income, their purchasing powers are high and therefore, are a key market segment for the bookstore. There is need to adequately cater for this group by offering a wide range of quality and interesting book collections.

    5.1.2 Children

    Children are a special group of customers for ZemBook because kids naturally love books i.e. story books. Despite the new technology trends that have introduced electronic books, children love printed books and get attached to them. There are numerous categories of children books and offering a wide variety is the best way to appeal to this target audience.

    Kids love to have a large collection of books and the bookstore plans to have children books starting from kids learning to rid to older children. Since they don’t have an income, children rely on their parents and guardians to buy them books. For this reason, this group has a close association with adults/parents discussed in section above.

    5.1.3 Students

    ZemBook sells different kinds of stationery which is required by both students. Since the store stocks items such as books, staples and files among others, there is a need to attract customers who are in need of these items. Even though they might not contribute as much revenue as the first two discussed customer groups, they are an important target group to consider.

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    5.1.4 Office Workers

    Office workers will be important customers for Zembook. The book shop business plans to sell stationery required frequently by office workers. Since there isn’t a bookstore in the neighborhood, Zembook bookstore is exactly what office workers need, so there is enough market without any competition.

    5.1.5 Seniors / Grandparents

    Seniors spend a lot of their time reading as most of them have retired from active career lives and are looking for a way to unwind and pass time. Because of their age, technology doesn’t really fascinate them and so, they still prefer to read traditional printed books as opposed to electronic books. They’re an important target group as those who love reading are likely to spend a good amount of money buying books.

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Adults 25% 15,000 18,000 21,000 24,000 27,000 8.00%
    Children 15% 23,000 26,000 29,000 32,000 35,000 7.00%
    Seniors 20% 10,000 13,000 16,000 19,000 22,000 10.00%
    Students 17% 12,000 15,000 18,000 21,000 24,000 12.00%
    Office Workers 23% 20,000 23,000 26,000 29,000 32,000 9.00%
    Total 100% 80,000 95,000              110,000 125,000 140,000 12.00%

    5.2 Business Target

    ZemBook targets to be the most popular bookstore in downtown Santa Monica. According to the financial forecast, the bookstore anticipates to recover the entire initial capital within the first three years after launching operations. It is also projected there will be an average of 15 -20% annual sales growth. For the business to meet its sales targets, the bookstore hopes to provide a wide variety of books as well as ensure top professionalism and exemplary customer service. How to open a bookstore business plan emphasizes the need to learn how to employ smart strategies to remain in business. ZemBook will capitalize on building sustainable long relationships with its customers.

    5.3 Product Pricing

    Product pricing is important for the survival of the bookstore. After doing an extensive market research, ZemBook has purposed to offer attractive but competitive prices for all its products in order to attract and retain customers. In this bookstore business plan sample, the business has shared how it intends to price some of its major products.


    After carefully surveying the market, Christine Jenns has turned her focus on implementing a smart and tactical sales strategy that will woo customers to her bookstore. With support from marketing professionals, the following sales strategy has been proven to work well when opening a bookstore.


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    The sales strategy intends to cover the following areas:

    6.1. Competitive Analysis

    ZemBook is expected to face stiff competition as there are other bookstores spread across different locations in the city. The bookstore is capitalizing on its strategic and busy downtown location that is directly accessible both for pedestrians and motorists. The bookstore is located close to other major shopping amenities that are frequently visited by visitors and residents thus guaranteeing better visibility of the premises. ZemBook hopes to tactfully organize its product pricing structures to woo customers but at the same time, ensure projected profits are realized according to the business plan for book store.

    6.2 Sales Strategy

    In order to know how to start a bookshop and run it successfully, ZenBook has put in place these ambitious and smart sales strategies to ensure the bookstore outshines its competitors.

    • Focus on book lovers, a key market segment that is growing on a daily basis. These are customers who’re willing to do anything to have their favorite book.
    • Understanding what the customer needs and responding to those needs in the best way possible. Do market research to see what sells and innovate solutions that support the bookstore’s growth strategy.
    • Ensure shoppers enjoy their time while at the bookstore by offering friendly and professional customer service.
    • Establish the bookstore in a central location that is visible and easily accessible for customers.
    • Vigorously market the bookstore on various media platforms i.e. local television, radio and on the digital space i.e. social media. Utilize exhibitions and events to market the bookstore.

    6.3 Sales Forecast

    ZemBook believes its well-laid-out strategies are a perfect demonstration of how to run a bookstore business and attain profits within the shortest time possible. The business plan for book store has forecasted an impressive boost and growth in annual sales. Based on the sales strategies, the bookstore hopes to meet the following sales targets on an annual basis. The following table and charts show information regarding the bookstore’s sales forecasts.

    Bookstore Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Books 300,000 400,000 500,000
    Books Subscriptions 200,000 300,000 400,000
    Arts and Crafts 250,000 350,000 450,000
    Comic Books 400,000 500,000 620,000
    TOTAL UNIT SALES 1,150,000 1,550,000 1,970,000
    Unit Prices Year 1 Year 2 Year 3
    Books $250.00 $280.00 $300.00
    Books Subscriptions $100.00 $200.00 $300.00
    Arts and Crafts $200.00 $300.00 $400.00
    Comic Books $300.00 $450.00 $650.00
    Books $200,000 $250,000 $300,000
    Books Subscriptions $150,000 $200,000 $250,000
    Arts and Crafts $80,000 $120,000 $140,000
    Comic Books $250,000 $320,000 $400,000
    Direct Unit Costs Year 1 Year 2 Year 3
    Books $1.20 $2.20 $3.20
    Books Subscriptions $1.00 $2.00 $3.00
    Arts and Crafts $0.60 $1.60 $2.00
    Comic Books $3.00 $4.00 $5.00
    Direct Cost of Sales
    Books $100,000 $120,000 $140,000
    Books Subscriptions $50,000 $80,000 $110,000
    Arts and Crafts $25,000 $35,000 $50,000
    Comic Books $40,000 $50,000 $65,000
    Subtotal Direct Cost of Sales $215,000 $285,000 $365,000
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    Personnel Plan

    ZemBook aims to be the best bookstore by offering superb products as well as exemplary customer service. In order to achieve this, the business has put together a winning team that will be tasked with running the business on a day-to-day business. If you’re unsure of how to start your own bookstore with a lean and effective staff, see how ZemBook has proposed its personnel plan.

    7.1 Personnel Plan

    ZemBook bookstore is owned, managed and controled the implementation of the business plan for book store by Christine Jenns who is an accomplished author. She will be assisted by Joe, the Assistant Manager who is conversant with book store operations and will be in-charge of administration and staff welfare. In addition, there will be two floor staff to assist customers coming to the bookstore, one store cashier, one sales and marketing executive, an admin and one cleaner. To ensure the bookstore only admits professional staff, the business will conduct intensive interviews, and offer on-job training for successful applicants one month before starting the job.

    7.2 Average Staff Salaries

    The bookstore intends to pay staff the following average salaries in the first three years of operation.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Manager $60,000 $80,000 $100,000
    Cashier $30,000 $40,000 $45,000
    Administrator $25,000 $35,000 $40,000
    1 Sales and Marketing Executive $30,000 $50,000 $70,000
    Floor Assistant $25,000 $30,000 $35,000
    Floor Assistant $25,000 $30,000 $35,000
    Cleaner $20,000 $25,000 $30,000
    Assitant Manager $50,000 $60,000 $70,000
    Total Salaries $265,000 $350,000 $425,000

    Financial Plan

    ZemBook has formulated a comprehensive financial plan that will be instrumental in helping the business achieve bookstore business plan goals. The bookstore will be financed by the owner, Christine Jenns and two investors.The funding available is enough to cater for initial business set-up so no external bank loan to business plan for bookstore will be borrowed. The following is a detailed breakdown that can also help you learn how to open your own bookstore and effectively forecast and manage its finances.

    8.1 Important Assumptions

    The bookstore’s has indicated its financial projection on the basis of these assumptions.

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 12.00% 14.00% 16.00%
    Long-term Interest Rate 4.00% 4.00% 4.00%
    Tax Rate 10.00% 12.00% 14.00%
    Other 0 0 0

    8.2 Brake-even Analysis

    The graph below explains the bookstore’s Brake-even Analysis.

    Bookstore Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 6000
    Monthly Revenue Break-even $120,000
    Average Per-Unit Revenue $300.10
    Average Per-Unit Variable Cost $0.60
    Estimated Monthly Fixed Cost $220,000

    8.3 Projected Profit and Loss

    ZemBook has shared the following anticipated Profit and Loss information that will be calculated on a monthly and annual basis.

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $800,000 $900,000 $1,000,000
    Direct Cost of Sales $60,000 $80,000 $100,000
    Other $0 $0 $0
    TOTAL COST OF SALES $60,000 $80,000 $100,000
    Gross Margin $400,000 $450,000 $500,000
    Gross Margin % 70.00% 74.00% 80.00%
    Payroll $265,000 $350,000 $425,000
    Sales and Marketing and Other Expenses $4,000 $6,000 $8,000
    Depreciation $2,000 $3,000 $4,000
    Leased Equipment $0 $0 $0
    Utilities $5,000 $7,000 $9,000
    Insurance $1,200 $1,400 $1,600
    Rent $10,000 $12,000 $14,000
    Payroll Taxes $30,000 $35,000 $42,000
    Other $0 $0 $0
    Total Operating Expenses $220,000 $250,000 $300,000
    Profit Before Interest and Taxes $50,000 $90,000 $100,000
    EBITDA $20,000 $30,000 $50,000
    Interest Expense $0 $0 $0
    Taxes Incurred $20,000 $23,000 $26,000
    Net Profit $100,000 $115,000 $130,000
    Net Profit/Sales 30.00% 40.00% 50.00%

    8.3.1 Monthly Profit

    Bookstore Business Plan - PROFIT MONTHLY

    8.3.2 Yearly Profit

    Bookstore Business Plan - PROFIT YEARLY

    8.3.3 Monthly Gross Margin

    Bookstore Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Yearly Gross Margin

    Profit and loss information has been illustrated in the table below.

    Bookstore Business Plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    The projected cash flow for ZenBook is explained in the following column diagram.

    Bookstore Business Plan - Projected Cash Flow

    The table below has key financial information such as pro forma cash flow, subtotal cash spent, subtotal cash received, subtotal cash from operations and sub-total cash spent on operations.

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $50,000 $55,000 $60,000
    Cash from Receivables $8,000 $10,000 $12,000
    SUBTOTAL CASH FROM OPERATIONS $58,000 $65,000 $72,000
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $58,000 $65,000 $72,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $20,000 $22,000 $24,000
    Bill Payments $15,000 $20,000 $25,000
    SUBTOTAL SPENT ON OPERATIONS $35,000 $42,000 $49,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,000 $45,000 $55,000
    Net Cash Flow $12,000 $15,000 $18,000
    Cash Balance $23,000 $28,000 $33,000

    8.5 Projected Balance Sheet

    The projected balance sheet captures the total amounts for the bookstore’s capital, assets, liabilities, current assets, long-term assets and current liabilities.

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $180,000 $220,000 $260,000
    Accounts Receivable $10,000 $12,000 $15,000
    Inventory $3,000 $4,500 $6,000
    Other Current Assets $3,000 $3,000 $3,000
    TOTAL CURRENT ASSETS $196,000 $239,500 $284,000
    Long-term Assets
    Long-term Assets $10,000 $12,000 $14,000
    Accumulated Depreciation $13,000 $15,000 $17,000
    TOTAL LONG-TERM ASSETS $2,000 $1,000 $500
    TOTAL ASSETS $200,000 $250,000 $300,000
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $15,000 $18,000 $21,000
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $15,000 $18,000 $21,000
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $12,000 $14,000 $17,000
    Paid-in Capital $25,000 $25,000 $25,000
    Retained Earnings $25,000 $50,000 $75,000
    Earnings $100,000 $120,000 $140,000
    TOTAL CAPITAL $200,000 $230,000 $260,000
    TOTAL LIABILITIES AND CAPITAL $180,000 $210,000 $240,000
    Net Worth $220,000 $250,000 $280,000

    8.6 Business Ratios

    This table contains business ratios, total assets, ratio analysis and net worth.

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 6.00% 30.00% 50.00% 4.00%
    Percent of Total Assets
    Accounts Receivable 6.00% 5.00% 4.00% 10.00%
    Inventory 3.00% 2.80. % 2.60% 11.00%
    Other Current Assets 2.00% 3.00% 2.95% 30.00%
    Total Current Assets 110.20% 130.10% 140.30% 54.00%
    Long-term Assets -4.00% -18.00% -25.00% 40.50%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 5.00% 4.00% 3.50% 24.50%
    Long-term Liabilities 0.00% 0.00% 0.00% 22.50%
    Total Liabilities 5.10% 1.00% 0.50% 42.10%
    NET WORTH 90.20% 80.00% 100.00% 36.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 70.00% 72.00% 74.00% 0.00%
    Selling, General & Administrative Expenses 60.00% 75.00% 62.00% 65.00%
    Advertising Expenses 3.00% 2.00% 0.50% 2.20%
    Profit Before Interest and Taxes 22.00% 25.00% 28.40% 1.50%
    Main Ratios
    Current 10 14 18 0.7
    Quick 25 27 32.3 0,5
    Total Debt to Total Assets 3.05% 2.00% 1.65% 55.00%
    Pre-tax Return on Net Worth 80.00% 90.00% 92.60% 2.20%
    Pre-tax Return on Assets 64.30% 58.00% 66.00% 7.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 16.00% 19.20% 23.00% N.A.
    Return on Equity 50.00% 54.00% 58.00% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4 5 7 N.A.
    Collection Days 92 97 110 N.A.
    Inventory Turnover 15 18 20 N.A.
    Accounts Payable Turnover 11.1 14.4 17 N.A.
    Payment Days 22 22 22 N.A.
    Total Asset Turnover 2.6 2.4 2.2 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.04 -0.02 N.A.
    Current Liab. to Liab. 0 0 0 N.A.
    Liquidity Ratios
    Net Working Capital $200,000 $220,000 $240,000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.32 N.A.
    Current Debt/Total Assets 5% 3% 2% N.A.
    Acid Test 24 28 32 N.A.
    Sales/Net Worth 2.3 2 0.7 N.A.
    Dividend Payout 0 0 0 N.A.

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