Bookstore Business Plan is an outline of your overall Bookstore business. The business plan includes a 5 year projection, marketing plan, industry analysis, organizational overview, operational overview and finally the executive summary. Remember to write your executive summary at the end as it is considered as a snapshot of the overall business plan. The creation of a Bookstore business plan requires careful consideration of various factors that might impact the business’s success. Ultimately, a Bookstore business plan serves as a roadmap to guide the company’s direction.
Table of Contents
Executive Summary
Overview: The Hockessin BookShelf was founded in 2002 and is a new and used bookshop in Hockessin, Delaware. With 826 square feet of inventory space, The BookShelf is a little marvel, much like our state. We have a wide variety of books, with fiction, mystery, romance, and children’s books being our most popular categories. We love books, and our reading habits are broad, spanning everything from genres to classics, biographies, and children’s books at the Hockessin BookShelf. Summer reading, book clubs, and fun in-store promotions have all been popular at our shop.
Mission: We give many books and continuing literacy assistance to families and their children beginning at birth. We serve as a model for communities to ensure that children become lifelong readers and learners.
Vision: Our aim is for a future where reading, learning, and access to information are valued as rights rather than privileges, allowing all children to flourish.
Industry Overview: Bookstore sales in the United States increased to $9.03 billion in 2021, up from 6.5 billion. The number for 2021 was a preliminary estimate that might be revised later. Still, it was a significant improvement over the figure for 2020, when store closures had a negative impact on sales. This industry’s businesses sell books both in physical stores and online. Barnes & Noble, Books-A-Million, and Follett (all located in the United States), as well as Fnac Darty (France), Indigo Books & Music (Canada), Kinokuniya (Japan), Thalia (Germany), and Waterstones and WHSmith (both based in the United Kingdom), are among the major retailers (both based in the UK).
Financial Overview:
Financial Highlights:
| Liquidity | 2020A | 2021A | 2022F | 2023F | 2024F |
| Current ratio | 6 | 12 | 23 | 32 | 42 |
| Quick ratio | 6 | 11 | 22 | 31 | 40 |
| DSO | 8 | 8 | 8 | 8 | 8 |
| Solvency | |||||
| Interest coverage ratio | 8.2 | 11.1 | 14.2 | ||
| Debt to asset ratio | 0.01 | 0.01 | 0.2 | 0.18 | 0.16 |
| Profitability | |||||
| Gross profit margin | 51% | 51% | 53% | 53% | 53% |
| EBITDA margin | 12% | 14% | 21% | 22% | 22% |
| Return on asset | 5% | 6% | 13% | 14% | 14% |
| Return on equity | 5% | 6% | 16% | 17% | 17% |
FUND USAGE
Industry Analysis
In this digital era, consumer books are referred to be “analog.” Although the printing press was established centuries ago, books are still widely available, affordable, and serve as a source of pleasure and knowledge for people all over the globe.
Most adults, it’s reasonable to say, don’t think much about the market: they either think about books one at a time or don’t think about them at all. Even if a print book today appears remarkably similar to one acquired decades ago, the market and all players in it have been impacted by a perfect storm of changes: Everyone in the industry, from Random House to the lone one-person publisher, is under pressure from rising printing and distribution costs, an image problem of appearing “old fashioned” in an increasingly wired world, and a public that appears increasingly scatterbrained and distracted even to consider picking up a book.
The book business in the United States has encountered several issues, ranging from the rising popularity of digital media to the difficulties faced by traditional bookshops. Despite this, books continue to play an important role in customers’ lives. The number of books sold in print has increased, and annual unit sales now exceed 650 million. Print is also the most popular book format among Americans, with over 60% of people have read a print book in the previous year.
Net revenue of the book publishing industry in the United States
from 2008 to 2020(in billion U.S. dollars)
The book publishing sector in the United States is expected to bring in $25.71 billion in net revenue in 2020. Although this is a modest decline from the previous year, income stays consistent and is an improvement over the number for 2018.
After more than a decade of losing sales, the Book Stores business has consistently battled to enter a new chapter. Industry revenue is falling even as consumer expenditures and disposable income per capita rise. The sector has been harmed by increased competition from internet shops and big-box retailers. Traditional retail locations have also been pressured as e-books have become a widely recognized medium. Industry income is predicted to drop by 6.3 percent annually to $9.3 billion in the five years leading to 2021. Industrial revenue fell by 10% in 2020 due to the temporary closure of industry operators.
Trade books, magazines, paperbacks, and religious literature are all sold by companies in this business. Domestic and, in certain situations, foreign producers and distributors are used to get these items. The operators subsequently sell these commodities to the general public at industrial shops. This business does not include retailers specializing in derivative products, electronic shopping, or mail-order houses.
Book store sales in the United States
from 1992 to 2021(in billion U.S. dollars)
According to PR Newswire, the worldwide book industry is predicted to rebound and increase at a CAGR of 2% from 2021 to reach $91.4 billion in 2023. The biggest region, Asia-Pacific, accounts for 34% of the worldwide book publishers market in 2019, followed by North America, which accounts for 34% of the global book publishers market in 2019.
Roughly 6,500 businesses (single-location enterprises and units of multi-location corporations) make up the US bookshop sector, which generates about $10 billion in yearly sales.
There has been a lot of conjecture about the collapse of the American bookshop over the last several decades, and some of it isn’t wholly unjustified. How can tiny local shops expect to thrive while large brands like Borders succumb to internet sellers, e-books, and other types of electronic entertainment? While the situation for booksellers in the United States is not ideal, it is not as terrible as it seems. Despite the print media’s catastrophic forecasts, Americans continue to read many books and spend billions of dollars on them each year. Even though a significant portion of book sales now take place online, many small and big bookshops continue to make good money. There’s a lot of opportunity for improvement, but it’s not all doom and gloom for booksellers in the United States.
The coronavirus pandemic might have devastating long-term consequences for booksellers. Sales will be lost to online bookstores, notably Amazon, due to consumer shop closures and social alienation, which the sector has been combating for decades. COVID-19 will almost certainly hasten bookstore sales decreases. In March 2020, bookshop sales decreased by more than 33% and were down more than 11% this year compared to the first quarter of 2019. Major bookstore chains, in particular, have been targeted.
Marketing Plan
A marketing plan of a Bookstore business plan outlines the company’s strategy to promote its products or services to its target audience. It includes specific tactics and channels the business will use to reach potential customers. This section defines the company’s unique value proposition, identifies the target market segments, and discusses the competitive landscape. It also includes insight into budget allocation, projected outcomes and key performance indicators to measure success. Marketing plan helps businesses demonstrate their understanding of the market dynamics, their positioning within the industry and their approach to driving customer engagement and sales.
Website: A website that has an order button to inform clients about the items offered by The Hockessin BookShelf.
Content Marketing: Create a blog about new arrival books and books that are on sale at your The Hockessin BookShelf website with material for prospective customers.
Discounts: Provide reward points or incentives to The Hockessin BookShelf customers frequently visit the store.
Social Media: promote The Hockessin BookShelf products and services using Facebook, Instagram, Linkedin, and other social media platforms.
SEO (Search Engine Optimization) helps The Hockessin BookShelf rank higher in searches on Google and other search engines.
Email Marketing: The Hockessin BookShelf will be sending commercial messages to a group of people.
Organogram:
Financial Plan
A financial plan of a Bookstore business plan provides a comprehensive projection of a company’s financial health and its anticipated monetary performance over a specified period. This section encompasses a range of financial statements and projections such as profit and loss statements, balance sheets, cash flow statements and capital expenditure budgets. It outlines the business’s funding requirements, sources of finance and return on investment predictions. The financial plan gives stakeholders particularly potential investors and lenders a clear understanding of the company’s current financial position. A financial plan helps businesses demonstrate their financial prudence, sustainability, and growth potential.
Earnings:
Break-Even Analysis:
Income Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| ANNUAL REVENUE | |||||
| Item 1 | 9,217 | 59,117 | 175,410 | 415,277 | 781,357 |
| Item 2 | 34,701 | 222,558 | 660,368 | 1,563,394 | 2,941,580 |
| Item 3 | 4,067 | 19,561 | 46,432 | 78,519 | 114,905 |
| Total annual revenue | 47,985 | 301,236 | 882,211 | 2,057,189 | 3,837,842 |
| % increase | 528% | 193% | 133% | 87% | |
| COST of REVENUE | |||||
| Item 1 | 360 | 2,259 | 6,617 | 15,429 | 28,784 |
| Item 2 | 480 | 3,012 | 8,822 | 20,572 | 38,378 |
| Item 3 | 52,000 | 65,000 | 78,000 | 91,000 | 104,000 |
| Item 4 | 720 | 3,615 | 8,822 | 16,458 | 23,027 |
| Item 5 | 140,000 | 336,000 | 560,000 | 840,000 | 1,120,000 |
| Item 6 | 60,000 | 144,000 | 240,000 | 360,000 | 480,000 |
| Item 7 | 32,000 | 61,333 | 85,533 | 112,153 | 141,435 |
| Total Cost of Revenue | 285,560 | 615,220 | 987,794 | 1,455,612 | 1,935,625 |
| as % of revenue | 595% | 204% | 112% | 71% | 50% |
| Gross Profit | -237,575 | -313,984 | -105,583 | 601,578 | 1,902,218 |
| SELLING & ADMIN EXPENSES | |||||
| Item 1 | 28,000 | 96,800 | 154,880 | 175,692 | 193,261 |
| Item 2 | 75,000 | 105,000 | 120,000 | 120,000 | 120,000 |
| Item 3 | 36,000 | 96,000 | 108,000 | 120,000 | 120,000 |
| Item 4 | 8,000 | 12,000 | 12,000 | 12,000 | 12,000 |
| Item 5 | 3,839 | 18,074 | 44,111 | 61,716 | 115,135 |
| Item 6 | 3,359 | 12,049 | 26,466 | 41,144 | 76,757 |
| Item 7 | 5,600 | 10,000 | 12,904 | 15,034 | 17,376 |
| Item 8 | 6,667 | 14,000 | 22,067 | 30,940 | 40,701 |
| Total selling & admin expenses | 166,464 | 363,924 | 500,428 | 576,525 | 695,230 |
| as % of revenue | 347% | 121% | 57% | 28% | 18% |
| Net profit | -404,039 | -677,907 | -606,011 | 25,052 | 1,206,987 |
| Accumulated net profit | -404,039 | -1,081,947 | -1,687,957 | -1,662,905 | -455,918 |
Cash Flow Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| CASH FLOW from OPERATING ACTIVITIES | |||||
| Net profit before tax | -$404,039 | -$677,907 | -$606,011 | $25,052 | $1,206,987 |
| Depreciation | $44,267 | $85,333 | $120,504 | $158,127 | $199,512 |
| Payables | |||||
| Item 1 | $4,333 | $5,417 | $6,500 | $7,583 | $8,667 |
| Item 2 | $11,667 | $28,000 | $46,667 | $70,000 | $93,333 |
| Item 3 | $6,250 | $8,750 | $10,000 | $10,000 | $10,000 |
| Item 4 | $3,000 | $8,000 | $9,000 | $10,000 | $10,000 |
| Item 5 | $667 | $1,000 | $1,000 | $1,000 | $1,000 |
| Total payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| change in payables | $25,917 | $25,250 | $22,000 | $25,417 | $24,417 |
| Receivables | |||||
| Item 1 | $320 | $1,506 | $3,676 | $5,143 | $9,595 |
| Item 2 | $360 | $1,807 | $4,411 | $8,229 | $11,514 |
| Total receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| change in receivables | -$680 | -$2,634 | -$4,773 | -$5,285 | -$7,736 |
| Net cash flow from operating activities | -$334,536 | -$569,958 | -$468,280 | $203,311 | $1,423,180 |
| CASH FLOW from INVESTING ACTIVITIES | |||||
| Item 1 | $16,000 | $13,200 | $14,520 | $15,972 | $17,569 |
| Item 2 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Item 3 | $28,000 | $22,000 | $14,520 | $10,648 | $11,713 |
| Item 4 | $96,000 | $88,000 | $72,600 | $79,860 | $87,846 |
| Item 5 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Net cash flow/ (outflow) from investing activities | -$180,000 | -$167,200 | -$150,040 | -$159,720 | -$175,692 |
| CASH FLOW from FINANCING ACTIVITIES | |||||
| Equity | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net cash flow from financing activities | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net (decrease)/ increase in cash/ cash equivalents | -$114,536 | -$297,158 | -$134,320 | $575,991 | $1,833,128 |
| Cash and cash equivalents at the beginning of the year | – | -$114,536 | -$411,693 | -$546,014 | $29,978 |
| Cash & cash equivalents at the end of the year | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
Balance Sheet:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| NON-CURRENT ASSETS | |||||
| Item 1 | $16,000 | $29,200 | $43,720 | $59,692 | $77,261 |
| Item 2 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Item 3 | $28,000 | $50,000 | $64,520 | $75,168 | $86,881 |
| Item 4 | $96,000 | $184,000 | $256,600 | $336,460 | $424,306 |
| Item 5 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Total | $180,000 | $347,200 | $497,240 | $656,960 | $832,652 |
| Accumulated depreciation | $44,267 | $129,600 | $250,104 | $408,231 | $607,743 |
| Net non-current assets | $135,733 | $217,600 | $247,136 | $248,729 | $224,909 |
| CURRENT ASSETS | |||||
| Cash | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
| Accounts receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| Total current assets | -$113,856 | -$408,380 | -$537,927 | $43,349 | $1,884,214 |
| Total Assets | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
| LIABILITIES | |||||
| Account payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| Total liabilities | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| EQUITIES | |||||
| Owner’s equity | $400,000 | $840,000 | $1,324,000 | $1,856,400 | $2,442,040 |
| Accumulated net profit | -$404,039 | -$1,081,947 | -$1,687,957 | -$1,662,905 | -$455,918 |
| Total equities | -$4,039 | -$241,947 | -$363,957 | $193,495 | $1,986,122 |
| Total liabilities & equities | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |