What's Your Plan? Booksellers on Resources for Successful Business Plan Creation

For prospective booksellers who may be daunted by the idea of creating a business plan, learning what resources are available to help is a good first step. Just ask Mary McHale, whose Fox Tale Books opened in New Durham, New Hampshire, in 2006; Zachary Steele, who founded Wordsmiths Books in Decatur, Georgia, in 2007; and Jessica Stockton Bagnulo, a manager at New York City's McNally Robinson Booksellers, who recently won a $15,000 prize for her plan to open a bookstore in the neighboring borough of Brooklyn some time in the future.

All three recently told BTW that the American Booksellers Association sample bookstore-specific business plan, a 20-page document that includes sections on Target Markets, Competition, Advertising and Promotion, and Personnel, was key in helping them get started.

Each also wanted to create a vision for a store that would meet the needs of their communities. Wordsmiths was geared towards "offering a full range of literary activities/author events, group/book club meeting locations, community based initiatives, and café support staff." McHale described the kind of neighborhood bookstore where you "walked in a customer, and walked out a friend." And Stockton Bagnulo's plan emphasizes author events and includes plans for a café and wine bar.

Stockton Bagnulo, whose plan won first prize in the Brooklyn Public Library's Power UP! Business Plan Competition, said, "I used a lot of what's on the ABA site: the sample business plan, the ABACUS survey -- that data on bookstore financials was very impressive to the judges, I think -- and the [BookWeb.org] forums."

She also took advantage of a lot of free and low-cost education for entrepreneurs in her local community. "I got on the mailing lists of the Brooklyn Business Library, a local business outreach center, and women's business organizations, and attended every free workshop on writing a business plan and other related topics," Stockton Bagnulo explained.

In addition to referring to ABA's sample business plan, McHale drew on her previous bookselling experience as well as the counsel of trusted friends and other booksellers, but she did acknowledge the inevitability of some educated guesswork. "It wasn't like I was buying an already established business," she said. "I had to take a leap of faith."

One aspect McHale was certain about: the kind of retail environment she wanted to foster. As well as aiming to turn customers into friends, McHale sought to make Fox Tale Books the "heart of the community." She added, "I planned to provide someplace where everyone could talk books, politics, whatever they'd like."

Steele, who'd worked in big box stores and independents prior to opening his own store, mapped out the ideas he'd been mulling over for years. "I detailed every aspect of the business and how I hoped to develop it." In addition to the ABA sample business plan, information gleaned from online sources also helped steer him through the process of opening.

Primary features of Steele's plans for the bookstore were an events space and meeting space. "These two very important aspects needed to be planned out," he said. "I wanted to include a primary area for events, including readings and live music. I had to ensure that I had a floor plan that could accommodate different size crowds. The second most important designated area was a space for people to meet to hold book clubs, etc.... And I had to have a plan to attract enough people to support these spaces."

Sketching out how the store would draw its base, Steele positioned Wordsmiths, and Decatur itself, as a literary destination, and underscored the store's proximity to the busy town center to enable it to fulfill that role. He also listed "the inclusion of the community and the prevalence of top-tier authors [as the] paramount driving forces."

To generate his financial projections, Steele used proportionate numbers based on what he'd seen during his previous managerial experience, and he also worked with an accountant to develop realistic financial forecasts. "You have to break down every area of the business that can make money," he explained. "I developed three different plans according to low end, conservative, and high-end projections. But I'd stress that it's important to find other people -- other booksellers and/or an accountant -- to help you arrive at some answers."

Like Steele, Stockton Bagnulo found that fellow booksellers made excellent sounding boards to form "reasonable financial estimates," as well to brainstorm suggestions for a profitable inventory mix.

Even after carefully outlining and consulting on a plan, a certain amount of built-in adaptability is key, said Steele, who is learning from experience. Wordsmiths' building was recently sold, and the bookstore will relocate later this month. The upshot is Wordsmiths is moving to Steele's first location of choice, the historic Decatur Town Square.

"I ended up in an unexpected situation," he said of the move, which will result in a few days of lost business. "It was important to have some flexibility built into my plan. I'll have to go to my secondary position, because the costs will be more than I projected initially."

Stockton Bagnulo has found that after winning the award for her plan, it has continued to evolve. "Even after I submitted my business plan to the contest, I enrolled in an entrepreneurship class through the Brooklyn Economic Development Corporation, which was a great way to make connections in the business community, and it's helping me work through some aspects of the plan that still need work."

Stockton Bagnulo offered some advice to any would-be business plan writers. "Take advantage of the resources offered by ABA, and those in your community -- libraries, community groups, business development organizations, etc. There are a lot of people out there hoping to support small businesses, and you can combine their knowledge with your bookselling skills to create a better business plan." --Karen Schechner