Planning a small business failure

Local shops need the right passing trade

I don’t always like to be right, but when a bookshop opened in our village, I really couldn’t see how it would stay in business for very long. It has lasted only about six months and has now closed. It really is very sad, and I can imagine the owner’s happiness at the start as I suspect he always wanted to run a bookshop. That sort of ambition in the face of stark reality is so often how these business misadventures start.

The shop stocked mostly local interest, remaindered and second-hand books. Such a shop would have to rely on passing trade and also would need to offer a choice not readily available elsewhere locally. Yet in the small “main drag” of the village there are three charity shops selling books (such is the state of local retail anyway), and those books will be of much the same variety as the bookshop had, including the local interest stuff, but of course much cheaper. And then there are the boot fairs and car boot sales to satisfy the second-hand book browser.

A bookshop needs to rely on regular browsing by visitors anyway, and like a website that means having visitors, because you need a fair number of those visitors to get enough purchases. Yet so much of the new and second-hand book market has gone on-line, in particular to Amazon, and many second-hand book dealers sell through the Amazon outlet; some grudgingly, but that is another story.

A shop has overheads such as business rates, and there will be a rent, because the landlord needs to have some return on his investment. The bookshop owner needed to ask those critical questions:

  • Do I have the right product?
  • Who is my market?
  • How will I get customers?
  • Can I afford the premises?

I don’t doubt that the proprietor had a dream of being successful and of being a fixture in the village. Starting a new business often has some risk and needs care. It doesn’t make sense to plunge our cash recklessly into a proposition which really has no chance because we have not done our homework.

However, like the road to Hell, the road to ruin is paved with good intentions. We need a proper business plan and to have someone with experience cast their eye over it.

Do you sometimes hate to be right?

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