It’s not that everyone has chosen to read e-books. In fact, when communities poll people for what they want, bookstores rank #1 or #2 for the most desirable businesses. Today’s issue of The New York Times tells the story of how rents have escalated to the point of eliminating the possibility of creating a sustainable bookstore business. If you see a wonderful community without a bookstore, chances are the same dynamic is what prevents someone from opening.

IMG_2813When people call and tell us they are so excited to have found the “perfect” location, we caution them to do the math to make sure that the rents are affordable for their bookstore concept. Most profitable bookstores have occupancy expenses in the range of 7 to 8 percent of projected sales. Occupancy is much more than rent and rent-related expenses, it includes utilities and maintenance too.

While rents dipped during the economic recession that began in 2008, prime spaces are always going to be in demand. With interest rates still low, it may be a good time to consider purchasing a building if you can’t find a landlord who is willing to offer reasonable rents.

Some people may take the leap that a lack of bookstores means a lack of interest in printed books, but this is far from the truth as 80 percent of the book business is still about physical books. If your dream is to open a bookstore, do your homework and make sure you don’t sign the dotted line without understanding how the rent will affect the store’s ability to reach break-even and beyond. Sometimes, this process can take months, but you’ll find the right answer with a bit of patience and a commitment to making sure you’re positioned to be successful in the space.