How to Start a Bookshop Business in Kenya
Budget: Sh200,000
When the Narc government took over in Kenya in 2003, free primary education in public primary schools was launched all over the country. This increased the number of pupils attending schools countrywide. As a result of this, and in addition to the increasing number of private schools, adult readers, secondary and college students, the demand for books dramatically increased in the country. Though electronic books, audiobooks and digital magazines have come into use, many people still enjoy buying and reading traditional, printed books.
It is estimated that the government pays fees for more than 10 million pupils in primary schools and about 2.1 million students in secondary schools. A total of Sh670 is budgeted for each primary school pupil to cater for textbooks, instruction materials and facilitation of internal examinations.
The demand for exercise books, textbooks and other stationery materials will, therefore, keep rising. This tells you that bookshops will remain viable businesses for many years to come. An entrepreneur can therefore greatly benefit by investing in a bookshop business. You can identify a niche market or stock a mixture of school books and other types.
Location
Book business has serious competition. Your location should, therefore, be in a place that is not already saturated with bookshops. Choose a place that has high human foot traffic. Make your bookshop business highly visible and accessible. Such places are mostly found in established busy shopping malls, busy residential shopping centers and areas with high economic activities.
In a city like Nairobi, busy areas like River road, Tom Mboya Street, Accra Road, Latema Road, Commercial, and Tea Room are some of the strategic areas to locate a bookshop business in Kenya. In residential areas, it is better to operate from busy shopping malls since these areas are frequented by large numbers of people all the time.
Other towns in Kenya also have busy sections that are suitable for a bookshop business in Kenya.
The size of your operating space will depend on your expected volume of business. It is more expensive to rent a big space, therefore, clearly map out your demand and expected turnover before deciding on the size of room/premises to rent for your bookshop business. It will also depend on whether you may want to stock other stationery items such as office supplies.
Requirements
We have already talked about the space to operate your bookshop business. Other requirements will be the stock of books and shelves to stock them. Bookshelves should cost you roughly Sh10,000. You will need a well-designed stocking system fully labeled to enable you easily find the books. You will also need an assistant who understands the books very well. You may need to make a catalog of your stocks, divided into different categories, and complete with retail prices. This will help you and/or your assistant to easily locate any book that you need to sell.
Other requirements will be a single business permit from the county to legally operate your business.
Supplies
Before you buy from publishers, you will need to be a member of Kenya Booksellers and Stationers Association, therefore it is advisable to join this association. To join this association, visit their offices at Shankardass House on Moi Avenue with copies of your business license, ID, and PIN. The annual fee is Sh12,500 renewable at Sh5,000 annually. Their year runs from October to October. Note this very carefully.
Primary and secondary school textbooks may form a big portion of your sales. It is therefore advisable to stock these books as a priority. With the numerous changes in our education syllabuses, as a bookshop owner, it will be in your interest to keep in close touch with the happenings in the Ministry of Education and the policies.
As a starting place, we recommend that you download the Orange Book for both primary and secondary schools. Download for free the latest primary and secondary Orange Books here.These documents have an elaborate list of approved books and other instructional material for both primary and secondary complete with class, author, recommended price and publisher. Publishers such as Longhorn, Kenya Literature Bureau, Jomo Kenyatta Foundation, Oxford University Press, Moran and East African Publishers are some of those recommended by the government.
You should identify the fast moving books in the area where your bookshop is located. These should be the books to give priority as you stock. Apart from text books, other stationery items such as exercise books, pens, note books, geometrical sets and dictionaries also move fast.
Buying stock of books in bulk from these suppliers attracts good discounts. To minimize your costs and increase your profit margins, consider buying school textbooks books in bulk from the publishers. You should also buy exercise books and other supplies in bulk directly from the printers and other major stationery suppliers. If you are well established, publishers will be fighting over each other to deliver books to you, mostly on credit, which is payable once the books are sold.
The Orange Book will also give you a comprehensive list of all the recommended publishers and their addresses, telephone contacts and email addresses. It is a complete “Bible” for bookshop owners.
Competition
As already mentioned, bookshop business has stiff competition. Apart from locating in a busy and accessible point, your bookshop business setup should also differentiate itself from competitors. Aggressive marketing will be crucial for survival. You will be competing with major established players such as Book Point on Moi Avenue, Text Book Center on Kijabe Street, Sarit Center and other major malls, Svanis on Latema and many others in supermarkets and all over town.
You may need to reach out to clients instead of waiting for them to come to your bookshop. They may just go to your competitors since most books are standard; there is no recommended text book that can be said to be more superior. You may also stock a section for second hand books, both textbooks and novels. These have a higher margin than new books.
Try to lobby head teachers and school principals in the area and also use creative and innovative promotional efforts to draw attention to your bookshop. Branding and careful pricing will also help you in keeping ahead of the competition in this business. Stocking most recommended text books will also create loyalty among your clients and they will keep coming to you knowing that they will get the books or items they require. It will be your responsibility to attract and retain as many clients as possible.
Remember you will also be competing with many street vendors who sell text books on the pavements in major towns. These vendors may undercut you since some of them have low overheads, e.g they do not pay rent, electricity etc.
Complete Budget
Below is an estimated budget of what your cost structure may look like as you start. These are only estimates and are based on a medium bookshop so use them as a guide only. Stocking the bookshop will take the majority of the money. Exact amounts will depend on the size of your bookshop, quantity and variety of your stocks, location and projected demand.
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Pros
• No equipment to start.
• Stocks are clearly defined.
• High demand for book exists.
• Does not require a very big space to start.
Cons
• May require high capital to stock depending on size.
• Frequent changes in syllabuses may affect demand.
A bookshop business can be quite profitable especially on school opening season of January and February. Some bookshops claim that they make up almost 50% more during this time. You can target to make most of your profits for the year on these dates. Some of the street book vendors surveyed claimed to sell about 10 text books and 15 novels each day. Small and medium bookshops sell a minimum of 35 books per day on average. Margins of 15% and 35% are recorded if you purchase your stock in bulk directly from publishers.
As you have seen, a bookshop business in Kenya is simple to start although may need a higher amount of capital to fully stock. If you have been thinking about setting up a bookshop business in Kenya, we welcome your views, share with us your experiences and worries.
Originally published at PesaConsult.
