Tea in the Library (7 page)

One thing became abundantly clear pretty early on — I had better factor in the cost of a bookkeeper!

A lot of research was now needed, in finding answers to these questions. I decided to “rewrite the script” that said I was poor with numbers, and learn about this stuff. The added challenge was invigo-rating. I talked to leasing agents about premises to find out about rents. I asked other booksellers how many titles they started with, and what they paid their staff. I struggled to work out a sample roster to see how many staff would be needed for books and café. I collected some sketchy quotes for shop fits, and some firmer ones for computer systems and software. I studied “benchmarks” for the book retail trade and cafes, and tried to meld the two. I drew little floor plans to try to calculate the seating. I researched wait staff-to-seats ratios. I made a lot of guesses about expenses such as utilities, insurance, copyright fees, uniforms and office needs. I forgot a myriad of things, such as security, garbage, sanitation and repairs. For marketing, I just picked a number.

I got hold of publishers' catalogues and calculated what I would have to invest in order to fill the shelves with a minimum number of books (if you're interested, it turned out to be about $100,000). Although the majority of our stock could be purchased on a “sale or return” basis, it would have to be paid for up front. If unsold after three months, it could be returned in order to produce some credit to buy new titles. Returning too many books would have several downsides (apart from lost profit) — the major one being the acquisition of pariah status in the publishers' eyes and therefore a dreaded lowering of what is euphemistically termed, in the book trade, our “discount”. This term makes it sound like the publisher is doing the bookseller a bit of a favour, being generous, cutting some slack, giving a break, doesn't it? Not so, my friends.

This “discount”, I was to learn, represents the bookseller's gross margin. The term refers to the difference between the usual retail price of the book and the wholesale cost of it to the bookseller. After working very hard on this, importuning publishers, making big promises, name dropping, joining a buying group, meeting our bills on time, and so on, we were able in the first few months to achieve the princely average gross margin of 40%. Yep, and out of that 40% we had to cover our expenses in order to at least “break even”.

Moreover, this was considered an excellent margin for a small independent bookshop. Some of the bigger players, in particular franchisees who were part of the large buying power of a chain, could command much higher margins, which were possibly under less threat. They could probably also command better terms — our publishers in the main accorded us only 30 day accounts. A couple of days late paying up, and they would put one's future orders on hold — this is called being “on stop”. I later found out that it is far from uncommon for small bookshops to be “on stop” with several of their publishers, cashflow perhaps necessitating a late payment. Then cash would flow again and the “stop” would come off, and the book deliveries resume. The trick was to make sure this didn't happen to you just when “Harry Potter Six” was released.

We were assisted in our efforts to improve our average margin by joining a buying group called Leading Edge. This group pulls together small independents and accords them some measure of buying power. Certain titles — many of the most important popular new releases — are purchased in bulk by Leading Edge, and members can buy their small share at the bulk purchase rates. Leading Edge also provided other member supports — such as a pre-produced newsletter or buying guide, which the individual shops could have printed with their name & logo, and some promotional text if they chose. We used this service, especially for the more important buying guides, such as the Christmas releases, or the Summer Buying Guide. Belonging to this group was a big factor in keeping our margins anywhere near viable.

As to the café supplies, this turned out to be a quite different universe. Because many items are fresh food, accounts are generally seven days, needing quick handling in the bookkeeping department, or else your bread doesn't get delivered. In trying at first to source interesting and unique ingredients, we found ourselves dealing with many small suppliers of jams and cakes and smoked salmon and so on who were so small that their accounts were all hand written, they rarely kept good track of payments coming in, and small children answered their phone for mummy.

The upside is that margins in café are much better — an average of about 65-70%. Coffee and tea have wonderful margins. I was quite thrilled at the thought of how much gross profit there could be in a cappuccino. Of course, someone has to be paid to make the cappuccino, serve it, collect payment, clean the table and wash up the cup. Which is more time consuming than selling a book (although not always!) To say nothing of the repayments on the cappuccino machine.

I mulled this question of margins. Clearly here was a vital element to be understood. Of course, many businesses (supermarkets, for example) operate on much slenderer margins than 40%. They can do so because of massive volume. Businesses that sell one designer handbag a week are going to need a 4000% margin. The key would be sales, of course. We would have to get sales to a good level. Guessing again about what that might be, I squiggled calculations over numerous backs of envelopes, trying to estimate numbers for the three main elements of a workable business: income, expenses and margins.

My head still aches to think of it.

Although I worked diligently on the nuts and bolts of the Business Plan, and struggled with numbers and many new concepts, all the while I had in my mind The Vision of what my bookshop café would look like. I am a great believer in the power of visualization, and I wanted to make a picture of the putative shop, reasoning that this would ensure it became reality. At first, I printed and mounted a set of photographs of the Washington Club library which I had taken on my visit. I kept this visual in front of me whenever I could. It held the essence of The Vision, but I wanted something closer to reality.

I surfed the internet looking for design companies. Quite naturally, design companies all have rather gorgeous web sites, but one took my eye in particular — a company called Impress Design. They were located a stone's throw from my office — a sign? I called for an appointment.

It was a teensy bit nerve wracking to front up to a respectable business and tell them I intended to open a bookshop café. At this point I had no funds to do so, and no clear idea of whether it would really come to reality. But I felt that every step I took in anticipation would, of itself, help create that reality. As Frances Scovel Shinn would say, I was “digging my ditches” in anticipation of the rain. So I fronted at Impress Design's very gorgeous and funky offices, and announced to the two friendly ladies who met with me, that this bookshop café would exist. I asked them to design a logo, and I gave them a copy of the “Vision” chapter of my Business Plan. I tried to describe what was in my mind's eye. They were reassuringly enthusiastic.

I came back a few weeks later and was thrilled and astounded to find that I had managed to communicate, and the designer, Danielle, had clearly heard, The Vision. There it was, reduced to actuality on something Danielle called a “mood board”. She had taken snips of pictures from magazines, swatches of fabric, paint samples and even a teaspoon and had created Tea In The Library. I had an instant connection with what she had materialized , and the “feel” of it was spot on.

Having received my enthusiastic response to the mood board, Danielle unveiled two concepts for the logo. One was rather traditional, in that it used a stylized rendition of a book and a tea cup. It was elegant and attractive — a dark maroon red on cream. The second was more intriguing and less obvious — a curved lamp in a circular pattern of something that looked a bit like fleur-de-lis. Danielle said she had designed the pattern based on a medieval symbol for the beginning of a paragraph. It was also very elegant, rather more evocative and unusual, and was in an uncommon shade of mid-green on cream.

I chose the unusual design, thereby committing myself to a long search through lighting shops and catalogues for a lamp that exact shape, but that's another story (I found it). Of the two colours proposed, we decided on the green, mainly because the maroon was rather too close to Dymock's house colour. There's nothing like a trade marks lawyer for steering clear of competitors' branding.

I have made this sound like a quick and simple decision making process. Indeed it was not — I spent a lot of time discussing the attributes of the designs with the designers, and mulling over the mood board and the logos. Nevertheless, it was an exciting and creative stage of the project — and a heap more fun than margins and expenses.

I was happy with my choice, and I asked Impress Design to print me some business cards using the logo. That was the extent of it for now. I paid the bill, put the logo boards up in my room at home and at the office, and waited for the magic of visualization to take effect. Eventually it did.

At this point in proceedings, I wasn't sure what to do next. I lacked any source of finance to continue, but mainly I lacked the confidence in my ability to bring it all to fruition. So I put the Business Plan and all the research papers into a box. I thought of it as “my bookshop in a box”. It sat there for nearly two years, which admittedly is a long time to shelve a dream, and it was discouraging. Often I concluded that it had all just been a game, a little foray into another world, but as a tourist, not a true immigrant. It became a bit of a family myth, with my children occasionally sending me up for talking about opening a bookshop and then not doing it. “So when will the bookshop be open?” they'd ask. “I need a job!”

The real problem was deep within, of course, and I knew it. At one point, I became rather despairing — about myself. Perhaps this was a true “mid-life crisis”. Perhaps it was just a delayed adolescent crisis.