With a shop floor only 9ft wide and 11ft deep, it is one of the smallest bookshops in the country, but Evenlode Books in Market Street, Charlbury, is a flourishing business offering a valuable service to the 3,000 residents of the town and customers from surrounding villages.

Behind the shop is the office of The Wychwood Press, a publisher specialising in books about the people and places of West Oxfordshire - the area that in medieval times was covered by the royal hunting forest of Wychwood.

Since 1998, Wychwood has published nearly 30 titles, most recently Sweet Evenlode by Godfrey Hodgson, a celebration of the valley of the River Evenlode.

Owner Jon Carpenter has found that his publishing and retail businesses complement each other very well: "If you are going to go into business in a small town, it is useful to have more than one string to your bow."

Having previously run a bookshop in Cowley Road, Oxford, then worked for local publishing companies, Mr Carpenter already had considerable experience of the book trade when he opened Evenlode Books in April 2000.

"I started off with a very strong conviction that no-one owed me anything," he said, adding that he did not expect people to shop locally just for the principle of the thing, but because he really could provide something better than what they could expect elsewhere.

He decided on a simple pricing policy, offering ten per cent off the price of nearly all books, whether they are from stock or customer orders.

While online retailers offer huge discounts on their best sellers, they often offer none at all on more esoteric titles, and in any case the discount often has to be offset against postage costs.

Most orders can be delivered by his wholesaler the next day. A customer who pops into the shop before 5pm can usually expect a phone call around 10am the following morning to say their book has arrived.

The majority of his business comes from customer orders, but Mr Carpenter takes pride in offering an interesting range of books in his shop, going through lists of up to 4,000 new titles that are published each month and selecting those likely to be of interest to his customers.

Many booksellers order on the basis of wholesalers' star ratings, which indicate which books are likely to be big sellers, but he eschews this approach: He said: "You don't have to think, but you end up with all the same stuff that the supermarkets have. That is not the way to go - it is better to be different."

Mr Carpenter has diversified into CDs and DVDs of plays and poetry, as well as a range of greetings cards produced by local artists.

The central location of the shop means he has passing trade from visitors to the town.

He advertises locally in parish magazines and by using flyers and posters, has an e-mail list of 300 regular customers and delivers his Christmas catalogue to 2,000 homes.

He believes it is important to identify your business's catchment area and concentrate on promoting it there - he does not advertise in Chipping Norton and Burford, because they have their own bookshops.

Two years ago, Mr Carpenter also set up a website, Evenlode Books Online. This is a rich source of information about books, including, for example, up-to-date information about prize-winners, links to newspaper reviews, and a blog about what has recently arrived in the shop.

It also contains a lot of useful general information about local life, including a what's on' calendar. Despite this, he has reservations about online retailing. He said: "There is a small minority of people who make very good use of the Internet, but I think it's a big mistake to concentrate on that ten to 20 per cent to the neglect of the other 80 to 90 per cent."

Even his customers who consult the website tend to phone up or come into the shop to place their order.

It has undoubtedly become an important part of Charlbury's social life.

"What people appreciate in a shop like mine is that they can come out, enjoy some fresh air and have a chance to talk to people."

Mr Carpenter is vice-chairman of Charlbury Business Community, an organisation which has about 50 members who are running small businesses or working freelance from home.

He explained: "There is a lot we can do working together that we can't do on our own. At the moment, for example, we are trying to raise the tourism profile of the town."

With the introduction of the new bus pass allowing people over 60 to travel freely around the county, they are hoping to see an increase in day visitors from Oxford and elsewhere coming to enjoy what one Wychwood press author has called Charming Charlbury'.