PhotobucketTherese here. It’s the second Thursday of the month, which means it’s #IndieThursday–a day dedicated to independent bookstores here and at Beyond the Margins, an esteemed blog we hope you’ll add to your daily visits. I’m honored to introduce a post written by Bob Proehl, Director of Operations at an independent bookstore in Ithaca, NY, called Buffalo Street Books. Buffalo Street Books was in grim circumstances not long ago; it was in a financial crisis and seemed destined to close. But an unboxed idea pulled the bookstore back to its feet, and now it isn’t only surviving–it’s thriving. I know you’ll be equally inspired by Bob’s story, and enjoy not only his post but the Q&A we’ve included with him at the end for those who may consider following in the Buffalo’s footsteps.

The Community Behind the Independent Bookstore

There’s that one curse about living in interesting times that seems to be plaguing the book industry even as you’re reading this. The phrase “Gutenberg Moment” has been rolled out of the lexical silo, its coordinates set for (depending on who’s at the controls) the Big Publishing Houses, the little brick-and-mortar stores, or The Very Concept of Paper Itself.

Interesting. Like I say.

Many brick-and-mortar stores are opting for bunker mentality. Staffs and inventory levels are being axed, hours are being rolled back. We watch as the last ebook-fueled escape pod from a reportedly doomed planet departs without us. Pundits give us dire prognoses, death sentences of five years, ten at the outermost, six months more likely.

But as our extinction approaches and dinosaur analogies abound–and yes, I’m switching from nuclear apocalypse metaphors to the Cretaceous extinction. I’ll also be playing fast and loose with evolutionary biology. Darwin be damned! Stay with me here!–it becomes important to remember that all the best dinosaurs didn’t go extinct. They became birds.

The important question for independent bookstore at this moment, when big changes are in the offing at levels barely within our ken and forces hang like unseen swords in the rafters above us, is not a panicked “What the hell do we do?” but a contemplative “What could we become?”

There are myriad answers to this, and each store is going to need to find its own. When our store, Buffalo Street Books in Ithaca, NY, announced its closing just over a year ago, we did so with a list of considered changes in hand. Some of them might have garnered us one more 5% bump in sales, which would be quickly offset by sales lost to online outlets. Some of them had the potential to be game changers. But looking down the path a few years, we saw ourselves in the same spot again, pedaling twice as fast as the year before to end up in the same place.

So when I pitched the idea of a community buyout and the conversion of the store to a cooperatively-owned business model, it wasn’t the dire forecast of the publishing industry I discussed, or the slowly declining sales forecast for indie stores. It was the community itself, and the role the store played in our community. I took a look at what we did well, what we provided to not just our customers but the community at large and said to people, “Listen, the market may not be able to support this store for much longer. But our community is not the market, and this store has always been more than just a store.”

The response was nothing short of remarkable.

Within weeks, people in this city of about 30,000 had pledged almost $300,000 towards the purchase of the bookstore. Perhaps equally astounding, the follow-through rate on those pledges was nearly 90%. The store effectively reimagined itself not primarily as a retail outlet, but primarily as a community resource, a center for the literary arts in a town blessed with a statistically remarkable number of talented writers and populated with a mass of avid readers.

As we move into our second year since this change, we’re continuing to evolve. Over the next year, we hope to transition into a hybrid business model with the creation of a non-profit wing to seek grants and charitable donations to support and extend our literary arts programming and community outreach. We’re working to help out our local school and public libraries, each struggling under heavy budget cuts. And we’re working to expand our nearly 700-person ownership base to include an ever-more economically diverse section of the community, offering shares through labor equity purchase.

It won’t work for everyone, and the amount of effort and community support required to pull it off may seem truly daunting. But as the ground quakes beneath the feet of independent bookstores, it may be an opportunity to realize we’ve had wings this whole time.

PhotobucketA Q&A with Bob Proehl, Director of Operations at Buffalo Street Books

Q: When did you first conceive of the idea of an outreach to community members to help save your bookstore? Was the idea always that the store could become a co-op?

A: The idea was pretty much a Hail Mary pass. The previous owner had decided to close the store and things were at a crisis point. There was hope for a while that a new owner might step forward, but that quickly became unlikely. We had discussed other possible business models before that point, which included collective ownership by a dozen or so people, or a non-profit model. But it was Valentine’s Day and I was out to dinner with my wife and I had gotten to the point of saying, “Let’s move. Let’s get out of town, because I don’t want to live in a town that doesn’t have a bookstore.” And in the course of that conversation, the idea of a collective of owners expanded into the idea of having the whole community own the store. And the cooperative model seemed to be a perfect fit for that.

Q: What were your first steps in helping to spread the word about your plight?

A: Word about our “plight” was already out there. We had publicly announced that the store was closing and we had launched a final liquidation sale. All of this went on before we pitched the idea of the coop. There was a week long wake, where people were coming in and saying, “I can’t believe this is happening” and “I’m so upset.” I think in part it was the anger and frustration brought on by the closing of the store that allowed the community buyout to succeed.

As far as pitching the idea of the coop, I had written a rather long letter–more of a screed, to be honest. Four pages, single-spaced. I have a tendency to be a bit prolix. Finished it at two in the morning and brought it in to work the next day. I ran it by the owner to make sure this wasn’t going to screw up anything he had planned, and he gave it the okay. I contacted some friends who ran a local news website, and it went up on there first. Then it went out to the store’s email list and to my email list, and we linked it on Facebook pages. All that kind of stuff. All sitting at my laptop here in the office. And then we sat back and said, “Okay, let’s see what happens.”

That was about two o’clock in the afternoon. By three, I’d received the same email from about five different list-servs that I’m on. I’d gotten a call from the Cornell English department, informing me they had to take down my flyers because they were posted on department-only tackboards. I explained I hadn’t gotten up from my desk all day, and they said, “Well, someone posted a four page letter with your name on it up here.” I couldn’t read emails fast enough, they were just pouring in.

By five o’clock that day, we had over $20,000 pledged. By the end of the week, we were in six figures. And then it started to settle in that we were going to have to figure out how to actually do this.

Q: How would you recommend that others interested in starting a co-op bookstore proceed?

A: Slowly! If you are considering converting to a cooperative, start exploring it now. Start reading bylaws, start reading your state’s incorporation statutes for cooperative business. Start talking to other coops. Due to our particular situation, we had about two months from the time the idea was pitched until the day we re-opened the doors, and we’re still playing catch up on a lot of the legal and financial structuring we should have done at the outset.

Talking to other coops is the most important thing. Everyone out there who is involved in a cooperative business has probably been helped out by someone else and will probably help you out as much as they possibly can. And no one model is going to be a perfect fit for your store, for your customers or for your community. Talking to lots of folks gives you an a la carte menu of your options.

Q: What are five steps that bookstore owners should take to help ensure a co-op bookstore succeeds?

  • Get a good lawyer and accountant. Preferably on your steering committee. Cooperative incorporation laws vary from state to state, and the tax law for cooperatives is substantially different from tax law for other corporations, for LLCs or for single proprietors. Find a lawyer and accountant with coop-specific experience. If you can get them on your steering committee or executive board, so much the better.
  • Assess your store’s relationship with your community. Chances are your store does more than just sell books. All those little things you do that you didn’t do to make money? Those are the things you need to focus on when presenting your community with the idea of a community-owned cooperative. This is where intangibles become tangible.
  • Assess your relationship to your bookstore. It’s important to remember that in switching to coop, you are selling your store in a very real way. The people who buy shares in a cooperative bookstore are not investors, they are owners. In many store-related matters, each of their votes will count equal to yours. Be honest with yourself about what your relationship with the store is and what it will be after the conversion. This will not only help you decide whether converting to a coop is a good idea for you and the store, but it will help you create a position for yourself in the new company that is rewarding for you and effective for the store.
  • Keep the owners engaged. Any bookstore owner knows how important customer loyalty is. This becomes exponentially more true in a cooperative model. The strength of any coop lies in the commitment of its owners. Make sure your owners are informed and engaged at all times. Send out regular emails detailing the state of the store, and don’t be afraid to be honest, since at some point they’re going to see the balance sheets anyway. Find and create volunteer opportunities. Find and create incentives for ownership beyond what it says on the label. Stress again and again that this is their bookstore, because more than ever, your success or failure will be dependent on them.
  • Learn from other people’s mistakes. A cooperative is a highly democratic entity. Its early stages are not. It is much easier to build the coop you want than to build something close and then change it later. Most coops will have at least one story of some bylaw change they view as important to the business that continues to fail under membership vote, for one reason or another. Ask around and see what other coops wish they’d done at the beginning. At the same time, be ready to make changes, both at the outset and further down the line.

PhotobucketQ: What are some things that community members need to consider before committing to a co-op?

A: They need to consider what their bookstore does for them. Any retail business can send up a SOS flag and hope for an influx of patronage to bail them out of a financial hole. This is something different. This is a store saying “We believe we are a crucial part of this community and are deserving of a form of support beyond retail patronage.” Before buying a share of a coop, I think community members need to assess this claim. Does the store provide a community service? What is that service worth to me? As a patron, you’re already making that decision constantly in little ways. Every time you buy a new hardcover at list price from your local independent store, rather than getting it twenty percent cheaper online, you’re effectively saying, “It’s worth six bucks for me to have this store here.” Whether you’re thinking that or not. In deciding to commit to a cooperative bookstore, you’re putting a permanent price tag on whatever you believe that added value is.

We had people buy shares because their kids come in every week for storytime. We had people buy shares because they have a dream of one day doing their book launch party here. We had people buy shares because they like browsing the shelves on their lunch hour, or because their book club meets here, or because such and such author signed their book here. And we had people buy shares because they believe their town should have a bookstore. So when you’re considering purchasing that share, you should be asking yourself whether they want to take ownership of this part of their community.

Q: Any other steps that should be considered or taken to help a co-op store’s chances for success?

A: Don’t stop there. Converting to a coop did a lot of great things for us. It put us on more solid financial footing and cleared out a lot of the debt servicing we had hanging around our necks. It had a definite effect on customer loyalty which has translated directly into an increase in sales. But it also opened us up to change further, to pursue initiatives that might not immediately “pay off” in a financial sense, but were to the benefit of the store, our owners, and the community. A lot of the stuff we’re working on now–with building a non-profit wing, changing our relationship with local schools and libraries, offering programming and events that aren’t necessarily centered around book sales–these are things that I’m not sure we would have attempted if we hadn’t made this switch. Like any other bookstore right now, a cooperative bookstore needs to be willing to constantly adapt, to try new things.

Thanks so much for your time with this post and empowering Q&A, Bob! Readers, know of a beloved independent bookstore that’s fallen on hard times? Feel free to forward this post to them. Maybe the next coop bookstore will be coming soon to your community. And if you’d like to learn more about Buffalo Street Books, please visit them on the web. Read on.