Are you considering opening a book store or perhaps buying one?
Quick Background: Three years ago my partner (also my Mom) and I purchased a small (10,000 books) used (brick & mortar and online) bookshop in a small “downtown” area in the Northeastern United States. Overall the experience has been wonderful. We love the shop but I wanted to write this article in the hopes that others can learn from our mistakes.
In summary: “don’t make assumptions”. This sounds like common sense, doesn’t it? The problem is if you are opening a book store or purchasing a book store (or any business) for the first time, you don’t know what you don’t know. Hopefully, this brief story about what we wish we would have known before buying a bookshop, now looking back, will save you from making the same two incorrect assumptions we made.
Lesson One – Inventory the Inventory
My Mom and I tend to usually err on the side of caution. We did our due diligence during the purchase of the bookshop by hiring a lawyer to draft a purchase agreement and to make sure all of our bases were covered. I vaguely remember the lawyer saying ‘something’ about doing an inventory on our inventory but at the time inventorying 10,000 books just did not seem realistic to us and we assumed the former owners (a husband and wife) were very trustworthy people and we had nothing to worry about in respect to the inventory.
About one or two weeks before we took ownership of the bookshop the owner who ran the daily operations showed us how to use her inventory system (Homebase) and she trained us on the day-to-day operations. She gave us the user-ids and passwords for the shop email and all of the online venues they sold through (ABE, AZ, Biblio and Ebay at the time). About a week before the shop changed hands, the former owner took all of her inventory offline to make the transition smoother. In turn, we used the ABE inventory search to print out every book in their inventory priced at $50.00 or higher as our ‘inventory list’.
The purchase of the bookshop proceeded, we got the keys, put the inventory back online and we were in business. One of the first things we did as we were getting settled in on the first day was to look for the HIGHEST PRICED BOOK IN THE INVENTORY. We wondered: What does a 150 year old $1400 Angler book look like? The book was nowhere to be found! We checked Homebase, it was still marked for sale. We called the former owners and asked – where was the book?? She told us it had been sold on ebay just a couple of days before the shop changed hands! In hindsight I wish I would have asked her to send proof of that to our attorney, but being the generally non-confrontational person I am I quietly accepted her explanation and hung up the phone. Looking back on it…we should have at least inventoried the 50-100 most expensive books they listed in their inventory before we allowed the shop to change hands. It still annoys me when I think about it three years later…but I keep telling myself — karma. We’ve had a lot of really good luck with the bookshop and we love it even without the Anglers book!
Lesson Two – Research all of your Options (ie the Credit Card Machine)
The second mistake we made was to assume the owners of this shop were astute business people who MUST have researched the best deal for their credit card processing set-up! We simply took over their contracts. We signed them without a second thought. Oh – hindsight – what a beautiful thing. It took us a few months to realize our mistake. We were paying to lease a credit card machine to the tune of over $100 per month! Our fees and rates were reasonable but taking over the lease on the credit card machine was a big mistake. We were stuck with it for another 17 months! After realizing our mistake we started researching with banks, other credit card companies and small local businesses we dealt with. In the end the solution we found was recommended by my Mom’s hairdresser (of 15 years). She recommended a local person who sold us a used credit card machine for $250 (which is working perfectly) and provided us with lower fees and rates than our former provider.
** Here is another article on Opening a Book Store