Shane Gottwals
www.gottwalsbooks.com
Want to open a bookstore? Don’t want it to fail?
I’ll assume both of these are affirmatives since you have come to The Bookshop Blog. In the business world, there are few ways to “ensure” (not quite the right word… you never have sureties in retail) success. The biggest way is to open a franchise, which there are no known franchises based in the U.S. (that I know of) for the used book trade. The other way is a bit simpler…
I asked a question in an article I wrote for The Bookshop Blog a few months ago, “Knowing a company’s trade policy, pricing, and sorting system (things you can figure out just by studying a store for its face value) does not guarantee that you can make it work nearly as well or nearly as quickly. This is where the sense in franchising comes. I know that someone cannot offer Gottwals Books’s value until they have our business model. They cannot understand completely what we do. Hence, why not franchise?”
There’s a boom in franchising, particularly since the worldwide economy has been hurting. People are much more comfortable (and they should be) taking a concept that has proven to work in the past.
Well… Gottwals Books has stepped forward to offer our concept that has taken us to 5 locations in 3 states (and still growing).
The big disadvantage to owning a franchise is that the franchisor has control over your day-to-day operations. They tell you what to do, and you cannot decide to do otherwise (or you’ll lose your franchise rights).
We have decided to license the Gottwals Books business model, systems, and procedures as an all-inclusive package under the name “Walls of Books!” For a fee, you can purchase the rights to this concept along with the consulting, instruction manual, and training necessary to open your own store. While no one wants to ever pay a fee for anything, the cost is much less than a franchise fee and you keep the freedom. Also, we save you the time and expense of poor decision-making that comes from inexperience. We have access to vendors for software, equipment, and supplies. We also are working to provide incredible discounts on the shelving and other build-out materials you need to start your own used bookstore.
This is only applicable in the US, but we welcome feedback from everyone. We have already seen positive results from this endeavor, and we hope to open many new stores in the not-too-distant future.
The big advantage to something like this is that used bookstores have NOT been doing well over the past few years. As I’ve written many times before, most of this is due to the lack of proper policies and procedures, not to mention a lack of managerial skills. With the sales volume we’ve seen, there’s no doubt that our concept should appeal to anyone wanting to open their own shop. If it’s worked for us time and again, there’s little to stop the same financial success for anyone else who wants to try.
Also, consider opening a shop alone. If you are anything like us, it’ll take a couple of years to figure out how to do it properly. This is wasted time. You also hurt your chances with those first customers (if your store isn’t up to par), because many people will write you off. This happened to us… we’re still having people shocked at the transformation of our first store from the time they first came in… often years ago. They saw, they weren’t impressed, so they didn’t come back to spend their money.
If you can start out strong, you keep that repeat business. The bigger advantage is that you set yourself up to turn a profit much earlier than otherwise. Any license fees should easily be restored to your bank account. We are unique because we have seen such aggressive growth over the past years… during an economic downturn.
Find our more at www.wallsofbooks.biz!
There are definitely advantages and disadvantages to investing in a franchise. Though, while it seems to mitigate the risk, opening a business is always a risk and even a franchise can be run into the ground. Then again, it sure helps solve a lot of the problems based on the expertise.
While some of what you say is valid, those of us who have followed this blog since its inception are aware you are relatively new to the business. In fairness, it takes many years of experience (measured in decades) and sometimes much financial success (which is almost non-existent in this business) to develop any degree of credibility.
In previous messages you spoke of reading on the job as a sales aid for your customers and last we heard from you you were expressing your boredom with the book business. It is impressive to see you parlaying those into where you seem to be in your present message.
When a local bank suggested we investigate the possibilities of franchising we were doubtful because we suspected most people who want to get into this business are book lovers, many with unrealistic romantic notions about the business. Most startups fail quickly when they are confronted by the massive amount of work that SHOULD be done and devastated when their sense that they could sit around and smoke and read books while developing a comradery with others of their ilk is wiped out by the time a small amount of success would consume.
The hard facts are that what starts out as a hobby business has a real possibility of evolving into an influential and respectable community resource if the ownership is willing to work hard enough to grow the business. Being a workaholic would be the best aptitude for this business.
Anyway, the franchising expert who charged us $7500 to investigate us laughed when he first heard a used book business was foolish enough to think such a possibility existed because developing procedures and adequate controls in this business is extremely difficult. He said we have much of what it takes but now it will take a couple of years to compile a business plan, financial forecasts, cash flow forecasts, an employees’ handbook, etc, etc. and be very careful about the legal and human relations ramifications of allowing the wrong people to get their hands on a franchise.
I have seen too many good used bookstores with good book people operating them go out of business during the last five years not to be very skeptical you have figured this all out – but I sincerely hope I am wrong because North America could certainly use a lot more books stores.
We charge $1000 for a week of training in our very active stores but tell people they don’t really need us to become successful in the book business – in a week all we can do is save them the first 3-5 years of stumbling around in the dark.
Good luck.
From what I read this is not a franchise.
Quote:
“We have decided to license the Gottwals Books business model, systems, and procedures as an all-inclusive package under the name “Walls of Books!” For a fee, you can purchase the rights to this concept along with the consulting, instruction manual, and training necessary to open your own store. While no one wants to ever pay a fee for anything, the cost is much less than a franchise fee and you keep the freedom. Also, we save you the time and expense of poor decision-making that comes from inexperience. We have access to vendors for software, equipment, and supplies. We also are working to provide incredible discounts on the shelving and other build-out materials you need to start your own used bookstore.”
— endquote —
Looks like Shane is selling knowledge that he has gained from opening and operating 5 stores in 3 states. – Selling a business model as opposed to a franchise.
Regarding the ‘bored posting’ from last February I can see that he jumped out of that funk pretty quickly. More like bounded out because he stated in February that there were 3 stores. Now there are 5…
George,
I had become bored with the day-to-day operations because I am not wired to be in a bookshop all the time. I am wired to pursue business ventures and to do those “behind the scenes” jobs (like pricing, moving boxes, etc.) that it takes to keep a bookstore going.
You mentioned the years of experience it takes in order to have a valuable system. Obviously, the old way of doing things no longer works. Our system has seen rapid results. Our knowledge now is much more valuable than what someone who’s been in the business for 40 years can tell me. Even if they make significant profits… how long did it take them to reach that stage? We have seen profitability from the first days of opening our stores. That’s not common. That’s why we’re selling the system.
When I consult, I am clear about the requirements to open a successful shop. I know how much work it takes.
We are not a franchise, however. We consult and give a name. What the bookseller does with that knowledge is up to them.
I do think we have it figured out, at least for most areas. Our system will not work in some parts of the country. This is part of pre-consulting process.
You mentioned saving 3-5 years of them stumbling in the dark… our goal is that they lose all pitfalls. Just recently, we saved someone enough to cover the license fee just with shelving and start-up inventory. Besides the consulting, we place people on the right foot.
I do appreciate the comments from all.
This blog is doing a lot of good, for me included.
Shane and all others interested in the books business,
My experience is that almost all of the business is “behind the scenes” – I call it “beneath the surface” – getting to the store a couple of hours early or staying a couple of hours after closing – regularly – to attend to the obvious trouble spots. Hiring enough staff can also work but they require supervision.
I have had many staff, friends and relatives who were most comfortable lightly treading in the atmosphere of a bookstore, attempting to be “the brains of the outfit” and, eager to leave the heavy slogging to the few people who still think “real work” is meaningful. We highly value the latter and either dismiss or find isolated spots for the former.
The work still has to be done but most dreamers don’t give it much consideration. Each book has to be handled efficiently at least 5 times – bought, priced, categorized, shelved and sold. Want to teach people a better way? Do you know how to speed up all their processes to handle a minimum of 3000 books each and every month. Oh, and don’t forget to tell them about Pareto’s Law – only 20% of their inventory is salable – so they have to handle 15,000 books most months – 75,000 processes at five times each. And that is only a part of the routine daily work required in a minimally successful store.
It is not that the old ways no longer work – they work fine – as long as the work ethic is still there!
Profitability is a very vague, almost propaganda-like, term that can easily confuse the neophyte.
Anyone who can’t show a paper profit in a business with a 70% gross margin needs a better accountant.
The difficulty with “profit” in the books business is that it is all tied up in inventory (as it should be) to provide a worthwhile service to your customers. When my accountant tells me I had a profit of $100,000 last year he is telling me I have to somehow find $20,000 in cold hard cash to pay the tax owed plus another $20,000 to prepay the “anticipated profit” for next year.
You state “our goal is that they lose all pitfalls” – well, human frailty is tough to lose! And the romantic notions “book lovers” bring to this business are sometimes impediments to their success.
Perseverance and hard work may not be highly valued in some of the younger generations but without them the book business is doomed no matter how many stores continue showing “paper” profits.
It’s a good thing that doing something you love seldom seems like work.
I am so thankful to open this kind of site of yours because you really helped me so much to know how and what to do when there are things that will happen like this..because honestly i really don’t know what to do in terms of same topic .
THANXS FOR SHARING