The New England Independent Booksellers Association couldn’t have chosen better timing for the workshop on “Planning Your Bookstore’s Next Chapter,” just one day after nine-year-old Porter Square Books in Cambridge, Mass., announced that was putting itself up for sale. Close to 40 booksellers attended the workshop led by Donna Paz Kaufman and Mark Kaufman of Paz & Associates at the Biltmore Hotel in Providence, R.I., on March 12. Most indicated that they would like to sell their stores, or their interest in a multi-owner store, within the next three to five years—some even sooner. Porter Square co-owners Dale Szczeblowski and Jane Dawson fell into the latter camp. So, too, did a young couple who are finding that raising a toddler and running a bookstore are not necessarily a good fit. Both Linda Ramsdell, owner of Galaxy Bookshop in Hardwick, Vt., and bookseller Sandy Scott were at the workshop to learn about ways to transfer ownership.
“I think this is the beginning of a conversation all of us should be having in our business,” said NEIBA executive director Steve Fischer. “For us to have a conversation about the next chapter is really important.” So important that he’s already looking at continuing it in October at the NEIBA fall conference. Fischer seeded the day-long gathering with a panel of booksellers who have either gone through or are contemplating the process: Gillian Kohli, who purchased Wellesley Booksmith (now Books) in Wellesley, Mass., two and a half years ago; Joan Grenier, owner of the Odyssey Bookshop, whose partner, Neil Novik, retired last May; and Sara Hines, marketing and events manager at Eight Cousins Bookstore in Falmouth, Mass., who is contemplating buying the store. They were joined by Boston attorney Debra Leggett, a partner at Englander, Leggett & Chicoine, P.C., author of a white paper on “Exit Strategies for Small Business,” who provided practical advice on how to transition a business.
Donna warned booksellers not to expect a sale to happen instantly. It took seven months for The Book Stall at Chestnut Court in Winnetka, Ill., to find a buyer and sign a letter of intent—and that was speedy. Leggett recommended that booksellers begin the conversation with their CPA and lawyer three to five years before they want to retire. She also reminded booksellers that there is no one right approach to selling a business. Neither the Kaufmans nor Leggett made the prep work for sellers sound short either. “I think it was easier four, five, or six years ago, before e-books,” said Donna. “And lending continues to be an issue after the crash of 2008.”
Still, New England has seen the successful transition of a number of stores in the past five years, including that of Harvard Book Store in Cambridge, Mass., to Jeff Mayersohn and Linda Seamanson in 2008. As insight into perspective buyers, Mayersohn, who was in the audience, said, “This is a very strange business. Left to my own devices, I would have run the store into the ground in a few months. We’re still consulting Frank [Kramer, the former owner].” In fact, they have lunch every week. Kohli has also found a long learning curve to bookstore ownership, but for different reasons. Wellesley and its sister store, Brookline Booksmith in Brookline, Mass., had many intertwined operations. Although the two stores are separate now, issues continue to arise. However, she considered the staff’s decision to vote out the union last December a vote of confidence in her running of the store.
Time is also an issue for potential buyers like Hines, who grew up shopping at Eight Cousins, worked there summers, and told owner Carol Chittenden to keep her in mind if she ever wanted to sell. But when Chittenden approached her to see if she was still interested, Hines had one more year of graduate school left. After getting her degree, Hines began working at the store full time last summer; she and Chittenden told the staff that they were “dating.” “This is a year of research,” said Hines, who has been getting free mentoring on running a small business from SCORE, a nonprofit supported by the Small Business Administration. “We’re looking at a May deadline. It still might not work out. If it’s not going to work out, she needs to find another buyer.” Hines’s biggest concern is creative financing, but it’s not the only one. “Loving books is not the same thing as being an owner,” she noted, adding “everybody says Eight Cousins is an institution in Falmouth. But how much of that is Carol?”
That Hines is interested in buying Eight Cousins is something that the Kaufmans have seen frequently. Mark noted that oftentimes buyers are customers and recommended that those who want to sell their store send a personal letter to their top 100 customers. That’s in addition to contacting local media, which is how Kohli found out that her neighborhood store was for sale. Donna also noted that they get a lot of calls from baby boomers and people who have inherited money. The community where the store is located also makes a difference. For well known stores, anywhere between 20 to 40 potential buyers can surface.
But before all that happens, stores need to do their homework so that they can give potential buyers an accurate picture of their business and put together a team with a CPA, attorney, and someone who knows the book business. The Pazes provided a checklist of the financial, inventory, marketing, and other information that those wanting to sell a bookstore will need to prepare and that buyers should look for, from assets to inventory, square footage, payroll, and leases.
