|
|
|
How Roxanne Got Her Groove Back
SMALL-BUSINESS PERSON OF THE YEAR
How a hard-nosed New York accountant fell so in love with the idea of running a quaint New England bookstore that she forgot all the lessons of 20 years in business. (But then she remembered)
|
Business New Haven
1/24/2000
By: Michael C. Bingham
|
Well. It's a good thing the women of America have Roxanne Coady - entrepreneur, mother, successful business owner, wife, friend to literary luminaries - to show them how this whole “superwoman” thing is really supposed to be done.
“No, no, no, no,” demurs Coady. “I know that image is out there, and that people feel that way about me. But I don't feel that way. I guess it's the advantage of having a father for whom you never do enough right,” she says with a laugh.
“I'm a glass-half-full person about the opportunities life affords, but I'm a glass-half-empty person when it comes to my own abilities. So I'm always fueled by my desire to do a better job and learn more.
“People hold me up as an example of a woman who does it all. But I don't do it all. I have a lot of help. I have a husband who is phenomenal. I have a full-time nanny. I have an unbelievable staff, who you would think it was their store. So I don't do it all; I just look like I do it all.
“Besides,” she says. “Women already have it tough enough without having some goddamn example in their face of why they're even less competent than they thought they were.
“I am strong, though,” she allows, smiling.
You might say that entrepreneurship found Roxanne Coady. A C.P.A. for the first 20 years of her career, Coady by the late '80s was a partner and national tax director at the accounting firm of BDO Seidman in New York.
“I had all the things you'd want to represent that you were successful,” she recalls. “There had never been a woman national tax director. It was a very exciting job.”
But she was nagged by the feeling that life had more to offer than the good life of the fast-track New York career treadmill. “I was turning 40, didn't have children, married [to Kevin J. Coady, a real estate developer], and kind of felt as though at some point I really ought to do something else. It was really that simple.”
The Coadys already owned a weekend house in Branford, and loved Connecticut. Beyond that, “There was never any issue what I would do - it was always either publishing or a bookstore - but it took me about two years to think about it before Kevin and I decided to move to Connecticut full-time. So we did. We went from being very '80s to being very non-'80s.'” Kevin Coady left real-estate development for a more predictable life running Port Milford Marina, while Roxanne set about starting the bookstore of her dreams.
Originally Coady thought she would open a store in Branford. “Then this building came up for sale on the Post Road [No. 768] in Madison that had been abandoned for a couple of years.” But why rich-but-small (1990 population 15,485) Madison? “We drew maps with circles [representing] a five-mile, ten-mile and 15-mile radius from Madison. If I had opened the store in Branford, within a 15-mile radius was all my competition - Barnes & Noble in Orange and North Haven, and the Yale Co-op. Whereas within a 15-mile radius of Madison, in 1989 there were 195,000 people, and there wasn't really any bookstore of quality. So that looked like the better opportunity.”
The Coadys bought the building in 1989 and, guided by a 1923 photograph, restored it to its former glory - “right down to the tin ceilings from the original manufacturer.”
The unpredictability that is the hallmark of entrepreneurship was only beginning.
“One of the things that motivated us was that we didn't have kids, and who were we saving money for? We [figured we] might as well use it to give us the freedom to do what we wanted. And then” - surprise - “I got pregnant.”
So in April 1990 Coady opened R.J. Julia, and two months later welcomed another labor of love - a son, Edward - into the world. “It was pretty wild,” she allows.
Why books? “It was either reading or tap-dancing,” says Coady with a laugh. “Owning a bookstore sounds like one of the romantic industries. It isn't. The good part of having of bookstore is even better than I thought - and the bad part is even worse.”
Getting R.J. Julia off the ground required about $300,000 of the Coadys' nest egg, plus an equivalent sum in financing. Since then Coady says she has put in another $200,000 - “in money,” she emphasizes.
To what end? “It's a small business with bad margins [an industry average of two to three percent], a lot of intensive labor to do it right, and a stunning amount of competition,” she says. But even given all that, “It's a very satisfying way to make a living.
“The problem is, it's a barely-living,” she says. “Even as successful as we are - and I'm sure people view the store that way - it's pretty dicey financially to keep a store like that working.”
Coady's vision for R.J. Julia was a place where people could connect - authors to readers, readers to readers, people to their community. And the “community” embraced R.J. Julia - from day one, says Coady, sales grew from 30 to 75 percent each year. In 1995, Publishers Weekly named R.J. Julia its Bookseller of the Year.
From early on Coady managed the neat feat of making her store a destination for bibliophiles from near and far. Part of it was a jam-packed events calendar larded with A-list authors ranging from literary salon-types to supermarket-tab celebrities. Beyond that, R.J. Julia became known as a delightful place to spend a rainy Sunday curled up in a comfortable armchair, sipping mocha java and leisurely leafing through prospective purchases.
“My original business plan for the store was about making it a place of conversation, a place of ideas. The plan was always to have authors, to have discussions - to make it space that you would want to be in.”
That part worked just fine. The problem, Coady acknowledged in a 1996 Inc. magazine article, “was that my numbers stank.” Inventory turnover was too low and costs were too high. Costs of everything - supplies (shopping bags made from 60-pound paper, costing $2,500 a year more than regular stock), people (“I was accustomed to managing highly compensated, ambitious people,” she says, and “the pay scale in retail is so dramatically different that I assumed traditional management principles were not appropriate”). “I found myself unwilling to 'compromise my mission' for only $2 or even $200,” she recalls.
The result was that R.J. Julia lost $233,000 from 1990-92 - in spite of customer acceptance and rapidly climbing revenues. To make up the difference, the Coadys simply made up the difference from their shrinking nest egg. “The irony was that after I'd spent 20 years as an accountant, it seemed that my strength was in marketing and my weakness in accounting.”
To stanch the red ink Coady “finally realized that I needed a complete philosophical shift. I needed to consider my business a business.”
What she now considers “one of the good things” that happened to Coady was that “After six or seven years, I ran out of money. I mean, how much more money could I put into this silly little store?”
Coming to that fork in the road signified just one thing to Coady: “I had to make it work. And we have not lost money since then, since I changed my thinking.”
Changed it how? “I got careful. We used to print a newsletter every month; I realize now that you can't afford to do that.”
Coady likewise forced herself to re-examine her relationship with her workers. “Most small businesses function like families - and most families are dysfunctional,” she says. “Therefore, you tend not to hold people accountable, or have productivity standards the way you might in a 'grown-up' business.
“So I fired some people for the first time; I instituted goals and objectives.” She also rethought the way she compensated people. “I used to hand out really huge bonuses to people in the early years. People were working so hard for so little money, and I thought, 'Oh my God, I have to give them more money.' But the store was losing money. It was stupid.
“So I ended up saying, 'If the store makes money, you'll make money. Now we have a 401(k); I distribute 15 percent of the profits. So if [employees] want to make more money, they have to help make the store financially sound. And you know what? They have a better time. It works better.”
Sometimes entrepreneurs need to disregard or even overcome their instincts when the weight of evidence to the contrary becomes too great to be borne by belief alone.
“I like to be light,” she says. “I want this to be nice; I want us all to have a good time. What I'm learning is that you really can do both - you can make [employees] accountable, have them participate, share the profits with them - and have it feel good for everybody.
“What I can do is give them the opportunity to have a career, and not just a job.” R.J. Julia has 41 employees, or roughly 20 full-time equivalents (“We have one of the highest payrolls as a percentage of sales in the industry”), and Coady gives them an unusual degree of authority to make on-the-spot decisions. She reasons that if she's smart about hiring in the first place, more of those decisions will be good than bad.
Even during the dark days when R.J. Julia was losing money like a sieve, the story certainly had the look and feel of success. And both Coady and her business enjoyed - and have continued to enjoy - a highly visible media profile, practically all positive.
That was all certainly part of the plan, and Coady today sees in it additional confirmation that the veteran C.P.A. was really a better marketer than an accountant all the way along.
“I was that way even as an accountant,” Coady acknowledges. “I did a lot of TV; I was in the news a lot. One thing that gets us a lot of press is that we have a lot of authors, so that creates news almost on a daily basis. That was very deliberate.
“The other reason is that I like to talk. I can talk about books in a very accessible way, and I don't make people feel like they ought to be reading someone more illustrious or complicated.” Indeed, as she chats with a reporter she has just left the New Haven studios of Connecticut Public Radio, where she has a monthly gig discussing new releases on Faith Middleton's show. “I just love the beauty of reading.”
The obvious question, of course, is not whether independent bookselling has a future - but whether, in the shadow of online retailers like Amazon.com, bricks-and-mortar retailers of any size have a future.
This has hardly escaped Coady. “When I say I'm worried about Amazon or even Barnes & Noble or Borders, people say to me, 'Oh, Rox, don't be silly. People love your store. They'll always come to your store.'
“In point of fact, I think we can count on a certain amount of loyalty. But the chains get very different deals from the publishers than we do, and their cost structure is completely different from ours.”
For the short term at least, Coady believes that “'Clicks' can co-exist with bricks, and that places matter. But I worry that people will think someone else will make sure Main Street survives. And it won't.
“I don't think people ought to support their local store even though they're rude or more expensive. But I think you do it because there's a partnership: The store is there, they want to take care of your needs, and you have a kind of loyalty to them. I think people need to think about what they want their communities to be. I realize that Amazon is a pretty convenient way to buy a book. But are they going to support the local kids soccer team?”
But even notwithstanding abstract notions of community and good citizenship, Coady understands that, if R.J. Julia is to survive well into the next century, it must do more than simply sell books. “If we don't bring value to what is now a commodity,” she says, “then we don't need to exist.” BNH
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
