Owners have started ‘stockholder program to raise needed funds
Published in the August 20 – September 2, 2014 issue of Morgan Hill Life
By Staff Report
The future of downtown Morgan Hill’s BookSmart is in financial limbo after 20 years serving the community, so owners Brad Jones and Cinda Meister recently reached out to seek help from local residents to continue operating the popular bookstore. They’ve started an innovative “stockholder” crowd-sourcing program to raise $300,000 in investment funds by mid-September.
“A couple of years back we, like much of America, were hurt badly by the economic meltdown,” Jones said. “We did everything we could to stay in business including short selling our house and maxing out our credit.”
The bookstore owners talked with various community members and advisers who suggested they create a community-owned business. One of the advisers suggested the idea of a crowd-sourcing campaign using an Honorary Stock format and the couple liked the idea because they want the community to think of BookSmart as its bookstore as well as get youngsters excited about reading by making them “owners,” Jones said.
The program started Aug. 4 and goes to Sept. 18 and offers various benefits for stockholders depending on the level of financial support they provide, he said.
“Obviously the program is really not about the perks, but they do make it more fun to donate money so we have come up with different levels in hopes that the community will respond,” Jones said. “We know that not all people can afford to donate $500 or $1,000, so we started with the idea that everyone who gives at least $10 will get an ‘Honorary Stock’ certificate to hang on the wall and a button to announce their support.”
Other perks include T-shirts and ice cream socials. At the $10,000 mark, BookSmart will offer to convert the donation to a loan which will be paid back but at a very low interest rate, about what they would get in a savings account, Jones said.
The popular independent store Kepler Books in Menlo Park went through a similar financial struggle several years ago and sought the community’s help as a nonprofit to ensure its future as a business.
“Their program was very successful and the store is now in good shape and the nonprofit side of the business has been building steadily and can now tap into the charitable donation and grant community for support of the program they used to pay for out-of-the-store revenue,” Jones said.
If BookSmart were to close, it is unlikely that another store would come in to takes it place given the economics of the book business, he said. The biggest loss to the community would be the cultural impact of not having a place to browse and buy books, he said.
“I believe that it is important for children to learn to love reading and for people to have a place in the community where they can buy books for themselves,” he said.
Local businesses put back about four times as much money into the local economy as businesses that are not based here, Jones said.
San Juan Bautista resident Harry Albert comes to BookSmart to participate in the Morgan Hill Toastmasters group that meets every Thursday morning at the store. He said he enjoys purchasing books and toys and games for his grandchildren at the store as well as enjoying the Treat Ice Cream and hot dogs served as BookSmart’s cafe. He also has participated in various community events held at the store.
“They offer a variety of activities that go beyond selling books to the community as a whole,” Albert said. “Places like BookSmart make a cute little community like Morgan Hill better than it would be otherwise.”
