• A former biology teacher, Adah Fitzgerald, bought a small-town bookstore in 2015.
• Over the past nearly nine years, she’s enhanced the shop and gone from breakeven to profitable.
• In addition to business strategy, she shared mistakes she’d made and how she endured the pandemic.
• This article is part of “Banking on Small Business,” a series about wise money management by small business owners.

Outside the front door of Main Street Books sits a three-tiered cart with neatly stacked brown bags filled with books.

“Curbside pickup” is handwritten in chalk on the side of the cart.

It’s how customers pick up their online book orders, similar to how one might grab their to-go coffee on a designated shelf in a Starbucks — except, of course, the cart is outside and unattended.

“People think it’s very charming,” the small-town bookstore’s co-owner, Adah Fitzgerald, told Insider. “When we have our door open, in particular, we can hear people’s conversations as they walk down the street.”

They’re often surprised by the honor system, she said, adding: “We haven’t had a single reported incident of an order being stolen off that cart since we started it in 2020. And, probably once or twice, it’s even been left out accidentally after hours all night.”

Main Street Books is on Main Street in Davidson, North Carolina, nestled between another local business, Summit Coffee, and a Fifth Third Bank.

Fitzgerald bought the business in 2015 when its founders — Barbara Freund and Betty Reinke — put it up for sale after running it themselves for 27 years.

Over nearly nine years, she’s sought to enhance the independent bookstore — introducing new systems, including the cart — while maintaining its historical charm. For example, for a big interior update in 2016, she rearranged the store layout, updated the lighting, and painted from floor to ceiling but preserved the original antique shelves from when the space was a general store back in the early 1900s.

She also cleaned the floors but didn’t refinish them, she said: “They’re really nice wide plank pine floors that have a lot of stories to tell.”

From biology teacher to entrepreneur: buying the business in cash in 2015

Much of Fitzgerald’s career has been spent in the classroom: She taught middle and high school biology at a small, independent school in Davidson from 2004 to 2014.

She didn’t have any experience running a business, but an entrepreneurial career wasn’t out of the question. Her mom and her stepdad have their own company, and they had all “definitely had fun, casual conversations about running something together that was community-oriented,” she said. “It often took the form of a coffee shop, but when Main Street Books came up for sale that made even more sense to us as a family because we are big, big readers.”

The bookstore was in a community she knew intimately, having lived there since 1997 when she started her freshman year at Davidson College. She felt particularly good about the location, having watched Summit Coffee evolve and thrive over the past decade.

A major benefit of buying a business rather than starting one of your own is that there’s already a blueprint for how to run things, and you can have an idea of how it might perform.

The previous owners shared their financials, such as revenue, with Fitzgerald so she could vet the purchase. “We also conducted an inventory of the store ourselves, which they permitted us to do, so we knew everything that was in it,” she said.

That helped her when it came to negotiating the price of the store, which she, her mom, and stepdad bought in cash together in March 2015.

“We walked into this without a whole lot of knowledge,” Fitzgerald acknowledged, adding that the process was much simpler than it would have been had she started her own bookstore from scratch. She inherited the point-of-sale system, customer accounts, and a store full of books. “There are a lot fewer decisions to make,” she said. “We spent about nine months running it just the way it had been run before we did any major changes — and then we did some major changes.” 

Learning from costly mistakes and growing the company from breakeven to profitable

The transition from teacher to small business owner, while fairly smooth, didn’t come without its challenges. 

One memorable mistake happened when Fitzgerald got sucked into a phone conversation with a Yelp marketing rep. 

“I ended up signing us up for some sort of Yelp directory service,” she recalled. “I definitely handed over credit card information but didn’t really think too much of it.” About two months later as she was looking over the company credit card statement, she said, she realized that she owed thousands of dollars. “It was probably $2,500, which was a lot of money for us in 2016. I was livid and embarrassed.” 

The lesson: Don’t try to do everything on your own, said Fitzgerald: When you’re in charge, “someone else needs to answer the phone and be the gatekeeper.”

Fitzgerald invested a bit more cash into the business in the first 18 months to cover some invoices. She then broke even for a couple of years before becoming profitable in year five, which Insider verified by looking at her profit and loss statements.

She made a couple of key changes to the business in the early years that put her on the right trajectory.

For starters, she brought in more new releases. She said the former owners had “a bookstore full of books” but the inventory “wasn’t nearly as new as it needed to be.”

“If we didn’t have it on release day, we would have it on release week,” she said. “People notice that kind of stuff immediately. So sales just went up exponentially right away.”

She also started hosting events such as book readings and release parties. In 2018, the best-selling author David Sedaris came to Main Street Books for a reading. Fitzgerald had to set up an outdoor sound system so the overflow of attendees could hear the reading from the parking lot. 

Hosting an event is time consuming and not always profitable, she said, but just because something doesn’t bring in money doesn’t mean it’s not valuable.

“People were certainly buying some books at events but definitely also just re-engaging with the bookstore or maybe engaging for the first time,” she said. Ultimately, she added, the events helped get people in the door, and, if you do that, “then you’ve done a lot of work.”

She also started an Instagram account and launched a website (the previous owners had a Facebook page but no site), knowing a web presence would be important for longevity.

“Some of those things don’t necessarily have this specific link to a person buying a book but, right out of the gate, I think were impactful,” Fitzgerald said.

Pivoting in response to COVID to set up a profitable 2021

Fitzgerald said the business was “riding high” entering 2020.

When the COVID-19 pandemic hit in March 2020, like most businesses, Main Street Books was forced to close. It closed entirely for six to eight weeks before Fitzgerald started bringing customers back in by appointment.

Books really had their moment. People wanted books, they had time to read, it was cool to read. Adah Fitzgerald, co-owner of Main Street Books

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Sales took a major hit, especially since Fitzgerald didn’t have a great system in place to handle online book orders, but the federal PPP loans kept her staff paid even when she wasn’t able to open the doors.

Customers started returning by appointment in July 2020. That’s when Fitzgerald started rebuilding and made some key changes that set the bookstore up for a strong and profitable 2021.

The biggest investment she made was setting up a new point-of-sale system, which made it much more seamless for customers to place online orders. It was expensive, about $5,000, and was time consuming to train staff on how to use it.

But it increased their online sales significantly: Before the new POS system, “about 0.5% of our net sales was revenue that was coming in from the website, and it was mostly tickets for events,” Fitzgerald said. “Now it’s up at 9%.” About 2% of sales come from events. The rest comes from customers walking into the store and business-to-business sales.

The cart was also born out of COVID, when online orders became more prevalent, and is now a permanent fixture. 

It helped that the community leaned into shopping locally to try to help keep small businesses afloat during the pandemic, she added.

Plus, when people were forced to isolate at home, “books really had their moment,” she said. “People wanted books, they had time to read, it was cool to read. It was just so bizarre. I mean, it made perfect sense logistically but all of a sudden I had just stepped into this fragile retail industry that, instead of being completely obliterated, was getting so much attention.”

Competing with the big players like Amazon and finding ways to increase profitability 

Fitzgerald considers Amazon to be her No. 1 competitor. While it can obviously carry a lot more inventory than her 1,400-square-foot space can, she prefers to focus on what a small bookstore can do better than a behemoth.

“What we seriously bring to the table is a staff that reads a huge number of books and has expert, intuitive opinions about books and are very good at talking about books and matching people with books that are way beyond the algorithm,” she said. Some of her staff members read more than 100 books a year.

Plus, as a customer, sometimes it’s easier to walk into a space where there are 10,000 books to choose from instead of 10 million. There’s less sensory overload, Fitzgerald said.

Inventory is her biggest expense — she receives 2,000 to 3,000 books a week — followed by payroll. Other expenses include rent, internet, insurance, shopping bags, and wrapping paper. 

Fitzgerald uses QuickBooks to track company finances and pay vendors. 

She’s constantly looking for ways to improve profitability. A helpful resource has been ABACUS, a financial report card she receives annually from the American Booksellers Association. It details how her store compares with others in various categories, such as profitability and financial management. It’s free — she just has to submit Main Street Books’ financials.

It helps her evaluate where she’s doing well and where she could improve. For example, last year, she noticed that her store’s profit margin was unreasonably small compared with other bookstores of similar size. So she considered her biggest expense, inventory, and set a goal of lowering that cost, which required ordering directly from the publishers instead of from wholesalers.

“The goal was simple — we didn’t even really try to calculate how much we could move the cost of goods down,” she said. “We were just like, we’re going to move it down, that’s the only goal, and that’s what we did.”

Fitzgerald said she’d long kept overhead in mind when seeking profitability.

In the early years, “everything that we spent any money on really just had to be essential,” recalled Fitzgerald, who still runs a lean business and does most of the social media and graphic design herself.

An essential expense was staff, she noted: “We did immediately hire and just invest in people. And, at first, we were just hiring teenagers for barely above minimum wage, but they really liked working and, especially coming from education, I have a lot to offer — I can offer a lot of soft skills beyond that paycheck — and I’m happy to be a really great employer.”

Hiring can be intimidating, “and you might get burned, but it’s probably not going to break you,” she added. “Learn from it because you have to have people. A lot of business owners wait too long to hire someone.”