Taking risks de rigueur for entrepreneurs
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Hey there, time traveller!
This article was published 02/01/2010 (4896 days ago), so information in it may no longer be current.
The dispiriting news this week surrounding the bankruptcy of McNally Robinson has made me reflect on, among other things, my humble station as a salaryman.
Like the 100 or so Winnipeggers who have lost their income in the wake of the closing of the booksellers’ Polo Park location, I too often feel as though I am not the captain of my own fate.
More than a decade ago, in fact, it dawned on me that my income had peaked, at least in relation to the standard of living.
If more money were something I needed, I would have find to an entirely new occupation, something I may or may not succeed at.
On the other hand, being a salaryman has its consolations. Chief among them is its lack of risk.
Entrepreneurs live in a much harsher world. If they make a mistake, it not only affects their bottom line directly but it can alter the livelihoods of many others. This is why business owners deserve larger incomes than their employees.
McNally Robinson’s owners, Paul and Holly McNally, made some serious miscalculations. That has become evident to everyone blessed with 20-20 hindsight.
Their problem was not the sudden rise of ebook gizmos but rather expanding too fast and taking on too much debt. Small retailers and restaurateurs fall prey to this temptation all the time.
In fact, the McNallys took a similar risk in 1996 when they opened their Grant Park big box to forestall the expansion of the Chapters chain, which had decided to build a fleet of stand-alone stores from coast to coast.
This was a huge risk, and many thought the McNallys’ move would fail. It wasn’t smooth sailing at first, but they became a poster-couple for family entrepreneurship. Their national industry organization has named them Bookseller of the Year virtually every year since in which they’ve been eligible.
Even in a week that isn’t traditionally the slowest one all year for news, the McNally story would still be a huge talker.
Books retain about them an aura of something more important than merely goods to "retail." We see them as veritable repositories of civilization.
This is something the McNallys have always understood, and they built their brand accordingly. In an age of Internet shopping, when an American online colossus like Amazon has the huge upper hand in economies of scale, why pay 50 per cent more for the same title at your local independent?
The answer has much to do with self-image. Like the consumer of $4 coffee at Starbucks, you can say, "I am the type of person who shops at McNally Robinson."
As immigrants to Winnipeg — the McNallys relocated from Ottawa at around age 30 — they immediately grasped Prairie communitarianism. The company supports the writing community in ways too many to mention.
Without the McNallys’ initial endowment, the Manitoba Book Awards, now 20-plus years old, might not have got off the ground. You also see the McNallys’ names on the donors’ list of charitable causes ranging from culture to health.
Their stores’ practice of hosting book launches for anyone who asks proved to be genius. Who knows how many relatives there to see Uncle Harry read from his self-published family history were so chuffed by the experience that they made an impulse purchase on the way out?
McNally Robinson compiles a bestseller list for the Free Press Books section. Holly once told me they could never stop doing this.
The writers who launch books there, and sell more than a handful of copies, crack the list at least once. They clip it as documentary evidence that they have become a "bestselling author" — which is half their hope in writing a book in the first place.
Most important, the McNallys have built their Grant Park store into a cultural meeting place for Winnipeg, as important as many public institutions. Very few private businesses manage that, and maybe you need to be in something like bookselling to have a shot at it.
In the meantime, all charitable people hope they weather this storm. Risk-takers take risks and sometimes they fail.
As the McNallys retrench and reorganize, let’s also hope their numerous creditors and ex-salarymen don’t pay too heavily to maintain the business’s goodwill.
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