Sometimes, if you have a good idea that fills a genuine need you can become a successful capitalist even if you are against it.
Half-Price Books began in an old laundry in Dallas with $4,000, the inventory from a used bookstore that went broke, and 2000 books from the shelves of the co-founders. Peter Gjemre was looking for a job that wouldn�t interfere with his anti-war protest schedule. Pat Anderson was a complete counter-culturist. She wrote for an underground newspaper, plastered peace stickers on the family car, and her favorite book was Robin Hood because she loved the theme of taking from the rich and giving to the poor.
They got into business not to get rich, but to do what they thought was the right thing. They decided to sell used books because they wanted to recycle them to save the trees.
Everything in the first store was either second hand or handmade. They painted the walls with mis-mixed clearance bin paint they bought cheap from a hardware store. The shelves were bare-wood pine with the nails still exposed. The signs were all hand lettered.
Now, 30 years later, the signs are still hand lettered and the store fixtures handmade or second hand, but there are 64 store in 10 states and nearly 1000 employees.
From the beginning, employees were hired for their eccentricities and love of books, which meant they were likely well educated and had a flair for promotion and display. Instead of being frowned upon, nepotism was encouraged.
There has always been a laid-back free form atmosphere at Half-Price Books. Employees were forced to wear shoes only after workmen�s comp required it. Workers were allowed to bring their children to work until they became mobile. Many kids grew up in the back rooms of the stores. Due to company growth, this policy has been altered, but some parents are still allowed on a case-by- case basis to still bring their young children to work.
The biggest trick for the business is to know how to price. They have to be able to buy the books at the highest price possible to keep the books coming in and know at what price to sell them to keep the books flying off of the shelves.
Pat Anderson was a master at it and taught her children and employees how to become masters at it, too.
Pat Anderson ran the stores with a care-free attitude. She refused to do performance reviews of her employees. Her employees were also her friends and drinking buddies. She handled employee complaints with her famous retort, �Quit your bitchin� and was quick to tell someone to �Cut the bull.� While scurrying through the store puffing on a cigarette.
She was at work every morning until the one day when she unexpectedly didn�t. Her daughter, Sharon, went to her house to find her stricken by a heart attack. She was 63 years old when she died.
Peter Gjemre, who was Pat�s boyfriend, when they started the business, stayed on after their romance ended. He retired from day-to-day activity due to his health and his family still owns a large share of the company.
Sharon Anderson Wright, Pat Anderson's daughter, who has worked for the company from the first day when she was a teen-ager, is now the president and CEO. She goes by the nickname �Boots� and married one of the employees.
Sharon says, �We open about five stores a year, and we are content with that. We are not in a big hurry to take over the world. That�s where a lot of companies get into trouble, I think � We don�t have a big master plan. We make it up as we go along. Maybe that is our saving grace, because we use our common sense and street knowledge.�
For example, an employee wanted to move to Seattle, so the company opened a store there. It turned out to be a great business move. Half-Price Books now has six profitable stores there.
They practiced what they preached and took great care of their employees. They set up a pay system quite similar to another pair of left-leaning entrepreneurs- Ben and Jerry.
Their rule was that the highest paid employee makes no more than six times what the lowest paid employee makes. Sharon Wright, the president, makes about $50,000 a year. Half-Price Books gives out a bonus equal to 25 to 30 percent of the company�s net profit and distributes it equally to all employees every quarter. They have a retirement plan, and full medical, dental and mental and optical benefits. These insurance plans cover all domestic partners. They have paid maternity and paternity leave. Fathers get a full month paid leave to spend with their babies.
All promotions are done from within and store managers are never hired from outside. Many managers started with Half-Price Books sorting and stocking shelves.
They never borrowed money to build the business. All expansion was undertaken with savings and cash flow. If they didn't have the cash, they didn't do it.
Half-Price Books buys just about any used book, magazine or record that comes in the door. They give away to charities, schools and other local groups anything that they don't think will sell. �We get a lot of books that won't sell. They need books. What else are we going to do with them?� says Sharon Wright.
For non-readers, they sell books-by-the-yard to stock home bookshelves so they will look pretty, even if nobody will ever crack one open.
They have added some new books and remainders (unsold new books) to the inventory including most cookbooks and children's books which do not sell well used.
When Sharon Wright gets frustrated with the problems that everyone faces running a business she consults a handwritten page of advice from her mother. One suggestion is to �Worry only about the big problems� and another- �If whatever is making you angry will have no lasting consequence an hour from now, a month from now, forget it.�
Basically, Pat Anderson and Peter Gjerme did everything right- took care of their customers, took care of their employees, did not grow too fast, learned how to buy and price right- what every free enterprising capitalist entrepreneur should learn to do. They did everything but reward themselves.
When Pat Anderson died, her daughters were only able to sell her house for $45,000.