More than half of working Americans either own or work for a small business, according to the U.S. Small Business Administration, which is celebrating National Small Business Week. The annual celebration, which runs through Saturday, highlights the work of entrepreneurs and small business owners across the country.
Running your own small business is far from easy, as evidenced by the fact that roughly half of small businesses fail within five years of launching, according to the U.S. Bureau of Labor Statistics.
One type of small business in particular that’s facing an existential challenge is retail, as small shop owners struggle to compete with the ease and increasing popularity of online shopping on ecommerce sites like Amazon. In fact, UBS analysts expect roughly 75,000 retailers will have to shut down their businesses by 2026 as online sellers eat up more of the market for retail sales.
But even as the online shopping boom makes it harder for small brick-and-mortar shops to stay afloat, more small business owners have also turned to online communities for help in getting their businesses off the ground and keeping them in the black. In 2018, U.S. businesses raised $1.04 billion from crowdfunding campaigns on sites such as Kickstarter, Indiegogo and GoFundMe, according to Score, a business advice network that provides mentoring to small business owners. That number was up from $915 million the previous year, and Score predicts it will increase another 25% by 2020.
One such example is a decades-old used-books store that was saved by a community of book lovers in its New York City neighborhood who donated more than $50,000 through GoFundMe.
Westsider Rare & Used Books bookstore is an “institution” on Manhattan’s Upper West Side, according to neighborhood resident Bobby Panza. It’s the type of old shop where you can wander narrow walkways for hours while perusing towering shelves stuffed with books ranging from cheap, used copies to rare collectibles, such as a first edition copy of Jack Kerouac’s “On the Road.” The store has even been used as a setting in multiple films, including Woody Allen’s “Fading Gigolo” (2013) and Todd Haynes’ “Wonderstruck” (2017).
Panza is a regular patron. “My [6-year-old] cousin, Ben, loves going into that shop. I like to visit; it’s a beautiful space,” he tells CNBC Make It.
In January, Panza, a 34-year-old artist, saw the Westsider was having a going-out-of-business sale. He also read a story on a local blog in which store owner Dorian Thornley made an “off the cuff” remark that the store could stay open if it could raise $50,000 — “don’t see that happening, though,” Thornley told the site West Side Rag at the time.
Panza, who had never formally met Thornley but had shopped at the store for a decade, thought it was worth a shot and launched a GoFundMe campaign on Jan. 15 with the beseeching title, “Save Westsider Rare & Used Books, Please.”
In just four days, 850 people donated from $5 to thousands of dollars apiece and raised $54,000.
It was “amazing and gratifying” to see the community come together and “rescue” the store, Thornley tells CNBC Make It.
With the money, which is roughly equal to what the store sees in profits over a five-year period, according to Thornley — he paid off the two months of back rent he owed to the store’s landlord (the store pays roughly $10,000 a month in rent and commercial rental taxes, he says).
Thornley says he has also used some of the money to improve the business, including updating the store’s selection of used and rare books to attract more customers and reorganizing the interior of the bookstore to make it more friendly for browsing.
“We’ve opened up the space considerably and made it a bit less claustrophobic ... We opened up the mezzanine so we can have events up there,” says Thornley. He’s already starting to host more events, including poetry readings and book launches.
Thornley says he plans to buy advertising for his store, but the publicity from the GoFundMe campaign has helped raise awareness and helped boost Westsider’s sales by nearly 25% in the few months since the campaign met its goal. Thornley has saved some of the money too, to ensure Westsider won’t fall behind on its rent again anytime soon.
Thornley found out about the crowdfunding effort the day after it launched, when a customer asked him about the campaign, and whether Thornley was serious about keeping the store open for good if $50,000 could be raised. When he told her he was serious, the customer — a local writer and philanthropist named Sally Klingenstein Martell — chipped in a whopping $10,000 to get the effort off the ground.
Thornley calls Martell’s generous donation “the catalyst for everyone else donating.”
“I live in the neighborhood and hated the thought that we might lose a beloved book store,” Martell wrote in an email to CNBC Make It. “I had a hunch that a large donation would give the GoFundMe campaign the legitimacy it needed to encourage others to participate.”
Thornley was actually out of town when the GoFundMe campaign crossed the $50,000 mark, so he says he missed the initial “maelstrom”-like celebration in the store with employees and customers. But, less than two weeks after first announcing that the store would have to close, Westsider hosted a celebratory party with food and drinks to toast all of the donors who made the store’s survival possible, including Panza and Martell.
In trying to explain the outpouring of support, Thornley says it is likely due, in part, to the fact that the bookstore has been a part of the neighborhood for so many years. In fact, prior to owning the bookstore Thornley worked there starting in the mid-90s, when the store was called Gryphon Books. The space itself has housed a bookstore for more than three decades. Thornley bought it with a partner in 2002, along with a used record store on the same block. (Thornley says the record store’s business has remained relatively solid.)
He believes residents were reluctant to see it disappear at a time when so many other small, independent businesses have faded away in New York City, leaving countless vacant shops where neighborhood standbys once stood.
“You’ve got all of these empty storefronts and people just aren’t happy about it; they’re angry about it,” Thornley says.
Whether the cash infusion will be enough to permanently save the business remains to be seen. But now that Westsider has avoided the worst, Thornley is trying to make that happen, and the store has a new lease on life.
“We’re still here, we’re doing well. The store’s loaded with books,” Thornley says. “We’re in good shape.”