By Bill Dalton

Radford University, in Radford, Virginia, is not unlike many colleges and universities around the country. Radford is a four year state institution with an enrollment of 9000, with 3100 resident students. Located in southwest Virginia, it has been faced with many of the fiscal problems which most institutions of higher education are currently encountering.

In the summer of 1991, Radford opened a new student services building, Dalton Hall. On the ground floor is a new bookstore (15,000 sq. ft.), and the post office, as well as my office, Business Services. On the upper level is the Terrace Shops (with five (5) fast food stations), Pipers Steakhouse, and a cafeteria with seating for 550 plus. This is a natural hub of activity.

The summer of 1991 was also when Charlie King became Vice President for Business Affairs.at Radford. Shortly after his arrival, Mr. King and I began to address what we perceived to be a problem with the bookstore operation.

The store had been profitable for years but had not been charged for indirect support expenses for such areas as the offices of Business Services, Payroll, Accounting, etc. In 1987, an off campus competitor opened adjacent to campus. This, naturally, had a negative impact on our operation. During our discussions, Mr. King quickly determined that the bookstore operation had to be turned around financially. The question that remained was how to do it. The two options that presented themselves immediately were:

   -work with the bookstore manager in order to provide a much improved financial picture, or
   -contract the bookstore operation.

Although the option of working with the bookstore manager certainly sounded like the right option, I recognized that I could use some professional assistance in college store management. It is not easy to provide basic direction to an individual when you, yourself are not entirely sure of the proper step by step method of achieving the objectives. The second option, leasing, certainly would be the easy solution; a guaranteed return with very little direction from the administration. However, this solution did not seem appropriate either. There were two basic questions that needed to be answered:

-What could realistically be expected from Radford University's bookstore in terms of both operational and financial aspects, (where is the bookstore now, where should it be, and what will it take to get it there)?

-What are the operational options that would allow these expectations to be accomplished?

In order to determine the answer to the first question, "what is the potential of the bookstore?", an objective and knowledgeable third party opinion was essential. Mr. King and I discussed what consulting companies and/or groups could do to assist in providing an objective review of our operation. Emphasis was placed on the need for an overall and in-depth knowledge of the college bookstore industry, and an objective and credible position within the industry.

We determined that Bookstore Management Concepts of Georgetown University possessed the desired characteristics to accomplish the objective. It was a company whose staff has a strong background in institutional operations, leased operations, full retail operations, as well as strong financial analysis capabilities. Bookstore Management Concepts is owned and operated by Georgetown University. Since Georgetown operates its own stores, BMC has no reason to believe that a store can not be successfully institutionally operated. In addition to consulting services, BMC also provides management services, and leased operations. Additionally, Bookstore Management Concepts has its own Bookstore Management Training Center at Georgetown University. If it was determined that our current staff's problem was basically a lack of training, this problem could be addressed by BMC as well. I felt that since a balanced service menu could be provided by BMC, an objective review of Radford University's bookstore would be the result.

The review comprised of four (4) distinct steps:
   1) preliminary data we provided
   2) on-site data collection by BMC
   3) analysis, preparation, and presentation of report by BMC
   4) exit review of report

Generally speaking, I found the process to be relatively painless. The preliminary data collection aspect was basically the university providing such information as type of institution, number of students, number of residents, financial statements for two previous years, and competition, if any. This was followed by the president of BMC, Ron Duvall, visiting the campus for four (4) days. At the beginning of this period, Mr. Duvall and I spent time discussing the University's objectives for the bookstore. He asked questions pertaining to our objectives in terms of services and finances. These questions were easy to answer since we expect a highly responsive service entity that provides a significant financial return. During the remainder of the time, he interviewed the manager, the bookstore staff, as well as some faculty, staff, and students. There were meetings with our finance and budget personnel as well. As part of this process, he determined the store's capabilities in all operational aspects, ranging from staff level and knowledge, to departmental and financial policies and procedures, customer service priorities, and marketing and merchandising aspects.

After he had left the campus, telephone conferences were held to either clarify or verify information that had been gathered. After approximately 45 days the completed report was received. The review confirmed some of our thoughts concerning the bookstore operation. There was definitely much more that could be done in order to provide the caliber of service and financial responsiveness that we expected from our bookstore operation. There were specific recommendations in such areas as cash handling, textbook operations efficiencies, vendor negotiations and controls, inventory procedures as well as merchandising aspects. In the area of cash handling, recommendations such as not allowing more than one cashier to use the same cash drawer and the need for immediate managerial approval for voids were provided. The recommendations provided in textbook operations included a time schedule which allows for an orderly processing of textbook requisitions through the cycle which includes editing, used book acquisition, publisher orders, receiving and status information for faculty members. A daily used book buying program was also recommended. This was in direct response to the competitor's program, and would provide a more positive customer service image.

In the area of vendor negotiations and controls, BMC's suggestions included the feeling that we were dealing with too many clothing vendors (33). It was recommended that we reduce this number to less than ten (10). This would provide a much stronger negotiating position with the remaining vendors, thus allowing us to increase margin without increasing retail prices. It would also save significant time on the part of the buyers since they would not be scheduling appointments 3 or 4 times a year with the 23 to 25 sales people that were dropped. This would also assist in providing improved inventory procedures. With the inventory control suggested and the reduced number of vendors, our staff would be capable of more effective and efficient product control and purchasing activity.

In the area of marketing and merchandising, a constant promotional program was recommended. It begins with the freshmen and parents orientation program in the summer, and is intensified as the "rush" period begins. Throughout the year, sales or special events in the store will be publicized through a flyer and student newspaper program. BMC stated that one of Radford University bookstore's main objectives should be to have the university community think of their bookstore first and foremost in the fulfillment of their needs for books, academic supplies, and general merchandise.

There also were comments that were direct and critical of our bookstore operation. Although it is not particularly enjoyable reading critical comments about one's operation, it was in fact what we needed to see. We were paying for an objective and honest review, and that is what we received.

Once Mr. King and I had reviewed the report, we provided a copy to the manager, and the relevant sections to the various department heads. Mr. Duvall came back to campus for an exit review session. There was ample time for all participants to obtain a complete understanding of the report and its implications. Again, the review session was as straight forward as the report.

In discussions with our current manager it became apparent that, if possible, he would prefer to transfer to another position on campus rather than change the management style he had employed for over twenty (20) years in the bookstore business. Since there was another area under business services that needed an experienced manager, Mr. King and I agreed this would work well for everyone.

Our initial response was to do a search for a new manager. It was anticipated that it would take approximately 90 days to complete the selection process and have a manager in place. Due to the timing of the vacancy (May, June, and July), Mr. Duvall suggested that in order to insure aggressive action for textbook acquisition (used and new) in light of the competition, as well as turning the operation around, that BMC provide an interim manager. After further consideration, Mr. King and I decided that a "leased" manager on an extended basis as versus the short-term suggestion would best suit our needs. This would allow the University to actively participate in the management selection process. Additionally, and perhaps more importantly, the managing company could develop our operation for us. Utilizing their knowledge, management personnel, home office support staff, store staff training capabilities, and purchasing advantages would allow for a much quicker development of the operation than we would be able to do on our own.

Similar to a lease operation, the managing company would be required to provide periodic on-site visitation from the home office.. Additionally, proven marketing, merchandising and promotional techniques would be implemented. This is important to any institutional bookstore operation and takes on an even greater significance when there is competition. Radford University would still maintain all profits from the operation. At the conclusion of the agreement, once the store has been fully developed, we can select a manager and continue the bookstore operation.