Kepler’s Books and Magazines in Menlo Park, Calif., marked its 60th anniversary this month—its third anniversary since Praveen Madan, co-owner of San Francisco’s Booksmith, took over as CEO. Madan said that while much has been accomplished, including making the once-struggling store profitable, there is still a ways to go in making it “the bookstore of the future.”

Madan keeps three major parts of the Kepler’s transformation strategy in mind at all times: the why (its social mission of literacy and community engagement); the what (improving customer experience); and the how (a move toward a democratically run bookstore).

Along with Christin Evans, another Booksmith co-owner and the head of inventory management at Kepler’s, Madan started the overhaul with a two-and-a-half day community planning session in 2012. This yielded “a tremendous set of ideas,” said Madan, who defines his CEO role as standing for “community engagement officer.” The pair downsized the store by 40%, secured a less expensive lease, remodeled, upgraded to a PC-based point-of-sale system, and grew the inventory, which Evans said had “bottomed out”; the process of updating the inventory included identifying core backlist titles that were missing.

Founded by Roy Kepler in 1955, Kepler’s always held community events and programming, but according to Madan, it was “a cash drain on the store.” In an unconventional move for a bookstore, they decided to create a hybrid business with a separate nonprofit, Peninsula Arts and Letters, to handle events. “We realized that programming needed to be done—but didn’t need to be done in a for-profit setup,” Madan said.

Madan cites Peninsula Arts and Letters’ program of producing literary events in neighboring schools as a highlight. “Most of the school programming in the old Kepler’s was focused, by necessity, on schools where kids could buy books, so the underserved communities were not getting their fair share of the programming, because any event had to be justified by book sales.” The new nonprofit model means authors can go into public schools without Kepler’s worrying about making money. “After the first year of the program, we checked in with teachers and librarians, and books of the authors we brought were the most checked-out books in the library,” Madan said.

While the bookstore is still a for-profit company, Madan and Evans are committed to making Kepler’s a community-owned store in the future, noting that delays in implementing rules under the JOBS act are slowing that process down.

The two have a strong commitment to providing living wages and “100% transparency, strong staff participation in all decisions, and a commitment to improve staff wages and benefits.” One example is the creation of an annual profit-sharing plan. “For two years in a row we’ve been able to grow the business,” Madan said. “That’s because the entire team has worked really hard together, and we believe in sharing the rewards of that success with everyone. For two years now we’ve been able to distribute nice profit shares with the staff. We do that very democratically. I get the same bonus as the bookseller.”

Despite the raises and profit-sharing program, Madan realizes it still is difficult for the company’s 26 employees to afford to live in the region, a problem many Bay Area bookstores face. With a lack of housing in the Menlo Park area, and extremely high rents in the surrounding Bay Area, staffing is difficult. “It keeps me up at night,” Madan said. “Housing alone is so expensive, and it’s killing us.” Evans noted that one of the staffers was trying to move into a studio but that the “income requirement was $80,000.”

To be able to raise wages again, Madan said, “I am clearing my decks to focus on making the nonprofit side truly independent, because it still relies on the store for a chunk of its funding. That will allow us to raise staff wages. I need to stop being the reluctant fund-raiser; I need to embrace this commitment I made—it’s my job as the CEO to be the main fund-raiser and improve living wages for our staff.”

While it remains to be seen how the store transitions into a cooperative or community-supported business through the JOBS Act, one thing is certain: both Madan and Evans are preserving the legacy of Kepler’s while staying focused on creating a bookstore that can prosper in the future.