To Build or to Buy
The shop selected for this assignment is a bookstore near the gate of my apartment. My preference for the bookstore is due to my passionate and insatiable appetite to gain insights from books. Besides the passion for reading books, the proximity of the shop has also significantly contributed to my regular and high frequency to the store. Despite the convenience that I receive from reading and borrowing books from the bookstore, I still believe that with the business concept I have in mind, it can offer meaningful competition to the bookstore if not do better.
With the advent of technology and the sprout of online business platforms, opening an online bookstore can be a good business opportunity that will not only rival the existing bookstore near my locality but will also attract a broader customer base. Therefore, being a business idea, it would be imperative to develop a business plan that will aid in the execution of the start-up plans and efficient running of the business.
The following is a detailed business strategy for the Online bookstore that would provide an alternative to the customers instead of only visiting the physical bookstore located within the neighborhood.
To be a fountain of knowledge while providing credible and latest online books to our customers at all levels. We aspire to listen to the needs of our customers and provide books anytime at their convenience just by the click of a button. Our plan for growth will be inspired by the dedication to service delivery and desire to cascade knowledge to the grassroots level.
The online store business has goals that will be achieved both over a short and long period of time. The goals to be achieved in the short-term include; incorporating the services of family members and friends to assist in the running of the business by overseeing the daily operations of the online book catalog for six months. After that, an elaborate plan will be put in place to recruit and employ competent stuff placed at strategic locations to run the daily operations of the business. Secondly, the store also has a goal of addressing the inconvenience caused by having to visit the bookstore to access books. Sometimes the clients have to contend with undesirable changes in weather such as bracing the rainy days to borrow or read the books they desire. For that reason, the online bookstore will address the inconvenience caused by that and allow clients borrow books at the convenience of their homes. Furthermore, the business has an overall goal going international by being the only online bookstore for research and learning purposes.
Since it is an online business, the start-up capital would not be as much as starting a venture that requires setting up a premise or an office. In that case, one will have to buy a structure, pay rent or construct a premise. Furthermore, family members from inception will run the business to when it will achieve stability and become self-sustainable.
With the above two alternatives, I would recommend building and nurturing the new business venture of starting an online bookstore instead of purchasing the existing physical bookstore located in the neighborhood.
Form of Ownership
The ownership structure of the business would be a general partnership. Since the ownership of the online bookstore would be under two individuals, it fits the bill to register the business name as a general partnership. The ease of forming the business with my sibling and our willingness to make equal contributions of money and skills is what inspired us to conceptualize the idea. On top of that, the proceeds realized from the business will be shared equally. Similarly, the equal partnership contract mandates everyone to accept liability for the debts that the business may incur any time within the course of its operation. Additionally, the roles of the management structure of the business will be equally shared between the two shareholders where everyone will be assigned duties and responsibilities. The current financial constraints is also another factor that led to the adoption of the general partnership, ownership structure with my sibling as it was the only practical way of actualizing the business concept.
An Outline of the Business Plan
The online bookstore intends to provide a platform for accessing electronic books to customers within the neighborhood and later on, expand to cover the entire state which will then culminate in reaching an international market. Our services range from selling E-books, lending books to our esteemed customers at an affordable rate and advising clients on the new books that have been released into the market especially for those who read novels. Moreover, the business aims to eliminate the time wasted by the clients going to the bookstore to purchase or borrow books. Furthermore, our company also intends to conserve the raw materials used in the manufacture of papers used to print books.
The target client base of the business would be students in the entire neighborhood for a start and later provide a broad pool of books that would even be read by professionals and any other person who has the passion for books. Further, the business will also avail religious e-books that will be useful for the religious fraternity and can easily be accessed even during a religious function.
Future of the Company
Although the bookstore market is highly competitive, we believe that venture will attain its goal of providing affordable up to date e-books that will act as a complementary system of the library facilities in school and deepen the culture of research among students, researchers and professionals.
To store online books that will be easily accessed by customers at their comfort and affordable prices.
The online store business is a general partnership.
The online business bookstore will be part of the bookselling industry. At the moment, physical bookshops, libraries, and cybercafés have dominated the market niche and its projected that they will continue to deepen their market base due to the increase in the access to formal education. Again, despite the high levels of global inflation, the industry recorded revenue growth of $1.3 million in the second quarter of 2015 (Brynjolfsson et al. 1580). Therefore, that is a positive indicator of growth potential in the industry.
Our proposed electronic bookstore will have the following advantages compared to rivals.
- First, since the business will be run on an online platform, it will have an interactive and high-quality website.
- It will eliminate the time wastage of visiting a bookstore to purchase a book.
- Quick customer response whenever they inquire or place an order of a book.
- Regular updates to our esteemed clients of the new books that have been released into the market as well as the ones in our inventory.
- It will offer physical delivery of books to the customers who are not accustomed to reading E-books.
The proposed online bookstore must comply with all the state and federal regulations governing the selling of books. Specifically, there will be strict observance of the fixed book price agreement (FBPA) regulations. Moreover, the company’s website will strictly comply with the E-commerce regulations of displaying the relevant details to the customers via the website. Such information will include the following. The VAT number of the business, the registration number of the company, company contacts such as the email address, name of the company and the postal address if applicable (Kubasek et al. 30).
The proposed E-book sales store will offer the products at the following prices:
Academic books – $ 30
Novels – $20
The cost of borrowing and delivery of physical books will be as follows:
Academic books – $8
Novels – $6
Marketing & Sales
For the business to grow, the proposed online bookstore will do the following:
Conduct advertisements of the business products to the target customers as the business grows (Small Business Administration). Making trips to schools and research institutions with flayers about the online bookstore will significantly contribute to increasing awareness of the business to the members of the public.
The electronic bookselling business keeps communication with its customers through:
Targeted Social media and Google advertisements.
Regular provision of email newsletters about the business and the new products or books offered.
Adding labels about the company, to the books for the clients who will opt not to buy e-books.
The company website will also have contact information at all times. Therefore, the company envisages constant communication with the clients.
Brynjolfsson, Erik, Yu Hu, and Michael D. Smith. “Consumer surplus in the digital economy: Estimating the value of increased product variety at online booksellers.” Management Science 49.11 (2003): 1580-1596.
Kubasek, Nancy, et al. The legal environment of business: A critical thinking approach. Prentice Hall, 2006: 30-45
Small Business Administration. “Write your business plan.” Small Business Administration, 2017, www.sba.gov/business-guide/plan/write-your-business-plan-template#section- header-2