Ali and Son Bookshop is a new business enterprise which will start operating on December 1, 2010. It is a book and magazine and sationery store serving the needs of the population in the Bentong area and the surrounding housing estates. The objective of this book store is to provide the community with ample choices of books, magazines and stationery, besides promoting and to promote the reading habit of the residents of Bentong especially the younger generation. Presently Bentong does not have a retail outlet dedicated to books and magazines and stationery. Ali and Son Bookshop has a mission to fill this void.
Ali and Son Bookshop bookshop is owned by Ali and son. Ali has many years of experience in the book selling industry in Kuala Lumpur. He had served as a manager with Kinokuniya Book Store and Popular Book Store for thirty years and his son an accountant by profession, having worked in the retail trade in Kula Lumpur for five years.
The company has an ambition to attain and maintain a position as be a major source of books and magazines in the Bentong area. The companys’ target for the first year of business is to achieve a 20% of the local retail market for books and magazines, hoping it will increase to 30% by the third year of operations. A term loan of RM 200, 000 is required to ensure the store has enough inventory when the shop opens for business on December 1, 2010. To guarantee positive cash flows in the first year, operating loans amounting to RM 10, 000 are needed. Few book and magazine distributors have agreed to negotiations and distribution contracts have been drafted. One of them is MPH Distributor, the largest book and magazines distributor in Kuala Lumpur. The distribution contract is in the final stage of drafting after which it will be used for financing.
There are ample marketing opportunities in the book industry, in Bentong where industry studies and analyst projections show that the growth in the market for books is progressing for the next five years. Surveys in this book and business sector for the last eight years showed significant growth. The main client basic are residents with a secondary school education and an increasing population of school going children. An entertainment magazine controls a larger portion of the business. Research indicates that for the next five years this industry will have a 20% to 30% growth, especially in the sales of revision books for important examinations. With the emphasis being focused on obtaining excellent results, parents and students will not mind spending large amount of money buying these books. This in turn contribute to the major growth in the book industry. For magazines, an expected 2% to 3% growth is anticipated and stable. Statistics and data sources project a figure for the market to be RM 500, 000, the accumulative size will most probably studies show that 75% of all magazines buyers are between the age of 15 to 60 and that 60% of retail magazines purchases are female and the males portion is 40%. In Bentong, the majors market segment is the small business enterprise rubber – tapping and farming community.
As there is no other retail outlet in the Bentong district that deals with books, magazines and stationery for a radius of 200 kilometres in any direction, it is in an appropriate location to capture a large portion of the book, magazine and stationery sales. Since there are no other bookshops in this area, hence, there is no competition in this market. Therefore, by focusing on this aspect of the industry, Ali and Son Bookshop can achieve and then maintain a competitive position as the only merchant of books, magazines and stationery in Bentong.
Advertisements through leaflets and flyers distributions will be the key marketing strategy. In addition, introduction of the bookshop will also be included in schools annual magazines. The target audience is, simply put, book lovers. As emphasis is being focused on examinations so revision books will be one of the main items besides stocking books on popular fashions, sports, news and celebrity magazines. Since the larger segment of industries are small business enterprise, rubber – tapping and farming, we will all aim people involved in those industries. Children, parents and students are also potential targets and so are retirees.
The financial projections is anticipated to increase from RM 170, 000 in 2010 to RM 300, 00in 2012. We expect strong growth in revenues of 35% in 2011 and 32% in 2012 results from an expected increase of sales. Direct cost of sales average 61% of gross sales which includes 50% for purchase of books and 11% for purchase of magazines inventory. Projection of net income from 2010 to 2012 will be quite encouraging.
The facts and figures enclosed in this business plan is deemed confidential. Disclosure of information pertaining to it needs the expressed written permission of Ali or his son.
Potential investors are reminded that this business plan is a representation of the management’s best estimation of the imminent potentiality of this venture. The inherent risks should be seriously considered as not all major setbacks can be accurately predicted and non guarantee that few business plans are devoid of errors of omission or commission.
Ali and Son Bookshop is a new retail business enterprise which is due to start business on December 1 2010. The venture is a books, magazine and stationery store with an aim to serve the population of Bentong which does not have a books, magazine and stationery retail outlet. Ali and Son Bookshop aims to fill this void.
Ali and Son Bookshop has vision to become a premier supplier of books, magazines and stationery for Bentong and the surrounding communities. Promoting reading in the community, instilling an awareness of books as a source of knowledge and providing readers with a wide variety of choices is the ultimate goal of Ali and Son Bookshop.
Our primary objectives over the next year are:
Complete start up activities, acquisition of an inventory and opening the business to our customers.
Obtain contracts with main magazine and books distributors in Kuala Lumpur.
Seek approval for a term loan of RM200, 000 in order too acquire inventory for the shop and an operating loan of RM 10, 000 to ensure a positive monthly cash balance.
RM 10, 000 to ensure a positive monthly case balance.
Garnering a market share of 20% of all the books and magazines sold in Bentong by the end of the first year’s business.
Achieve and maintain a position as the main retailer of books and magazines in Bentong.
Ali and Son Bookshop is the proprietorship of Ali and his son. Both partners are handling the operation and management of the company.
Ali and Son Bookshop is located at 3, Main Road, Bentong and occupying an area of 2,500 square feet with a rental of RM 1, 500 per month. The store has in its possession a computer with the Word Perfect suite and a specialized inventory tracking program for small scale retail operations such as Ali and Son Bookshop. The building includes 300 square feet of office space besides having a 600 square feet of storage space. Furniture comprising of shelves, magazines racks and display units have been ordered and expected to be sent to the shop by December 1, 2010. Since Bentong is a small, rural town, the rental is cheap.
In Ali and Son Bookshop, a variety of books and magazines which appeal to the residents of Bentong are in its possession. The store also offers national bestsellers in both fiction and non fiction, books on outdoor activities, motivation, religions and revision books. Children’s books and related publications are not spared as well and a shelf has been assigned for it. The company will also add other types of books, depending on customer demand.
Different types of magazine related to entertainment, fashion, sports and investment will be made available.
Ali and Son Bookshop is considered unique, being a “one-stop shop” where there is a product mix. The goods for sale will reflect the reading preferences of the community of Bentong.
Orders are made directly from the publisher or an approved representative on all the book and magazine titles and no production on site.
It is the goal of Ali and Son Bookshop to continue to expand and diversify our products according to the wishes of customers. Further expansion will encompass an inventory of books on audiotape and CD-Rom as business progress. In addition, a special order service for any book or magazines will be introduced.
Mr Ali has contacts with renowned contributors, thus ensuring any special or limited edition books can be ordered directly from the publisher.
Information pertaining to the market potential of a book and magazine store in Bentong was gathered from a few sources, namely the statistics survey of Book Publishers and Agents. Market surveys were carried out to gauge the trends and preference of the community in Bentong by talking to them and asking them what types of books and magazines appeal to them. Sales data were compiled too. Information was also gathered on the future trends in the book and magazine industry. Form the facts, information and data collected, we were able to prepare client’s profile and deduce what kind of books and magazines were popular.
Datas gathered indicate that the size of the books and magazine industry is quite substantial. With the governments campaign to read, the future of the book industry is definitely very positive and promising. In Pahang, in which Bentong is located, statistics show that the expenditure on books by the population reaches RM 500, 000 annually.
There are three compartments in book sales, namely, Pleasure ( novels, mystery, romance, humour, action, general, non – fiction ), Educational ( textbooks and revision booksfrom primary to secondary schools ) Professional and Reference ( subject specific, subscription reference ). The pleasure segment consists of hard cover and paperback sales. Retail magazine sales can be categorised into sport/leisure, fashion, computer and electronics, business/financial, children and teen, men’s adult and automobile magazines.
The main customers in Bentong are residents with an inclination to reading and school children. Women whose age ranging from 17 to 55 are the most important market segment. Demographic profiles indicate that women make the most retail books purchases. Studies of the book industry show that most of the customers buying magazines are between the ages of 17 and 55. Surveys also indicates that female purchasers exceeded male customers.
Studies show that most of the purchasers are impulse buyers, meaning, they do not specifically intend to buy a specific book when they entered the store. Customers buy when they perceive the price as being reasonable, the books has visual appeal, relevance of subject matter and the customer’s reading capability the purchase is carried out in a straight forward way when the book is bought off the shelf and takes it away.
From the shop’s view, books and magazines in demands by our patrons will be ordered for the store. In a rural area, the distribution of books and magazines will be handled by one or two major distributors.
In Malaysia, large national chain bookstores such as Popular Book Store, MPH Book Store, Reader Book Store and University Book Store dominate the sale of books. Other major booksellers are colleges, universities, specialty book stores and super markets. In Bentong, schools and convenience outlets are the only stores that sell books, whereas magazines are sold in various outlets which include petrol stations, newsstands, supermarkets and provision shop
Due to the awareness created by the Malaysian government on the importance of reading, the onset of technology and a knowledge based society, more Malaysians are reading now. Therefore, it can be deduced that the book industry will improve tremendously as a result of the country becoming more affluent and developed. The Malaysian government aims to make this country as an education centre in this part of Asia, hence the sprouting of institutions of high learning attracting foreign students to study here. This will indirectly affect the book industry to move it into the positive zone when the purchase of books, magazines and stationery will increase. This will definitely have a spill over effect on the book, magazines and stationery business to Bentong.
We are targeting the market in Bentong and the surrounding areas especially
students, office workers, children, parents and retirees. Ali and Son Bookshop will
focus its efforts on the customers of “Pleasure” category books. Another sector will
be the educational category where revision books are a popular buy. The professional
category is not so popular, the demand is insufficient to stock these types of titles.
The makeup of the community and their preferences reflect the magazine titles.
Popular fashion, celebrity oriented magazines, sports and economical activities will
be our main magazine titles in our stock. Ali and Son Books will not stock books and
magazines that are prohibited by the ministry, for example ; pornography and other
reading materials that are considered degrading.
Presently, there are no other bookstores in Bentong to compete with Ali and Son
Bookstore. Although newsstands and convenience stores do pose a small competition
but they do not cause much harm to our business. These outlets gave very small space
to store books and magazines and they do not have more than 20 different magazines
titles.
Ali and Son Bookshop has an edge in capturing the majority of book, magazine and
stationery sales in Bentong as there are no other outlets dedicated to this industry in
the immediate surroundings. Because of the remoteness of Bentong, we believe Ali
and Son Bookshop is poised to fill the void. Ali and Son Bookshop is focused on
catering to the needs of the communities of Bentong and we can achieve the status as
the leading vendor of books and magazines.
Books and magazines will be sold with the price as indicated on the covers except
where there are sales events and clearance of stock. For special orders, a postage fee
and handling cost will be imposed to the cover price.
Ali and Son Bookshop plans to have a grand opening with much publicity by putting
up posters, distribution of leaflets and flyers and through announcements made from a
moving vehicle through loudspeakers. This vehicle will make as many trips as
possible in the surrounding areas, to bring to the knowledge of the inhabitants of
Bentong about the opening of our bookshops.
To overcome the risk of increased store’s product costs should the distributor increase
its prices, a contract will be drawn to prevent the distributor from doing so with the
inclusion of a clause in the agreement for a two year fixed price.
Decreased interest in reading is a risk that needs to be taken care of. As a remedy,
we will stock those titles that are popular, hence minimizing the risk.
Economic downturn when unemployment worsens and less disposable income to
purchase books and magazine.
For the next few months, Ali and Son Bookshop will undertake the following activities:
To complete contracts with the distributor and obtain inventory once financing is secured.
Start implementing marketing strategies and opening the store for business.
Obtain operating loan of RM 10, 000 to maintain monthly cash balance in the first three years of operation.
Periodical adjustment of the product mix and be proactive to customers feedback
Impressive arrangement of books for display as well as furniture.
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