Business Name : The Heaven Bookstore
● Sole trader
The Heaven Bookstore will be a sole proprietorship. This is the best suitable option for many small businesses across Australia, with 61% of Australia's business being sole traders.
The benefit of being a sole trader is the convenience and cost effectiveness of this structure. The business will incur a low start-up cost due to inexpensive registration with the Australian Securities and Investment Commission (ASIC) and minimal government requirements, namely no company tax.
As a result, the business will retain majority of its profits, which can be reinvested to encourage growth and profitability. The time-efficient process of setting up a sole proprietorship will also allow the business to focus on improvements and further innovation rather than a myriad of of legal compliance and bureaucratic issues that come with other structures.
Additionally, with a sole proprietorship, the owner could retain full managerial control so decisions can be made quickly, without the need to deliberate with partners or a board of directors or the delay of potential disputes.
The Heaven Bookstore will become a creative hub in the heart of Newcastle, celebrating words and a love of literacy by offering children and adults a quality selection of books to sustain a local community of lifelong readers.
Our vision is to become the largest and leading book distributor in Newcastle and to be the bookselling household name in Newcastle.
The Heaven Bookstore will be located at a shopping mall at Westfield, Kotara. It will have a large amount of space where customers can walk comfortably in the store and have a look around at the books on offer. Renting a building is typically more cost-effective in the short-term than purchasing constructing your own building, which is why this option is the most suitable while the business is still establishing.
While rental expenses may be relatively high, Westfield Kotara specifically a prime location due to high customer flow as over thousands of people walk into the shopping mall. This can be partly attributed to the mall providing free parking and being located in a central area. Because of these factors, having Heaven Bookstore located within the mall will provide competitive advantage to other bookstores and earn enough sales to be worth the expense.
The success of this location will be enhanced by having the store in close proximity to stores that attract a similar target market, so it is convenient for customers to visit Heaven Bookstore. This could be next to National Geographic where people purchase education resources and Heaven Bookstore can share the flow of customers.
The main financial goals include the following respectively:
- Maximising profits
- Maximising market share
- Maximising growth
Specifically, Heaven Bookstore has the goal of achieving a net profit of more than $150,000 over the 2018/2019 financial year. This will be achieved by encouraging sales through effective marketing strategies and efficient operations processes to increase demand and customer base while reducing expenses and non-value adding activities.
Heaven Bookstore also has the goal of capturing 40% of the market of book-buyers in Newcastle. Currently, the big competitors in the book market are Dymocks, QBD and Booktopia. Heaven Bookstore will dominate these by ensuring all the newest and high demand books are stocked and by creating strong relationships with customers through a loyalty program which tracks the customers' favourite books and buying patterns. This information can help Heaven Bookstore ensure customers are satisfied with the store so they can encourage further customers by word of mouth.
If Heaven Bookstore achieves the profit and market share increase as forecasted, the store will experience continual growth.
Non Financial Goals
The main non-financial goals include the following:
● Social goals
● Environmental goals
Heaven Bookstore aims to have a reputation for their community service and diversity. This will be achieved by sponsoring and supporting community events and ensuring ethical business practices. Internally, this includes equal treatment of employees, women in managerial roles and celebration of diversity, which studies show will result in more productive employees and less absenteeism. Heaven Bookstore would publicise their social work by hosting education seminars on cultural and gender diversity and publicly supporting charities and not-for-profit organisations to develop a good bond and engage with the community.
Heaven Bookstore has the environmental goal of supporting sustainability throughout its operations. This will be achieved by abiding by the ISO 14001 standards of environmental efficiency, being energy conscious by having dim lighting, and using green bags or encouraging customers to bring their own. This adds to Heaven Bookstore's reputation as a socially responsible business and will encourage future sales and growth.
Situational/ SWOT Analysis
- We hire people who have a strong desire and passion and absolutely love books
- We will have local authors readings and book signings
- Can have local authors and lectures and book signings
- We can make personalized recommendations to long term customers
- We will sell new and popular books
- Skilled workforce due to a comprehensive training program
- Competitive advantage due to a free and convenient parking in a prime location Weaknesses
- Small store space is a shopping mall which can be congested
- Rental expenses is relatively high
- Limited financing options as new businesses may only receive a limited line of credit and have limited equity financing options
- Have not experienced past failures so do not know where to improve on
- Health insurance costs are rising
- Business is slower during the summer vacation
- Competitive advantage due to free and convenient parking compared to some other bookstores.
- New technology will allow people to online order
- Interest rates are low, which means lower cost of debt financing
- The Australian Council for the Arts has today released a summary of new research into Australia book reading habits which reveals Australian ranking reading as their number 1 favorite leisure activity and they still prefer a printed book in their hands Threats
- Current economic growth is slow, therefore sales may be initially low
- Larger competing chains have more market power, which means they have an established customer base
- Increasing demand for eBooks may eliminate the need for physical books
- Younger market segments that are influenced by technology don't read as much as older generations.
The production process
Heaven bookstore will have the input of staff and labour hours and books sourced from suppliers, such as wholesalers and publishers. The inputs will be transformed into a retail service that displays books in a logical physical layout to customers and having technology that ensures that inventory management and sales are conducted efficiently and accurately. The output of Heaven bookstore will not only be high quality books, but also exceptional customer service. This operations process will ensure that the output will maximise customer satisfaction.
Since employees are the face of Heaven Bookstore, the focus will be on total quality management. In training programs and while working, employees will be encouraged to focus on quality in everything they do so customers are continually satisfied and will repeat purchases. Areas of focus include cleanliness and presentation of the store, efficiency of service as well as the physical quality of the goods sold.
The target market of this bookstore is young adults to people who are in their 30s. This is because 95% of Australians in this age group enjoy reading for pleasure or interest and 68% would like to read more, with relaxation and stress release the most common reason for readling. 75% of Australians believe that books make a contribution to their life that goes beyond their cost. This bookstore is currently aimed at the Newcastle Region, which has about 546,788 residents in total, and residents within the target age range.
The books that are sold by Heaven Bookstore will be positioned with the image of a high quality. If there is a tear or anything is wrong with the book, customers will be assured exchanges and refunds.
The business name for this small business is Heaven Bookstore, and the logo is as pictured. They will contribute to the success of the business by making the target market feel a sense of joy and relaxation when they see the logo.
The type of book that this bookshop selling is fiction stories that are really popular and are on high demand. The popular reads will be on a bookshelf display with lights around them to highlight and promote the product.
The price method that Heaven Bookstore is setting is penetration pricing, which is the pricing strategy when the price of a product is initially set low to encourage a wide fraction of the market to purchase the books and switch over from competitors to initiate word of mouth for the store. This strategy will hopefully provide the business with a competitive advantage resulting in increased market share, growth and revenue.
The strategy works on the expectation that customers will switch to a new brand because of the lower price as it becomes more appealing and satisfying compared to the higher priced competitors. Therefore, it would give the Heaven Bookstore a competitive advantage which would lead to increased market share, faster growth and increase customer relationship. while this strategy may mean lower revenue per unit, it will lead to increased sales volume, and lead to greater total revenue in the long term.
Heaven Bookstore would use many promotion techniques to attract customers and help to maintain their loyalty.
One way to promote the business is through brand loyalty through image reinforcement. This can be done effectively through the use of social media. Heaven Bookstore will be advertised through social media such as Instagram, Facebook, email marketing, Blogs and Reddit. During these posts, Heaven Bookstore will inform and persuade to buy the books offered and enhance image by offering the main features that the business would have to offer. Furthermore, the business will use TV advertisements in local stations. This may be costly, but it reaches a large audience.
Another way that the business could promote this is by personal selling. Heaven Bookstore could arrange for one of its staff to go knocking on doors and modifying the message to suit the person's needs and wants. This would allow the customer to be interested as the books would be well suited to them.
The distribution channel that will be used is: wholesale – retailer – consumer. There are many advantages to this.
Most business don't have the energy to go out and get the stock so wholesalers deliver goods and stock to your doorstep.
Also, if a retailer purchases their stock from a wholesaler frequently, they may receive specials offers and develop a unique partnership. There is a good chance that the wholesaler will have a loyalty system in which Heaven Bookstore can earn points and gain discounts to lower their cost of goods sold.
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