BOOK JUNCTION

G-18 LAJPAT NAGAR IV

NEW DELHI-110024
ph:011-29815487


18 August, 2011
Prepared By: Tanu pahuja, Vendita singh
aditi saini, Gaurav gupta, Sakshi gupta
Description
Book junction plans to expand its market by providing onsite book renting
service to book lovers at their doorstep.
PROPOSAL NO. 6250-214


www.book junction.com


TABLE OF CONTENT














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EXECUTIVE SUMMARY
Introduction
Book junction is a start up books lover point. It is the goal of company
management to acquire local market share in the book store industry through low
price, a dominate selection of products, a competitive variety of services including
renting book online or on telephone plus a relaxing, friendly environment that
encourages browsing and reading.

Company
Book junction will be a limited liability corporation registered in the Delhi-NCR
region. The company will be jointly owned by Tanu pahuja, Vendita singh, Aditi
saini, Gaurav gupta and Sakshi gupta.
Owners are establishing this firm as a growth oriented endeavor in order to
pursue their dreams, continue meeting people with similar interest and to leave a
business to their successors.
Book junction will be establishing its store in one of the busiest section of India,
New delhi. This area is well known for its upscale resident and high quality
establishment.





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Products/Services
Book junction will offer a wide range of books, magazines, journals and music
selections. This includes just above every conceivable category including fiction,
nonfiction, business, science, childrens, hobbies, collecting and other types of
books. In addition we will be offering a competitive rental service to assist in
lowering our profits margin. Books junction will have a relaxed reading room type
atmosphere that will encourage through the placement of chairs, couches, etc.




www.bookjunction.com
when you have
finished , schedule
a pickup and
we ll send
you books
from ur list
Browse the
online books
catalogue


OBJECTIVE
In order to survive and expand, book junction must keep the following issues in
mind;
We must attain a high level of visibility through the media, and other
advertising.
We must establish rigid procedures for cost control and incentives for
maintaining tight control in order to become the low cost leader in renting
books.
In order to continually attract customers, we must be able to keep the
variety of books and achieve a high level of customer service.

MISSION
Book junctions mission is to provide a comfortable atmosphere for its clients that
promotes browsing, relaxation, and an enjoyable environment to spend extend
time in. we attract our customers by providing large selection of books.



www.bookjunction.com


INTRODUCTION
Company summary
Book junction will be a limited liability corporation registered in the Delhi-NCR
region . The company will be jointly owned by Tanu pahuja, Vendita singh, Aditi
saini, Gaurav gupta and Sakshi gupta.Owners are establishing this firm as a
growth oriented endeavor in order to pursue their dreams, continue meeting
people with similar interest and to leave a business to their successors.
Market analysis:
Bookstores serve the entire purchasing population but focuses majorly on
customers who desires to have books on rent at lower prices. Books at book
junction can flourish in an upscale environment. we can divide our customers
based on purchasing habits.
Casual shoppers: These are the customers who go to library with no set idea of
what kind of books they want to study. They seek to spent much time on
browsing and hence considered as impulsive customers.
Hard to find shoppers: These are the customers with very specific needs. They
are looking for a difficult to obtain item. If we can satisfy this kind of customer
then we will be able to build a loyalty.
Specific category shoppers: These customers are of that type that generally
demands for a particular category, such as fiction or romance. They have the
greatest trade potential.

www.bookjunction.com


COST SUMMARY
Our start up expenses come to Rs. 35,00,000. Which largely on long term assets
like books, CDs etc. These cost are financed by both private investment and
borrowings.
The cost will include:
Assets
Inventory(books, journals, CDs) Rs. 20,00,000
Cash required Rs. 2,00,000
Other current assets Rs. 80,000
Long term assets(furniture , motorbikes) Rs. 8,00,000
Expenses
Land and building(rent) Rs. 2,40,000 p.a.
Insurance premium(books and motor bikes) Rs. 30,000 p.a.
Advertising expense Rs. 1,00,000
Initial preliminary expenses Rs. 50,000
TOTAL Rs. 35,00,000



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The cost of the project will be incurred by both private investment and debt.
Project will include:
Capital
Planned investment (equally by all) Rs. 12,50,000
Liabilities
Borrowed fund (Proposed) Rs. 22,50,000












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REVENUE MODEL
The revenues of the projects will come from the renting the books to customers
and from the members in form of annual membership fees.
The membership fee will be as under:
PLANS NO. OF DELIVERIES
PER MONTH
BOOKS YOU CAN
RENT PER MONTH
PAYMENT
SUPER
READERS
Unlimited delivery
of 3 books each
Unlimited Rs.800 per month
REGULAR
READERS
3 deliveries of 2
books each
6 books Rs.500 per month

RELAX
READERS
2 deliveries of 2
books each
4 books Rs.300 per month

CASUAL
READERS
1 delivery of 2
books
2 books Rs. 150 per month
TURTLE
READERS
1 delivery of 1
book
1 book Rs.80 per month


Members will receive their deliveries at their registered address. They can notify
any change before selecting the product to the cart.
Late return fine will be charged after 10 days @ Rs. 3 per day.



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MEMBERSHIP FORECAST
We are assuming that our sales will be less in the initial period and will gradually
increase with the increase in awareness among the people.
Based on market analysis number of membership per month will be as follows:

MONTHS SUPER
READERS
REGULAR
READERS
RELAX
READERS
CASUAL
READERS
TURTLE
READERS
SEPTEMBER 15 10 7 0 0
OCTOBER 17 11 7 2 1
NOVEMBER 22 15 12 5 7
DECEMBER 25 18 15 7 5
JANUARY 25 20 15 8 6
FEBURARY 30 27 18 2 3
MARCH 45 40 32 8 9
APRIL 60 55 39 10 11
MAY 40 43 37 15 20
JUNE 60 57 46 20 30
JULY 50 52 43 25 32
AUGUST 55 53 37 19 28




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The graphical presentation of membership forecast is as follows:








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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
TURTLE
CASUAL
RELAXED
REGULAR
SUPER


HESTINATEB PR0FIT ANALYSIS
BREAK-EVEN ANALYSIS:
For first six months

EXPENSES/MONTHS SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY
RENT 20000 20000 20000 20000 20000 20000
ELECTRICITY 15000 15000 15000 15000 15000 15000
INSURANCE 2500 2500 2500 2500 2500 2500
INTEREST ON LOAN 18750 18750 18750 18750 18750 18750
ADVERTISMENT 20000 15000 15000 10000 10000 5000

TOTAL EXPENSES 76250 71250 71250 66250 66250 61250

REVENUE

MEMBERSHIP FEES 19100 21580 30010 34950 36180 43440
LATE FEE 0 0 0 0 0 0

TOTAL REVENUE 19100 21580 30010 34950 36180 43440

PROFIT -57150 -49670 -41240 -31300 -30070 -17810




www.bookjunction.com



For next six months

IMPLICATION:
The profits of the company are negative in the couple of months due to
huge expenditure on advertising.
If the total revenue is equal to 61250 then the company will be at break
even point.
The above revenue is estimated on the assumptions that the company will
earn super normal profits in month like april and june because at that time
the demand of books will be high.


www.bookjunction.com
EXPENSES/MONTHS MARCH APRIL MAY JUNE JULY AUGUST
RENT 20000 20000 20000 20000 20000 20000
ELECTRICITY 15000 15000 15000 15000 15000 15000
INSURANCE 2500 2500 2500 2500 2500 2500
INTEREST ON LOAN 18750 18750 18750 18750 18750 18750
ADVERTISMENT 5000 5000 5000 5000 2500 2500

TOTAL EXPENSES 61250 61250 61250 61250 58750 58750

REVENUE

MEMBERSHIP FEES 67520 89580 68450 95700 85210 86690
LATE FEE 0 0 0 0 0 0

TOTAL REVENUE 67520 89580 68450 95700 85210 86690

PROFIT 6270 28330 7200 34450 26460 27940



The revenues and profits depict that:



y In September to February the profits are negative and decreasing at
increasing rate.
y from march onwards the company is able to make profits which are
increasing except in the month of may.






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-80000
-60000
-40000
-20000
0
20000
40000
60000
80000
100000
120000
REVENUES
profits


HINPLINENTATI0N S0NNARY
Book junctions competitive edge will be lower prices we will charge our
customers and the dominant selection above what our library rivals can
offer. This is based on managements industry knowledge, greater
capitalization and excellent location. One of the most critical element for
the companys success will be its marketing and advertising.
In order to capture attention and sales our company will use prominent
sign at store and on web




most critical element of Flyleaf's success will be its marketing and advertising. In order to
capture attention and sales our company will use prominent signs at the store locations,
billboards, media bites on local news, and radio advertisements to capture customers. We
expect an average 4.5% increase in sales during the first three years as we establish ourselves
in the community. After that we assume a much higher average growth of between 10%-15%
growth over the next five years with growth then tapering off to the industry average of 2.5%
from year to year. These figures may seem very high, but considering the level of initial sales
and the growth possibilities, management actually considers this to be conservative.
5.1 Competitive Edge
The company's competitive edge will be the lower prices we will charge our customers and the
larger selection we can offer: through our large store, buyback/trade program, and leveraging
management excellent supplier contacts. As stated before, in the bookstore industry, low cost
and dominate selection are the two success criteria. We plan to create these advantages in a
new, comforting environment that will retain customers.
5.2 Marketing Strategy
One of the most critical elements of Flyleaf Book's success will be its marketing and advertising.
In order to capture attention and sales our company will use prominent signs at the store
locations, billboards, media bites on local news, and radio advertisements to capture customers.
5.3 Sales Strategy
Since our store will be a stand alone facility, there is little in the way to directly influence how we
close the sale other than to have an attractive storefront with our low prices and excellent


selection. We believe this in itself is its own seller. One critical procedure we will be establishing
is to insure top customer service and reliability and that our store always has enough inventory
of all our products. We will be using industry data on inventory for bookstore chains to assist us.
5.3.1 Sales Forecast
Based on a 10% mark-up, our forecasted sales will increase by an average of 4.5% from year to
year.
These sales figures are based on a conglomerate of commuter and walk-by traffic established
by the Loeman/Twin Towers Mall management and with an average $3.00 purchase amount
conforming to industry averages. The target profit margin was defined as an average net profit
of all merchandise. As retained earnings increase, a debt retirement fund will be established to
encourage early repayment, thus relieving interest expense. Also, a cash basis for purchases
will be used to avoid incurring liabilities.










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