I have taken efforts in this project. However, it would not have been possible
without the kind support and help of many individuals and organizations. I
would like to extend my sincere thanks to all of them.
I am highly indebted to SIR.ALI RAZA NOOR for their guidance and constant
supervision as well as for providing necessary information regarding the
project & also for their support in completing the project.
I would like to express my gratitude towards my parents & member of Naeem
Book Store for their kind co-operation and encouragement which help me in
completion of this project.
I would like to express my special gratitude and thanks to industry persons
for giving me such attention and time.
My thanks and appreciations also go to my colleague in developing the project
and people who have willingly helped me out with their abilities.
Awami Old Book Center is a start-up used bookstore in the Blue area,Islamabad. It is
the goal of the company management to acquire local market share in the used
bookstore industry through low price, a dominant selection of products, a
competitive variety of services including a buyback/trade program and hard to find
book search, plus a relaxing, friendly environment that encourages browsing and
These are the goals for the next three years for Awami Books:
Achieve profitability by July Year 2.
Earn approximately 400,000 Rs. in sales by Year 3.
Pay owners a reasonable salary while running at a profit.
Keys to Success
In order to survive and expand, Awami Old Book Center must keep the following
issues in mind:
We must attain a high level of visibility through the media, billboards, and
We must establish rigid procedures for cost control and incentives for
maintaining tight control in order to become THE low-cost leader in used
In order to continually attract customers, we must be able to keep the
maximum amount of inventory available and achieve a high level of customer
Awami Old Book Center`s mission is to provide used quality literature of all types at
the lowest possible prices in the Blue Area,Islamabad. The company additionally
seeks to provide a comfortable atmosphere for its clients that promotes browsing,
relaxation, and an enjoyable environment to spend extend time in. Awami books
attraction to its customers will be our large selection of books, magazines, used CD's
and our purchasing/buyback option, which lower our book acquisition costs and
allows our customers to discard unwanted books/CD's in exchange for cash.
Awami Old Book Center will be a limited liability corporation registered in the state
of Islamabad. The company will be jointly owned by Mr.M.Owais, a former head
librarian of the Islamabad Library.
Mr. M.Owais is establishing this firm as a growth-oriented endeavor in order to
supplement his retirement, continue meeting people with similar interests, and to
leave a viable business to his children. Awami Old Book Center will be establishing
its store in one of the busiest section of Islambad`s Blue area. This area is well know
for its upscale residents and high-quality establishments. Our facility is a former
8,000 square ft. furniture store which allows the company to stock a large amount of
Our market is facing a decline in growth over the past two years. This is attributed
to the overall weak economy. Book store industry sales rose only 3.6% for last
year whereas overall Pak. retail sales grew by 4.3%. However, management believes
that this may be an advantage to the used bookstore industry. As customers cut back
on purchasing, used bookstores will look more attractive to customers who still
wish to purchase books. Therefore, management believes this may be a good time to
get into the industry and gain market share.
The bookstore industry as a whole is going through a large consolidation.
Previously, the market was dominated by local, small stores and regional chains.
With the advent of the "superstore" as created by Naeem Book Center, the largest
players in the market have been able to gather significant market share and drive
many independent booksellers out of the market.
Where independent booksellers can still create a viable position for themselves
within the market is in the used books segment. This segment generally does not
attract big companies since the "superstore" concept is much more difficult to
replicate in a market with such low profit margins. This tends to favor the local
independent bookseller in the used book market segment as long as they can
acquire a sufficiently large enough facility to house an attractive inventory and
compete with the national chains.
Our start-up expenses come to 178,0000, which are single time fees associated with
opening the store. These costs are financed by both private investors and Banks
loans. Please note that we expect to be operating at a loss for the first couple of
months before advertising begins to take effect and draw in customers. Awami Book
Center will be receiving periodic influxes of cash to cover operating expenses during
the first two years as it strives toward sustainable profitability. Funding has been
arranged through lending institutions and private investors already. We do not
anticipate any cash flow problems during the next three years.
Our start-up expenses come to 178,0000 Rs/-, which are largely single time fees
associated with opening the store. These costs are financed by both private
investment and short- and long-term Banks guaranteed loans.
Land location and finders fee
Initial store facilities
Total Start-up Expenses
Other Current Assets
Awami Books will offer a wide range of book, magazine, and music selections. This
includes just about every conceivable category including fiction, non-fiction,
business, science, children's, hobbies, collecting, and other types of books.
Our music selection will concentrate on CDs as these are the most popular and take
up the least amount of floor space. In addition, we will be offering a competitive buy
and trade service to assist in lowering our inventory acquisition costs and making
our store more attractive to our customers. We also offer a search and order service
for customer seeking hard to find items. Another less obvious service to our
customers will be the relaxed "reading room" type atmosphere that we will
encourage through the placement of chairs, couches, and etc. We strongly encourage
our customers to spend as long as they like reading through our book selection and
enjoying a quiet, relaxing environment. Our store hours will be 8:30 a.m. to 8:00
p.m. Monday-Friday and 10:00 a.m. to 6:00 p.m. Saturday. Once profitability
becomes stable, we will extend these hours.
The company anticipates serving the needs of all the potential customers within a
ten to fifteen mile radius in which the approximate population is 150,000 (based on
census information). The majority of the residents in this area are Caucasian
(78.8%) Black (13.6%) and Hispanic (9%) with occupations classified as
professional, homemaker, or retired. The majority of household incomes range from
50,000 - 100,000 Rs (50.3%). The median income in this area is 68,096 Rs,
compared to the whole Blue area which is 34,248 Rs. The typical "head of
household" age is 25 - 34 (22.4%) or age 34 - 44 (23.1%) with a median age of 44.4
years old and an average age of 32 years old.
Target market segments:
Used bookstores serve the entire purchasing population of its geographical area but
focuses on customers who desire to purchase books/music at discount prices
because they are seen either as near commodity items or, in the case of books, are
not considered to be a long-term investment (i.e. they will trade them back).
Because of this relatively low value placed upon our merchandise by potential
Casual Shoppers: These are customers who go to the bookstore with no set
idea of what they want to purchase. They seek to spend a fair amount of time
browsing the store and often are considered impulse buyers. Often they leave
the store with small purchases or without buying anything. These customers
are attracted to bookstores with low prices and large inventory.
"Hard to Find" Shoppers: These are customers with very specific needs.
They are looking for a difficult to obtain item, usually a book that is out of
print. If we can satisfy this customer, then we are able to build significant
customer loyalty. These clients are generally price insensitive and are also
drawn to stores that have large inventory.
Specific Category Shoppers: These customers are those types that
generally buy books or music of one category, such as fiction or romance.
These customers generally have a good idea of what they want to purchase
and have the greatest buyback/trade potential. These customers represent
the highest volume purchaser, often leaving the store having spent 300-500
The following table and pie graph show how our market segments are broken up
into size and relative percentages. We use the city of Brecksville census information
to determine growth figures.
Casual shoppers 2%
78,000 79,560 81,151 82,774 84,429 2.00%
"Hard to find"
22,000 22,440 22,889 23,347 23,814 2.00%
50,000 51,000 52,020 53,060 54,121 2.00%
2.00% 150,000 153,000 156,060 159,181 162,364 2.00%
Strong management can help Awami Books reach its potential by utilizing
strengths and eliminating weaknesses
Pricing Power :
Customers typically rebel against price increases by switching to competing
products, but if a company has pricing power, customers will continue using
Awami`s Book products and services
An innovative culture helps Awami Books to produce unique products and
services that meet their customer’s needs
Asset Leverage :
Asset leverage allows Awami bookstore to use their best operational assets to
Customer Loyalty :
When given a choice, customers are loyal to Awami bookstore.
Cost Advantages :
Lower costs lead to higher profits for Awami bookstore.
Tarnished Reputation :
A tarnished reputation can hurt Awami Bookstore`s brand in the eyes of a
Weak Management increases business risks and reduces profits for Awami
bookstore, because they are responsible for the health of the business
Weak customer service hurts Awami bookstore’s reputation and causes customers
to flee to competitors, who are more respondent…
An Inefficient work environment means that Awami bookstore’s goods and
services are not being utilized properly
New Product can help Awami Book to expand their business and diversity their
New markets allow Awami Book to expand their business and diversify their
portfolio of products and services
Emerging markets are fast growing regions of the world that enable Awami
bookstore to quickly expand
Change in Tastes:
Consumers can change their tastes very quickly. Awami bookstore depends on
knowing which goods and services consumers want
A bad economy can hurt Awami bookstore’s business by decreasing the number of
Changes to government rules and regulations can negatively affect Awami
bookstore… … "Govt Regulations (Awami bookstore)" has a significant impact, so
an analyst should put more weight into it.
Competition and Buying Patterns:
Our main competitors are: Wonder bookstore (which holds approximately 22%
nationwide market share), Maqbool (which holds approximately 15%), and other
local new and used bookstores. The used bookstore that most closely rivals our own
is Standard Books which is located approximately 13 miles away from Zero Point
Islamabad. It is estimated that they hold 9% of the local market share.
Management feels it must be clearly stated that we do not intend to directly
compete with the Wonders/Maqbool and Other Over the years, these large
companies has successfully leveraged their resources to engineer customer
experience to a degree that consistently differentiates otherwise commodity-like
products and services. This differentiation provides these companies strategic
competitive advantage. Resources such as distribution technology, strategic
alliances, process research and development, and brand name combine into valueadded services that provide the customer with proximity, dominant selection,
discounts, and store ambiance.
One of the most critical elements of Awami`s Books 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.
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.
Based on a 10% mark-up, our forecasted sales will increase by an average of 4.5%
from year to year.
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.
Initially the company will have a small staff including upper management and sales
personnel. We expect to expand our personnel and extend our hours once we begin
to make a profit.
Mr. Owais Khan
The following is our financial projects over the next three years. Please note that we
expect to be operating at a loss for the first couple of months before advertising
begins to take effect and draw in customers.
The company is basing it assumptions on a stable growth market using average
interest rates over the past ten years.
Current Interest Rate
Long-term Interest Rate
Awami Bookstore is an online store of used books. We provide a wide range of
different types of books of various genres and specializations.
Our major pricing objectives are market share and profit. We prefer to apply such
pricing methods as penetration and discounting pricing customary pricesand
standard markup pricing We are going to sell with a low price on a value principle
Our business is located in Blue Area of Islamabad of Pakistan, therefore we expect
to have a large group of potential buyers.
Our electronics as well as books will be on sale for the opening week of business,
and will assume normal pricing from there onwards. On select weeks we will offer
discounts to students and promotional deals to the general public.