Introduction
Flyleaf Books is an innovative used bookstore located in Cleveland, Ohio. Management at Flyleaf Books has set out to increase local market share in used bookstores by offering low prices and a broad selection of products. They also offer a range of services such as buyback/trade programs and hard to find book searches.
Company
Flyleaf will become a limited liability company in Ohio. Mr. James Vinck (a former head librarian at the Philadelphia City Library) and his wife Aracela will jointly own the company.
Mr. Vinck 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. Flyleaf Books will open its first store in Brecksville, an outer suburb of Cleveland. This area is well know for its upscale residents and high-quality establishments. Our warehouse is an ex-furniture store measuring approximately 8,000 square feet. This allows us to stock a lot of inventory.
Products/Services
Flyleaf Books can offer a wide range 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 CD’s 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 to customers who need to locate hard-to find items. Flyleaf Books’ reading area will be relaxed and will include couches, chairs, and others.
Market
Over the last two years, our market has seen a drop in growth. This is attributed to the overall weak economy. While the overall U.S. retail market grew 4.3%, book store sales rose just 3.6% in last year. Management believes this is a benefit for the used bookstore sector. The used bookstores that are still open for business will become more attractive to customers looking to buy books. Therefore, management believes this may be a good time to get into the industry and gain market share.
The whole bookstore industry is experiencing significant consolidation. The market was previously dominated by small, local stores and regional chains. The emergence of Barnes & Noble’s “: Superstore has helped the largest players gain market share and driven out many independent bookellers.
There is still a place for independent booksellers to create a market position in the used books section. The ‘#8220/superstore’ concept is more difficult to replicate than in a market with low profit margins. This segment tends not to attract big businesses. The local independent booksellers in the used market tend to be more successful than the national chains, as long as they are able to acquire sufficient space to hold an attractive inventory and compete against the national chains.
Financial Considerations
The start-up costs for the store are $178,000 and include one-time fees. These expenses are funded by private investors as well as SBA loans. We expect to operate at a loss the first few months of advertising before we can attract customers. Flyleaf Books 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 cashflow problems in the next 3 years.
1.1 Objectives
These are Flyleaf Books’ goals for the coming three years.
- Gain profitability by July 2.
- You can earn approximately $200,000 per year in sales
- While earning a profit, owners can get a fair salary.
1.2 Keys to Success
Flyleaf Books should keep these points in mind in order to survive, and expand.
- We must achieve high visibility via media, billboards, or other advertising.
1.3 Mission
Flyleaf Book’s mission is to provide used quality literature of all types at the lowest possible prices in the Cleveland, OH area. Flyleaf Book also strives to create an environment that encourages browsing, relaxation, as well as a place where clients can spend extended time. Flyleaf’s 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.