September 11, 2019 in Business


Creating an online retail store for books is a venture that is profitable for a budding entrepreneur whose main quest is to attract the online customers. With the advent of the computer technology, many people are finding it easy to shop online for the products that they look forward to stock in their libraries and their homes. Furthermore, the quest to have the e-books is not only friendly to the environment, but creates the ease of the target class of clients having the ease of reading of the various books that they have. In starting up an online business venture for books, one needs to develop the requisite policies that affirm the commitment of the company or the organization to abide by the ethical codes of business and the requisite legislation of operating the business. Furthermore, the proposal on the establishment of an online books store needs to further delve on the specific target market that the business aims to attract and the investigation of the demand of the product that the online based firm aims to offer to their target clientele. The secret of operating or running a successful business venture lies in the understanding of the business environment in which the business operates. The understanding of the market has the primary focus of offering options on the type of the business model canvas that is either used or applicable in the online book store that is set to be established. Furthermore, one needs to have a projection of the financial flow that is expected within the business including the pro form financial statements that can predict the nature of cash flow that is expected within the company. With the business being online based, the design of the website that is set to be used by the business is pertinent in establishing the nature of the interactions and addressing the different needs that the different customers are set to have regarding the business. This paper presents a proposal of an online book store. 

Value proposition and the target customer segments

The customer segment that the business aims to forge and establish make up the mantle of the business that one aims to start up. Value proposition is what makes the business to tick. Therefore, value proposition is the statement that affirms the quantified value of the business, its unique differentiation and the relevancy that the business has with the target market that it aims to forge. The value proposition that the business is set to establish is that the online book store will have the option of mailing the hard covered books for free and the option of sending the e-books to the client upon the wish of the client within a time of maximum 72 hours owing the geographical region where the client is based. In the value proposition of the business, the business affirms that there is an increased use of the internet with the present generation thus the need to establish a relationship with the clients by making the business online. The online books store is not only a convenient option for the online users to shop for the goods and the products that they need but also an option of the online users to shop for a wide array of books from a simple click. 

As such, the main customer segment that the business is set to attract are the online users. However, there is a specific category of the online users that the business aims to net in. The category of the target market includes the students, researchers and schools. The online books store is set to provide research journals, academic materials and the fictional novels mainly thus broadening the target market that the business aims to attract and establish within its operations. 

Setting up the online business makes the demand of the product to emanate from many parts of the world. However, there are two main markets that are set to provide or offer the level of demand that is applicable to the effective running and establishment of the online business. The two markets are the United States of America and China. According to Osterwalder & Pigneur affirms that China and the United States of America lead in the e-commerce concept in countries sampled. From the research, China and the United States of America lead in the use of the smart phone technology and the use of the tablets that create the ease of making the demand for the utility of online shopping by the consumers. The demand that is the business expects to realize from the establishment of the online shop is the realization of web traffic of at least one hundred people per unit time within the operating hours, also regarding as peak time, and fifty users per unit time after the operating hours otherwise regarded as the off peak. From the demand that the business is set to realize, the business looks forward to selling at least ten units of books, either in hardcopy or the e-books thus earning the revenue that is sufficient for the effective running of the business. 

The effectiveness of the market segment can thus be affirmed by the increase in the funds that are set for researches and the increased enrollment in universities in the United States and China. From the projected demand that the business is set to realize, the market segment that is chosen by the proprietors, that is, the students and the researchers, the company looks forward to having a sustained revenue flow taking into consideration the need of the business to sustain itself during the entire period of operations. 

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Business model canvas

The business model canvas is set to address nine key areas, that is, key partners, key activities, key resources, value propositions, customer relationships and channels. Others are customer segments, cost structure and the revenue streams. The business model canvas of the online book store is further meant to address the front-end and the back-end of the online book store. The front-end and the back-end refer to the target market and the operational infrastructure of the business.

To begin with, the key partners of the business involved in the running of the firm are five members. The members have an equal share in the business and are involved in the day to day running of the online business. The other strategic partner of the business is the suppliers. The suppliers of the business are mainly the book publishing firms mainly from the United States of America, the United Kingdom and China. The main role of the suppliers is to ensure that the online book store has enough stock of the books that are mainly on demand. Some of the notable suppliers in the business include Oxford publishing firm, Cambridge and McGraw Hill. The five partner involved in the day to day running of the online bookstore each has a responsibility to perform in the business. The five key departments that the online book store is set to have are information technology, human resource, finance, procurement and administration. As such, each partner is set to take up one docket of the five dockets that are available in the firm. The partners are also set to have an equal proportion of the shares earned in the company and have an equal vote in the managerial process of the company and her resources. Another strategic partner of the business is are the mail dispatchers who are set to enable the business send the hard copy books that are ordered by the clients to reach the clients within an ample time. Finally, the next strategic partner for the business is the bank. The banks have the overall responsibility of ensuring that the business is able to make adequate business transactions. As the clients of the business, mainly the students and the researchers, make orders for the books that they need, they need to as well make payments through the online banking channels. One significant banker to partner with in the business is PayPal. The business is set to receive automatic notifications once the payments have been made by the customers to facilitate the company in sending the books to the clients. 

The key activities that the online book store is set to conduct include placing order for books, hiring of the staff to run the various departments of the company, dispatching of the books to the clients and ensuring that the stock that is maintained the company is up to date. The five departments are also set to have key activities that are all geared towards making the business commit to offering quality products and timely service to the target clients. The administration department has the overall activity of handling the queries and complaints from the customer besides drafting the strategy that the business ought or needs to incorporate. The procurement department has the major activity of maintaining the stock of the books that are available in the online book store and making the orders of the more books on a demand basis. The finance department has the main activity of paying the suppliers and receiving money from the clients. The human resource department has the main activity of ensuring that the business hires competent staff, the salaries of the staff are processed in time and the claims of the employees are also processed with the right time. The information technology department is also set to have the main activity of maintain the website of the firm. The information technology has the main activity of developing the firewalls that protect the critical data of the company besides minimizing the incidences of downtime in the systems. Furthermore, the activity of the information technology department is to ensure that the web pages of the company enable the clients to have the ease of navigation and the interface of communication between the customers and the support is up and running. 

Pro-forma financial statements

proforma financial statement

From the proforma financial statement of the company, the startup capital is expected to be approximately one million dollars. The operating expenses in the first year are set to be approximately $596,000 with a projected sales value at $1,000,000 leading to a net profit of $404,000. In the second year, the projected sales value is $1,150,000 with the total expenses netting in at $676,000 resulting in a net profit of $474,000. From the analysis of the financial projections in the proforma invoice, the value of the sales, expenses and net profit are all set to be higher in the second year compared to the values of the first year. The main item that is worth analyzing in the projected financial flow is the cost of sales.  In the first year, the amount of money that the company is set to use in the promotion of the website and the online book store is set to be higher than the value of the second year. The first year marks the point in which the company begins to operate fully thus the need to have higher expenditure is sales and promotion to gain clients. The second year is set to realize a reduction in the amount of money that the business has to spend in marketing owing to the number of the clients that the company shall have gained and the increase in the publicity of the operations of the company. Furthermore, the increase of the values of the sales, total expenses and net profit are all set to rise in the second year compared to the first year owing to the increase in the activities of the business having taken foot in the second year. As such, the profit margin values are almost equal to the net profit values thus affirming that the business is sustainable. 

Operating policies

The operating policy of the company is set to incorporate the need for privacy and the assurance of the returns that the company expects to make from its operations. Top of priority in the policies is the need to maintain confidentiality. From the online system that the business is set to maintain, there is need to affirm the clients that the private information and data that they sign up with shall be kept confidential and only put in use for the purpose of the business transactions. The second policy is set to be on the need to maintain a quality relationship with the customers by ensuring that the customers receive the goods that they order within the stipulated time. As such, the company sets to offer the clients the hard cover books within 72 hours from the time of making the payment for the service and 6 hours for the e-books from the point at which the client makes the payment for the books. Third, the company affirms the publishers that it will adhere to the copyright laws and will not engage in the reproduction of the published materials without the approval of the authors or the publishers. As such, the policy of the copyright laws shall be attached to all the products that are sold by the company to inform the clients and the customers on the need to obey the copyright laws. 

Basic Design of the website

The online retail store is an online based business. The key features set to be delved upon in the discussion of the basic design of the website is the need to have a home page that is attractive and offering product information that the business offers to her target clients. The home page of the website is also set to have attachment to various web pages of the company with each web page serving a particular purpose in relation to the main activity of the business, which is, selling books online. 

The design of the website of the company is set to use MockFlow. MockFlow is an application that enables the web developer of the company to have the freedom and the ease to have a wireframe specific for the needs for the online based company. The purpose of the wireframe is to ensure that there is ease in linking of the various pages in the website of the company to ease navigation for the clients. The MockFlow application that is set to be used in the designing of the website is set to serve the sole purpose of ensuring that the website has a cart, link to the books, the payment link and the queries tab to handle the questions set to be raised by the customer. 


Basically, the operations of the business are all set to be online based. The online business nature of the business of the company affirms the need of the business having a flexible payment system for the customers to make payments on the goods that they set out to buy. The main e-commerce platforms that the business aims to use in their operations are Storefronts and PayPal. The justification of using the two online platforms is the need to address the ease of the clients in America and China to trade since the major projected markets of the business are set to emanate from the two geographical regions. 


Concisely, setting up of the online business is meant to cost an average of $1,000,000. The value proposition that the company aims to utilize in their operations is the affirmation that the clients will be able buy the books that need through the web based platform, main academic and research books, with the option of the client choosing either an e-book or the hard copy book. The decision to offer the client either option of any book that he or she chooses is meant to create the ease of the client to select the option that is most convenient for him or her. Furthermore, the business is set to use the MockFlow app in developing the website of the company for the ease of navigation. Finally, the company is set to use Storefronts and PayPal as the e-commerce platforms. 

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