AbstractThis paper will be presented in the form of a business plan for an imaginary bookstore called Bradbury’s Haven, in remembrance of Fahrenheit 451. The business plan will include an introduction to the business, a description and explanation of the type of business entity that is best for the business, a draft of a valid contract with a supplier that illustrates all elements of a contract, a description of possible ethical considerations, a description of a possible disagreement, and an illustration of the various ways in which that disagreement could be resolved.
Keywords: business plan, bookstore, introduction, business type, contract, ethical considerations, disagreement, resolution
Introduction to the Business
After years of dreaming about the formation of a business, the time has finally come to do so. Bradbury’s Haven, a bookstore, was conceptualized several years ago between friends. The name was selected as a tribute to an old favorite, Ray Bradbury’s Fahrenheit 451, a tribute to the idea that books should not be destroyed or burned, but instead should be shared with all for the purposes of expanding knowledge and awareness. While in most respects, the store will be a traditional secondhand used bookstore, there will be several variations. A rolling cart will be left outside at night for take a book, leave a book. Books can be acquired using this cart at no charge by anyone. People will be requested to leave any books that they no longer want as well. To determine how books will be placed on the cart, if the store has more than three copies of a book, any additional copies beyond that point will be set aside for inclusion on the cart. In the morning, the books will be compared to the store’s inventory. If multiple copies of the book sold the day before, copies will be removed from the cart to fill the shelves. At the same time, all left books will be added into the system, going on the shelf, as long as they meet the aforementioned criteria.
Another variation is the cost; the competition, Half Price Books, is, for the most part, the lowest priced bookstore of the competition; however, as the years have gone by, the store has stopped offering discounts that are as deep as they once were and instead destroys books rather than reducing the prices of their books as they used to, or expanding their clearance section as they used to. As the point of Bradbury’s Haven is to save books, and not to destroy them, the clearance section will be full of deep discounts. Books that are more than two years old but less than fifty years old will have a flat rate price of $5 per hardcover and $3 per paperback. Clearance prices will be set for books that have been at the store more than 6 months, with prices dropping to $2 per hardcover and $1.50 per paperback. It is expected that this will increase the desirability, boost sales, and provide high levels of profit, particularly in light of the manner in which books are acquired.
The store will not engage in book purchases, but will instead utilize a mixture of donations and the purchase of gaylords. Zubal Books, a wholeseller, offers 5-50% on bulk orders of gaylords, with an initial, pre-discount pricing of gaylords for $750 for one gaylord of books, a cost that is reduced, pre-discount, to $500 per gaylord for 28 or more purchased (Zubal Books, 2016). A gaylord consists of ~1,100 used books consisting of a mixture of non-fiction, hardcover, softcover, and ex-library books (Zubal Books, 2016). This phenomenal pricing, in conjunction with the donated books allows the store to offer prices below the competition. The store will also sell book bags, bookmarks, bookends, and other assorted book paraphernalia all locally made, with a referral option to a local carpenter for actual solid wood bookshelves made custom fit and to the specifications of the customer’s space. The referral program will serve as a means of further income generation.
Type of Business Entity
After determining that now would be the best time to start up the bookstore, when it came to the type of business entity to setup, there was no question; the store would be a partnership. It took two people to conceptualize the store and both will go in equally; this works to ensure that both parties have equal time to themselves and that the duties and responsibilities are divided between the two (Carter, 2016). As no loan is needed and both have good credit and have each saved $3000 toward the start of the business, there should be no issue. The first partner is tasked with the rental of the space, the purchase of the bookshelves, setting up the utilities, and the purchase of the P.O.S. system, as her credit is higher by approximately 50 points, providing better rates; the second partner has an obsession with books bordering on the possessive and will be tasked with the acquisition of the gaylords. The first partner will be responsible for running the front of the store, while the second partner will be tasked with running the back of the store and ensuring that inventory is up to date. While the partnership does not require a document to come into existence, it will require additional steps to start the business and allow it to operate legally in Texas.
Steps to Start the Business
To legally form a partnership in the state of Texas, there are certain steps that must be taken. First, the business name must be selected, in this case, Bradbury’s Haven, and the DBA, or doing business as, paperwork must be filed in the county in which the business will operate, complete with a legitimate physical address, no P.O.Boxes (Smith, 2016). Next, the partnership agreement must be filled out and attached to the request for a business license and again to the form for an EIN, or Employer Identification Number, the Tax ID (Smith, 2016). Once this paperwork comes back, a process that can take between 6-8 weeks, though in some instances can be completed in as little as one week, or in the case of the DBA, the same day, the individuals may start the setup process, obtaining the storefront, the facings, the hardware, and the inventory.
The following serves as a sample contract between Bradbury’s Haven and Zubal Books, the supplier.
Purchase and Supply Agreement
This purchase and supply agreement is made on March 28, 2016, by and between Bradbury’s Haven, a company duly organized under the laws of Texas with tax payer no. XXXXXX having its principal place of business at 1234 Bluebonnet Street Austin Texas (hereafter referred to as the “buyer”) and Zubal books, a company duly organized and existing under the laws of Ohio with tax payer no. XXXXXX having its principal place of business located at 2969 West 25th street Cleveland OH (hereafter referred to as the “seller”).
The buyer intends to purchase from the seller the products identified and attached hereto, specifically no less than 28 gaylords per six months for a period of one year to start, with an option to extend. The buyer and seller therefore agree as follows:
Supply of products – the seller agrees to supply the buyer and the buyer agrees to purchase from the seller the products mentioned above during the time period of this agreement.
Terms and conditions of purchase – All conditions and terms are governed by general purchase and supply conditions, with all product to be delivered as agreed based on the conditions set forth by the seller as of this date, conditions to be upheld throughout the term of the agreement, specifically that each gaylord will have no less than 1000 books and that all books will be in clean condition, appropriate for resale.
Language – All business will be conducted in English
Blanket purchase orders – All orders are blanket purchase orders and the buyer agrees that it will not be able to go through and select books by hand, while the seller agrees that there will be no more than a reasonable amount of duplicates present for any given copy of a book.
Delivery – The purchased gaylords will be delivered no later than two weeks following the purchase date, with potential additional costs for delivery, to be discussed and agreed upon based on gasoline costs and mileage prior to each delivery.
The business will adopt a position of social responsibility in that it will work to ensure that books are distributed appropriately, not turning away an individual for lack of funds by way of the provision of the cart. Knowledge dissemination is vital to the continued presence of society and no individual should be denied access to the same. The bookstore promotes the sharing of knowledge and the assisting of others in the attainment of knowledge. Books will not only be freely available to those, regardless of ability to purchase, but will also be, when a set of twenty of the same book are determined to be extras, donated to women’s shelters, domestic abuse shelters, schools, and the like, depending on the type of book for which there are multiple copies (i.e. a book that has a theme of violence will not be donated to a domestic abuse shelter but a classroom set of Charlotte’s Web would be donated to a school). Not only will this allow for the furthering of society through giving, it will also work to ease the financial burden of these institutions, who often do not have extra in their budgets for such items unless paid for out of pocket by workers therein.
Potential Disagreement and Resolution
A potential disagreement that could arise would stem from the seller, Zubal Books, no longer being willing to deliver the books from Ohio. Depending on the cost effectiveness of the same, it may be determined that it would be more cost effective for the company, Bradbury’s Haven, to rent their own truck and make the delivery run themselves. If this is found to be the case, the first trip will consist of a flight up to Cleveland, an average price of $59, and then the rental of a truck to make the trip back down, a cost of less than $400, as a one week rental for a 26 foot truck, including gas, traveling from Texas to Pennsylvania with a full load costs $500, a distance of several hundred additional miles. This allows for a cost effective solution for all while at the same time ensuring that the agreement remains the same.
- Carter, C. (2016). Differences between Sole Proprietorship, Partnership and Corporation. Houston Chronicle. Retrieved 8 March 2016, from http://smallbusiness.chron.com/differences-between-sole-proprietorship-partnership-corporation-3990.html
- Smith, S. (2016). How to Form a Partnership in Texas. Nolo.com. Retrieved 8 March 2016, from http://www.nolo.com/legal-encyclopedia/how-form-partnership-texas.html
- Zubal Books. (2016). Purchase Bulk Books by the thousand. Zubal Books. Retrieved 8 March 2016, from http://www.zubalbooks.com/buy-bulk-books.jsp