Business Proposal Plan
The main aim of this business proposal is to open a library in Australia by developing an effective business plan. In Australia, people, school and college students always required a library for developing their information level to a large extent as library plays a key role in providing information to people and students. This paper will discuss different business options and benefits which this business plan will help in achieving successfully. Moreover, this business plan report will also help in understanding the actual market situation and opportunities in relation to book industry. However, there are some major risks like market risk, collection and maintenance, financial risk, competitive risk which will be analyzed in order to understand and develop a plan in efficient manner to overcome these risks. Further, investment appraisal will also be included in which net present value and return on investment will be evaluated in order to determine that investment will provide profit and benefit to community or not.
This business proposal plan is developed for opening a new public library business in Australia. Public library is highly demanded in all over the world as now a day’s students and people wants a silent and comfortable environment to study, write and read. In respect of this, new library business will be established in Australia in order to provide the best environment and services and resources available to them (Schaper, et al., 2014). However, the main objective of this business plan is to target the students and people who are finding a silent and comfortable environment for developing their knowledge. In this paper¸ business review, business options, time duration, project cost, market analysis will be conducted in order to understand and determine the opportunities and target large market successfully.
The alternative business option for this business plan is to provide customer with additional services like free WiFi facility in which customers can easily access to online data bases and collect new information efficiently and effectively. In concern to it, the other business option will be developing a own publishing house where different & new writers and authors books and novels will be published. However, the opening an own publication house will help the company to target the large market and develop their business to a next level in this highly competitive environment of Australia. This business options are more effective and efficient for growth and development of existing business. In regards to this, Finch (2016) stated that opening a new additional business with existing one will help in targeting a large market as well as attract customers and develop reputation of company in the market. Therefore, this business option is best suitable option to this business plan as it will help company to grow and develop.
Current situation and market opportunities
For opening a business in Australia, it will be necessary to understand the actual current market situation and opportunities with the help of external factors. The external factors include legislative factor, technological factor, economic factor, social factor. With the help of these factors, market trend will be identified and understood and also it will help in opening a business in Australia in better manner. In legislative factor, the impact of this factor is less on the public libraries in Australia (Hoey, et al., 2016). However, there are other public sectors where this factor highly regulates their process. This factor critically influences somewhere public funding policies and budget related to public education sector.
On the other hand, economic factor involves both internal and external factor and both have significant impact on the policies and budget of public education system. While analyzing the economic environment of Australia, it is identified that economic downturn creates impact on public libraries demand as there are some reasons like free internet access, providing people with training to develop their skill and knowledge which influences the economic downturn. At the same time, technological environment is also creating impact on public libraries demand in Australia (Royer, 2015). While studying Australia libraries working group, it is found that there are 53% non-library users but if user’s wants to learn something new or develop their knowledge then users of libraries increase to 90%. The social environment of Australia is attractive as it is directly connected with technology and demand of people. In Australia, public libraries are main social institution which serves their services for reducing barriers like poverty, improving education system.
| Strengths
· Lifelong learning · Location and environment of building will attract the customers · Provide face to face customer services · Develop strong community engagement · Will get support to local council (Thorpe & Galassi, 2015) |
Weaknesses
· Difficult to generate sufficient income · Lack of trained staff to meet customer requirements · Maintaining and collecting a books and magazines cost high |
| Opportunities
· Provide easy access to online data bases which help in attracting a new customers · Promote public library as best effective space to develop knowledge. · Opportunity to select trained and skilled staff |
Threats
· Threat to maintain a relevancy of libraries to local community · Difficult economic climate · Reduction of public funding will reduce the free services provided to community (Zou, et al., 2015) |
After SWOT analysis, it will be easy to determine the actual market situation of public library in Australia. The market condition of public library will be highly competitive in Australia as there are high demands for comfortable environment. The specific target market for this business is school, university, writers and readers who prefers to develop their knowledge and to provide them silent place. This business project stands stable in relation to the Australia market trend as government and local community council will fully support this project for developing a public library (Wild, et al., 2014). The disadvantage to community from opening a library business is that people will access to other online data base but this provides extra information which is copy pasted or obsolescence of books.
In this part of business plan, different community benefits will be provided and achieved by opening a public library in Australia. The benefits which community will get from this business plan is that they will develop their knowledge and will easily get the books of top writers which are not easily available in the market (Ward, 2016). The main purpose will be to target large customer (students and people) and made them available with the books which are not easily access online or offline. In similar manner, the community will also get benefit from this business plan in large manner as opening of library will help the other countries students and people who likes to read and grab new knowledge easily at one place. Thus, these all benefits to community will help company to achieve its business objective easily and effectively on time.
This project will take 5 months to establish this project in Australia but for achieving the business objective, this project will take 1-2 years for targeting the customers successfully. For targeting a customer, time duration will be evaluated on the basis of different milestones which will be achieved in particular period. The list of major milestones:
| S. No. | Major Milestones |
| 1 | Incorporation of library |
| 2 | Defining system requirements |
| 3 | Designing and launching a company website |
| 4 | Development of revenue sharing initiatives |
| 5 | Increase in awareness program for students |
| 6 | Development and expansion of libraries |
| 7 | Hiring additional staff |
For this business project, the estimated project cost will be $ 20000 so that a business with well – furnished building, books, novels and magazines will be provided to customers under a one roof. This project cost will be estimated according to the requirement and demand of people. The overall cost will be determined by calculating the expenditure which will incur while establishing a business in Australia. In context to it, the below stated table shows the total expenditure and investment which will be required for this business plan:
| Total Expenditure | Year 1 | Year 2 | Year 3 |
| Total Project Expenditures | 12000 | 14000 | 15000 |
| Total General & Administration Expenses | 8000 | 9500 | 15000 |
| Total Expenditures | 20000 | 23500 | 30000 |
In addition to this, this project will be funded by two different investors i.e., library community and province. For first three years, investment in this project will be made by both parties i.e., 35% by library community and remaining 65% by province.
| Total Investment | Year 1 | Year 2 | Year 3 | Total (%) |
| Library Communities | 7000 | 8500 | 10000 | 35% |
| Province | 13000 | 15000 | 20000 | 65% |
| Total | 20000 | 23500 | 30000 | 100% |
Cash flow
| Year | Cash Inflow (£’000) |
| 1 | 33000 |
| 2 | 33000 |
| 3 | 33000 |
| 99000 |
Net present value (NPV) analysis
In the investment appraisal, net present value represents the different between the current cash inflow and the current value of the cash outflow. This technique is also used in the capital budgeting to calculate the profitability of a project.
| NPV Calculation | |||
| Present value | |||
| Year | Cash Inflow ($) | PV Factor @ 7.35% | Cash Inflow ($) |
| 0 | |||
| 1 | 33000 | 0.931532371 | 30740.56823 |
| 2 | 33000 | 0.867752558 | 28635.83441 |
| 3 | 33000 | 0.808339597 | 26675.20671 |
| 86051.60935 | |||
| NPV | 66051.60935 | ||
Return on investment (ROI)
Return on investment (ROI) is a significant technique of the investment appraisal. It is used to calculate the profit and loss of generated on the investment. It provides the outcomes in the terms of the percentage that helps to compare the results with another project. In order to calculate the return on the investment, the below formula is used:
ROI = (Net Profit / Cost of Investment) x 100
Net profit = sales – investment
Sales = 99000
Investment = 73500
Net profit = 99000 – 73500
= 25500
Cost of investment = 735000
ROI = (25500 / 99000) * 100
25.75%
Payback Analysis
The Payback period is time in that the initial cash outflow of the project is awaited to be covered. It is the simplest investment appraisal techniques. The below formula is used to calculate the payback period.
Payback Period = Initial Investment / Cash Inflow per Period
Initial investment = 20000
Cash flow per period = 33000
Payback period = 20000 / 33000
= 0.60 or 7.2 Months
The five major risks which are involved with the implementation of this business proposal are market risk, people risk, competitive risk, financial risk and collection and maintenance risk. Theses all risk creates huge impact on the society and their mind as these risks influences the people decisions to large extent and that affects directly or indirectly to the growth and development of business (Mehra, et al., 2016). Due to financial risk, this business plan may get affected because if any investors do not provide investment to the company then it will create problem for establishing a new library successfully in competitive environment in Australia.
In similar manner, people risk ill also affect the development of business as this risk is dependent on the employees, and customers who visits the library. On the other hand, competitive risk also creates impact adversely as there will be existing competitors who are leading in the market. This competitive risk is connected with the market risk in which there will be a situation when market will develop differently (Verplaetse, et al., 2016). However, the major risk is collection and maintenance risk of the resources in the library because there will be large number of books, magazines and maintaining their records and collecting new books will be difficult for librarian.
From the above study, it can be easily concluded that this business proposal plan is effective for opening a small business in Australia i.e., opening a library. This overall plan helps in understanding the actual requirement of people as well as help in focusing towards the benefits which this project will provide to community to huge extent. In this study, time duration is calculated on the basis of project requirement as well as estimated project cost is pre-determined so that business is set up properly and starts on time. While developing a business plan, various barriers are identified which creates difficulties for implementing a business in competitive environment of Australia. Thus, this business plan will help in achieving the business proposal objective which is set.
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