Starting Your Own Publishing House

I talked with two very different aspiring publishers in the last 24 hours, both of whom had committed serious time and resources to preparing to launch their own publishing houses. Both were considering using print on demand (specifically Lighting Source) in their business, but the similarity ended there. To put it as simply as possible, one had a business plan, the other just had an idea. I don't mean that the idea man hadn't done a lot of work, in some senses, he was further along the path to publication, but he was shooting from the hip and throwing around money without having figured out exactly what the business would be.

People have different reasons for starting their own publishing house. Some have written a book they can't get published by a trade, but are sufficiently entrepreneurial to ignore the subsidy press route. Some genuinely want to create and grow a publishing house, whether self publishing or otherwise, and some just chose publishing as a business venture. I'm not sure what attracts non-writers to publishing, it's a tough enough business to get into even as an author, and the competition amongst publishing houses is cut-throat. One factor that has to be considered in any model for a new publishing house is whether it can stand competition from the big boys. If you compete in a small pond, competition from the major NY trades isn't a major issue, but if you are launching a new genre with a "wow" effect, you better believe that as soon as it shows up on the radar, some heavy-hitting publishers will rip-off your idea and completely change the economics of your business model.

That's where having a business plan comes in. If you want to start a publishing house as a self published author who knows how to promote books, you can do your business plan on the back of a napkin. However, if you're going for a big launch, publicity, offset print runs, major start up expenses, you better write a business plan that allows for the contingency of competition. Just think about the 10,000 plus books Barnes & Noble publishes for their own stores. Keep in mind that the book industry can usually have several titles about famous people who pass away on the shelves within two weeks of their deaths, so you can't count on having an open field to run in for more than a few months after your big idea hits the shelves.

You don't need a degree in accounting or business administration to write up a business plan for a publishing house, but you can't wave your hands at the basics, like how much it costs to print the specific books you want to sell, what cover price your market will be willing to pay, and how much of that cover price you will end up in your bank account. You can't even start doing this basic math without knowing how many pages the books will be, whether they need to be softcover, hardcover, or both, and whether you'll be paying for design services or doing the whole thing in house. That might sound obvious, but the gentleman with the big idea from yesterday was far from being the first aspiring publisher I've spoken with who had thought that these were minor considerations that would work themselves out.

I'm fond of saying that the publishing business is all about marketing, and it's certainly true that books don't sell themselves. However, there's a caveat to the idea that anybody who can market books can start their own publishing house, and it's that you need a business plan in place that will allow you to make a profit on the books you sell. Otherwise, you'll be wasting your marketing genius on reducing your net value. I once wrote something to the effect that anybody can get customers for $20 bills if he's willing to sell them for $19, and it's as true in the publishing business as any other. Selling books is all about marketing but starting a publishing house is all about business. I'm always happy to respond to educated questions (don't ask me to do your homework), but write a business plan first and ask me about the parts you can't fill in. If you essentially ask me to write a business plan for you, I'll probably just end up convincing you that you're in the wrong business:-)