Business Plan for New Publishers

I started my publishing company without writing out a business plan, but I'd been involved in publishing for years as a trade author and had failed in a previous attempt at publishing in the old offset press model, so I had a pretty good idea what I was about. Every once and a while I hear from somebody at government agency (on the local level) or from a volunteer in a business incubator asking me to help out with a business plan for a client they are advising. I try to be helpful, and have had a few interesting phone conversations as a result, but I don't think they buy into my basic message about the need for a marketing platform. Finding customers for books is just a very different business than opening a storefront or bidding on contracts, and competition is on a global rather on a local level.

But I can give new publishers a good starting point for a business plan: Make a profit on every book that you sell. That may sound like a no brainer, but I've had experiences in publishing where I lost several hundred dollars apiece selling $20 books. It's called wasted advertising. If you lump your marketing expenses into on bundle for the lifetime of your business and amortize them against all of your book sales, it might look cheap enough, but I believe in linking a marketing campaign directly to the results. Another way to lose hundreds of dollars per book sold is to print a lot of books and only sell of few of them. I know some people would argue that printing the book only cost a couple dollars and they sold it direct to a customer for over $20 (or into distribution for less than $10), but if you had to order thousands of books to get that printing price and you never sold a hundred, it was a bad piece of business. Been there, done that.

But in talking with these business advisors to aspiring publishers, I find they want to focus the business plan on exactly the wrong points. I think it has to do with wanting to define the things that can be "easily" defined, such as design costs, printing, computer equipment and software, and advertising campaigns, not to mention professional services for accounting and legal issues. I've seen such business plans, and I'm sure they're a lot of fun to write. After all, anytime somebody can open up their old college textbook and see a black and white plan for success, it's comforting. Too comforting I believe, and I hate hearing failed businessmen complain that they failed, despite "doing everything right." I do understand the problem new publishers and their advisors are faced with in drawing up a plan for the business. It's tough get it all down on paper when you don't really know what you're doing:-)

Instead of giving a framework for new publishers to fill in the blanks and go broke, I'm going to give a brief list of things you really need to start, and things that are easy enough to find, and things you can add or change as the business progresses. The primary thing you need to start is a marketing platform. It could be your public speaking, a byline in you journalism, a website, a media presence, or any number of other existing platforms that will guarantee your titles eyeballs or ears. The key here is that the marketing platform should be in place before you start publishing. Another thing you need to start is a manuscript or manuscripts that fit your marketing platform. If you're a TV personality, you can probably push whatever book you want, but if you make your living teaching people job hunting skills at seminars, I'd recommend that your first title has something to do with career planning. The same goes for the owners of a chain of garden shops - stick with gardening books at the start.

Another thing you absolutely need is a market. I don't care if you have the best book ever written about roof thatching in sixth century Italy, the market is way too limited to build a business plan around it. You learn about your market by doing market research, looking at competing titles and title sales within the genre. If you can't find any competition, it's more likely fool's gold than the motherload. The last thing you really need to get started is a modest amount of time and money, a few months and a few thousand dollars can do it. You can substitute a few hundred hours for a few months if you're going to go at it part-time, but you need time to do your homework and market research at the start and to make changes in accordance. You can't do market research and work on your platform or write a book at the same time, the market research has to come first. Unfortunately for most self publishers, the manuscript usually comes first and everything else ends up depending on luck.

The things that I call easy enough to find are services like editing, proofreading, cover and interior design. Again, you can have a great deal of fun studying up on postal rates for books, visiting UPS and FedEx, signing up to have an infrastructure in place for all eventualities, but it's a big waste of time for a publisher who has yet to sell their first book. When you start out, it doesn't matter if you get the best bulk price on your first dozen padded envelopes, what matters is that people are actually ordering your books. Don't rush out and buy fancy accounting software when all you have is expenses, the IRS has its own notions as to what does and doesn't constitute a legitimate business expenses, especially for a business that hasn't made any money yet. Nobody needs filing cabinets when they start, nor postage machines, nor office furniture. Publishing is an ideal laptop business. What you need is regular back-ups!

Things you can add or change as the business progresses include printing, warehousing and business banking services. We used to have merchant credit card processing when we were printing on offset, I suppose we still have the swiper, but it never paid for itself. My personal feeling is that the majority of new publishers who don't need offset printing quality are best of starting out with Lightning Source to do print-on-demand printing and order fulfillment into distribution, all hands-off for the publisher. If you need a ton of low cost books for a flood of bookstore orders, you can always get them printed in a week or two. As a new publisher, don't get caught up thinking in terms of building business relationships, it will be strictly a one sided process. The companies you deal with when you are starting out are going to treat you as a cash-and-carry customer. Your plans for the future don't carry any currency in an industry where success is rare.