Business Continuity Planning For Publishers

I thought of titling this post "If you're reading this I'm dead" - but that would have been false advertising. If you're making a living as a self publisher or as the sole owner of small publishing business and you haven't done any business continuity planning for the event of your natural or accidental demise, it's time you do so. I've been talking about it for years, and even considered setting up a brokerage for small publisher assets held by the heirs of small publishers who didn't know what to do with them, but I never quite got around to putting a plan on paper until last week. The Foner Books business continuity plan below is a working draft - I've already given the first copy to my family for safe keeping. It's specific both to my business and to my heirs, but it may serve as a template to get you started.

For My Publishing Business Heirs

As a sole proprietor with a successful publishing business and no employees who know the ropes, it's time to do a little estate planning. Should I get run over by a Smith College courtesy van while out running through the campus, I'd hate to look up from, I mean down from heaven, and see that some con artists had taken over my websites and that my books had all gone out of print that year. While it's difficult to predict the future, if I stopped writing tomorrow and simply allowed the business to wind down with minimal supervision, I estimate it would bring in couple hundred thousand dollars before losing commercial relevancy. Yet I would roll over in my grave with surprise if you could find somebody willing to fork over just $50,000 up front for the whole shooting match, and I'd be very disappointed if you took it.

Running the business in a holding pattern will require very little money or time. There's the $10/month for hosting my three websites ($360/year) and $12/title/year for the five books I currently have in print through Lightning Source. The eBook download service I'm using, e-junkie.com, automatically charges my business PayPal account $5/month. Some years down the road, you may want to extend the registration of the Internet domains, but I've paid for the next ten years in advance on the important ones. It's a good time to mention that any mail you get stating that a domain is expiring is probably a scam, it’s easy to check expiration dates with WhoIs on the networksolutions site. That's it for regularly occurring expenses.

On the income side, whoever is assigned to administer the business will have to get a new EIN from the IRS (free) and plug it into the payee information for the existing corporate payers, Lightning Source, Amazon, Google and PayPal. Since all of those payers are tied into my current business bank account, hopefully the bank will let you substitute that EIN for my social security number without changing the account number. If the account number needs to be changed (or if you choose to use another bank for the business account), you’ll need to plug the new bank account number into the payer accounts as well. Note that they all make automatic monthly deposits or send checks, with the exception of PayPal which requires manual (online) transfers.

Somebody should be assigned to do a daily check of e-mail, the eBook download site and a few other items - less than fifteen minutes a day all told. You should set up an autoresponder on e-mail telling people I should have been more careful crossing the street, but it's still important to check the mail in case there's a customer who wants to order a ton of books or is asking for a refund. Other than those two things, ignore all e-mail that's not personal or from a business affiliate (like Amazon, Google or PayPal) and never click on links in those e-mails because they are often fakes. Just go to the affiliate site and log in, if there are any genuine problems, that's where they'll show up. The reason to check the eBook download site every day is to make sure that customers have actually downloaded the ebook they paid for. Maybe twice or three times a month, somebody misses the download link and their spam filter eats the confirmation e-mail. You can contact them and resend the link or you can just issue a refund through PayPal, takes two seconds.

You should also visit the fonerbooks.com website once a day, just to make sure it's up and hasn't been hacked. It wouldn't hurt to get into the habit of choosing a different page to look at each day, just to get an idea of how things work. If something appears wrong, call my Internet host, he actually answers the phone or returns calls. He would be able to restore the site from a back-up if it's been hacked and give you a new password. If a couple years go by and he's quit the business or his area of the country has made the Internet illegal, sign up with another $10/month host who answers the phone, and have somebody upload the exact copies of the websites that I'll leave you. The websites are all simple HTML, which means they don't require any special hosting or setup, the whole thing won't take a half hour. Then go to NetworkSolutions, where I registered the domains, and change the addresses to point to the new host, or call cousin Ernie and ask him to do it. Everything will be back to normal within a couple hours.

Don't sweat the small stuff or start thinking about cosmetic changes. I've been doing this since 1995 and everything is the way it is for a reason. Some small, well meant changes could end up costing me, I mean the family, a lot of money. If something goes wrong, like one of the services the business depends on goes out of business, between family and the friends contacts I'll leave you, it can all be worked out in short time. Don't go shopping for new partners without the need, that’s just looking for trouble. Don't bother replying to people who want to advertise on the site, most are only semi-legitimate and even the serious ones will do more harm than good.

It would also be a good idea to check the in-print books on Amazon and Barnes&Noble.com once in a while, though dealing with the occasional problems or errors that creep up there will be a job for one of my publisher friends. In general, the printed book part of the business changes more slowly and runs into fewer glitches than the electronic side, but those problems are harder to get corrected.

My fondest hope is that somebody in the family will take a genuine interest in the business and continue to grow it. There are plenty of published authors in the current generation, and given the educational paths their kids are taking, work that doesn't require a degree and offers flexible hours would be right up their line. Between the three websites, there's plenty of groundwork laid for different businesses, and maybe someday I'll write up another plan suggesting the best way to expand without accidentally damaging the ongoing revenue. If the book designers in the family want to start a business offering services for self publishers, owning a site that ranks in the top 10 in Google for "Self Publishing" is a great place to start. Anybody in the family who's really interested should start watching the website traffic every day to learn the who, what, when, where and how of why people visit and what they might be interested in that we don't already have. It would also be a good idea for that person to read through my publishing blog, starting with the oldest posts. Would take a couple months at a half hour a day, I wouldn't advise going faster.

Don’t try to make any sense of the stuff on the hard drive of whatever laptop is left behind. There aren’t any business records you need, just historical data, and the last back-up website copies I leave on DVD are best for emergency repairs. I have also started (today) to make a conscious effort to keep an official copy of each website in the “/websites“ directory on the C: drive. There are multiple other experimental copies and fragments on the laptop, ignore those.

Various contacts and accounts:

I didn't see the need here to share all of my account log-ins and emergency contacts with the general public, but it came to about two pages of accounts, with brief descriptions of who they are and what they are for. You may have noticed that the basic continuity plan has a disaster recovery plan mixed in - how to cope with hacked websites, book catalog problems, and a reference to the contacts to call in case some expertise is required.

If I knew that my heirs would be in a hurry to either sell the publishing business for quick cash or to take it over as a career for one or more of them, I would have taken a very different approach. This business continuity plan is written for what I currently see as the most likely scenario, a gentle wind-down. The fact that the business has no debts and no employees means that my heirs aren't under any pressure to do anything, other than comply with tax laws. If you're currently pouring money into a business investment that you believe will pay off big if it can only be completed, you should try to line up somebody who will be able to do that work and make them part of your continuity plan.

The amount of detail you need to put into contingency planning depends on both the complexity of your business and the probability of your heirs actually following your instructions. If your family never takes your advice while you're alive, it's probably a waste of time to go into great detail about what they should do once you're dead. My own goal was to provide enough detail to get the job done without getting into so many specifics that it starts looking too difficult. I know my family well enough to know that in the latter case, they would ask people in their community for references, and end up hiring some clown who makes a good appearance. The clown would then find ways to squander the income, claiming I left things in a mess, and then destroy the ongoing business in an attempt to look proactive. Good thing I won't be around to see it.

Zombie Authors or Zombie Publishers?

The term "Zombie Banks" was coined (I believe) in the 1990's by western analysts who accused the Japanese of prolonging their financial crisis by keeping dead banks going with government support. Funny how the same analysts have so little to say now that it's their own life savings at risk. I'm using the term "Zombie Publishers" in this context, no offense intended to fans of zombie novels or real dead zombies. A zombie publisher is a publisher whose acquisitions editors all gave up the ghost (or their principles) years ago and nevertheless continues to publish new titles. The real question is whether these titles are being written by zombie authors.

A couple weeks ago I received a charming e-mail, which I'll gently parody below to give you the flavor:

My name is Mark Twain and I am a writer for Sardine Publishing in
New York, NY. I'm currently putting together a book and I require your help! There is no charge to assist us with this book, which I'm sure will be mutually beneficial to both parties. The planned title is "The Guide To Publishing Your Own Book With Print on Demand: A Recipe For Success That Will Turn Any Author Into A Major Trade Publisher". Here's the deal:

I'll send you a list of questions, and then I'll rewrite your answers as a case study. The resulting case study will be reproduced in the book along with your brief bio, company and contact information. Plus, you'll receive a one free copy of the book for participating (further copies can be purchased at a discount).

When the book is ready for press, you'll get a further chance at fame if you contribute a foreword and testimonials. It goes without saying that by promoting this book you'll be promoting yourself. Please get back to me if you are on-board so I can rush you the questions.

So what's wrong with this business model? I don't begrudge anybody trying to make a living, but when a publisher sets out to create inferior content on a deadline, it screams "Zombie" at me. I know enough about the subject in question to be very certain that a journalistic approach by a zombie author without any knowledge or experience will result in a frightening book that causes more damage to the buyer than the mere purchase cost. In some cases, the aspiring writer may in fact be transformed into a zombie author by following the book's brain dead tactics. I'd prefer if publishers who are set on making money from gullible dreamers would stick to something less harmful, like "How To Buy Your Own Tropical Island." As long as the book explains that the first step is saving a lot of money, it isn't going to destroy the life of the average reader.

It wouldn't have occurred to me to publish a rant about zombie publishing techniques if I hadn't read a short Frank R. Stockton novel "Rudder Grange" over the weekend, which included the following passage:

Eupemia and I once wrote a book, this was just before we were married, - in which we told young married people how to go to housekeeping and how much it would cost them. We knew all about it for we had asked several people. Now, the prices demanded for a yearly rental for a furnished house, by the owners and agents to whom I've been speaking, were in some cases, more than we had stated a house could be bought and furnished for!

That Stockton would include such a humorous description of how-to authorship in a collection of stories he wrote in the late 1800's goes to show that this zombie publishing is hardly a recent phenomena.

Zombified trade publishers crank out many more harmful how-to books than even the weakest self publishers by following this basic publishing formula:

Step #1 - Find a zombie writer who can meet deadlines
Step #2 - Refer the zombie to successful titles on the subject for "reference"
Step #3 - Flesh out the bones with inapplicable pages full of fat
Step #4 - Add graphic elements and factoids to taste
Step #5 - Print, rinse and repeat

I've frequently seen this basic model promoted as a way to get rich quick publishing eBooks, but I also encountered it presented as a system for generating passive income at a local entrepreneurial event a couple months ago. The basic formula was:

Step #1 - Write to a bunch of Internet "gurus" and ask them to contribute articles
Step #2 - As soon as one bites, write to more gurus saying that guru #1 is your slave so they should drink the Kool Aid as well
Step #3 - Combine the contributions with a sexy title and a high price
Step #4 - Get the gurus to promote the launch for you on their blogs
Step #5 - Publish as eBook (or podcast or audio book), rinse and repeat

Books slapped together from solicited contributions tend to read like commercials for the products and services of the contributors, which goes to show that the contributors aren't stupid, and may not be zombies themselves. Another constant of such books is that they are unfailingly inspirational, unlike you-know-who. And books that proclaim "Anybody can do it" are far more popular than books that caution "If you do everything right, you'll have a fighting chance." If you don't believe me, just check a bestseller list.

I recommend Harlan Ellison's turnip truck rant embedded below for anybody who isn't offended by salty language:

Is Time Running Out For Offset Printed Books?

The heart of the 20th century publishing model was the offset press. Employing an intermediate roller to transfer the ink to the paper allows for much higher speed, the use of roll stock in a continuous web and lower printing costs in high quantities. But the publishing model that grew up around the offset press is sorely pressed itself, with newspapers and magazines failing by the day and trade publishers desperately searching for new sources of revenue. The offset press, as brilliant an innovation as it was, can't compete for speed with the Internet or for flexibility with print on demand.

The Espresso 2.0 machine recently introduced by On Demand books is another step in the direction of a new publishing ecosystem. A self publisher with access to an Espresso 2.0 machine and a properly formatted book on a USB memory stick can walk away with a printed and bound book five minutes later. An Espresso 2.0 machine running full out may not reach the annual turnover of a small independent bookshop, but Espresso 2.0 machines located in hundreds of independent bookshops or chain stores would have a tremendous affect on the traditional publishing model. The application I'd love to try myself is to put an Espresso 2.0 in a small storefront with pedestrian traffic in a foreign city with strong demand for English and other non-native titles. In a city like Jerusalem or Tel Aviv, selling titles printed on demand from the Lightning Source library, along with printing books on the spot for self publishers and helping them gain access to international distribution, would make for an interesting business.



But is the bell tolling for libraries as well as the offset press? The picture above is from a 100 year old library tower pendulum clock, and believe it or not, I was there today with a friend to fix the trip hammer that tolls the hour on the bell (you can see the hammer over my shoulder in the video below). Many libraries in America are in a serious bind, as funding cuts combine with increased demand for non-book related services to reduce the budget for collection building. But integrating the Google Books library (I'm looking ahead here) and Espresso 2.0 machines would help libraries serve patrons who aren't interested in the latest bestsellers, and to serve them more efficiently than purchasing those books out of distribution. Maybe a Bookmobile featuring an Espresso 2.0 and shared between several towns will become a standard feature of 21st libraries.

In a brave new business model, the library might offer the patron the opportunity to purchase the book for a "donation" that covers the immediate costs associated with downloading and printing it. Otherwise, the book would end up in the library collection when returned, and the librarian could inform that patron that rationing is now in effect:-) As a long toothed library hound who is constantly checking out books from the stacks that have yet to be cataloged (and sometimes have never been read), I'm the last person who would suggest that libraries should exit the business of providing low demand books. But it would be more efficient and cost effective to provide these books only when the demand materializes in the form of a patron walking in and asking.



So how many Espresso 2.0 (and later generation) machines would it take to change the world of publishing? A hundred wouldn't be enough, but I think offset printing would reel under the impact of a thousand. It's not that any POD machine can, or ever will, print books cheaper than an offset press in quantity. It's that all non-offset book sales will eat into the offset business model. I frequently point out that Amazon presents a direct threat to the offset printing model, simply by their exploration of alternative book production and delivery systems, such as POD and Kindle, along with the leverage the Amazon platform gives them with publishers. It isn't necessary that Amazon, Lightning Source or the Espresso machines produce and sell hundreds of millions of books outside of the offset based system to deal it a death blow, they only have to change the economics enough on the margin so that publishers abandon offset for all but the surest bestsellers and most reliable mass market romances.

After our library clock surgery, it's been tolling the hour properly, but a half an hour late. Even though I rushed the video in today's post, I'm not likely to try another take, but maybe I'll get some good footage of the clock chiming if I go out there again.

Google Books, Amazon Kindle and ePub Publishers

Update: I just posted an analysis about how much Kindle is selling.

In the heat of every technology battle, experts on all sides tend to forget that the key to crowning a new displacement technology is popularity, not features. For that reason, I wrote a few months ago that publishers trying to establish an e-Publishing model need to adopt the unofficial anthem of the software industry, "Anything worth doing is worth doing badly." I've seen some elegant approaches to publishing eBooks, some going back more than a decade (on CD-ROM), but none of them ever developed the critical mass to create a defacto industry standard. And with all due respect to the International Digital Publishing Forum, ePub has yet to reach critical mass as well. While I think ePub will be with us for a while, thanks largely to publishers investing in the technology and tools before the real eBook winner was announced, but ePub may not make the final cut.

The reason for my skepticism about ePub is simple. Outside of publishing pundit and blogger circles, nobody cares about eBook standards. The vast majority of the future audience for eBooks just want the next Harry Potter equivalent to be readable on the thing they choose to read it on. Despite the number of people currently reading books on tiny phone screens, I personally don't believe pocket devices will be the eBook reader of choice for the long haul. I'm betting on larger screen devices, whether Kindles, Sony Readers, netbooks, or the super cheap full capability laptop behind door number three. If it wasn't for those bothersome small screens, I think that the PDF format would have won the eBook publishing wars already, and the new large screen Kindle with its PDF support is certainly going to ease the way for textbook publishers to adopt Kindle. And textbook publishing is nearly as important as trade publishing in terms of dollars.

Not long after I signed up with Google Books, I also signed up to allow them to sell the full text of my books as eBooks. Years went by with no movement, but Google finally announced last week that the eBook program will be live by the end of the year, and it looks like Google will deliver the eBooks to anything with an Internet connection. Since most of the books in their program are from scans or PDFs, it's hard to imagine that they are enthusiastic backers of ePub, but they haven't said anything to me about it one way or the other. Google eBooks and Amazon Kindle have gone together in my mind for some time now, and I've speculated that as Amazon moves into the eBook cataloging business, Google may move into print by partnering with a major POD provider. This would quickly make Google the first destination for printed out-of-print books.

So Amazon has a big Kindle that can handle PDFs and Google can take over the out-of-print market, but what does that have to do with the price of eBooks in Springfield? Those two examples are just the cherry on top. Amazon is already the world's biggest book retailer and the first place people go to look for books. They've been wise in creating a Kindle app for iPhone and will no doubt make sure to support any platform they view as necessary to maintain their position. In the end, it's not simply eBook sales or Kindle sales that Amazon is playing for, it's leverage with publishers. Amazon is playing for higher stakes with deeper pockets than any other player in the eBook game, and I don't see them rushing to adopt ePub support. An ominous sign for ePub is that rather than trashing their Kindles, fans are jumping through hoops to convert ePub docs for reading on Kindle. That's a sure sign that Kindle is popular and ePub is a stumbling block vs the other way around.

Currently, Google doesn't push Google Books results on their most valuable real estate, book results only show up if there isn't something more profitable to display. But when Google goes live with the ebook sales program, that will allow them to monetize those sales for dollars, rather than a few cents for a click on a related ad, and I expect book results with an effective eBook sell-through will take a place of pride on many Google results pages. Will that be enough to make Google the most popular eBook store in the world? Not initially, but if the program works well, trade publishers will welcome the Google program as a counterbalance to Amazon. Amazon pays just 35% of the retail price of an eBook to publishers, while the Google program (at least as offered back in March of 2006) pays 70% to the publishers. Unlike the Amazon Kindle deal, with Google, the publisher always sets the price.

All the work that went in the ePub standard, the committee meetings at conferences, the position papers, the compromises and consensus, that doesn't mean a thing to consumers. Strangely enough, despite all the time and money publishers have invested in ePub and e-Publishing consultants, it doesn't mean that much to them either. It comes down to markets and the bottom line. Amazon has created the premier marketplace for books, and they pay publishers in good hard cash. Google has created a huge online book repository and will soon be selling eBooks (and perhaps eventually reprints) and paying publishers even better. The International Digital Publishing Forum, the organization that promotes ePub, doesn't have a book marketing platform and doesn't pay publishers one red cent for participating. That makes ePub an expense rather than a profit center, and for me, it's not a necessary expense.