How to Start a Publishing Company

Part 1 - How to start a Publishing Company business - Background

Publishing companies have historically focused on physically printing books, but now, that is shifting more toward digital publishing. This works for both the consumer and the publisher because the consumer’s desire to read text via digital devices dovetails nicely with the publisher’s desire to keep costs down.

Our guide is in 3 parts:

• Part 1 - How to start a Publishing Company business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a publishing company?

The costs of opening a publishing business are potentially very small. For instance, many publishers begin by working out of their own home, so this automatically cuts the need for an expensive lease and extra utilities each month. While an upfront advertising cost is necessary, it should take less than $10,000 to create a multimedia campaign that plays in area papers, radio stations, and online, which should complement the social media advertising you are doing that costs nothing at all. Beyond that, the costs are primarily a matter of figuring out how many books you want to start with. Generally, $5,000-$6,000 is a good estimate for the editing, proofing, and overall design of a single book, including creating an attractive jacket and capturing or creating striking imagery to use with it. This estimate also includes digitally converting the text as necessary. For print books, you must also factor the cost of printing them and having them shipped to you which, so long as you are ordering 3,000 or more books at a time, this comes to a dollar or less per book.

What are the ongoing expenses for a publishing company?

As mentioned earlier, your only real ongoing expenses will be the costs of the books you decide to publish and costs of ongoing advertising. A good estimate is $5,000-$6,000 per book, with an ongoing advertising budget of $1,000-$1,500 per month. And don’t forget that it will cost approximately one dollar per book you print, with that price per book going up if you are printing in smaller batches (below 3,000 at a time).

Who is the target market?

Generally speaking, the best clients for a publisher are those who are simultaneously passionate about their work but open to suggestion. This is a surprisingly fine line, as many authors are hesitant to change much of their work in order to make it more marketable and more successful. Others may think they don’t really need a professional publisher because it is easier than ever to self-publish. Thus, the best author to work with is committed to making their book succeed, being willing to edit as necessary and understanding your role as a professional facilitator of their success.

How does a publishing company make money?

On the most basic level, publishing companies make money through the sales of their authors’ books. The writer and publisher will sign a contract that works out a certain percentage of royalties that will be paid to the author for the sale of each book. The remaining money goes to the publisher, which is one of the reasons that digital books are so attractive to market and sell, as it lowers the overhead that will eat into your business profits.

How much can you charge customers?

While the exact amount that you charge clients is up to you, a general industry standard is to pay authors between eight and ten percent royalties on printed books (with possible higher percentages for book sales past a certain amount) and between 25 to 30 percent for eBooks. The higher percentage for ebooks is because those books have no printing, shipping, or distributing costs.

How much profit can a publishing company make?

As mentioned earlier, the publishing industry is generally profitable, consistently bringing in about $28 billion in revenue each year. While your own publishing business will start small, your productivity dictates exactly how much money you make, as selling modest “hits” (books selling 3,500 copies or more) can reliably net you $3,000 or more of pure profit. With no real lease, utilities, or other overhead to eat into this profit, the sky’s the limit with what you can achieve!

How can you make your business more profitable?

Many of the ways of making your business more profitable have already been detailed above. These include focusing on electronic texts (which ultimately save you time and money and makes contracts more enticing for authors), embracing more social media advertising (which is essentially free, and highly effective), and doing as much work as possible on your own (reducing the need to hire others).

Day-to-Day and Growth

What happens during a typical day at a publishing company?

The exact day-to-day activities of your publishing business will vary depending on the size of the business itself. For instance, if you start out as the only employee of your business, a good part of any given day may be dedicated to reading and editing manuscripts. You may meet with authors and decide whether or not to publish their work and, after it is edited and otherwise cleaned up, you will be figuring out how to promote and sell the book. This includes designing an attractive cover (important even for digital texts) and marketing it through traditional and non-traditional avenues. Each day should also have a dedicated chunk of time for responding to emails and returning calls. As a small publisher, you will also be fielding the incoming phone calls yourself. Finally, even the pleasurable act of reading becomes a part of your job as you should constantly be studying what is trending and, more importantly, what is about to trend so that you can be more successful in promoting your authors.

What are some skills and experiences that will help you build a successful publishing company?

One simple skill that leads to a successful publishing company is consistency, such as setting a goal of publishing a certain number of titles each month and sticking to it. It is also important to be good at marketing and to be media savvy, as this can help with everything from making sure your website is mobile-friendly to taking advantage of the numerous free ways that social media can help promote your company. Don’t be afraid to network with other publishers and learn from both their successes and their failures so that you can chart a more direct course towards success.

What is the growth potential for a publishing company?

The growth potential for a publishing business is decent. The industry itself has held steady, bringing in about $28 billion for the last several years. Businesses that start small and focus on digital texts also have great potential to branch out into traditional print publishing, audio books, and other formats as both technology and public taste evolve.

What are some insider tips for jump starting a publishing company?

One insider tip for your publishing business is to create a niche. The world is crowded with both traditional publishers and self-publishing authors, so having a unique niche will help your business stand out. Also, the more hats you wear for the business, the more you should research everything from marketing to design to how to optimally format for print. Basically, every job you can do yourself is a job you do not have to pay others to do, with the final result being more money for you when the smoke clears!

How and when to build a team

The short answer to “when should I build a team” is “whenever you want to stop doing everything.” In all seriousness, the cheapest way to begin as a publisher is to serve as your own editor, designer, marketer, and so on. As your business becomes more successful and takes on more books at a time, it may become less feasible for you to do everything, which is when you should selectively build a small team. At this point, though, you must decide whether you want to hire a flexible team who can work from their respective homes or to instead rent an office space. Keep in mind that the cost of an office may be prohibitive and will certainly increase business expenses.

Read our publishing company hiring guide to learn about the different roles a publishing company typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Part 2 - Is a Publishing Company business the right fit for you?

Part 3 - Action plan to launch your Publishing Company business in 90 days