How to Start a Publishing Company

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Our guide on starting a publishing company covers all the essential information to help you decide if this business is a good match for you. Learn about the day-to-day activities of a publishing company owner, the typical target market, growth potential, startup costs, legal considerations, and more!

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Start a publishing company by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your publishing company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your Business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

  • What are the initial costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will you name your business?

Luckily we have done a lot of this research for you. Skip on ahead to the Business Overview for more detailed answers to all your questions.

Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2: Form a legal entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your publishing company is sued. Consider using a registered agent service to help protect your privacy and stay compliant.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

STEP 4: Open a business bank account

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get Business Insurance

Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

STEP 8: Define your brand.

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

STEP 9: Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Business Overview

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.

Who is this business right for?

First and foremost, this is a business for those who love books. In addition to working in a field you'll love, the fact that certain books are hits and other books flop means you will need a keen eye when deciding to publish what may become the next big thing. The job is also good for a multi-tasker because, especially when first starting out, you will be doing many things besides “only” publishing books. This includes setting up book tours, book-related events, and handling most of the marketing of the text. Finally, this job is good for a “people person,” as you will be dealing with a wide variety of authors, bookstore managers, and advertisers.

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 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.

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 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 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.

Where can I find a business mentor?

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

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!

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Growing Your Business

How to promote & market a publishing company

As mentioned earlier, it is vitally important that you have both a mobile-friendly website and an active and engaging social media presence in order to advertise your business. For the website, make sure you have mastered search-engine optimization (SEO) so that it is easier for authors searching for publishers to find your site. Similarly, you should pay attention to Google Analytics or other metrics to get a better idea of what is bringing customers to your site so you can better understand your demographics. It's also true that advertising via print and radio can help you quickly gain the attention of local writers. Collectively, these techniques let you cast a wide net.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

The absolute best ways to attract and retain customers have already been mentioned. Specifically, you should find your niche and stick to it, as fans of particular genres are likelier to be loyal to publishers putting out content that they like. Engaging with those customers on every level is the best way to retain who you have. This can range from social media engagement to simply meeting them where they live. For instance, if your niche is genre books such as horror or sci-fi, make sure your authors are visiting local “Comic-Con” type events where they can directly engage with their primary audience.

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.

Legal Considerations

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a publishing business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:

Maintain Personal Asset Protection

Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.

Two of the simplest steps that will protect your business, and yourself, are to:

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.
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CORPORATE VEIL

To learn more about maintaining your LLC's corporate veil, read our guide and protect your personal assets.

Publishing Agreement

Publishing businesses should require clients to sign a publishing agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership (typically the company becomes the owner of the copyright associated with the written work). Here is an example of one such publishing agreement.

Earning Potential

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.

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).

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).

Next Steps

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