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.
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Learn how to start your own Publishing Company and whether it is the right fit for you.
Start a publishing company by following these 10 steps:
- Plan your Publishing Company
- Form your Publishing Company into a Legal Entity
- Register your Publishing Company for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Publishing Company
- Get the Necessary Permits & Licenses for your Publishing Company
- Get Publishing Company Insurance
- Define your Publishing Company Brand
- Create your Publishing Company Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your publishing company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
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 startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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).
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Publishing Company Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your publishing company is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
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.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
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.
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:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
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.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
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.
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.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Publishing Company in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
Take the Next Step
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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
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.
Real World Examples
- Penguin Random House, one of the largest publishing companies in the world
- Agate Publishing, a successful small press publishing house