Publishing has never been easier to break into.
- In the past, publishing meant print media, but today you can also publish electronically (eg. On CD, DVD or the Web).
- In the past, print media distribution was often monopolised by large companies, and new, small publishers needed to work excessively hard to break into distribution networks. Distributors no longer have the same stranglehold they once did, partially due to globalisation (international distribution opportunities) and partially due to electronic publishing.
Publishing is a business and, like any business, can be either profitable or unprofitable. The initial choice that faces any publisher is what to publish. This relates not only to the content of the publication, but also size, format, quantity and commercial potential. Most publishers apply restrictions on what they will publish, minimising the danger of over-extending their resources (physical and intellectual) or harming their reputation by producing inferior products in some areas. Some choose to focus on certain categories of writing, and to build their business by producing a limited but quality range of products (such as children’s books).There can be considerable market value in growing a reputation as a publisher of a certain kind of book (journal or newspaper).
Small Business Opportunities
Publishers may either initiate their own projects or sub contract to publish for other organisations
Many organisations (private companies and government departments) need to have booklets, magazines, web sites, instruction manuals and other things published. Increasingly this type of work may be contracted out to publishing businesses.
Most organisations today publish web sites. Not only do they need to engage web developers to publish them, but also to maintain (update them; an that can mean ongoing, regular work.
From time to time, small organisations or individuals will recognize an unfilled niche in the print media market (perhaps a specialist magazine). Some very successful magazines have started this way; but there have also been some significant failures. Critical factors more often than not are knowing the discipline, being able to generate significant advertizing before even printing the first issue, ensuring good distribution, and last but not least timing (You must launch before others identify the niche and launch competition).
Producing a good publication is only half of the job of any publisher. The other half involves managing the finances.
Producing any sort of publication requires resources; and that usually means money. Publications can generate income from any of the following sources:
- Advertising – paid advertisements within the publication.
- Advertorial – editorial in support of another company, product or service. Usually the rate charged is less than an advertisement).
- Individual publication sales (to individuals).
- Batch publication sales (eg. to a retailer, a club or association or distributor).
- Subscriptions (eg. pre-paid purchased for a number of copies such as magazines for a year or a series of books, videos, CDs etc).
- Sponsorship – commercial sponsors may receive some special exposure to promote their business. Non-commercial sponsors such as government or philanthropist organisations may sponsor a publication in order to support a “cause” which the publication is promoting).
- Take on a partner/investor – this may be a trade-off: the deal may reduce production costs but any profits are shared.
- Selling rights to copyright (eg. syndication, magazine selling book rights or Internet rights).
Costs can be minimised in the following ways:
- Print in another country where labour costs are cheaper
- Minimise colour
- Use cheaper paper, binding and cover stock
- Produce smaller print runs
- Don’t pay for writers … seek unpaid contributions
- Use copyright-free illustrations, for example, in Australia, copyright normally expires 50 years after death of the creator. For more information see www.copyright.org.au
- Use electronic publishing for both production and formatting (ie. printing the document on CD-Roms and/or the Internet)
- Publish electronically instead of in print media
- Publish smaller quantities, but charge more per copy. This does not work for everything, but it can be viable for some types of publication)
Most new publishers have certain goals and aspirations for their business. Unfortunately, in many circumstances, these goals remain in the heads of the owners rather than in writing.
The budgeting process needs to express its financial goals and plans in writing. It commonly involves the preparation of budgeted accounting reports. This is done by estimating what is expected to happen some time in the future. Some budgets set targets of achievement, whilst others set limits of expenditure.
As budgets involve predictions of future events they are not expected to be perfect. Budgets are simply a tool for planning future events. The performance of a budget must be evaluated, updated or modified if needed.
Below is a list of some of the budgets which may be prepared for a publishing business.
- Master budget. This sets out the overall planning strategy of a business and is made up of figures from most other budgets.
- Service fee budget. This predicts the future service fee revenue of the firm.
- Materials budget. This estimates the cost of materials required to earn the estimated service fees.
- Labour budget. This can be used to predict the staff required and the cost of such staff.
- Expense budget. This outlines other expenses need to meet the business plan.
- Cash budget. This predicts the future cash flows of the firm.
- Budgeted profit and loss statement. This provides a summary of all estimated revenues and expenses.
- Budgeted balance sheet. This estimates the future financial position of the business.
Many businesses do not prepare all of the budgets listed above. Probably the most important budget to most businesses is the cash budget, which involves estimating the future cash inflows and outflows of the business.
A budgeted cash flow statement will help highlight:
- Those times when a cash shortage is likely and therefore alert the business in advance. This allows the business an opportunity for action to bridge the period of shortfall.
- Those times when a cash surplus is likely, providing the business with the opportunity to consider alternative investment options. This will enable the most effective use of the resources of the business.
Budgets are Only a Tool
While necessary; budgets are only a tool for the publisher to use. Budgeting is a way of planning and knowing what needs to be done in order for the publishing business to remain financially sound.
Learning should come before planning and planning before spending. If you prepare and are fully awae of what you are doing; your chances for success in developing a publishing business, can be greatly improved.
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