Starting a publishing company can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful publishing company.
Importantly, a critical step in starting a publishing company is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Publishing Company:
- Choose the Name for Your Publishing Company
- Develop Your Publishing Company Business Plan
- Choose the Legal Structure for Your Publishing Company
- Secure Startup Funding for Your Publishing Company (If Needed)
- Secure a Lease for Your Location
- Register Your Publishing Company with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Publishing Company
- Buy or Lease the Right Publishing Company Equipment
- Develop Your Publishing Company & Book Marketing Materials
- Purchase and Setup the Software Needed to Run Your Publishing Company
- Open for Business
1. Choose the Name for Your Publishing Company
The first step to starting a publishing company is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally, you choose a business name that is meaningful and memorable. Here are some tips for choosing a name for your publishing company:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also, check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your publishing company.
2. Develop Your Publishing Company Business Plan
One of the most important steps in starting a publishing company is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your publishing company.
- Company Overview – this section tells the reader about the history of your publishing company and what type of publishing business you operate. For example, are you a book publishing business, magazine publisher, textbook publisher, digital publishing company, or an indie publishing company?
- Industry Analysis – here you will document key information about the publishing company industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build a competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions, and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your publishing company? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization, and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your publishing company make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Publishing Company
Next, you need to choose a legal business structure for your own publishing company and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is the simplest business form in which the owner of the publishing company and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal business structure that is popular among small businesses. It is an agreement between two or more people who want to start a publishing company together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a publishing company include flexibility in management, pass-through tax benefits (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a publishing company is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays business taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your publishing company, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your own business.
4. Secure Startup Funding for Your Publishing Company (If Needed)
In developing your publishing company business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a publishing company to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding, and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a publishing company that they believe has a high potential for growth.
5. Secure Your Location
When choosing a location, you’ll want to consider your target audience and what part of the country they live in. You’ll also want to think about your budget and what amenities are important to you.
If you’re targeting a local audience, it might make sense to open your publishing company near them. This will help you cut down on shipping costs and give you easier access to potential customers. However, if you’re targeting a national or international audience, you may want to choose a location that’s more centrally located.
6. Register Your Publishing Company with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your publishing company’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your publishing house to help you separate personal finances separate from the company’s assets and expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
In order to start a publishing company, you will need to obtain a business license and a permit to publish from the state government. You will also need to register your company with the IRS and obtain an Employer Identification Number (EIN). Additionally, you may need to register with the Secretary of State and/or the Department of Labor depending on your state.
10. Get Business Insurance for Your Publishing Company
Below are the main types of insurance to consider for your business:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Publishing Company Equipment
Most publishing companies don’t need much equipment. To start a publishing company, you probably only need a computer, phone, and internet access. You might also need office furniture.
12. Develop Your Publishing Company & Book Marketing Materials
Marketing materials will be required to attract and retain customers to your publishing company.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your publishing company. Your logo will be printed on company stationery, business cards, marketing materials, and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional publishing company website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Marketing: establish a social media presence in your own company’s name. Accounts on Facebook, Twitter, LinkedIn, and/or other social media networks will help customers and others find and interact with your publishing company.
13. Purchase and Setup the Software Needed to Run Your Publishing Company
To run a publishing company, you need software that can manage your workflow and production. Adobe InDesign, Illustrator, and Photoshop are common design software used in the publishing industry. QuarkXPress is also a popular choice for publishing companies. Other software that can be helpful for publishers includes content management systems (CMS) like WordPress and Drupal, as well as e-commerce platforms like Shopify and Magento. To help you track business expenses, you will also need accounting software such as QuickBooks or Xero.
14. Open for Business
You are now ready to open your publishing company. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start Your Own Book Publishing Company FAQs
Is it hard to start a publishing company?
It is not hard to start a publishing company. You will need to create a business plan to help map out your strategy and business goals.
If you follow the steps above, you should be able to start your publishing business without too much difficulty.
How can I start a publishing company with no experience?
There are a few things you need to do in order to start a publishing business. First, you need to come up with a business plan and establish some goals for your company. You'll also need to set up a company structure and get the necessary licenses and permits. Finally, you'll need to market your company and attract authors and customers.
If you're not sure how to start a publishing company or you don't have any experience, there are a few resources available to help you. For example, you could join a publishing association in your niche to learn what it takes to be successful. You should also read several books on the topic and talk with other publishing companies that are already established.
Is a publishing company a good idea and/or a good investment?
Publishing businesses can be a great idea and can be a good investment, but there are also some things to keep in mind when starting a publishing company. First, it's important to consider what type of publishing company you want to start. There are different types of publishing companies, such as book publishers, magazine publishers, and digital content publishers.
Another factor to consider is the market for your type of publishing. For example, the market for book publishers is very different from the market for digital content publishers. You'll also need to consider the competition in the publishing industry and whether there is room for another publisher.
Finally, you'll need to evaluate the financial feasibility of starting a publishing company. This includes estimating how much money you'll need to start and run the business and whether you'll be able to generate enough revenue and profit to support your business.
What type of publishing company is most profitable?
There are a few types of publishing companies that are most profitable. These include children's book publishing, educational publishing, and religious publishing.
Children's Book Publishing
The first type of publishing business that is most profitable includes children's book publishing. Children's books are in very high demand because one, they teach valuable life lessons to all readers, including adults, and two, people want their kids to have the best material possible.
Educational Publishing
Educational publishing is one of the most profitable forms of publishing companies. Educational publishers, like children's book publishers, are established and well-loved because people want their kids to have the best tools possible for learning.
Religious Publishing
The last type of publishing business that is most profitable includes religious publishing. Religious publishers are in high demand because people want to read material that can provide insight into different religions and faith groups.
If you're looking for the best way to start your own company, consider what types of books sell well and which ones you're interested in.
How much does it cost to start a publishing company?
The costs of starting your own publishing company vary depending on the size and scope of the business. There are some basic expenses that are common to all businesses, such as incorporation fees, legal fees, and accounting services. Other costs may include advertising, marketing, and website development expenses. Generally, the total cost of starting a publishing company ranges from $5,000 to $50,000.
What are the ongoing expenses for a publishing company?
The ongoing expenses for a small publishing company can be broken down into three categories: marketing and advertising, royalties, and production. Marketing and advertising can be costly, especially if you are trying to reach a national audience. Royalties vary depending on the contracts you sign with your authors, but an established publishing company can offer around 7-15% of the book's list price. Production costs can range from the cost of paper and ink to hiring a freelance editor.
To keep your publishing company running smoothly, it's important to budget for all of these expenses and track your spending carefully. By doing so, you can ensure that your own publishing company is sustainable and profitable in the long run.
How does a publishing company make money?
A traditional publishing company makes money by selling books written by other authors or their own books to the public. They may also make money by selling advertising in their books, or by selling subsidiary rights to movie or television producers.
Digital publishing companies make money by selling ad space, subscriptions or products on their websites.
Is owning a publishing company profitable?
The profitability of a new publishing company largely depends on the type of publishing company that you own, the size of your company, and the market conditions at the time. That said, there are a few things that you can do to make your publishing company more profitable. First, focus on high-quality books and/or content that are both entertaining and informative. This will increase the chances of people wanting to read your content. Second, pick a popular niche so that you can tap into more of the market. Finally, try to get good reviews so more of the public has an interest in reading them.
Why do publishing companies fail?
One of the most common reasons why small publishing companies fail is because they do not have a clear understanding of their target market. Without knowing who their target audience is, it becomes difficult to create content that will resonate with them and generate sales.
Additionally, publishing companies often fail because they do not have a business plan in place or they are unable to execute the plans that they do have.
Lastly, poor marketing can also be a reason for failure. If publishers do not allocate enough money or resources towards marketing their titles, then it becomes difficult for them to reach their target audience and make a profit.
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