establish a book publishing house

Starting a publishing company - How to become a successful book publisher

A publishing house can be founded quickly and without major formal hurdles - but in order to run it successfully, there are economic, professional and legal aspects to consider. As a small publisher, you operate within an industry dominated by large publishing houses. What do you have to pay attention to when you want to found a publishing house?

Start a publishing house - yes or no?

There are currently around 3,000 book publishers according to the German Publishers and Booksellers Association in Germany. However, only 40 of them generate almost 80 percent of total publishing revenues. Small publishers do not have an easy time holding their own in the market.

Before you start thinking about how to start a publishing company, you should ask yourself if it's the right decision. How did you come up with the idea? Did it come with writing your novel or because of rejections from book publishers? Do you want to publish your own books or books by other authors? Do you want to be a publisher or are you using it as an option to get your books out? Do you have experience in publishing or bookselling and how familiar are you with developments and trends? What about commercial expertise?

As a self-publisher, you'll need to get your and other authors' books ready for print, take care of Cover, editing and Typesetting take care of them, have them printed and - most importantly - get them into bookstores. A Self-publishing service provider can be an easier alternative to publish and distribute your own books.

What types of publishers are there?

There are different ways to publish a book through a publisher. You can publish your Manuscript submit to a traditional book publisher, publish through a self-publishing service provider with your own publishing brand, or start an independent self-publishing company.

Classic book publisher

A classic Book publisher produces printed books and e-books. In return, the publishers obtain the rights for a book publication from selected authors. The publisher produces, distributes and promotes these books. It pre-finances all these activities for authors. How the book sells only becomes apparent as soon as it is available in bookstores or online shops. A traditional publisher therefore takes a high financial risk. It operates according to paragraph 1 of the law on publishing rights for his own account: "By the publishing contract concerning a literary work or a work of musical art, the author is obliged to entrust the work to the publisher for reproduction and distribution for his own account. The publisher is obliged to reproduce and distribute the work."

Self-Publishing

To keep the financial risk low, some self-publishing service providers offer the option of publishing under your own publishing brand. tredition also offers solutions for setting up a publishing house. The principle here is that you have your own publishing brand and your own ISBNs or ours, but you can use tredition's services for all book-related services from layout to printing to distribution. This way, you don't have to pre-finance any print runs, but the titles are published in the Print on demand-process.

Self-published

There is also the possibility of setting up a self-publishing company. The most important prerequisite: You must have one or more of your own acquire ISBNsto get your published books into the databases of the Booksellers to make them visible. Nevertheless, book wholesalers are needed so that the titles are available at bookstores - and concluding contracts as a small self-publisher is almost hopeless.

For debut authors in particular, it is advisable as an alternative to publish via an Self-publishing provider or a classic book publisher without having to take on publishing tasks on their own.

What are the legal forms of publishing houses?

Whether it's a sole trader or a limited company, there are different legal forms you can choose to set up your business. From a survey of the Federal Statistical Office for 2017 shows that the majority of book publishers in Germany are sole proprietorships and corporations. Before making a final decision, you should seek advice from the tax or trade office, the Chamber of Industry and Commerce or a specialist lawyer.

Founding a publishing house as a sole proprietorship

Founding a sole proprietorship is the easiest legal form when starting your own business. You have entrepreneurial freedom and make all decisions yourself. However, you are liable with your private assets.

Founding a publishing house as a limited liability company

A limited liability company (GmbH) is a legal form frequently chosen in Germany. Here you are only liable with your business assets. However, a starting capital of 25,000 euros is required. The GmbH must also be registered Commercial Register be entered.

Founding a publishing house as a limited liability entrepreneurial company

The haftungsbeschränkte Unternehmergesellschaft (UG) is a subform of the GmbH. This enables entrepreneurs to establish a corporation with lower capital. It is therefore theoretically possible to start the UG "with only one euro" share capital. An essential difference to the GmbH is also that profits must be used at the end of the year proportionately for reinvestment and/or as legal reserve. More information is available on the specialist portal Smartlaw.

Founding a publishing house as a civil law partnership

In order to found a publishing house together with other people, a civil law partnership (GbR) would be the right legal form. In contrast to the GmbH and UG, all partners are liable here with their private and business assets.

Business registration

If you want to start a publishing company, you have to register a business at the responsible trade or district office before you start publishing. The term "Business" means an economic activity which is not carried out on a self-employed basis. As a writer, you're usually a freelancer. However, if you want to start a publishing company, you are a trader. In addition to your name and legal form, you must describe exactly what your business is about. Once the trade licence has been issued, the Trade Licensing Office will automatically inform the tax office and the Chamber of Industry and Commerce (IHK) about the foundation of your publishing company, as well as the local court for entry in the commercial register. As a trader you have to pay trade tax. Here it is important to know: If your publishing company makes less than 50,000 euros in profit per year, you are considered a small trader and can benefit from simplified accounting. More information can be found at the Specialist portal for business registration.

Before the start: How do I develop a feel for the book market as a publisher?

What direction should your publishing house take? This is a question you should ask yourself in advance if you want to found a publishing house. It doesn't hurt to inform yourself about the book market and its economic situation. Only if you know your market environment can you decide where you want to position yourself.

To keep up to date with news and industry developments, you should subscribe to the free newsletters of relevant industry services such as book report, Financial Times and Book market subscribe. You should also keep an eye on the bestseller lists, visit bookshops regularly to see what titles are currently available, and read a lot yourself to keep an eye on trends and topics. 

In order to establish contacts within the book industry, a visit to the Book Fairs. There are workshops and lectures about the book market. Talks with other (young) publishers, booksellers and authors to exchange experiences can be valuable.

Cornerstones: What are the industry standards in publishing and the book market?

Copyright, fixed book prices and the right of return are terms that you should deal with if you want to set up a publishing company. They are the basis for your work and the calculation of print runs and order quantities. Advice from experts in the industry is useful here. As a member of the German Publishers and Booksellers Association you can take advantage of offers. You should seek legal advice for the formulation of publishing contracts.

Copyright

As a publisher, you publish books and thus intellectual property that is subject to copyright. So you and your authors must respect the Copyright of others, at the same time your published titles enjoy legal protection.

Publishing law

The publishing right is the right to reproduce and distribute a literary work. For this purpose, a publishing contract must be concluded in which the author, i.e. the author, transfers the right of distribution to the publisher. All the details are contained in the law on publishing rights regulated.

Book price fixing

In Germany, bound prices apply to books, i.e. the publisher sets an unchangeable selling price for each book which is binding on all dealers.

Right of return

Booksellers generally enjoy the right to return ordered books to the publisher against credit. As a rule, they do not order books from publishers or self-publishing service providers who do not grant a right of return.

The concept: What questions should you ask yourself before founding a publishing house?

From the name of the publishing house to the layout of the books published to the pricing and distribution methods: There are some questions about your publishing company's profile that you should think about before you start. Possible questions could be:

  • What should distinguish your book publisher from others? What is the unique selling point?
  • What do you want to call the publisher?
  • In which genres do you want to publish books? What content do you want them to have?
  • What do you want the books you publish to look like?
  • Which target group should the books be aimed at?
  • How many books would you like to publish per year?
  • Should only books by German-language authors be published or also licensed titles from abroad?
  • In which price categories do you want to offer the books?
  • In which product forms, i.e. paperback, hardcover or e-book, should content be published?
  • Are there already authors who want to publish with you?
  • How would you like to acquire authors for your publishing house?
  • What are your expectations for sold runs?

Take enough time to clarify the questions for yourself and talk about them with business start-up consultants or ideally experts from the publishing industry. Are your ideas realistic and feasible? Also, be careful when coming up with a name. Not only should it fit your publishing profile, but it should not be used by any other publisher. This can be expensive. Check the database of the German Patent and Trade Mark Office (DPMA) free of charge, which trademarks have been registered for protection.

The basis: How does a publishing house work?

A classic book publisher takes care of the production, promotion and distribution of a book. To do this, it has departments for editing, marketing, sales and production, rights & licenses and press relations. If you take care of your publishing house alone or only employ a few people, it is almost impossible to do everything yourself. You can only do that as long as you publish a few books a year. But consider how much time proofreading and editing alone will take. You also can't underestimate the amount of publicity you'll have to do. For small, owner-managed publishers, it makes sense to work with service providers.

Cooperation partners for printing and distribution are indispensable. About the IHK or the German Publishers and Booksellers Association you can find printing companies. There you will also find addresses of publishers' distributors. Book distribution is difficult, especially for small publishers. The book wholesalers, who distribute to retailers, do not conclude contracts with very small publishers or self-publishers for economic reasons. It is therefore advisable to use the services of a publisher's distribution company, which handles distribution to bookshops for many book publishers in bundled form. It has become increasingly difficult for small publishers to find distribution due to the tight situation in the book market. Self-publishing service providers can be an alternative. At tredition, for example, it is also possible to publish a book under your own brand and with your own ISBNs.

The framework: Your personal business plan

If you want to start a publishing company, you need a business plan in which you work out your business idea and draw up a financial plan. This will not only give you an overview yourself. For example, it is indispensable for investors or banks with whom you would like to obtain financing for your company. On the Specialist portal for founders you will find a detailed description of everything that belongs in your business plan. There are now programs available for creating a business plan. An overview of current software is offered, for example, by the portal Founder's Kitchen.

What belongs in a publisher's business plan?

In a business plan you work out your business idea in detail. This includes your basic idea, your planned offering, i.e. book genres, titles, topics and authors, as well as the target group. Also very important: a comprehensive market analysis. In it, you make clear how large the market segment is in which you operate, which competitors there are and how the market is doing economically. Your medium-term goals and your strategy also belong in the business plan. The same goes for your unique selling proposition, the customer benefits and which marketing measures you want to use to reach your readers.

What belongs in a publisher's financial plan?

In a financial plan, you determine what capital you need to start a publishing company and how you want to finance your business. The start-up and running costs include the business registration, the ISBNs, an annual subscription for the backlist, office equipment from furniture to computers to stamps and costs for editing, layout, printing, marketing as well as distribution.

Due to the current stagnant book market, it can take months or even years to recoup the costs of just one book. As a publisher, you pre-finance the production, marketing and distribution of books and therefore incur high costs until the first sales of the books occur and thus to turnover. It is therefore absolutely necessary to think about how you are going to cover the costs. If you do not have sufficient reserves, a loan is unavoidable.

Conclusion

If you want to start a publishing company, you will have to answer many questions in advance. Industry contacts and exchange of experience are just as important as a well thought-out publishing profile. You should familiarise yourself with the common terms used in the publishing industry and develop a good feel for the book market. Think about which tasks you can take on in the publishing house and in which points you need support from service providers. Work out a business plan and get advice from experts.

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