Starting a publishing company is exciting when you think about all the creative freedom it offers you. Besides, opening a publishing company has many other advantages, and it can bring you significant profit if done right.
Let’s see how to start your own publishing company in the US and Europe. The process is similar, with some minor differences, which will be pointed out.
❕Disclaimer: This article does not constitute legal advice. If you have any questions, seeking legal advice before moving on is best.
- Starting a publishing company offers artistic autonomy and the potential for significant profit, providing full control over creative decisions and revenue streams.
- A publishing house manages book production, marketing, and author support, offering credibility, brand growth, and tax benefits, fostering a professional industry image.
- Publishing companies generate income through book sales, rights licensing, subscriptions, and merchandise, with strategic marketing and global distribution amplifying revenue potential.
- PublishDrive simplifies title management, global distribution, royalty tracking, and sales analytics, empowering publishing companies to handle book publishing operations and maximize revenue streams efficiently.
This write-up goes over:
What Is a Book Publishing Company?
A publishing company is a business that produces and distributes written works. Larger companies release thousands of books yearly, while smaller ones may publish only a handful.
A publishing company manages the book cover design and editing to ensure high-quality content. They also decide on the best marketing strategies to sell their books effectively.
If you’re an author thinking about starting a book publishing company, know that it helps you build your author identity, sell other authors’ books, and safeguard your assets.
Starting a publishing house can seem demanding, but it can be done. In this article, we’ll see how.
Why Start a Publishing Company?
Opening a publishing company is an excellent choice for authors because it has various advantages. Here are some:
1. Authorial autonomy
Deciding between established publishers and your own company involves considering the degree of creative control you desire. Collaborating with a big publisher grants access to their resources but limits your say in cover design, layout, and marketing. Your independent company allows full authority over your work.
2. Supporting other authors
While initially focused on your creations, expanding your portfolio to publish other writers can be rewarding. Transitioning your company into an independent publishing brand creates opportunities to assist other talented writers and introduce noteworthy books to the market.
If you’ve been in the self-publishing business for a while, you know starting from scratch can be difficult. This can be a great opportunity to help fellow authors.
3. Professional image
Highlighting your publishing company rather than just your name when you publish a book can enhance your credibility as an author.
While investing in your name as a writer is a pertinent decision, you may want to increase your standing in the literary world by becoming a beacon in your niche by starting your own publishing company. This comes through collaboration with other authors who share your vision and add a new professional layer to your authorship.
4. Brand growth
Starting a publication company has a direct impact on your author brand.
And here’s why.
Successful self-published authors can broaden their brand and publish similar works by other writers. This expansion allows for publishing complementary titles that fit your brand, solidifying your publishing company's standing as an influential voice in that particular literary niche.
Associating your name with other influential writers helps your professional image in the industry (as I’ve mentioned previously).
Having your own publishing company comes with many benefits, including control over your book marketing that lets you expand your author brand in the desired direction.
Both in the US and Europe, owners of publishing companies can access various tax benefits and deductions. Here are some common ones:
In the US:
- Business Expenses Deductions: Owners can deduct necessary business expenses, including office space, equipment, supplies, marketing, professional services (like editorial or design), salaries, travel, and more.
- Home Office Deduction: If a part of your home is used exclusively for business, a portion of related expenses (like mortgage interest, utilities, and insurance) can be deductible.
- Depreciation: Owners can depreciate the cost of certain assets (like computers, printers, furniture) over time, reducing taxable income.
- Health Insurance Deduction: Small business owners may qualify for a deduction covering a portion of health insurance for themselves and their employees.
- Retirement Plans: Contributions to retirement plans like SEP-IRAs or SIMPLE IRAs can be tax-deductible, helping save for retirement while reducing taxable income.
- Business Expenses Deductions: Similar to the US, business expenses such as office rent, equipment, employee wages, advertising costs, and professional services are deductible.
- Value Added Tax (VAT): VAT rules vary across European countries, but in some cases, VAT paid on business expenses may be recoverable, reducing the overall tax burden.
- R&D Tax Credits: Some European countries offer tax credits or incentives for research and development activities, which might be relevant for certain publishing endeavors involving innovation.
- Employment Incentives: Certain countries offer incentives or reductions in social security contributions for employing people, which could benefit publishing companies hiring employees.
- Regional Investment Incentives: Some regions offer tax incentives or subsidies to businesses setting up in specific areas, aiming to stimulate economic development.
4. Liability protection
Starting a publishing company, like any business entity, often offers liability protection through legal structures such as a Limited Liability Company (LLC) or a Corporation.
Here's how it generally works:
You create a separate legal entity when you establish your publishing company as an LLC or Corporation. This separation means that, in most cases, your assets are protected in case of lawsuits or debts incurred by the business. This "limited liability" shields your personal finances from being used to cover the company's liabilities.
The business entity—LLC or Corporation—is responsible for its debts, obligations, and legal actions. If someone sues the company or if the business faces financial issues, your personal assets (like your home or savings) are typically safeguarded, assuming the company has been maintained properly and there's no evidence of personal wrongdoing.
It's essential to understand that while liability protection exists, it isn't absolute. Certain situations, like personal guarantees on loans or if you've committed illegal acts or behaved negligently, might jeopardize this protection. Setting up a business structure for liability protection requires legal expertise, so it’s best to consult a legal professional.
How to Start a Publishing Company in 8 Steps
If you have enough industry knowledge and you've built connections within the industry, you’re ready to start your own publishing company.
Here are the steps.
1. Set business goals
So, you have the idea of starting your own publishing company. This idea needs to be broken down into a list of goals.
These goals will be your business plan that will guide you in the beginning, but also with many important decisions you’ll have to take throughout the process.
Here are a few possible business goals:
Aim to establish a diverse range of publications across genres, catering to various reader preferences.
Foster strong relationships with authors by offering fair deals, transparent communication, and supportive marketing strategies. Building a reputation as a publisher that supports and respects its writers can attract more talent.
Set goals to enter specific markets or niches, whether it's regional, genre-specific, or focused on certain demographics. This might involve marketing campaigns, partnerships, or distribution strategies tailored to those markets.
Quality and innovation
Strive for high editorial standards and innovation. Consider adopting new technologies or formats to stay ahead in the digital publishing landscape.
Establish realistic financial goals to ensure the company's sustainability. This might involve targets for revenue, profit margins, cost management, and securing investments if needed.
Work towards becoming a recognizable and respected brand within the publishing industry. This involves building a strong brand identity, marketing campaigns, and consistent quality across publications.
Adaptation to trends
Stay updated with industry trends, reader preferences, and technological advancements. Adaptation could include exploring audiobooks, multimedia content, or other emerging formats.
Develop efficient distribution networks to ensure wider reach and availability of publications. This could involve partnerships with bookstores, online retailers, and libraries or exploring direct-to-consumer sales models.
PublishDrive is an aggregator that will help you with your book distribution around the globe. You can distribute ebooks, audiobooks, and print-on-demand books catering to various audiences from different continents.
Check out PublishDrive’s list of stores:
Sustainability and responsibility
Incorporate environmentally friendly practices where feasible and demonstrate corporate social responsibility. Setting goals for sustainability initiatives can positively impact both the company and its stakeholders.
2. Create your brand
Once you've got your goals sorted, it's time to give your brand some shape.
First, you have to pick a name. Your company name should be like a magnet, pulling in readers, writers, and booksellers, so make it catchy. A brand that clicks with its crowd sticks around. It's about creating an allure that connects with what readers want, what writers dream of, and what booksellers look for.
Before choosing your business name, make sure it’s not used or trademarked by anyone. Also, don’t use the words “corporation” or “inc.” unless you set up your business as a corporation – we’ll see that next.
Then, think up a mission statement that captures what you're all about, and decide what books you want to publish.
You should also consider the style you want to infuse in all the book covers and the overall design of your books to have a cohesive design throughout all the titles.
3. Choose a business structure
To get into the business of publishing, you need to decide on a business structure. You should research and decide which one is right for you and your goals.
Here are the business structures you could opt for.
- Corporation: It operates as a unified entity with shareholders, a board of directors, and defined protocols. Setting up a corporation, whether as an S-Corp or C-Corp, demands more formalities and paperwork compared to other business structures.
- Sole proprietorship: Also known as a sole trader or self-employed, this structure involves a single individual running the publishing company. It's straightforward in terms of setup and decision-making but may carry personal liability for business debts. Choosing the liability coverage of an LLC is a wiser move.
- Partnership: Partnerships can be formed between two or more individuals who share the publishing company's ownership, responsibilities, and profits. Different types, such as general and limited partnerships, vary in terms of liability and management roles.
- Limited Liability Company (LLC): This structure combines elements of partnerships and corporations, offering limited liability for owners while allowing flexibility in management and taxation. It's a popular choice due to its flexibility and protection of personal assets.
- Societas Europaea (SE): This is a European public limited-liability company established under EU law. It allows companies to operate in multiple EU countries without establishing a separate legal entity in each country.
Most self-publishers opt for either Sole Proprietorship or LLC, the latter being the safest option.
4. Choose a location
Besides a plan, a name, and a structure, your business needs a location. This can be a physical location or a virtual one.
Options in the US
Registered agent: When registering a business entity (such as an LLC or corporation) in the US, you typically need a registered agent. This agent serves as the official point of contact and must have a physical address within the state of formation. This address is where legal documents and official correspondence are sent.
Physical address requirements: Depending on the state where you’re registering the business, you might need a physical address within that state. However, this address doesn’t necessarily have to be an office space—it can often be a residential address or the address of your registered agent.
Virtual office services: Some businesses use virtual office services or professional registered agent services that provide a physical address for official correspondence, meeting regulatory requirements without needing a dedicated physical office space.
Business operations: While a physical office isn’t mandatory for business registration, having a place to conduct operations, meetings, or store inventory may be necessary based on the nature of your publishing business. However, this doesn’t have to be a dedicated office space—it could be a home office, shared workspace, or rented office as per your needs.
Many states offer flexibility regarding the address used for business registration, allowing the use of a registered agent's or virtual office address. Remember that each state in the US has its own regulations regarding business registration and physical presence requirements. It’s essential to research the state's specific requirements where you plan to establish your publishing company.
Options in Europe
Virtual offices: Some countries allow virtual offices or registered agents to fulfill the legal requirement of having a physical address for business registration purposes. These services provide a legal address for official correspondence and registrations without needing a physical office space.
Registered address: You may be required to have a registered address within the country where you’re establishing the publishing company. This can often be a legal requirement for official documentation and government communications, but it doesn’t necessarily mean you need a physical office space.
Flexibility in location: Depending on the country’s regulations, you might have flexibility in terms of the type of address that’s acceptable. This could include using your residential address, renting a physical office space, or utilizing a virtual office service.
Business structure: The type of business structure you choose (sole proprietorship, LLC, corporation, etc.) might also influence the requirements for having a physical location. Larger companies or corporations might be expected to have a physical office for operational purposes.
It’s important to research the specific requirements of the country where you plan to establish your publishing company. Some countries might have stricter regulations that mandate a physical presence or a specific type of office setup.
💡Before starting your publishing company, consult with legal advisors or experts who are familiar with the specific country’s regulations.
5. Register your business
When you start a business in the US, you need an Employer Identification Number (EIN) from the IRS. This number helps the IRS track your company. You can apply for an EIN by mail, online, or fax. Once you register your business, make sure all your accounts are linked to this EIN.
In Europe, you have to register your publishing company according to the laws of the specific European country. This involves choosing a business name, registering with the appropriate government authorities, and obtaining necessary licenses or permits.
6. Set up your business infrastructure
Another step in creating a publishing company is setting up the administrative parts, such as:
- Domain name
- Brand logo
- Email address
- Bank account
- Accounting system
- Printing method (it can be print-on-demand)
In this phase of setup, it's vital to attend to every detail—from obtaining the manuscript and ISBNs (International Standard Book Numbers) to choosing your sales channels.
You’ll also need to decide on who’s going to design the book covers and edit the manuscripts. You can be part of these processes, especially if you have the skills and you intend to be the sole employee of the company or the only author represented by the company. Still, once you start publishing more books, you must delegate these responsibilities to others.
Besides a designer and an editor, you’ll also need an accountant and marketing people to handle the book promotions.
Another important aspect is to claim your business on Google, where you’ll be able to add information about your company, and people can leave reviews.
7. Publish books
This is the whole reason you want to start a publishing company, so once you have everything set, publish some books. You can start with your own if you’re also a writer. Then, go ahead and collect manuscripts to get them ready for publishing.
8. Market your books
After you publish books, you also need to promote them.
You can easily identify your target audience according to the books you choose to define your publishing company. Once you do that, set in place a few effective ways to reach them. You can look at similar books in your genre, learn from their marketing approaches, and use their methods while highlighting what makes your book special (your unique value proposition).
If you don’t want to get overwhelmed or you want to keep your marketing approach simple, you can use a few basic but effective promotional strategies:
- Set up social media accounts on the platforms you think your audiences are and reach them organically
- Use paid promotion on social media
- Use Amazon Advertising
- Use book promotion websites
- Send review copies
The good news is that you can create a solid marketing plan using PublishDrive.
Here’s a write-up of what PublishDrive offers in terms of promotion. In short:
- Get your books featured in selected stores.
- Get your books featured on Written Word Media Websites (Freebooksy, Bargain Booksy, Red Feather Romance, Audio Thicket, NewInBooks, Readers' List).
- Set up price promotions in selected stores (Amazon, Apple Books, Kobo, Barnes & Noble, and Google Play Books).
- Run Amazon ads.
- Take part in sales events in selected stores.
This leads us to –
Your Publishing Company & PublishDrive
Opening a publishing company is one thing, making it profitable and successful is another.
So, once you know the ins and outs of how to start a book publishing company, you need to think about optimizing your day-to-day operations.
PublishDrive handles global distribution whether you’re an author or you own an independent publishing company.
But since we’re talking about starting a publishing company, here’s how PublidhDrive can help:
1. Title management
Owning a publishing company means handling many book titles. PublishDrive simplified the entire process, helping you organize, import, and manage book titles effortlessly, covering ebooks, audiobooks, and print-on-demand.
Part of your publishing company’s success is the distribution. You can partner with local bookstores and list your books there, but this won’t be enough when it comes to sales.
You need to go global and wide.
PublishDrive is an aggregator with the widest distribution out there. We cover ebooks, audiobooks, and print-on-demand in the US, Europe, and Asia.
3. Royalty management
PublishDrive developed the perfect royalty-splitting solution – Abacus.
This service makes it easy to calculate co-author royalties, keep track of team costs, distribute royalty reports to contributors, and more.
Besides, you can also generate detailed reports and handle payments for contributors using an easy-to-use royalty tracking tool.
With PD Abacus, authors and publishers have everything they need to manage royalties for collaborative publishing projects:
- Royalty calculation for teams
- Ability to easily import Amazon sales data for ebooks and print titles, as well as ACX audiobook sales data
- Downloadable royalty reports
- Option of inputting costs, advances, and additional revenue streams for comprehensive financial tracking
- Built-in message board to communicate with collaborators
4. Sales analytics
We want to make it easier for you to find the data you need to run your business.
With PublisDrive’s Sales Analytics, you can filter your book sales by date, sales type (free or paid), book series, countries, stores, and formats. Additionally, you can see data for both sales and preorders.
You can filter earnings by stores or series and display those results daily, weekly, or monthly.
Moreover, you can look at your best-selling titles and series and see the countries where you’re making sales and connecting with readers.
How Do Publishing Companies Make Money
Publishing companies make money through various avenues, but mainly by taking in book sales after paying authors the royalties they agreed on in a contract.
Here are some primary ways publishing companies generate income:
1. Book sales
Selling books is a core revenue source for publishing companies. This includes sales of physical books through retailers (bookstores, online platforms) and digital copies (ebooks) through platforms like Amazon Kindle or proprietary websites.
2. Licensing and rights
Publishing companies can earn revenue by licensing the rights to their content. This includes selling foreign rights for translation and distribution in other countries, as well as adaptation rights for films, TV shows, or other media.
3. Subscriptions and memberships
For publishing companies that produce periodicals, magazines, or subscription-based content, revenue comes from subscription fees or memberships.
4. Advertising and sponsorships
Some publishing companies generate income by selling advertising space within their publications or on their digital platforms. Sponsored content or partnerships with brands can also contribute to revenue.
Publishing companies might sell related merchandise like branded items, educational materials, or ancillary products tied to their published content.
6. Events and conferences
Hosting events, book fairs, author tours, and conferences can be revenue-generating activities for publishing companies through ticket sales, sponsorships, and merchandise sales.
Starting a publishing company offers creative freedom and lucrative opportunities. Whether an author seeking autonomy or an entrepreneur supporting writers, it's a chance to build a brand, access tax benefits, and establish a professional presence.
The process involves setting goals, choosing a structure, and understanding legal requirements. From infrastructure setup to global distribution and revenue streams, it demands initial investments but promises returns through book sales, rights licensing, subscriptions, and more.
PublishDrive simplifies title management, distribution, royalty tracking, and sales analytics, aiding your publishing journey.
Get acquainted with PublishDrive and its benefits by watching this episode of The Self-Publishing with Dale Podcast: