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Business Plan Outline for Publishers
Here is an article I wrote for the Connecticut Authors Association
newsletter. It is a description of a business plan outline that I have used
for several years.
My business plan serves two purposes. First, it provides me with a
guide to operate my business. Second, it is a sales tool that has impressed
bankers. I have also used it to convince distributors that I am serious
about what I am doing. My plan describes the following:
- Current Situation
Always include a short summary of your business particularly if you intend to use it to woo
investors. It also serves as a reminder of where you propose to focus your efforts. Limit the
length of the summary to one page and include the following:
- A brief description of your book and market
- A brief description of your skills and competence
- A summary of your financial projections
- Company and industry. This contains background information on your company and describes
the nature of your industry. It should include the following information:
- Your company
- Date of incorporation
- Principals and what role each has played in the business to date
- Business purpose and highlights of progress to date
- Present what you feel to be the current status and prospects for the overall book business;
what are your sources?
- Describe the major "players" and how they are performing, including growth in sales, profits,
and current market share
- Product. Completely describe your book, articles, video or skills
(design, editing, etc).
- Market. This forces you to research your competition and opportunities
to create a realistic forecast. Include the following:
- Market Definition. Describe the potential customers, their locations, their interest in your
product and seasonal changes in sales. If your book has a track record, discuss how it is viewed in
- Market size. Use statistics and other objective data (much of which can be found online).
- Market Trends. Describe the market's growth potential. For example, if employment is
growing, why should a distributor consider my new job search book? (i.e., I demonstrate that
college enrollments are growing and that my title is directed toward this growing pool of
- Competition. Name and discuss all major competitors. Compare your book with your
competitors' books on the basis of price, unique benefits and other important factors.
What you will accomplish in this period in terms of unit sales, gross
revenue and net income.
Remember the 4Ps of marketing: product, place, price and promotion.
Describe broadly how you intend to manipulate each of them strategically to
reach your objectives.
- Product. What will you do to improve the strategic market position your book (skills,
- Place. There are two basic ways to get your book to the intended audience: directly or
indirectly. Direct distribution strategy bypasses the traditional channels using distributors and
wholesales. An indirect strategy utilizes them. How will you use or combine these two
- Price. Explain why the price you have calculated will increase acceptance of your product,
produce profits and maintain or increase your market share.
- Promotion. Explain how you plan to bring your book to the attention of potential
These are the details of specific actions you will take to implement the strategies that will
ultimately achieve your objective. Again, it is helpful to categorize them by the four P's.
- Product. Can you make your book more detailed than competitors' works? More up-to-date?
What will you do next? A new book or planned second edition will enhance your stature among
publishers and distributors. They are more likely to take you seriously if you can demonstrate you
are not a single-title author.
- Place. If distributors or sales representatives will be used, describe how they will be attracted,
motivated, compensated and what geographic (or markets) areas will be covered.
- Price. Always consider the discount the people in your distribution channel will assess.
- Promotion. Public relations. Describe how you will generate free publicity through
appearances on television and radio shows. How will you stimulate book reviews? Show samples
of press releases.
Sales promotion. Give examples of the sales promotional tools you will implement. What kind
of promotional literature will you develop? Four color? Black and white?
Advertising. In what media will you advertise? How will you use continuity to create
awareness of your new book? How will you use direct mail to reach your targeted lists? Include a
description of the trade shows you will attend such as the BEA or regional shows.
Personal selling. Describe how you will stimulate sales through personal presentations, book
signings and seminars you will conduct.
If you perform all these tactics, how many books will you sell? Here you will provide an
estimate of sales in terms of units and revenue. Identify any major customers who have made or
are willing to make purchase commitments.
Given the revenue you expect and the costs for implementing all your tactics, create a budget.
The amount of financial information presented in your business plan will depend largely on the
stage of your financing and the amount of money you are seeking. Your plan should describe in
general terms the type and amount of funding you need.
- Current Financial Statements. If your company has a financial track record, provide financial
statements for the last three years or since your company's inception including a detailed
breakdown of income statement categories.
- Assumptions and explanations of any unusual fluctuations in income or expenses.
- Financial Projections. Provide a three-year cash flow, profit and loss statement and balance
sheet projections. If your company has had a track record, the projections should be on a
quarterly basis for the first year and annually thereafter. Otherwise, the projections should be on a
monthly basis the first year, a quarterly basis the second year and annually thereafter.
Make sure you allocate for returned books (20%?) and bad debt. Also take into consideration
the 90 -120 day payment policies of retailers and distributors.
It will take a considerable amount of time to create this document the first time, but it will be
well worth the effort. You will have a prepared list of actions to take to sell more books. Your
objective will be there to motivate you to work more, and your budgets will keep you fiscally
I hope this helps,
James A. Cox
Midwest Book Review
278 Orchard Drive
Oregon, WI 53575-1129
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