Every title an investment

This article is an excerpt from the MAI webinar by Yna Reyes on “Publishing Program Planning: The hows, whys and whos of what books to publish.”

Every book that your publishing house decides to develop will require publishing funds. Every title is an investment. Especially for those of us with limited publishing funds, every publishing venture presents a challenge and a risk. Therefore, as much as possible, we need to make sure that every new book project is financially viable.

However, if it is intentional on your part to publish a book that will not sell as fast as your other titles, but which you believe addresses a pressing need of a particular market segment in your country, you should be able to justify the decision to publish; and be prepared for just a breakeven, or even a loss.

Tips on how to manage your publishing funds:

  • Work within your publishing budget for the fiscal year.budget expenses
  • Based on your publishing budget, determine the number of titles you can afford to publish for the year. Be realistic.
  • Set a budget for every title in your publishing plan. Your budget will determine the specifications of the book (book size; number of pages, paper stock; binding; quantity to print)
  • Set a 1-year target sales for every new book in your list. How many copies do you expect to sell? How much are the equivalent total sales?
  • Determine a retail price for the book that will cover author’s royalties, production expenses, marketing expense, discounts for booksellers, and still allow for a modest profit margin.

As most of us work with limited publishing funds, we need to carefully select which titles to prioritize.

Questions to help us prioritize:

  • What are the gaps in our present publishing list?
  • What market segments have been underserved in previous years?
  • What new titles did well in previous years and created a demand for similar titles? Perhaps you can develop a line for these books.
  • What will surely sell? You will need sure sellers not just for one year, but for many years – to serve as your “bread and butter” titles that will generate the income you can use to develop more books. For example, The Purpose Driven Life has remained the No. 1 bestseller for us for many years, and has generated huge income that allowed us to not just publish more books but open our own retail stores.

As publishers, we need to be faithful stewards of the resources available to us. Therefore we do not engage in vanity publishing, but in intentional and transformational publishing. Each title we publish should be carefully selected, prayed about, and wisely budgeted.

Yna Reyes is a children’s author and the editorial director of OMF Literature, the largest Christian publishing house in the Philippines. She has led training for editors in multiple countries. Yna is also a Trustee of MAI-Asia.

Photo above courtesy Stuart Miles, Freedigitalphotos

How to Collect on Unpaid Accounts

By Ramon Rocha

The bottom line for accounts receivable is: “Books sold on credit are fictitious until the amount due is collected!” I used to preach this at the publishing house I led.

While traveling this past year for MAI, I heard several Christian publishers cry out that they are facing the problem of rising uncollected accounts receivable. What are the steps publishers can take to manage this important balance sheet item?

MAI President John Maust remembers a publisher in Asia having to fire one of FreeDigitalPhotos by David Castillo Dominicihis staff, after overhearing her telephone a deadbeat customer and saying in total exasperation, “If you don’t pay, you’ll be in danger of hell!” Angry statements like this one are commonly heard by debt collectors, but within the Christian community it’s important to approach the situation in a Christ-like manner.

1.   Develop a carefully drawn set of credit policies and practices:
If you already have created policies, review your existing ones. What type of clients qualify for credit?  What is your process for screening customers that are applying for credit? How disciplined are you in enforcing your credit policies?

2.  Age your receivables:
In a spreadsheet, name your credit customers, itemize each invoice amount and  how long the invoice has been past due.  Monitor this report regularly.

3. Make phone calls:
Assign a staff person to  make a friendly phone call to each customer reminding them of debts that are due. Problematic customers get the pleasure of receiving more frequent phone calls. If you are silent and don’t do any follow up calls, the money usually goes just to the “noisier” supplier.

4. The CEO should visit important customers:
There’s nothing like formal, yet friendly visits. Visiting customers makes them feel appreciated, and they will hopefully give priority to paying off your invoices. As a general rule, good customer relations contribute to a good cash flow.

5. Keep money reserves for rough times:
During good years, build up allowances for bad debts. Some customers with unpaid accounts simply vanish. They are Christians, but perhaps their hearts have hardened despite reading Zacchaeus’ story. Pray for them.

In all financial circumstances, may we look to the Lord for provision and wisdom to handle our finances well. Remember to ask: What am I doing to make sure my credit sales are managed properly to ensure I have enough cash to pay my bills on time?  

Find more helpful pointers from Michael Hess’ article at CBS Moneywatch entitled The best way to handle customers who don’t pay.

Do you have any other suggestions? Tell us here.

Photo above courtesy FreeDigitalPhotos, David Castillo Dominici

Every Publisher Needs a Business Plan — All the Time!

Ramon photo

“Help! What can I do with lots of slow moving inventory?  Our declining revenues are not able to cover our monthly expenses!” “Our cash may run out in 4 to 5 months!”

MAI recently received these two urgent requests for help from two separate Christian publishers. These publishers serve in different regions but are both beset with a distinct set of difficult challenges. The boards of trustees of both houses required their respective CEO’s to come up with a “business plan.”

Business plans are usually required by venture capitalists so they can properly evaluate investment opportunities in start-up “for-profit” enterprises. However, clearly stated and thoughtfully prepared business strategy plans are much needed, even by ministry-oriented Christian publishing houses. Indeed, failing to plan is planning to fail.

The boards are likely considering the need for a fresh infusion of working capital to help tide the publishing firms over the hump. Thus, their requirement to develop a business plan.

I created a simplified template that any publisher could complete. It outlines a clear objective, an executive summary, analysis of the publishing house’s current challenges, a description of the market, and a financial plan.  Please see the Simple Business Plan Template for your use.

In addition to a business plan, firms must also discuss the actual publishing plans for the next 12 to 24 months: 1) the new titles, 2) how to maximize the bestsellers, and 3) how to sell out the slow moving titles (including, perhaps, a plan how to give them away!). Why focus on these three? They significantly affect the financial health of the company.

It goes without saying that filling in the columns of these spreadsheets would entail a lot of discussions, research and analysis. The nice thing about spreadsheets is that you can add more columns and insert anything relevant in your planning, implementation and monitoring.

Business strategy plans should be part and parcel of every Christian publisher’s year-round operations.

Email me at [email protected] if you’d like any of these sample spreadsheets:
1. 2-year publishing plan
2. bestseller marketing plan
3. slow-moving titles plan

What planning and measuring tools are you using to help you accomplish your mission and vision?

— Ramon Rocha III, MAI director of publisher development