Overview: While establishing your own publishing company is not necessary to self-publish, it can provide several benefits that enhance your author brand, offer financial protection, and even provide tax advantages. In this article, we’ll explore the pros and cons of starting your own publishing company, and how it can support your goals as a self-published author.
What is a Publishing Company?
A publishing company is a business entity established to publish and distribute books. Authors who choose to start their own publishing company can self-publish their own books under this business, rather than listing themselves as the individual publisher. This setup can provide a professional appearance, boost credibility, and offer additional opportunities to expand into other areas of publishing.
Benefits of Establishing a Publishing Company:
- Boosts Author Brand: Publishing under a business name can add legitimacy and help establish your author brand.
- Provides Financial Protection: Establishing a company separates your personal and business finances, reducing personal liability.
- Offers Tax Benefits: Depending on your location, a publishing company may offer tax advantages such as deducting business expenses.
Pros and Cons of Establishing Your Own Publishing Company
Pros
1. Boosts Author Brand and Professionalism -Publishing your books under a business name can enhance your professional image and distinguish your books from those of other self-published authors. It can also help build a recognizable brand for future books and publications.
- Enhanced Professional Image: Publishing under a company name looks more professional on book covers, websites, and marketing materials.
- Stronger Brand Identity: Establishing a brand name helps readers associate your books with quality and consistency.
2. Provides Financial and Legal Protection -Creating a separate business entity, such as an LLC or corporation, separates your personal assets from your business liabilities. This can offer protection in the event of legal disputes or financial difficulties.
- Reduced Personal Liability: Separates personal and business assets, minimizing personal risk.
- Financial Security: Creates a clear division between personal and business finances, making it easier to track expenses and income.
3. Offers Potential Tax Benefits – Establishing a publishing company may allow you to deduct business-related expenses, such as printing costs, marketing, and office supplies. This can reduce your overall tax burden and improve your financial situation as an author.
- Business Expense Deductions: Deduct costs associated with publishing, marketing, and other business expenses.
- Improved Financial Planning: Create a structured financial plan for your publishing activities.
Cons
1. Requires Additional Time and Effort – Setting up and maintaining a publishing company involves additional administrative tasks, such as registering your business, filing taxes, and keeping financial records. This can take time away from writing and creative activities.
- Administrative Workload: Managing a business involves more paperwork and compliance requirements.
- Time Commitment: Time spent on business tasks could reduce the time available for writing and book promotion.
2. Initial Costs and Ongoing Expenses – Establishing a publishing company may involve initial setup costs, such as registering your business and obtaining necessary licenses. There may also be ongoing expenses, like accounting services or legal fees.
- Setup Costs: Registration fees, licensing, and initial marketing costs.
- Ongoing Expenses: Accounting, legal, and administrative costs.
3. Not Necessary for All Authors – For authors who only plan to publish one or two books, establishing a publishing company may not be worth the effort or expense. Consider your long-term goals before deciding whether a publishing company is the right choice.
- Evaluate Long-Term Goals: Determine if establishing a company aligns with your long-term publishing plans.
- Consider Publishing Frequency: Authors with a limited number of books may not need a separate publishing entity.
How to Establish Your Own Publishing Company
If you decide that establishing a publishing company is right for you, follow these steps to get started:
Step 1: Choose a Business Structure
Select a business structure that suits your needs, such as a sole proprietorship, LLC (Limited Liability Company), or corporation. Each structure has its own benefits and requirements, so choose the one that best fits your goals.
- Sole Proprietorship: Simple setup, but no separation between personal and business liability.
- LLC (Limited Liability Company): Provides personal liability protection and flexibility in management.
- Corporation: Offers the highest level of liability protection, but involves more complex setup and management.
Step 2: Register Your Business Name
Register your publishing company’s name with the appropriate government agency in your region. This process may involve checking the availability of the name, registering a DBA (Doing Business As), and filing necessary paperwork.
Step 3: Obtain Required Licenses and Permits
Check local regulations to determine if you need any licenses or permits to operate your publishing company. Requirements vary by location and business structure.
Step 4: Set Up Business Finances
Open a separate business bank account and keep financial records for your publishing company. This will help you track expenses, income, and taxes more effectively.
Step 5: Create a Business Plan
Outline your goals, target audience, marketing strategies, and financial plans. A business plan will serve as a roadmap for your publishing company and help you stay organized.
Final Notes:
Establishing your own publishing company is a strategic decision that can boost your author brand, provide financial protection, and offer tax benefits. While it’s not necessary for self-publishing, it may be worth considering if you plan to publish multiple books or expand into other areas of publishing. Use this guide to weigh the pros and cons and determine whether starting your own publishing company is right for you.
