DECEMBER, 2009 – PUBLISHING NEWSLETTER
As always, our e-newsletters are brought to you, the publishing professional, as a free and educational source of information about the parts and pieces that make up the world of publishing by NPL Publishing Consultants Corporation, offices in Plattsburgh NY, and Montreal QC. The views expressed in this newsletter are to be used as a general guideline and jumping off point to acquire additional specific information as it relates to your own situation and should not be taken as legal or accounting advice. Such advice should be sought out from your own consulting professionals who understand your operations and goals and how the laws and rules relate to them. Should you wish to pursue further discussion on these topics, feel free to email Mr. Martin Foner, principal of the firm, at: mfoner@nplconsult.com . Should you wish to have your email address deleted from future mailings of this kind, simply send an email indicating the address at which you receive this e-newsletter, and we will delete it.
MONEY BACK GUARANTEE: THE TIPS IN THIS EDITION OF THE NEWSLETTER ARE WORTH A MINIMUM OF TWO THOUSAND DOLLARS TO YOU, MAYBE MORE. IF NOT, I’LL REFUND WHAT YOU PAY FOR YOUR SUBSCRIPTION!
Hello, Everyone!
Thanksgiving is over, and the year is almost over as well.
May I be the first to wish everyone a wonderful and peaceful holiday season, regardless of the holiday you celebrate. Health is paramount; guard it with your life!
This has been a difficult year for many publishers, and following on the heels of 2008… not a very kind back to back… and yet, the opportunities that come out of adversity are almost always plentiful and fascinating. Let’s dig right into some interesting ideas for you to use in your business and personal life. I will keep this newsletter brief, and let you link to longer articles and more information via my website.
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Website Security
The NPL website www.nplconsult.com has been disturbed yet again. In reality, only the pictures on the Home page have been zapped…and I am busily replacing some of the new, missing content.
It is an excellent reminder of having strong security for your website, a complete backup AND MIRROR SITE at the ready. (If you don’t know what a mirror site is, ask your web person.) Change passwords every 60 days, and only link to materials and articles that you can verify are ‘clean’. Remember, your website is only as safe as the security used by anyone to whom you are linking. It is a good time at least once a year, to review your website, its security, and how to handle a disaster.
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Strategic Plans
Is your Strategic Plan in order? And, more importantly, your 2010 ‘piece’ reviewed at least twice with a firm schedule, structure, interim goals as guides for success, and objectives clearly laid out?
If you don’t have a written Strategic Plan, here’s a Holiday gift to all of you:
Email me at mfoner@nplconsult.com and request a boilerplate Strategic Plan outline, and I’ll email you back a very solid outline of a Strategic Plan, including questions and sample commentary, that, if you put your mind to it, could be completed in an hour or two. But I will warn you… once you get into the process, you’ll finally break down and give it the time it requires to become an asset to your publishing trip.
And once you finish the Plan… you will want to take another half hour to sketch out your goals and guideposts for 2010. Then, you can answer yes, you’re ready for the New Year to come.
No roadmap… no trip. Now go do it!
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Now, some personal and business tax saving ideas for publishers…
Big Tax Tip.
With the virtually assured advent of higher income taxes on the Federal level, and absolutely for certain higher taxes on the State and Municipal levels… may I strongly suggest you do a bit, a little bit, of front loading of income for the end of 2009. In this way, you will have an opportunity to reduce 2010 and 2011 revenues (and thus income taxes) by the same amount, but it will be worth more then.
If you overcompensate by adding in too much revenue, you can always ‘adjust’ inventory at the end of the year to balance the numbers somewhat… but, as I said, I would be overloading revenues for 2009 and, in essence, banking the small extra payment now against a much larger potential savings in 2010 and 2011.
The math is simple. Let’s assume you had a pretty bad 2009… and likely you’re in the 15% bracket, with state and local taxes, at most the 25% bracket. An increase in revenues will still keep you in the total 25% bracket for 2009.
But, in 2010 or 2011, when things both improve AND taxes are increased, you will be in the 25% plus state and local increased… could be total of 40% bracket… that extra revenue added THEN, will cost you an extra 15% in taxes! So, it isn’t bad enough to have to pay a combined 25% on this revenue, but by waiting, you will likely be pushing the envelope closer to 40%. If you are able to ‘move’ even $10,000 this way, you’ll save $1,500 in taxes!
Yes, this flies in the face of the usual, delay revenue tactic… but when taxes are on the RISE, the objective is to front load revenue, not push it back.
If you don’t understand what I am saying here, email me at mfoner@nplconsult.com and I’ll answer your question in more detail. If you want to discuss specifics, we can arrange to do that as well in a short consult. No, I don’t want to replace your accountant, just enhance your personal wealth. Information is currency.
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Another Approach, Tax Tip II
In line with the tip above, this might be an excellent year to finally have your accountant handle your new project development costs the way IRS regulations call for it to be done, instead of the way 99% of accountants do it, which is to expense everything. You can’t fault them (well, you could, but what would it get you?), since a local accountant usually has one, possibly two publishing clients and no reason to do the serious research on how development costs should REALLY be handled.
But, using the ‘increasing taxes’ line of thinking, you should be amortizing your development costs for new titles or revised editions, rather than expensing them straight out. Firstly, because you aren’t supposed to expense them per IRS regs. Secondly, this gives you one more, legitimate, way to accept a slightly higher income in 2009, in exchange for a slightly lower income in 2010 & 2011, or even longer if you so choose.
Remember, every $1,000 given up in this way costs you $250 now and will save you $200 a year if divided over 2 years, or $130 a year if divided over three years. Or more.
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Macabre Tax Tip.
Die in 2010. Really. A panoply of advantageous tax laws regarding estates and inheritances expire at the end of 2010. You’ll be doing your heirs a big favor tax wise if you can arrange your demise in this tax year.
Don’t believe me… ask your tax professional. And no, don’t ask me specifically how to make the arrangements… I am just the messenger.
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The Settlement and My Role In It
Yes, that one. I can’t give out any details yet but, apparently, I have been asked to debate with some well known attorney who is strongly on the YES side of the settlement. Wow… not only do I get to feel the thrill of victory, but I can double my pleasure by trouncing an attorney in the process. Yeah, I know… some guys get all the luck. It hasn’t yet been determined if it will be a podcast, a webcast, or a back and forth written debate/blog format. I voted for the written kind of assault… keeps the police away from me. As a rather emotional guy, it is entirely possible I may become hysterical listening to some of the drivel I expect to hear… in fact, when sent to read some of his writing on the subject, I could barely keep from spitting tea all over my desk. This guy should have been a comedy writer… I believe he missed his calling.
Anyway, if and when… I’ll send out a special email letting you know how to view the carnage… and like any other accident, you will hate yourself for looking, but won’t be able to turn away.
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Gold & Silver – personal advice
I am going to spare you the political, economic, and global reasons for all this. You have likely heard me before, if you have been reading far enough back, and know what I believe. Nothing has happened to change my beliefs. If YOU want to believe the recession is over, prosperity is just around the corner, with a chicken in every pot, share whatever you’re smoking with everyone in your life, so they can float along with you.
Just a few facts, draw your own conclusions. If you really feel the need to know WHY I think what I think, send me an email and I’ll answer your specific question.
REAL unemployment is hovering at 18%. We have added THREE trillion to the money supply, SEVEN trillion to our contingent debt, and 1.4 TRILLION to the current debt. Be careful of interest rates going flying, the dollar tanks big time, and we’re all (well, you are all) pretty much wiped out, in the name of allowing the government to start over.
My 2008 and 2009 gold & silver predictions have come to pass in spades. Those of you who followed my general advice to acquire over the last two years have made lots of money. Lots as in 35 to 50% on your investment. (Feel free to send over a bottle of fine wine, or anything else that shows your appreciation.)
As with anything in the market, these too will have to drop back and take a breather… and no, I can’t say how or when… but when that pullback is over… expect gold to hit $1,500 and silver $30 on its way to a much larger number.
How large? Interim ‘panic moves’ for gold to over $2,500-$3,000, settling down in the $1,500-$2,000 range… silver easily at $50… possibly $75 in a pinch, settling back to $40-50 range.
Don’t believe me? You didn’t when I said we would blow through $1,000, fall back, and do it again even higher, did you?
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Some more predictions about money – more personal advice
The relative value of the USD will become roughly 60-80 cents against the Canadian and Australian dollars and Swiss franc. Expect the Chinese currency to revalue against the dollar but only AFTER the US dollar devalues itself in a surprise move to try desperately to keep the doors open. The Euro will hit parity with the Pound and they will run together, maybe eventually becoming one. The US will push hard, particularly once it goes to 60 cents Canadian, to combine itself with Canada and Mexico in the Amero currency. Canada will acquiesce only because of security concerns and will have the US military in exchange for its cooperation in this new currency. As the Amero comes in, this will allow the US to revalue everything… and in the process, pretty much wipe out fortunes created privately for the ‘public benefit’ of a stable economy in the future.
And you thought Bernie Madoff was the Ponzi King? The USG will make him look like a small time business hustler.
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Caveat on all ADVICE of a non-publishing nature: This isn’t an investment newsletter… so my advice is NOT professional; it is simply one person’s (mine) personal opinion. Invest at your own risk. Live in the U.S. at your own risk. And shut your eyes tightly at your own risk. Maybe if you shut them hard enough you’ll wind up in OZ? She was right about one thing… This ain’t gonna be Kansas as we knew it any more, Toto.
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If you’re worried about such things, you would do well to go to my older blogs and give some of them a re-read. Click here. Or click here. Or just go down the list here. If you’re not worried, just keep on smoking that stuff I referred to in an article above.
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And back to publishing…
Revenues from the Internet
As you go into 2010, is your projected Internet created revenue stream up to 30%?
In mid 2007, I wrote a lengthy essay on the state of the industry, and strongly recommended you create an Internet based electronic sales plan that created, if not actually collected, 10% of your revenues from the Net in 2008, 20% in 2009, and increasing by 10% for 2010, 2011, and 2012, so that by the end of 2012, you would be creating half of your revenues from Net related efforts.
Thus, for 2010, you need to be at 30% to stay on target.
As I have said in the past, this doesn’t mean your shopping cart has to be specifically ringing up 30% of your gross revenues, but efforts on the Web have to be helping to create 30% of your revenues.
Again, if this isn’t making sense, or you’d like a list of ten or so basic ways to increase your Net presence… send me
an email mfoner@nplconsult.com, and ask your question or request the list.
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As you might be noticing, I am being a bit more ‘helpful’, offering to answer more questions and provide some boilerplate outlines and lists. This is actually no different than in the past… many of you ask questions after every newsletter, and often request this or that item I have discussed in one of these articles or shorts. Now, I’m just letting everyone else know I welcome the questions and am glad to help. I do my best to answer every email personally, and now, because I am making the offer ‘publicly’, please expect a slight delay in my responses. Sending out thousands of newsletters, the response might be a bit more than usual, and so my ‘next day’ reply might be a ‘second day’ reply. Just a thank you in advance for reading and responding, and an apology in advance if I take an extra day to get back to your question or request.
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Non-Profit Publishing (NOT UN-Profitable Publishing)
One area where I get regular email questions is about Non-Profit Publishing.
I believe a good bit of the interest in it is from understanding the hidden benefits… like 50% discount on postage, no income tax on your profits, and the ability to now qualify for millions in grant money that you could never even ask for as a For-Profit… FREE money for the application! Many believe they have to grab the brass ring now during this Administration, since the next one won’t have the money or support to keep doing this kind of work.
Some companies want to become Non-Profits as a way to continue the legacy of the founder’s work long after the founder has passed on. Others, to continue the publishing of specific subject material with a short budget and the hope that grants or outright donations will help ease the financial burden of continuing. Still others, more interested in creating meaningful materials rather than profitable ones, have private financial resources who would provide funding if that funding could become tax deductible for the donors (just not as business losses, which can become sticky once done year after year, as the ‘limit’ is four years of losses before the entire loss may be ‘clawed back’ by IRS). Thus, the donation route is safer and legal, both now and later.
If you have ever considered becoming a Non-Profit publisher, for any of the above reasons or any other legitimate reason, and would like to discuss it, email me confidentially with your ideas, and if they merit pursuit, I’ll let you know and and we can set up a brief, no charge consultation by phone.
Most ‘For-Profit’ publishers simply cannot ‘change or morph’ themselves successfully, and many ideas you have won’t pass muster at IRS as Non-Profits. We can get those out of the way quickly, and then get down to the real discussions with those companies who have acceptable plans for the conversion, or just to open a new Non-Profit and skip the conversion altogether.
By the way, this doesn’t mean that your ‘new’ program won’t be profitable… on the contrary, you are likely and expected to make that part of your work profitable… and use those profits to underwrite the other parts of your program that don’t create any revenues at all. So, you’ll still need all your skills to be profitable; you’ll just channel your profits in a different way now as a Non-Profit.
If you want more ‘background’ information about Non-Profit publishing, click here… you’ll be in the Non-Profit section of my website and can look around there before contacting me.
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Pricing eBooks and Downloadables
Another area of intense questioning comes from the issues surrounding pricing eBooks and other downloadables.
The main issue seems to be the Kindle. Since Amazon requires anything you want to make available as an eBook on the Kindle, be priced at $9.99 or less… publishers are trying to figure out how to achieve this price point. In my opinion, they should be more focused on an overall eBook pricing strategy, and if Kindle fits into it, fine; if not, then that’s one venue that won’t be available. It isn’t usually too bright to fit yourself into one possible distribution program at the expense of your own program, bottom line, and future dealings in eBooks.
Knowing that Kindle seems (and only seems) to have the retail eBook market wrapped up (for the immediate moment), it would be wise to find a way to get your materials on board. This might require offering a completely different, shorter, abridged, or condensed product to this market… with an offer to credit the customer’s Kindle purchase price against a purchase directly through you for the complete eBook product.
You don’t change your Strategic here… just the specific products you make available.
Pricing eBooks and related materials is a result of developing a strategic for these products. This includes answering questions about free content products, downloadables for which you charge, and full fledged eBooks for which you also charge. I have found that a good starting point for pricing… Click here to continue reading this longer article.
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And speaking of Electronic Publishing, allow me to remind you of my special offer to help you make the Migration & Transition to Electronic Publishing. Until the end of the year, I am offering a complete service, end to end including everything from Strategic to Editorial, Branding to Production, and Pricing and Marketing, for ONE HALF the usual fixed fee for the service. Click here for more information. Then email me… time is short.
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Survey
One idea I have been strongly considering is putting up general questions I get, into a forum on the website, with both question and answer and any general (non-identifiable) follow up responses on both sides… and with the potential for others of you to leave your own comments, ideas, and questions as part of the process. I would have each question as its own thread… have RSS so you could sign up and keep up as new materials come on board (so you won’t have to come to the site every day looking if new stuff isn’t there)… and generally, make my ‘FREE’ work available to everyone.
Times are tough and free advice, while often worth what you paid for it, can be very beneficial if it is about something you are wrestling with yourself.
If this sounds like something you would sign up for and use and participate… email me: mfoner@nplconsult.com and send me a one liner… Yes, I would be interested in the forum.
When I get it put up by the web gurus… I’ll email you to sign up via RSS… and then the rest will be automatic. I would imagine 500 to be a sort of minimum number of reader/participants to make the work and time feel like it is of value.
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Yes, I still handle sales of publishing and related companies. I do it confidentially, and without much fanfare… keeping the whole transaction as much as possible under the radar. In roughly half the sales, the company is never even made publicly available. If you would like to discuss the potential of selling your company, or a line, or even specific titles, inventory and rights, let me know. Click here to learn more about selling your company.
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Companies For Sale
I have two somewhat fire sales…
1. A five book primarily Christian focused homeschool publisher of curricula and related basic hands on titles. Leaving the country shortly. Sales are way down from the usual $12-15K part time gross to under $5K.. no promo, no working at it… one primary distributor only… virtually dormant except for inventory of about 12-14K in decently recent © materials. Looking to get inventory cost as sale price, and now will take a 25% or so discount to about $10K cash, plus standard 10% royalty on these and any future books reprinted or published. Owner/author may assist with revision and new editions for financial consideration in future. This is on a Jan 31, I believe, deadline. Would fit into a similar line… nice materials! Let me know.
2. A sports related publisher, almost all in the golf and coaching fields. Many classic materials that are perennial sellers… and some materials that are customizable and sell as large bulk sale products. Revenues on a very part time basis are still in the $75-80K range (were higher when owner was full time), and will sell for inventory cost plus IP value cash, plus a small, guaranteed sales override for 2-3 years payable monthly/quarterly on revenues. Now, for the upcoming golf season, and the bulk sale potentials. Let me know.
I have one fine eBook company, with a storied history but sales never matched… so the price is closer to about half value, but as an eBook company, because of the IP assets and technical acuities the firm has acquired for a potential new owner, it is a somewhat non-negotiable half value.
3. A long time eBook company. Over 125 titles, primarily fiction some non fiction, has been in business since the dawn of eBooks, in all formats, wide distribution, owners have been groundbreakers in the field, but have never made much if any money from it. Recent gross has been growing but still in the teens, profits in single digit thousands. In this company, it is the knowledge, the platforms, the distribution, and contacts that have the primary value, not the daily business itself. New owner will need to be more marketing focused; these people were the tech people. It wouldn’t hurt if the new owner has a decent sized line to convert to eBook to add to the revenue stream. Forget reasonable value… what has transpired here and the value of having an entire eBook operation ready to go is what you will be paying for.
I have set the selling price, not an asking, at $50,000. Real valuation could be double or triple, if you look at having 125+ titles in multiple eBook formats, the technical expertise to adapt to any line of titles, the distribution channels for eBooks in place, and a history of small but profitable operation that can be scaled to any size line… this is but a down payment on any other operation.
In addition, they do hard copy/POD on about two dozen or more titles to create additional revenues for those who want hard copies of the works.
This company will not last long in this much more eBook aware environment. I had interested buyers who unfortunately did not understand the real value of the acquisition, and expected this to be a fire sale from the $50K price. It isn’t, and we will wait quietly, and the first person who realizes the intrinsic value of an eBook company will scoop it up for the price and utilize the technology and structure to make a great deal of money adapting their own titles to this program.
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I also have one upcoming directory company with whom I am in negotiations on pricing, terms, and gathering their data. And, while I have potential buyers already lined up, one never knows what button makes them reach into their pockets and pull out the wallet. So, just in case this new one doesn’t, and you have interest in the directory field, and can close quickly if the package works for you… let me know so when the info becomes available, I can pass it along asap.
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And I have two ‘Wanted to Acquires’…
1. If YOU have a publishing interests in the Non-Profit field, fundraising, volunteers, management, legal and accounting, anything… and you want to monetize current non performing assets (meaning sell off titles that aren’t profitable or a line that isn’t doing its job) then let me know! I have a roll-up who is acquiring… now up to three small/medium sized publishers so far and the initial marketing is creating solid response… so becoming a piece of the roll up could be very profitable on a longer term payout basis.
2. If YOU have a directory or a line of directories, reference materials, online databases, or similar materials, in any field at all… that you want to monetize, then let me know!
In either of the above, email me with information on the materials available, and I’ll get back with you immediately. I have clients ready to acquire them.
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OK… enough. If you need a question answered, email me at mfoner@nplconsult.com.
If you need to have a consult on one or more of the subjects I have covered, don’t be shy. I will be pleased to review your situation in an email you send, and then determine when we can discuss and pursue it.
Short term, affordable help to get you on track or keep you on track.
If you want to be removed from my mailing list, use the unsubscribe link at the bottom, or send me an email and I’ll have the web guys take care of it.
Be well… and I’m not sure if this will be the last 2009 newsletter, or I will have time to do a holiday, December newsletter.
Martin Foner
NPL Publishing Consultants, 1080 Military Turnpike, Suite 3, Plattsburgh, NY 12901
mfoner@nplconsult.com 800-675-6146 (Email is much faster.)
Copyright © 2009, Martin Foner