Building a Better Budget, Part 7: The Broadest Benefit
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In the press of everyday imperatives, it’s hard to find time for taking the broadest view of your company, and reevaluating it. But we all know that this is important, and if you make the last step of your budgeting process a strategic review, you will find yourself doing the task despite the crush of other priorities. (For steps 1 through 6, visit ibpa-online.org; click on Independent Articles on the Home page, and search for “Building a Better Budget.”)
Your strategic review should focus on why you are in this industry, what your overall goals are, and the main elements of the strategy you are using to achieve those goals. As you conduct it, draw on what the budgeting process has shown you about the viability of your company’s plans and about how to spot trouble while it is still far enough in the future so that you can avoid it.
What’s It All About?
Of course, success in business requires goals and a plan for reaching them. Most independent publishers have goals that are about far more than profit and growth. We make books at least partly because we believe in what we’re doing, or for love.
Take an hour or two and engage in introspection. What is it that you love about this business, and why? Is your company following that dream? Why do you publish one type of book rather than another, or rather than doing something completely different?
Obviously, profit will be important, but focus first on the emotional part of management. Organizations are made up of people, and the motivations that drive the individuals and the group can make success possible or failure inevitable.
Then create or update your mission statement by writing a clear description of why you publish books and what you want to accomplish by publishing them.
Next, examine the company’s goals. You should have a set of goals for the next year, a set for the next two to five years, and a set for the far future. Are they achievable? Are they in line with your mission? Are there better choices, in light of what you learned about your company’s options during the budgeting process?
Goals shouldn’t be limited to objectively measurable things such as a number of manuscripts signed, or books published, or profits made. Perhaps you want to promote literacy. In which case, one of your goals might be: Create a line of learn-to-read books that entices and excites reluctant readers in the 8- to 10-year-old age group who have dyslexia and anxiety about reading. It is a specific goal, and it meets your mission. It is also something that can be achieved within a few years.
With a mission and a set of goals in mind, look again at the books you have chosen and the markets you have focused on. Are they in line with your reason for being here? If not, do they reveal reasons that should be added to your mission?
Alter your description of your mission and your goals if necessary.
Now, examine the readers you are cultivating in that same light. Does doing this reveal anything more about the real reasons you are in this business? Again, alter your mission statement and your goals if necessary.
Also, go back and reexamine your acquisitions, target markets, and distribution. Have they been chosen because they were convenient? Do they fit your current mission and goals? If they fit well, and you are making a solid profit, with a certain amount of flexibility for dealing with the unexpected, congratulate yourself. If some parts and pieces of your current operation are not contributing to the accomplishment of your mission, make sure the strategy you’re developing provides for changing that, and that you can devise tactics for implementing that strategy on a day-to-day basis.
Route for Success
A strategic plan is like a large-scale map showing the way to fulfillment of your mission and achievement of your goals. Accordingly, it must take account of the market or markets for your books. Where are the readers? And what are the best ways of connecting with them?
In this changing environment, you might want to think about new ways to reach your markets that are now cost-effective, although they weren’t before. Look at Web 2.0 options, and consider ways to build a tribe, as Seth Godin recommended in his inspirational address at the Publishing University 2010. Look at nonbook retail distribution if your core audience can be reliably found in other types of stores.
The last step in your strategic review is looking at the larger chunks of your budget critically. Is there a distribution channel that’s not paying its way? Is there one you have neglected? Is there a market segment you are not yet reaching? Is there a type of overhead that is out of proportion to the revenue you are generating? Can you find a way around this?
Consider your fulfillment and distribution options. You may need to offer your content in a number of different formats to maximize your reach and your profits. If your books are mainstream fiction or general-interest nonfiction and your market is broad, then you probably will still need a mainstream approach—putting books onto bookstore shelves and into online booksellers’ warehouses. If you mine a niche in consumer, academic, or professional markets, your options will be different, and more numerous with each passing year, as you access data about your customers that you can use for future marketing efforts online and off.
Crossing the Finish Line
When you are finished adjusting your strategy and the associated tactics, filter them back through the budget process. Once you’ve done that, you should have a plan for the future of your business that you can use not only to help you achieve your goals, but also to demonstrate to trading partners, funding sources, and others that your company is professionally managed and competently led.
And then you’ll deserve a break and a bit of a celebration!
Marion Gropen consults with micro- to medium-sized publishers on financial and operational issues and offers consultations by the question for smaller publishing companies. She recently published the first part of her e-book series, The Profitable Publisher. To learn more, visit GropenAssoc.com. You can reach her, with questions about this article or other publishing issues, at: Marion.Gropen@GropenAssoc.com.
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