What Creates Value in a Publishing Company

May 2006
by Howard W. Fisher and Daniel R. Siburg

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Long before you are ready to
think about selling your publishing company, you should think about what
creates value in it. The following are key factors in creating value.

 

Seller’s Reputation

 

A publishing company is a business
that reflects the owner’s character and reputation in the industry. Many
independent publishers use their own names or parts of their names in their
companies’ names, and a publisher’s competence and attention to detail become
evident through every aspect of the business. A prospective buyer needs to feel
comfortable with the seller, and with the reputation the seller has built up
over many years. A seller’s history can make or break a deal with a buyer.

 

Product-Line Quality and
Depth

 

A quality product stands the test
of time. Add depth to a product line with strong backlist sales and you improve
your company’s chances to achieve success and lasting value. Add a good forward
publishing list as well and you make the company still more attractive to
buyers.

 

Because buyers think in terms of
purchasing product for future revenue streams, strong backlist sales are a key
value component and help predict future revenues. Buyers analyze sales by title
and by channel, placing higher value on recurring sales at full retail and/or
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