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In early 2014 four colleagues and I started Caffeinated Press, Inc. CafPress ran as an author-friendly micro-press; we published a dozen or so ISBNs each year, split among books, anthologies, and a literary journal. We followed industry best practices for contracting and built an exceptionally robust behind-the-scenes technical infrastructure to support a distributed workforce of contract editors, for-credit academic interns, and our board members. We even leased an office, chartered a toll-free phone number, and held a series of community events.

Yet we closed CafPress in December, 2019.

For people who think they want to be independent publishers, I offer a cautionary tale—for despite the romantic heroism of the journey, the path is dark, full of shadows, and infested with dragons. Roughly half of all small businesses make it to the five-year mark, and only a third hit a 10-year anniversary. And the economics of publishing aren’t as favorable as other industries, especially with Amazon eating everyone’s lunches.

Publishing: The Good

Let’s start with the good thing about small-press publishing, the thing that kept us going and made us proud: We brought genuinely good stories to market that larger presses wouldn’t pick up.

This is a huge deal. It’s exceedingly difficult for debut writers to break into the major Big Five presses. First, they need an agent; next, the agent needs relationships with the “right” acquisitions editors; and then the editors must sell the provisional profit-and-loss statement to house executives. Emerging writers have much better odds of being struck by lightning than in receiving a contract from a major publisher for a debut novel.

But small presses? Their significantly lower cost structures mean they can better absorb the finances of correspondingly diminished sales targets. A small press, in some ways, is no better than a self-published author in terms of book distribution: Anyone, after all, can register an IngramSpark account. And small presses generally lack the sales force to get their books on the shelves at chain bookstores. The best they can often manage is to build relationships with a handful of indie booksellers to promote book placement and in-store author events.

Nevertheless, small presses are real presses. They’re legit (as long as they’re not operating on a pay-to-publish model, anyway). That’s a huge stamp of approval for the author, a legitimizer of the first literary rank. And as a micro-press leader focused on books, anthologies, and a literary journal, we brought hundreds of authors to print — many, for the very first time.

That’s freakin’ cool.

Publishing: The Bad

But the cool comes with a cost. In a traditional publishing model, the publisher bears all costs for a book (the technical term is assumption of the risk—in an economic, not a tort, sense) but shares the revenue for a book, even if the revenue isn’t adequate to cover the costs.

The chief bad thing about publishing distils to the financial model. A small press, even a tiny one with no office lease, still bears some fixed overhead, even if it’s just subscription fees for stuff like Adobe Creative Cloud or an online accounting system. And every book entails costs to produce, even if your “volunteer” board members don’t get paid for what they do.

Legally, you can’t work for free in a business setting. Consult with your business attorney or accountant to discuss reimbursement and costing for labor performed by business partners, interns, and contractors.

Consider a typical small-press book’s financial costs:

• A proportion of fixed costs (rent/utilities, subscription fees, banking and legal fees, etc.) spread evenly against all titles published in a year
• Actual costs incurred for the book (ISBN cost, title-setup fees with distributors, print costs, contractor costs for artists/designers, etc.)
• An up-front author advance on royalties
• Post-publication costs including inventory, shipping, marketing, and administrative recordkeeping

It’s not unusual for a micro-press title to incur direct cost outlays of something like $500 to $2,000 to bring a typical novel to publication. Costs vary based on things like contracted cover designers or license fees for images or typefaces. Plus marketing materials.

The fair market value of that work is likely closer to $10,000 to $15,000, however, if the “free labor” offered by press owners were fairly assessed against the project at median rates established by the Editorial Freelancers Association.

Beyond costs, the revenue picture isn’t so hot, either. Consider a novel published print-on-demand and released in the Ingram catalog. (A typical framework for micro-presses.) If that novel is priced at $14.95, then subtract 55 percent for distribution fees and another 15 percent for wholesale print fees. That leaves roughly $4.50 in revenue back to the publisher for each print book sold. Pricing it at $9.99 for an e-book yields $5.59 in revenue, but in general, e-books don’t sell as well for small presses as print books (although mileages vary, obviously).

How does that map?

• If the project is priced at $2,000 for all-in fixed expenses, and you assume a split of 70 percent print to 30 percent e-book, then to break even, you’d need to sell 291 print books and 125 e-books. That assumes that the press team isn’t being paid for their work, which arguably runs afoul of U.S. labor law.
• If the project is fairly priced to include fair market labor costs by house staff, then a typical budget might be $12,500 — for which, you’d need to sell 1,813 print and 777 e-books to break even.
• For context, a typical small press struggles to move 1,000 copies of a book; large presses often consider 10,000 sales to be a success. Even books long-listed for the Man Booker have sometimes not hit the 1,000-sales threshold! And a micro-press with no effective sales team will rarely move even 100 copies of a book over its lifetime unless the press is hyper-aggressive about author platform (which most aren’t).

To put it into context: Over five years, the business partners of Caffeinated Press contributed more than $100,000 to the business. We earned, over five years, less than $10,000 in revenue. We never had a profitable year. Even if you subtract $50,000 that accrued to our office and its expenses, we still wouldn’t have turned a profit.

Publishing: The Ugly

For people who minimize expenses and work super-part-time, publishing can be a rewarding hobby — one that really helps aspiring writers to launch their professional careers. Every hobby has costs, and it’s certainly possible to contain costs enough to run a part-time publishing business on a shoestring.

However, there’s an ugly side to micro-press leadership: Authors.

Because the tiniest of presses generally work with the newest of authors, you’ll work with all sorts of people who have one thing in common: They’re new to the industry, and each comes to the table with sets of expectations that may be radically out-of-line with industry standards.

One of the hardest lessons we discerned during our Caffeinated Press years is that to be effective at a very small scale, you can’t just be a publisher. You also have to be an author coach. Press leaders must teach writers how to become published authors. In particular:

1. Most authors don’t understand contracting and won’t hire an attorney to help them parse their contracts. Thus, when there’s a question about the project, authors will often scream that you’re in “breach” even when … well, you’re not. Similarly, we had one author become upset that a project was delayed by one month and he very angrily said that he “rescinded our right to publish” his story. Even though his contract didn’t allow for it.
2. Many authors assume that small presses are service providers and expect that they’ll be treated as customers rather than as suppliers. (A publisher’s customer is a wholesale buyer, not an author.) This friction usually manifests in expectations that an author with questions or complaints can go “to the top” (i.e., the president or CEO of the company) and receive near-instantaneous replies to emails and calls.

Early in our existence, we made a lot of mistakes. We incurred a fair amount of friction with a subset of our authors — some of which was our fault, but some of which wasn’t. We found that after we invested the time and energy into developing a complex author-training program (to cover industry acumen, marketing, costs, etc.) that friction levels sank dramatically.

Thus, micro-press leaders who want to publish books must consider carefully the interpersonal dynamic and how you’ll partner with emerging authors to bring their expectations into alignment with normal industry standards. This point is significant, because even a few high-touch authors adversely (and significantly) affect the “quality of life” for the press team.

Should You Start a Small Press?

People sometimes ask me if I’d do it all over again.

I don’t know.

I loved Caffeinated Press, but I didn’t love writing checks to the company each month. I loved publishing new authors but I didn’t love training the high-touch ones. I loved laying out new books but I didn’t love marketing them.

But if you’re interested in taking the plunge to start a micro press, consider the following:

1. Start with adequate capital. You cannot launch a low-margin, high-cost business like publishing without a start-up fund that can weather at least two years’ expenses with no incoming revenue. It’ll take quite some time for (a) authors to seek you out, and (b) for you to build the relationships that translate to sales to booksellers.
2. Plan to lose money. There are almost no scenarios short of a unicorn author or a Black Swan viral title that will lead to most books even breaking even. The best option, financially, is to run an anthology or lit journal that assesses reading fees — but reading fees create a whole layer of challenges for certain types of periodicals. Diversification (e.g., by hosting paid author seminars) can help, but it’s hard to launch cognate product lines to a publishing brand.
3. Consider a facilities plan. You can run a micro press in a home office or with a remote team, but this experience isn’t ideal and it creates avoidable friction for inventory storage, records storage, meetings with writers, and related activity. But office space isn’t cheap, and it comes with overhead (utilities, insurance) that must be paid each month.
4. Set clear corporate accountabilities. Unless you’re a one-person shop, some things (like annual financial reports) that aren’t an option require a system of mutual accountability among team members so that important tasks aren’t lost in the weeds.
5. Pick what you’ll publish. There’s a world of difference between a micro-press that publishes books and one that publishes anthologies and literary journals. Books incur long-term relationships with authors, long development times, a host of external relationships, and ongoing financial-reporting obligations—and most books lose money. However, anthologies and literary journals operate on a one-time-license model (serial rights) and thus the contractual obligations and the relationship model are sharply constrained.
6. Learn the minutiae of how books come to market. Publishing is a complex multi-stakeholder business. The logic models of provisional P&L statements and standard editorial flow from query to backlist isn’t standard and it’s not intuitive. If you really want to be a publisher, book a few hours with the Diction Dude for a friendly conversation.

If I Could Turn Back Time, If I Could Find a Way ….

All of the above notwithstanding, if I could hop into the TARDIS and tell 2014 me what 2020 me knows, I’d offer the following advice:

• Scale correctly. We had a lot of people up-front willing to be part of the team. They dropped away quickly, after we had made a lot of commitments based on that early optimism. It’s better to eat the loaf bite by bite than to swallow it whole. In some ways, our rapid early expansion bedeviled us until the day we closed up shop.
• Plan to train your authors. The smallest presses bring interesting things to market that wouldn’t otherwise find a home. But these authors need guidance to find a comfortable place within the industry. Without that coaching, you’ll end up with a lot of high-touch relationships that sap your motivation to break your back at a financial loss.
• Budget for loss. You won’t make money. Period. At least, not at first. The best you can do is to start small (with an anthology or a lit journal) and constrain your costs by using free or low-price services. As you get a feel for the industry, you’ll find it easier to incrementally add other products to your catalog.
• Market like a mad demon. Books don’t sell themselves, and readers aren’t generally interested in publishers. To drive sales, you’ll need to work with local indie booksellers for product placement and events. Promote those events on social media and through both the press’s and the author’s distribution lists. A direct-to-consumer sales channel won’t be your meal ticket because almost no readers follow presses unless they’re aspiring writers who want to be published by that press.

Publishing is a tough business. It’s rewarding, to be sure, but the hours are long and the revenues are miniscule. But if you have the fire in the belly to help the next generation of literary talent find its voice — wonderful!

Just do so with your eyes wide open.