What do school books publishing company do ?
Books publishing company can identify the latest hot topics, prepare the content of the book with professionals in educational system, print the same with printers and market them.
However in case of school books, it is little easy to identify the contend based on market trends and prepare the books based on this. It would be very less risk as the content may not change overnight. There can be few changes in short period.
What are the steps involved in establishing school books publishing company
Registration of the company
1. Registration of the company name with commercial tax of the local authority. The sales taxes would be based on local government guidelines.
What to publish first ?
1. Since publishing the books for all subjects would consume lot of time, it would be better idea to start with a few subjects at the beginning of this project. Designing subjects like Mathematics would be time consuming; hence such subjects can be worked at later time.
2. Identify the classes for which the books need to be worked upon. It would be good idea to start for primary classes initially
Identifying good professional designer / professor and printing
1. Ensure that a good professional designer / professor are selected for preparation of the content. We need to pay the price at later point of time, in case we have a bad selection in this area.
2. Need to ensure that a proper Printer (Printing press) is identified. The initial motto is not cost saving, hence proper attention needs to be given for quality of the paper used and quality of the print.
3) A checklist should be prepared for each marketing staff which includes the schools to be visited, progress thereon
4) A good quality books with bad marketing staff cannot be sold
5) The marketing staff should be able to delivery the goods with the help of the local staff to concerned schools on time
When to start
If the schools start from Jun of the year, then initiation of this business should start atleast 12 months prior to this i.e. Jun of previous year. The first 3-6 months will go in preparation of the books and getting printed. The next 3-6months would go in marketing the books and selling them.
What are the profit margins
If the business is successfully initiated, one is expected to do a turnover / Sales of 2 times the amount invested in inventory. For e.g. if one has invested Rs.5 lacs, one can expect to do a sales of Rs. 10 lacs in the first year. See the below table.
Amount invested in Inventory / books – Rs.10 lacs
Average inventory required = 30%. Means 70% can be sold i.e. cost of Rs.7 lacs books can be sold.
The cost of a book is expected to be 35%. Means Rs.7 lacs of books can be sold for Rs.21 lacs.
Normal discount – 20%
Additional discount to be given in initial setup of company – 10%
Total cost before any company overheads – 65%
Total profit before company overheads and marking cost = Rs. 21 lacs x 35% = Rs.7 Lacs
Marketing and office overheads can be expected at Rs.50K per month i.e. Rs. 6lacs per annum. Hence initial years, the profit is expected to be zero or less than a lakh. Once the business is setup and additional discounts are removed, the margins are expected to be 20% i.e. Rs.4 to 5 lakhs per annum.
However in case the business is setup with higher capital, the margins value will increase. We have taken this at a very conservative level.
Does this business case works for every one ?
This business case does not work for people who expect overnight returns. If the business is planned well In advance, it is expected to be successful in 2-3 years .
What challenges do we expect from this business
Like other business, there is lot of competition in this business too. Additional trade discounts needs to be given to promote the school books to book sellers. This would reduce the profit margins.
The other one is the modern trend of digitalization of education system. Players like Tata, Educomp are already started implementing the digital/smart class educational courses which poses threat to this business. I would be discussing this in my next post on how one can start such business with detailed analysis
Have you enjoyed this post. Please provide your valuable suggestions to improve future posts. If you are excited, share the link in Twitter/Facebook (copy URL from your current brower and pubilsh in your Facebook/twitter)
- Nykaa (FSN e-Commerce Ventures) IPO Review – Is it good or bad for investment? - October 23, 2021
- LIC MF Launches Balanced Advantage Fund NFO – Review - October 21, 2021
- HDFC Launches Nifty Next 50 Index Fund NFO – Review - October 20, 2021