In this weeks session, the focus of the class was to introduce us to the P&L within commission editing. Abbreviated for ‘Profit and Loss’, the P&L assesses the financial position of a proposal or existing book with a possible re-release, and plays a pivotal role within the work of a commissioning editor. As Jane Friedman states: ‘ the P&L is a publisher’s basic decision-making tool for determining whether a book makes financial sense to publish.’ (1) For example, in academic publishing, if a book has sold well in hardback, the publisher may well consider a re-publishing of that book in paperback so as to maximise profit – a re-release in paperback would reduce production costs compared to hardback, and more books can be sold. Often with academic publishing, specific subject cover which won’t sell many copies will likely be made into hardbacks, selling at a larger price to meet production costs.
P&L’s are documented using an Excel format. Due to the necessity of such a document in professional practice, the P&L process is an area in which I will be expected to learn and understand – part of my assignment work will be to demonstrate and produce a basic, successful P&L sheet, ensuring that a book gets at least a sixty-five percent gross margin.
* Gross margin – profit based on money coming in minus costs going in.
The reason that it is suggested a minimum of a sixty-five percent margin is because there needs to be enough profit coming in from a proposal to make the project worthwhile. A book that won’t sell is a waste of money and resources if it was to be published. Below is a basic portrayal of a P&L spreadsheet. The page shown here is a ‘sales and royalties’ page next to the P&L; this sums up the profit/loss in a shorter space.
I feel that I have made a strong start to this work. During the session, I began practising using P&L spreadsheets by inserting a set of data into an empty spreadsheet, putting in figures which would be realistic for a prospective book. For my assignment when I am required to produce a P&L I will need to have a gross margin of sixty-five percent or more. I am happy that I managed to get to eighty percent after my first attempt at using it. As a class, I think the majority of students found this introduction challenging, even overwhelming. Me included. However, by the end of the session, I felt a little bit more at ease so I will be optimistic when tackling it in weeks to come.
The session also allowed me to learn some key terms, which was very useful. For example, the R.E.F (Research Excellence Framework) was a good term for me to familiarise myself with within academic publishing. Put simply, this involves academics needing to publish four pieces of work every seven years in order to maintain their academic professor status.
I also gained some insight in how to access authors and face up to competitors. Questions commissioning editors would ask are: ‘can this proposal sell well for the company?’, ‘Is this going to compete well against main publishing rivals?’, ‘Does this proposal make sense to publish – i.e does a competitor already have something similar published?’, and ‘what subject areas/genres are not being published by competitors and so pose an opportunity?’. Consequently, this session has taught me some vital facts and information. Looking forward, I need to make sure I learn the Harvard referencing system so I can cite my findings with accuracy, thus making my blog work easier and more efficient.