Traditional book publishers have a wide variety of employees, each with different but complementary abilities. Every task required to effectively publish a book is under one roof (metaphorically speaking these days, of course). Everything is geared toward publishing books well.

The same could be said of many author-paid or indie publishers. Talented people with a goal of publishing well, working together.

But the unique element traditional publishers bring to the table is money. Traditional book publishers are, in effect, venture capital investors in authors and their books.

Author-published books simply shift the financial risk to the author or organization paying to have a book published. Hybrid publishers have a mix of each, with both the publisher and author contributing to the publication costs.

But traditional publishers evaluate every project as an investment of their resources, assessing each for the message, but also from a financial standpoint.

Every traditional publisher has a limited number of books they can publish in a year and revenue targets to hit from those books. Depending on the publisher, the baseline revenue for every book is somewhere between $20,000 and $100,000. Some are a lot higher. Since publishers have overheads like payroll, insurance, electricity, IT, and everything else a workplace needs; they must allocate an amount of every book revenue to overhead.

Traditional publishers all do the same type of financial analysis for every book. While specifics will vary, publishers start with a projected retail price for a book, estimate sales and wholesale revenues, calculate gross profit, and decide, with finances as a key element.

When agents or authors propose a new book to a publisher, many of the questions confronting the publisher are similar to what a venture capital firm would ask of a businessperson seeking investment in their company:

Tell us about yourself.

What experience do you have in this field?

Have you successfully proven your concept?

What type of marketing will make this business grow?

What is your long-term business plan?

One could make direct comparisons of the above questions to those sections in a book proposal:

Tell us about yourself.

What is your writing experience or publishing history?

Have you successfully proven your ability in books and other media?

What type of marketing platform are you doing?

What are your long-term plans for additional work?

Every question leads to a yes or no decision about whether to invest $20,000 to $100,000 in a book.

Even if an author accepts no royalty advance, a publisher must evaluate whether a book is worth a substantial investment to publish it. Publishing is a risk-based business.

Of course, authors start the “risky business” by writing something without compensation. Then agents might take over and put time and effort into something that may or may not sell to a publisher, meaning no money for them either.

In a world where authors can hire people to create a book and self-publish on Amazon, traditional publishers need to clearly define what role they actually play in the world of books.

The bottom line: They invest their experience; time; effort; and, most importantly, their money to publish books well.

Book publishing is a business segment like no other, where real-life money and creativity work together, with the iceberg of financial loss awaiting every new book launch.