Before even beginning, during the planning phase, I determined we would be engaged in several distinct payment streams, both outgoing and incoming, each at widely differing schedules. Outgoing payments were pre-production design and digital-to-press file preparation, and press expenses (about $40k/initial and subsequent printings). These two were on the “immediate” payment track. Warehousing and fulfillment (outbound shipping) were on a monthly payment track while our distributor paid for deliveries on a 90-day basis. Other income tracks were our own Internet individual sales which were immediate, and our own vendor wholesales (other than our main distributor) which were on a payment-upon-receipt track. The assortment of payment schedules was rather daunting, with several unknowns thrown in for good measure at first. The whole “system” had to be charted out PERT-style to actually see our predictable payment “choke points” once a sales experience was established.

Of these, the biggest could be seen to be our first reprint. Our distributor’s 90-day payment schedule would tie up about $10-12k in revenue on any given day and our first reprint (another $40k) would come along before we had accrued enough income to overcome that shortfall. Since our contractual agreement with the distributor was “etched in stone”, I worked out a low-interest loan plan with our banker in advance to cover that printing cost shortfall, using our distributor’s payments-due list as collateral. That was the key to avoiding the kiss of death many start-up publishers face: going temporarily out of print. Once the wheels of book commerce stop, they sometimes don’t ever re-start.

What you say is very true: Anticipate as many of the timing issues you can in advance, and innovate solutions to free up the unavoidable “choke points” before you encounter them.