Walker and Company: Profit Plan Decisions

Objectives: 1. To illustrate the importance of the assumptions embedded in a profit plan 2. To familiarise students with various sources of business information 3. To learn how to use a profit plan to test key business decisions Case Synopsis The case portrays a series of profit planning decisions in a family-owned publishing company. The case is written by and about the same individual, Ramsey Walker, a young, recent business school graduate. The case begins with a quick …

…for the heftier advances that larger publishers can offer. In fact, a publisher rarely makes a good profit margin on a title where a large upfront advance was paid to a "guaranteed bestseller" author. Small publishers can compete with large ones by offering authors the same chance to earn long-term royalties. Walker's second strategy is to find "undiscovered," less expensive authors, keep them through good editorial service, and build up their writing to award-winning quality.