I understand the need to be cautious and pragmatic with new companies, but at the same time I've always felt it was a bit of a Catch-22. A person should wait for a few years to see how the company is doing before submitting. Let others test the waters? But the advice is telling everyone to not be the ones to try, but to wait it out. And yet if everybody is doing that, how is the company going to be able to prove themself? All companies need to start off somewhere, oui?
Chompers,
I don't presume to speak for everyone, but here's how I see it after all these years working with Writer Beware:
A new publisher should have experience in the publishing business. They should have worked with a company, even if it's a small one, and learned things like how to project sales, project costs (hiring editors, hiring cover artists, hiring marketing personnel), and seen how the business rises and falls.
A new publisher should be able to show their experience as well as the experience of those working beneath them. No, the publisher doesn't have to hire an all-star crew right off the bat, but they should have enough experienced people working for them to train up their less-experienced staff. Why would you let a new publisher LEARN the business with your book? If you spent years getting your book ready to go to press, shouldn't the press have years of experience to get your book out to the public? After all, who does the public remember if the book is not up to snuff - the publisher or the author?
A new publisher should have enough experience that they've developed a business plan and adhere to it when they get started.
A new publisher should be more than sufficiently capitalized before they ever let anyone know they're even thinking about opening their doors.
A new publisher (with sufficient experience) should have authors they've already worked with and know lined up and their books ready to go BEFORE they ever open their doors.
For example, a new publisher opened a couple of years ago - they'd been an editor at a big-5 publisher, so people already knew who they were - and they approached a specific writer's group for a very limited number of books. These writers knew, or knew people who knew, this new publisher. The books were written, edited, and prepped well before the publisher ever let the general public know they were going to be open for business, and when the first set of books came out, they'd been well-marketed, had great reviews weeks/months ahead of time, and the authors were ready to talk about them during the summer convention circuits. AND, they still only do a few books a year so they can ensure each gets the attention they need versus some publishers who dump 50-100 books out in a year and hope something sticks.
And even with all this, even well prepared publishers still go out of business within 2-5 years of opening their doors, just like every other small business. Markets change, unexpected expenses drain reserves, a frivolous lawsuit, illness/injury to key personnel within the small company, etc., none of these things are necessarily the fault of the publisher, but they can happen. The difference is, if the publisher is professional, if they have a contingency plan for if it doesn't work, then books get reverted their authors, monies owed get paid to the authors, and everyone moves on older but wiser. If the company is not well-organized and well-prepared BEFORE they open their door the first time, well, we have example after example in the grayed-out links in the index of publishers who started, flamed out, and disappeared taking hopes, dreams, and money with them in about two years time.
So, while you don't necessarily have to wait two years to see if a publisher is going to make it, you should be able to see specific signs right off the bat whether they have a chance of making it or not.