The high risks of publishing small

Risk is synonymous with any new venture. Phil Zuckerman, publisher of a fast-growing Cambridge, Mass., imprint, Apple-wood Books, issued his first title from the basement of his brother's house in 1976. It was a hand-bound edition of medieval poetry. His list has expanded steadily, with a concentration on fiction and poetry, and there are plans to publish 14 titles this year.

Mr. Zuckerman is impatient with the notion that publishers do not have to be good businessmen. First, to be a publisher you must have the inspiration and the enthusiasm, but the second element, he stresses, is financing. ''You must have a capital pool on which you can draw. You have got to have a way to pay your bills , and cash flow is just a constant problem. Part of the reason for this is the constant war between stores and publishers - there is always the issue of collection vs. extension of credit.''

And, Zuckerman continues, ''In the beginning, you have got to watch your overhead. A primary goal should be achieving a profit as soon as possible.'' He assesses the sales volume of Apple-wood Books, after half a dozen years in business, as still too low. ''We are finally breaking even on about $400,000 a year. Our average book costs $12.50, and our advances range all the way from zero to $7,500. But we just don't have the cash reserve to pay large advances.''

What Zuckerman does have is an adamant commitment to taking risks with new authors or unusual projects - a philosophy that he believes has fallen by the wayside in the larger houses. ''My feeling is that if some of the big publishers could do 'The Book of Job' and do it three different ways, they'd be happy, provided it sold, of course. They're not trying to find the young writers. And the editors in the big houses have no entrepreneurial role. In fact, the editor and publisher are often at odds, the editor being closer to the author, although he or she is paid by the publishsher.''

Following his own editorial instinct, Zuckerman has issued an unusual serial novel, ''Peter Leroy,'' by Eric Kraft, as well as titles that he feels demonstrate a sense of social responsibility. For example, ''Cocktails at Somoza's: A Reporter's Sketchbook of Events in Revolutionary Nicaragua'' is the work of Richard Elman, the author of 12 previous books. ''But,'' says Zuckerman, ''Elman couldn't find anyone to take this one, so he came to us, and we're doing quite well with it.

''Most of all, we want to emphasize our editorial focus. Random House made its reputation with new authors, and that's a lesson a lot of publishers seem to have forgotten.''

Second of four articles. Tuesday: The benefits of publishing small. Daphne Abeel is a free-lance writer and book editor.