Becoming a self-published or a published author is much like becoming self-employed.
Many people who start a business or write a book have no idea how much money it will cost nor any realistic idea of how much money they might make. They only have hopes. Is this you? It doesn’t have to be.
Believe it or not, even published authors can lose money on a book and in fact, many do. See this example based on my friend’s real experience with a New York publishing house—“What Happened to Karen’s $100,000 Advance?”
Why do published authors lose money? They don’t know what the game they are playing with a publisher involves.
You see, unlike authors, publishers don’t expect to make money on every single book. Instead, publishers count on a small number of “best-selling authors” to make a profit. Here’s a statistic circulating on the Web—publishers make money off only 10 percent of their authors.
This is why whether you have a publisher or self-publish it is essential for you to come up with a business plan for creating and marketing your book yourself.
You needn’t be in the dark about expenses while you write your book. Nor do you have to jump into your new book with no idea of how to make any money. In fact, if you can, you should be planning your marketing and working on your book’s budget even before you start to write.
Your first step should be to click on the brown, yellow, and green tabs at the top of Authormaps home page. These three articles will take you through Creating Your Book, Formatting Your Book, and Distributing Your Book.
Your choices about these three steps in book publishing will affect your costs for producing and selling your book.
As for estimating the costs of your own time in creating, publishing and marketing your book, one possible principle to start with is called “opportunity cost“.
This is jargon from economics. It means that you come up with an hourly price for doing a project by looking at what else you could do with your time that would bring you money.
In other words, ask yourself, “How much could I make per hour from my alternatives to writing?”
Opportunity costs will be different for each of us, depending on how each of us makes money, e.g., from wages, investments, freelance earnings, retirement earnings, scholarships and grants, rents, royalties, etc.
For example, if you are working on a book, then perhaps you will work less on your business or take a part-time job instead of a full-time one. The business or employee income you forgo while writing is your opportunity cost for writing your book.
That amount should go into your budget along with the other costs of doing a book so that you have a benchmark figure to measure against the earnings you make from your book.
You can deduct most costs of creating your book on your federal taxes, but remember this: you cannot deduct the cost of your own labor on an IRS Sole Proprietorship Schedule C; you can only deduct the costs of other people that you hire as consultants or employees to help you write, publish, and market your book.
It’s smart to hire others because they will help you save money in many ways. Here are a few benefits of using freelance professionals—they can:
Here’s my list of an author’s dream team for creating a book. If you want to sell your book to libraries, it’s vital to find experienced professionals to assist you in designing your book.
Publishers may or may not provide you with these kinds of services. So, be prepared for the numerous, necessary details of publishing that you’ll encounter.
Here’s what popular Canadian mystery author, Louise Penny had to say about the realities of publishing:
One thing that has surprised me about a writing career is the mountain of detail involved. Permissions, mailings, accounting, ordering supplies, and simply organizing everything so important things like the tour schedule, don’t get lost. I’m frankly terrible at those sorts of things. Happily, the fabulous Lise Desrosiers is as disciplined and organized as I am slothful. In looking after those elements of my life Lise has freed me up to write.” (Acknowledgements for Penny’s book, A Trick of the Light)
Consider hiring a virtual author’s assistant if you start experiencing what Penny did. Or think about seeking out an independent press, scholarly press, non-profit organization, or a small press publisher.
These book publishers do not require the huge expenditures that larger publishers will require authors to make; nor would you need to hire an agent.
Information about smaller presses is available online and at your local library as well as in my book, Marketing Your Book to Libraries: An Insider’s Guide for Authors.
I frequently get questions from authors looking for someone, anyone, to sell their book for them. While this would enable you to deduct more expenses from your federal taxes, the costs of book promoters may be beyond the average author’s means. And there is a bigger drawback.
The reality is that no one can sell your book with as much commitment as you, its author. Even publishers will expect you to promote your own book. (See Karen’s story, for an example). If you want your book to sell well you have to promote it as well as publish it.
Deciding right now exactly how you will format, promote, and get your book into the hands of customers will enable you to more accurately price your book. You’ll have all of the costs of marketing and distribution that you’ll face for your book in addition to its production costs.
Don’t wait until you are done with your book to make these decisions! You’ll feel like you’re facing a giant uphill battle to sell your book if you wait until it’s published to begin promoting it.