Mainly, I didn’t bash agents because it’s not an agent’s fault that writers hire them in this new world. It’s not an agent’s fault that writers give them all their money and all their paperwork and then wonder why they got ripped off. It’s not an agent’s fault that a writer signs an agency agreement giving the agent part of the copyright in a work. It’s not an agent’s fault that a writer lets a non-lawyer agent negotiate a contract with fifty lawyers on the other side.

And it’s not the agent’s fault that a writer didn’t notice the agent stopped working for writers and started working for publishers years ago.

I didn’t bash agents on the panel in Las Vegas because it is not an agent’s fault that writers don’t know business.

Granted, agents take advantage of stupid writers (which there never seems to be a shortage of). But writers let themselves be taken over and over and over and then wonder why their career died. Or never got started. So I didn’t bash agents on the panel last week. But I did bash stupid writers.

And I have been doing that here for years now.

I guess that makes me anti-agent, but I am not. I am anti-bad-business. And anti-stupid-writer.

So now comes this week’s events and one more point in the proof how bad agents in general are for smart writers in this new world.  Just this week (yet again) the agents themselves gave us even more proof that they work for publishers, the very people they are supposed to represent writers against.

The AAR (a group of agents joining together to pretend to have more power when they have none) just put out a letter asking that all agents and writers and other publishing professionals write the Department of Justice and say that we all don’t like the suit filed against the major publishers on the agency agreement.

Excuse me??????

Now agents have gone so far as to flat represent publishers. Right out in public. No more hiding their true intent now.

And their organization did this with not one thought on how such a position will help or hurt their writers (at least the midlist writers and indie writers). And the agent organization put out this letter with not one thought on how Department of Justice forensic accountants crawling around inside big publishers just might find some of our money hiding in those cooked books. You know, the money from our electronic sales that are underreported over and over and over.

I’m not going to get into all the details here of the lawsuits and the letter from the agents, but for two great perspectives on all this, in a ton of detail, go read Joe Konrath http://jakonrath.blogspot.com/ and Bob Mayer’s post on Digital Book World.

Both are great posts about this topic and the stupidity of what the agent organization did. And I like what Bob basically said in his post that this industry is changing so fast, no one knows where it’s going.

Bob is right. No one knows. Least of all agents who are now trying to protect their partners in the crimes against writers.

What should the AAR have done? Nothing. Or maybe start helping their writers take back electronic money they helped us give to publishers for electronic sales. Yup, one day the agents and all publishers sort of “got together” and decided electronic couldn’t be 50% of cover anymore (as it was in all contracts before this magical agreement), but had to be 25% of net. It was “better for the business” that way.

Just as setting agency pricing “was better for the business” as the publisher’s said, and now the agents want us to support those publishers.

Excuse me??? 

There are great arguments on both sides of agency pricing and wholesale pricing. As an indie publisher and writer I can see both sides. And the good and bad of both sides. Please argue that topic somewhere else because no one really knows where this is heading. And is not the point of all this, really. The point is the clear sign again that agents and their organization work for publishers.

Last week at the SuperStars writing seminar, all seven of us instructors (all bestsellers and long-term writers) were asked where publishing was going. There was a long, long, long moment of silence, then finally someone said, “As soon as we figure it out, we’ll let you know.”

That’s right, from a panel of “old” professional writers, most with over thirty years of experience and hundreds of books each. We don’t know.

But I do know one thing. Smart writers are running in droves from agents. And many young writers are not even going after agents at the moment, but instead going directly to editors and using IP lawyers to help with the contracts. Or indie publishing and letting the dust settle.

So now the agent organization came out asking us all to help protect their small “little” publisher partners being unfairly attacked by the Department of Justice by writing letters of support.

Wow.

Stunning.

It makes you wonder just how long agents as a class in publishing will survive. Even the most stupid writer has to wake up one day.

Or at least stop giving an agent all the money and all the paperwork for that money.

And we got the comments problem solved at least on this site. For those of you who were having trouble making a comment on a post here, try again. The website cleaning service hardened up the sites just a tad too much. (grin)

Kris and I want to thank everyone again for the kind support on all this. We’re using it to make some changes on our sites, which we were planning on doing, but now those changes have increased in speed, so watch for them shortly.

And I have a number of blog posts almost ready to roll, plus more chapters in the 2012 edition of Think Like a Publisher. So soon.

Any questions on the workshops, feel free to ask in the comment section now.

FRIDAY UPDATE!!

All sites completely clean and warning signs coming down. We are returning to normal here, whatever that is. (grin)

Here on the Oregon Coast, we have a few workshops left this spring and early summer and then three brand new workshops for the fall.

Starting next week is the Cliffhanger workshop followed by Genre Structure workshop. Both are closed and are going to be great fun.

In the middle of June, Kristine Kathryn Rusch is teaching a Short Story Workshop. It’s a week long and since someone just dropped out yesterday, there is now one spot open again. Since there is a reading list, it would be some work to jump in with only just over a month to go, but possible. Anyone interested or need more information, e-mail me. Basic information on all these are under the “Workshop” tab above.

In July there are two critical workshops to indie publishers.  Together they cover one week. First is Pitches and Blurbs. That workshop will be taught by me and you will learn how to write pitches and blurbs for cover letters to editors in New York and for ad copy and back cover copy of your own books. With everything selling through electronic stores, having a great story blurb these days is far more critical than it used to be. If you are wondering why your books don’t sell, maybe it’s because your blurbs are bad or dull.

The second part of the week in July is a workshop called “Think Like a Publisher.”  Scott William Carter and I run you through every detail of how to be an indie publisher and help you learn how to format your work, do covers, understand POD and web sites, and how to sell your work effectively. If you are afraid of the indie publishing process and starting your own publishing company, you won’t be when these four days are finished.

We have room in both July workshops still, so check out the information under the “Workshop” tab above and write me if you have questions or are interested.

NEW WORKSHOPS

We are doing three brand new workshops this fall with some great guest instructors. All three workshops are one week long, starting at 7PM on a Saturday and going until late the following Saturday night. All three are $650.00 workshop fee. Again, details under the “Workshop” tab above. But let me outlines what these workshops are. There is room to sign up in all three.

SEPTEMBER 29-OCTOBER 6, 2012
POD Workshop. 

Everything you need to know about doing printed books in your indie press. We will teach you how to lay them out, do wrap-around covers, interior design, and how to sell them into bookstores and other sales outlets.

Taught by Dean Wesley Smith and Allyson Longueira. Allyson has a masters degree in graphic design and has been an editor and publisher in the past. She is now the publisher of WMG Publishing and will have well over a hundred books laid out and designed before the workshop. Dean Wesley Smith is the former publisher of Pulphouse Publishing, one of the largest publishers in science fiction and fantasy in the 1990s.

Workshop fee is $650.00 and room rate is $50.00 per night. (This will be limited so sign up as soon as you decide.)

——

OCTOBER 20-27, 2012
The Sexy Side of Writing. 

Everything you need to know about how to write hot, sexy fiction in any genre. Taught by three of the top writers in three different genres, this will be an intense and fun writing workshop. Instructors are Kristine Kathryn Rusch, Phaedra Wheldon, and Dayle Dermatis.

If you want a writing and craft workshop, this is one I wouldn’t miss.

I’ll put instructor bios here in the next week and under the workshop tab.

Workshop fee is $650.00 and room rate is $50.00 per night. (This will be limited so sign up as soon as you decide.)

—–

November 10-17, 2012
Beyond the Page. Audio. 

Everything you need to know about how to read your own work, how to do audio books cheaply with your own computer, and how to sell them as well through your indie press, your web site, and other places.

Instructors are Kristine Kathryn Rusch and J. Daniel Sawyer, with help on the sales side by Dean Wesley Smith and Allyson Longueira.

Kris used to train new radio announcers how to read and speak and that’s what she will be doing for writers in this workshop. Reading your own work in an effective and entertaining way is a skill and Kris can teach you how to do it. Dan is a sound professional as well as a professional fiction writer and he will teach you how to do the audio books in the WMG Publishing sound room.

You will leave this workshop knowing how to read your own work, record it if you want, and sell the recordings.

(I’ll put instructor bios here and under the workshop tab in the next week.)

Workshop fee is $650.00 and room rate is $40.00 per night. (This will be limited so sign up as soon as you decide.)

In the first picture it is (from right to left) Eric Flint, Rebecca Moesta, Kevin J. Anderson, Brandon Sanderson, James Artimus Owen, David Farland, and me on the very end.

In this second picture, same order but missing Brandon Sanderson.

Thanks again to Joshua Essoe for the great photos.

I’m still in Vegas but heading home, so I will be back here tomorrow with new stuff. The Superstars workshop was great fun. More later when I’m not typing on an iPad.

(Added Note the next day.) I’m back and we have hired a national computer security firm to clean all the web sites and get things back up and running. And make sure this site is clean and will be as secure as possible as well.

Thanks, everyone, for all the support and for spreading Kris’s last blog, which I thought was important. It seems that someone injected into her site a very nasty thing that spread through her web sites as she tried to link and reroute the post. It’s going to take a few days, more than likely into early next week to get things up and running and completely safe again.

And a huge thanks to The Passive Guy and others who posted her article in full while this craziness is going on. It really is a special world we live in.

SATURDAY NIGHT UPDATE: The great service we hired has cleaned all the web sites we have and is working to remove the warnings. But until those warnings on Kris’s site are down, don’t go through them. Everything is being monitored and seems clean at the moment, but give it a little time yet. Maybe a few days before everything is back to normal. If anything we do on these web sites is normal. (grin)

SUNDAY NIGHT UPDATE: All cleared out and my sites are cleared as well, but hold off on going to Kris’s site until all the warnings are down. Thanks a ton for all the support on this, everyone. I’m sure Kris will talk about it all in a few days.

It’s been some time since I wrote the first version of Think Like a Publisher. Since I wrote those first chapters, Scott William Carter and I have taught three workshops by the same name, plus an advanced workshop helping indie writers make more money from their books. This fall I will be teaching a POD workshop on all the aspects of designing and selling paper books. (Watch for the announcement.)

And during those workshops and from comments and from hundreds of sources I learned a ton more information.

Plus the publishing company I helped start (WMG Publishing) now has a full-time employee and has published over 240 different book titles.

And the overall publishing business has changed as well. Amazing numbers of changes, actually.

As traditional publishers grab for more rights and become even more difficult to work with, more and more writers are moving to indie publishing. As they make the jump, they ask basic questions on how to do it, how to be treated with respect as a publisher, and even how to do simple things like setting up a publishing business.

An indie publisher is still a publisher, the same as any traditional publisher.

Think Like a Publisher 2012 is an updated version of the book from over a year ago, including some of what has changed and what I have learned over the last year or more. I’m sure in another two years I’ll do a third edition. Some things are changing that fast.

Every three or four days I will post a chapter for free here with a link under the tab above. But the entire 2012 edition is now available in both trade paper and electronic editions in all electronic bookstores (Kindle, B&N, Smashwords and so on) if you want to jump ahead of these posts. (B&N link also has the paper version through Barnes & Noble.com) Make sure you get the green cover. The red cover is the first edition.

Comments on each chapter are welcome and help us all learn, but keep the comments focused on the topic of the chapter, please.

I hope these chapters help you get a jump on learning how to be a publisher.

Chapter Three

Projected Income

To actually get a profit-and-loss calculation for a book project, you must now make some pricing decisions and projections of income.

Yeah, I know. I know. This is all so new, how can anyone predict how much money they will make on any project? Well, you can’t. Not really. But you can try. And you want to know a dirty little secret. New York traditional publishing can’t predict how much they will make on any book either.

But they try.

And that’s the key. To really act like a publisher, you need to understand what you are trying to gain. You need to know how many sales will get your expenses back. And you need to know at how many sales will you start making a profit.

So this chapter is about why you need to try to determine set income ranges, and how to do that at this moment in 2012.

This is the last of the basic three set-up chapters. After this one, we start getting into more detail on specific areas.

Caution!!

Here we go again, back into pricing. Remember, this discussion is about acting like a real publisher, not a hobby writer. Real publishers are in the business to make a profit. That’s the focus now, so please keep that in mind. If that is not your intent, fine.

Pricing

To determine any kind of income and sales potential, you must first make some pricing decisions. And you must decide as a publisher what your long-range goals are.

(Holy smokes have we had discussions about this topic here on the blog. Feel free to bring up the old questions again if you feel they have not been answered yet.)

Those of us involved with the starting of WMG Publishing sat down and talked about long-range goals. We all wanted WMG Publishing to become, down the road, a decent mid-sized publisher of fiction of all types from many, many authors. You might decide that your publisher is just to publish your work. That’s normal for indie publishing and nothing wrong with that at all. Or maybe your business mission statement isn’t to make any money, but to have a lot of people read your work. Fine as well, if you are clear for yourself on that.

The choice of mission statement will also determine your standard pricing. And your pricing will determine also how you sell books, both electronically and in paper editions.

(Ignore for the moment promotion discounts. I will cover that in a later chapter.)

The values we set for WMG Publishing changed over time, which is also natural, especially in a growing and changing market like this one.  But the values I will be using for this discussion on setting income are as follows:

Electronic Publication (2012)

Short story: $2.99.

Gross Income Expected: $1.80 to $2.00 per sale. Use $2.00 for rough calculations.

(Note: If you don’t feel right about pricing a short story at this level, especially the shorter ones, add in an extra bonus story. Then add the first story as a bonus story on the second. Just to get the world length up and the value up.)

Short Novels, Short Collections: $4.99.

Gross Income Expected: $3.25 to $3.50 per sale domestic. Use $3.25 for calculations.

Regular Novels (over 35,000 words), Long collections: $5.99 to $7.99

Gross Income Expected: $3.24 to $3.49 per sale domestic. Use 70% of the retail price for calculations.

(In the above calculations, Gross Income is after the fees and costs taken out by the bookstores and providers of electronic sales.)

POD Publication (2012).

Short Collections, Short Novels: $7.99 to $9.99 trade paperback.

Novels, Long Collections: $15.99 to $17.99 trade paperback. (Might vary upward with extra long books.)

Gross Profits on both are in the range of $3.00 to $4.00 per sale. Use $3.25 for calculations.

Why Pick These Prices?

These electronic prices are under traditional publishing ranges, yet not too far under to seem to be a discounted price. Trade paperback prices are normal traditional publication prices for trade paperbacks in the size range indicated.

For the trade paperbacks, the price range also allows WMG Publishing to do catalogs and give 40-50% discounts to bookstores as well.  (More on that in later chapters in Think like a Publisher.)

As I mentioned in the first post, there are three types of publishers. Discount publishers, high-end publishers, and middle ground publishers. We wanted WMG Publishing to be in the middle ground with the mass of most traditional publishers. To do that, the prices had to be in that range as well.

Also the price range we picked allows for promotional pricing at times when needed.

Again, all pricing decisions are based on the early mission statement and the hope for the future for WMG Publishing. With your own press, think about what kind of publisher you want to be, then figure your prices to fit in the range of that decision.

Also, keep some basic math in mind. If your motives are profit, you must sell ten books at 99 cents to make the same amount that you would make when you sell one book at $4.99. And since almost no traditional publishers do 99 cent novel pricing except rarely as a short-term promotion, a 99 cent price for a novel will label you as a discount or hobby publisher.

Calculating A Project’s Projected Income

Now comes the fun part. Hang onto your math brains. And let me stress again that not even traditional publishers know this number for a fact. If they did, publishing would be a very simple business without risk.

In traditional publishing, publishers have some tools to use in this area. For example, they can look at a book and then (like shopping in real estate) they compare to other books of the same length in the same genre with the same basic author recognition. So if a similar book sold 20,000 copies, then it is pretty safe to use that sales number in the current books calculation.

They also use an author’s track record. If the author’s last book sold 50,000 copies, then it is pretty safe to do a profit-and-loss calculation with that as the sales range. (And that projection then sets the author’s advance.)

But as an indie publisher, with no real track record yet, (and a world that is expanding into electronic publishing faster than most people can keep up with) how is it possible to make any real projections of sales?

Bottom line: It’s not.

Traditional publishers have functioned under the idea that a book is only active and available new to readers for a short time. Just like fruit in a grocery story. But unlike the produce model of traditional publishing of paper books, where books spoil and get pulled from limited shelving, electronic publishing doesn’t have that issue.

Our books don’t spoil. And we have unlimited shelf space to display our books until readers find them. And in this area, that makes all the difference. And we don’t print paper books ahead of time, but only to order, so we are not trapped into warehousing and shipping costs.

Traditional publishers had to hit their projections within a certain selling time frame before the book was pulled and another book took its place on the shelf. Indie publishers have no real time restriction at all. So instead of trying to guess at a total sales in a set time to determine the amount of money that can be spent on a project so that the project makes a 4% profit, indie publishers can calculate a different number entirely.

The Break Even Number

(Or… At what number of sales does a book starts earning a profit?)

Actually, traditional publishers have that “break even” number sort of in their calculations as well, but pay little attention to it.

Indie Profit-And-Loss-Calculation

For traditional publishers in the produce model, this profit-and-loss calculation is done on computers and has many varied factors. And actually, you also can set up this sort of program on a computer to plug in all your factors on every book as well if you have that bent. Art costs, layout costs, overhead in your office, time it took to write the book, and so on.

I don’t care to do that much work, to be honest. But I do want to know at how many copies sold will the book or story start earning a profit for WMG Publishing.

And I want to know that number BEFORE I start into a project.

If the projected expenses are such that a book would need to sell 100,000 copies to start earning a penny, I’m going to back away from that project quickly. Too many things could go wrong and I sure don’t want to be like traditional publishing where a book that sold 50,000 copies could be considered a failure. (It happens more than you can ever imagine.)

So an “Indie Profit-And-Loss Calculation” would run simply like this:

—

All Actual Costs plus Time Costs plus Overhead Costs divided by Gross Income Per Book equals NUMBER OF SOLD BOOKS NEEDED TO BREAK EVEN.

A Sample: A 5,000 word short story.

Your only actual cost is $10.00 for some art. Your time to write and launch the story is ten hours at a rate of $20.00 per hour. Your overhead costs for that ten hours are less than $20.00 so use $20.00.  You are going to add a bonus story to the story and sell the story for $2.99, so you get $2.00 per sale.

$10.00 + $200.00 + $20.00 = $230.00 divided by $2.00 = 115 books sold to break even.

If you average about 5 sales over all the sites over all the world per story per month, it will take you 23 months, or just about two years to break even on the short story and be into pure profit.

Of course, I am NOT COUNTING any income from a collection the story might be in.

—

Calculating Basic Average Sales Rate

My attitude about sales is that even though there are more outlets than I can count worldwide, (not counting bookstore sales of the POD) I want to do this calculation on the bottom of any sales I can imagine. My bottom calculation is 25 novels sold total per month across all sites around the world. And as I said above, my calculations for short stories are 5 short stories sold total per month average and 5 collections sold told per month average.

Now, at the beginning of an indie publishing career, that might sound slightly high, especially if you are only watching Kindle US numbers. But remember, before you even begin to see the sales for, say, January from Australia through iPad, it’s going to be seven or eight months later. And that is not counting that it might take three or four months for the book to even reach those Australian shelves through all the systems.

So, give things time to grow and don’t panic and get in a hurry. You are growing a business. (Again, a topic for a coming chapter.)

Just use the above math to figure how many books you need to sell depending on the price of your book to make back your expenses at the base rate of 25 sales per month for novels and 5 sales for short fiction and collections.

What happens next with the novel or story?

In traditional publishing, after 3 years you would have been paid your novel advance, the novel would have been published and vanished except maybe trickling along at 25% of net income for you from a few electronic sites.  And years and years would go by before you could even think of getting your rights back. Even if you signed a great contract. And that is very, very rare these days.

But for me, with my indie-published book, my novel or story is still just out there in thousands of stores worldwide, in a growing market, still selling. It has been there as inventory while I write and publish more and more and more books and stories to join it on my unlimited shelves.

The book just keeps on earning me money. Even bouncing along the bottom at 25 sales worldwide every month, I will have a passive income every month. For doing nothing.

Let me say that again. For doing nothing.

At some point I will have been paid for my time, my expenses, and then the book or story just keeps on earning.

And in this new world, there is no telling how long that passive income could flow. No way of knowing. None.

But the key up front is to try to give yourself some basic income projections when deciding on a project. And if the costs are too high for the project to ever earn back, move on. That’s what any publisher would do and you are now a publisher, remember.

Learn to think like one.

————————————————

Copyright © 2012 Dean Wesley Smith

Cover Photo by Edward Fielding/Dreamstime.com

————————————————–

This chapter is now part of my inventory in my Magic Bakery.  I’ve talked about the Magic Bakery a few times in various posts, but just think of this column as a pie and I am allowing samples of the pie here. Understanding the Magic Bakery is critical to making good money as a publisher. So I will talk about it in these chapters coming up as well.

If you feel this helped you in any way, toss a tip into the tip jar on the way out of the Magic Bakery.

If you can’t afford to donate, please feel free to pass this chapter along to others who might get some help from it.

And I would like to thank all the fine folks who have donated over this last year. The donations and the comments both after the posts and privately are really keeping me going on this. Thanks!

Tip Jar: Go To Paypal

So let me try once again from a slightly different angle, and, I hope, a little more directly on my point.

First off, I need to clear up one thing. I still have two books under contract with traditional New York publishers and I plan on writing both to the best of my ability. So I haven’t jumped completely to indie publishing just yet. And unless a few things change, as I said in the last post, I find it hard to imagine ever doing another book for traditional publishers except for rare exceptions.

Unless things change.

That’s the key.

Unless things change. And the changes I am asking for are in the contracts and are fantastically simple.

Do I Want More Money?

Well, duh. Who doesn’t?  But I am not asking for more money from traditional publishers. I know how the math works, I know how they calculate a profit and loss statement, I know what a range for an advance means in sales. If an offer is fair for the product on the money side, I would not turn down an offer. And I have written books over the last ten years from $5,000 advance and on up.

I have always felt that my advances were fair for what I have been writing. In fact, for about ten years, I felt as if I were the most overpaid writer working, because I did rescue jobs at times in which I was offered far more of an advance than the book could handle in sales. I took it. Because the publisher needed me to help them with a larger problem.

But if I wrote a nifty little midlist romance right now, I’d be happy at the advance for a midlist romance right now. And those advances range from $4,000 to $20,000 depending on a ton of factors. And more than likely I could make more money than that indie publishing the same book over a period of years. That’s a factor in a decision, but honestly not my main factor. When you can write a novel as fast as I can, (meaning I am willing to spend the hours at the computer in a short overall span of time) then I can often make choices that have nothing to do with money.

So in the decision of more money, if the offer is fair from a traditional publisher, it’s usually fine with me.

So Bluntly, Why Did I Say There Was No Balance?

Simply put, I want traditional publishers to respect me as a writer and supplier of their product. Nothing more.

And nothing less.

One more time. Here are the respect contract terms I would demand and are far more important to me than money in this new world.

So to TRADITIONAL PUBLISHERS, here are the respectful terms I are asking for.

And I hope many other writers ask for as well until these terms start to happen.

(Notice, no extra money. Just asking for respect.)

One… 

The contract has a firm termination date.

If you (traditional publisher) are offering me a small midlist contract of say $5,000.00, the contract terminates completely in five years from the day of publication or six years from the day of signing on the contract. Period. If the publisher feels they can continue to make money on the book, they must come and negotiate a new contract with me.

If the contract advance amount is larger, I will go up to ten years max. Again, the term in negotiable, up to a point. No more “forever” contracts in publishing. They are disrespectful to the owner of the copyright. (Ummm, that’s me.)

Two…

Not one breath in the contract of trying to control my other work.

And if you (traditional publisher) try, then we add into the contract how you must give me rights to walk into your business and tell you what you can and cannot buy from other authors. It’s only fair. And respectful.

Keep your hands and control out of my business except for one book under the one contract. Nothing more, nothing less. Those kind of restrictions do not belong in a single book contract. No amount of money gives you the right to control my business beyond the contract. And no amount of money gives you (traditional publisher) the right to tell me what I can and cannot write.

Three…

You (traditional publisher) must allow contract terms that allow me to cancel the contract at any moment if you (traditional publisher) do not perform up to the contract terms.

It’s a form of consideration (if you want the legal term.) You (traditional publisher) demand that I turn in a book at a certain time and there are repercussions in the contract if I do not. I should be able to have cover approval and demand that you publish my book within a certain time frame as well. The repercussions of failure on both sides need to be the same: termination and complete reversion of the right and/or return of money.

—

That’s it.

Three simple things.

Of course, there are many other clauses that do not belong in a publishing contract, not the least of which is the agency clause. But I don’t much care about that because I haven’t had an agent in seven years now. (If you are still silly enough to give a perfect stranger all your money and the paperwork with your money and allow that agency clause to be in your contract with a publisher, you need some major business classes and should watch a bunch of fairly recent news programs about a guy called Bernie.)

For now, I would be happy with the three major changes I outlined above. They are very simple, they don’t cost the publisher extra money. Nothing. Not one dime.

And all short fiction publishers have no trouble with any of those three. They are standard in short fiction.

Yet traditional NOVEL publishers across the board are turning down those terms and demanding even more control over a writer’s work.

And sadly, some writers are signing. And their agents are too afraid to stand up for their clients to even ask for any of this. (Shame on you, agents. When did you lose your courage to fight for your clients?)

That’s how really, really screwed up traditional publishing on the novel side has become.

And that’s why I say there is no longer a balance for any smart writer between indie novel publishing and traditional novel publishing.

Indie publishing, where we writers (copyright holders) are in control of our own work, wins every time over giving away our copyrights, our control, and our art.

I am not asking for more money from traditional publishers.

I am simply asking for respect.

But traditional publishers think so little of writers, they are not willing to even give that in return.

And so many writers have so little respect in themselves, they are willing to let traditional publishers take all this from them.

Not me. After I finish these two novels that are under a very old contract, unless those three simple terms are in a contract, I’m not signing.

I respect myself just a little too much to do that.

It’s been some time since I wrote the first version of Think Like a Publisher. Since I wrote those first chapters, Scott William Carter and I have taught three workshops by the same name, plus an advanced workshop helping indie writers make more money from their books. This fall I will be teaching a POD workshop on all the aspects of designing and selling paper books. (Watch for the announcement.)

And during those workshops and from comments and from hundreds of sources I learned a ton more information.

Plus the publishing company I helped start (WMG Publishing) now has a full-time employee and has published over 240 different book titles.

And the overall publishing business has changed as well. Amazing numbers of changes, actually.

As traditional publishers grab for more rights and become even more difficult to work with, more and more writers are moving to indie publishing. As they make the jump, they ask basic questions on how to do it, how to be treated with respect as a publisher, and even how to do simple things like setting up a publishing business.

An indie publisher is still a publisher, the same as any traditional publisher.

Think Like a Publisher 2012 is an updated version of the book from over a year ago, including some of what has changed and what I have learned over the last year or more. I’m sure in another two years I’ll do a third edition. Some things are changing that fast.

Every three or four days I will post a chapter for free here with a link under the tab above. But the entire 2012 edition is now available in both trade paper and electronic editions in all electronic bookstores (Kindle, B&N, Smashwords and so on) if you want to jump ahead of these posts. (B&N link also has the paper version through Barnes & Noble.com) Make sure you get the green cover. The red cover is the first edition.

Comments on each chapter are welcome and help us all learn, but keep the comments focused on the topic of the chapter, please.

I hope these chapters help you get a jump on learning how to be a publisher.

And on finding an audience for your writing.

Chapter Two:

Expected Costs 

The first chapter was “The Early Decisions” which included picking a business name, setting up checking accounts, and so on. There were no real costs at all in those early steps unless your state had a small fee for registering a business name. Checking accounts are free, so are PayPal accounts, and so on.

So, the question on this second basic business-planning chapter is: “What are your expected costs?”

For those of you with a basic understanding of business, you can now see the structure of how I am setting up these chapters. Before starting into a business, there are certain things that need to be figured. Set-up costs, projected production and business costs, and projected income.  You have no real data on the costs or the income, at least not accurate data, but anyone with a lick of sense who is starting a business will sit down and try to figure these factors out to some degree.

It would seem that expected costs should be tough to figure. But actually, in this business, they are not. At least for most levels. It just will take a little homework is all.

So, let me first divide this discussion into three major areas.

Cost in Money.

Cost in Time.

Set Costs.

All three areas are critical to figuring overall expected costs of producing a product.

In the first two categories I’ll divide the discussion down into three major ways of running your company: 1) Do All Work Yourself. 2) Do Some Work Yourself, and 3) Hire all work done.

And, of course, the categories cross over. If you find your time more valuable than your money, then hiring things done will be more of an option. And so on.

Cost in Money 

1) Do It All Yourself: For Electronic Publishing

No costs. None, zero, zip. No actual costs that I can see at all if you want to do everything yourself, and I do mean everything. You lay out the book in some free program, lay out the cover in some free program, find free art at public domain sites or free photos or take your own electronic photos with a camera given to you as a gift at Christmas on a computer given to you for your birthday.

There is no cost at all to upload a file to Kindle, B&N, and Smashwords (which then gets your story out to Apple, Kobo, Sony and others). Use the free ISBN feature on Smashwords and use the free tracking numbers (which are like ISBNs) for Kindle and B&N.

So, do all the work yourself and there are no real expense costs per project.

However, most of us buy our own computers, some of us have bought software we use to format books, and so on. There are all kinds of accounting tricks depending on how you set up your business (see Chapter One) to get some of that early expense money back when you start making money. Talk to an accountant for help with business taxes if you do not understand taxes. But for this discussion, let’s just assume you had the computer and the software before you formed this business and can use that equipment at no real cost to the business.

So, bottom line, there are basically no direct costs if you do all the work yourself and put everything up electronic publishing. (I am not counting overhead at the moment, so accountants, stop shouting. I’m trying to be real basic here.)

2) Do Some Work Yourself: For Electronic Publishing

A few large warnings in this area that we have talked about in the New World of Publishing series. If you are going to hire help, do it the way you would hire day labor. Simply put, if you want to have a hedge on your property trimmed, but you don’t feel you have the time or the knowledge or the equipment, so you hire a gardener and pay him or her for the job. A one-time fee. That’s day labor.

Never give anyone a percentage of your property for a single task. Your copyright is a property (basically), so giving someone a percentage to do a simply job such as doing a cover would be like giving that gardener part ownership in your home for trimming a hedge one afternoon. When put that way, it sounds too stupid for any writer to do, right? Well, the stupidity of writers never ceases to amaze me when it comes to business, which is why I am saying this bluntly right here.

If you pay for a task to be done, pay a set price. Period. There are lots of new start-up businesses that offer a menu of tasks for set prices.

But let me also say this clearly right now. If you are worried about money, spend the time to learn how to do this yourself and have no real costs. This is not rocket science. At WMG Publishing, we offer a four-day class in which we will teach you how to do it all yourself, easily. And so much more. You would be better served coming to one of those classes (for information, go to deanwesleysmith.com) and then doing it yourself than paying to have someone else do every cover or every conversion.

But that said, now that I have been clear, there are some tasks you might not have the equipment to do. For example, I have a bunch of old books and short stories that at some point I will want to republish electronically or in POD form. But I do not have a good scanner and software to scan the book. I can clean it up afterward to a degree, but I will pay someone to do the scanning for me on a one-time fee per story or novel. (And don’t offer. Thanks, but I already know whom I will hire.)

So sit down, do the research (the homework I mentioned before), find the people, the businesses who can do what you need for a single fee, then compare prices, shop around, and mark the price down.

3) Hire All Work Done: For Electronic Publishing

In this area you have a lot of work to do to find someone or some other business to do all the work for you. (Giving a percentage of your property is again just silly. It may sound good, but it is too stupid for words.)

But if you do plan on hiring everything, do your homework, find the costs out, and then get the costs totaled and written down for all size projects you might do. You will need that number for the profit-and-loss statement you will be doing later on.

Print On Demand (Trade Paper)

1) Do Everything Yourself: Print on Demand (POD) Publishing

When we get into POD publishing, we start running into some costs and projected project costs. First off, just the POD publishers have some basic per project costs. CreateSpace is by far the cheapest to start and learn. CreateSpace is pretty much a flat fee of $25.00 plus cost of proof and shipping the proof. WMG Publishing usually gets a book done and approved for under $60.00 per book. LightningSource has “mistake fees” that can mount up. And their per-book charge is higher. So do your research on the two to determine what you need and then decide.

As far as software and computers, you can do it yourself on any number of programs as readers have made clear in the comments sections of The New World of Publishing. WMG Publishing has gone ahead and invested in a top-line Mac computer, InDesign, and Photoshop for me to help out on. And I am learning slowly. Plus with new programs there is the $25.00 per month fee for Lynda.com to learn the programs.

Again, talk to an accountant (which will cost as well) for how to figure in the capital expenditures of buying computers and such. But for per-project figuring of a POD book, the costs can range between $60.00 at CreateSpace to hundreds at LightningSource.  Estimate and research before you start to know which way you would like to go.

2) Hiring Some Help and 3) Hiring it Done Completely: POD Publishing. Do your homework. Get estimates. Then make sure you have those figures handy for figuring out a profit and loss calculation later on.

Cost in Time

1) Do It All Yourself: Cost of Time For Electronic Publishing

Wow, is this going to be tough for you to figure. Unless you already have book design skills and some cover skills, the learning curve will be painful and frustrating at times. Again, this is not rocket science, but there is a learning curve, and learning not only takes time, but feels uncomfortable.

(Note: If you are not willing to spend the time to learn, stop now. The learning takes time, but once you get ten or fifteen books under your belt, the times gets to be almost nothing. Just don’t complain to me that you haven’t taken the time to learn.)

The early books and stories will take the longest amount of time. And you will make a lot of mistakes. But the book can always be changed later. That’s one of the values of electronic publishing.

As you learn, the time spent on each project will be less and less. Honest, it will. But how do you figure your time? That’s a calculation you will need to figure out.

As I have said before, I like Mike Resnick’s saying. “If you aren’t earning $500 per day, you are not having a good day.”  Since I work over ten hours per day, I just divide the $500 by 10 and get $50.00 per hour. That’s the number I use in my calculations and on any profit and loss calculation. It works for me. And I can tell you that some of those early stories I put up for WMG Publishing will never earn out my wage because I was in major learning curve mode. Expect that.

However, I have another way of looking at this:

Your early projects are just school.

You don’t expect to get a direct return on an hourly basis from going to class or college to learn a skill. Think of the early books as learning classes and don’t charge your time against them. WMG Publishing had a meeting and decided that we all needed to develop skills, so we only did short stories for the first six months, just practicing, as if we were in school. Now the novels and other real projects are going up and they look a ton better. And we are making some money on those practice projects as well, but wow do some of them need to be switched out. We’ll get around to that over the summer of 2012.

And a side note: WMG Publishing does some basic workshops in publishing. For example, this fall we will be doing a POD workshop. And if you want a hand going through the electronic and web design and such, this summer Scott and I will be again doing “Think Like a Publisher” four day workshop. If you want a jump-start into all this, check out the workshop schedule and write me.

2) Hiring Partial Help and 3) Hiring it all Done: Cost of Time for POD Publishing.

This is where you as a publisher need to balance your available money with your available time. My suggestion to you is hold off on POD if you don’t have the money to hire help until you have the electronic sales earning money for you. And also, by then, you’ll be more comfortable with book production and can do it yourself.

But if you have enough money, again do your homework. Expect help on POD layout and covers to cost more because it takes longer. Get quotes per job and shop around. And then try to figure out how much time it will take you for each project, even with someone else doing some or all of the work. Each project will be different.

Set Costs

Set costs are expenses set by your work situation. Your computer connection fee, your electric bill, your office rent, and so on.

Best way to figure these costs if you are set up at home is set up a room or area in your home only for publishing. Then figure what percentage square foot of your house your office is. (Example: 1,200 square foot home. 200 square feet of dedicated office space. So 1/6th of all your home expenses are office expenses.)

Do not ignore these set costs. They mount up and should be calculated.

At first, these costs will be tough to figure in a per-project basis. But you need to try. For example how many projects can you get up per month? If your set costs are say $300 per month and you can manage 3 projects per month, than you need to put $100.00 in set costs against each project.

Given time you’ll catch the hang of all this. It doesn’t have to be to the penny, but do count set costs to act like a real publisher. And if you do, you’ll save money in taxes and such.

My Suggestions About Expenses

Back in 1987, Kris and I started Pulphouse Publishing because it seemed like a good idea at the time. And I was in a hurry, so instead of making sure I had the money first, I went out and borrowed enough money to get the business off the ground. And from that moment forward Pulphouse seemed to always have higher expenses than it had income.

Let me simply say: NEVER AGAIN!

So my suggestions from the school of hard knocks are:

1… Do it yourself.

If you can’t do it yourself, wait and keep learning until you can do it yourself. (I think this is the most important suggestion I will ever give you.)

2… Don’t spend one extra buck you don’t need to spend.

All successful business people are cheap.

3… Don’t put money pressures or expectations on the business and the sales of any project.

Sleeping is a lot more fun and you won’t sleep if you are constantly worrying about what you are doing wrong or trying to sell as many copies as some other writer.

4… Do Not borrow money to start this up.

Too much pressure. Let the money build slowly in the business account and only spend what you have available and then only after careful thought. WMG Publishing now has a full-time employee in an office. But we waited, even though we needed a ton of help, to hire the full-time person until we had a full year’s expenses in the bank.

5… Remember, if you do this yourself completely, this is a production business that has no real project costs beyond set costs.

Sure, as a writer, you have time and writing costs and office costs and such, and all that needs to be figured in. But you have no real production costs per book sold through your online stores. And you can make up to 70% of retail. Let the money build. There is no other business I know like this one.

6… Do Not get in a hurry.

Sure, I know this feels like a gold rush and that if you don’t jump in with everything all at once, you will miss out. But hogwash. Stop reading the Kindle Boards. This is no gold rush.  Books do not spoil and readers do not vanish. In fact, in six months there will be more electronic readers than now, and even more a year from now. You have the time to learn.

7… Think of the early projects as a form of school or class.

They are practice. Figure a profit and loss for them as well as practice, but don’t sweat that they might not make a profit until 2015. Call them practice.

8… Keep learning everything you can about publishing and business.

I’m afraid this does not mean listening to the other beginners on the Kindle Boards. It means talking to real business people who are running successful real-world business. Talk to them, ask them questions, ask them about bookkeeping and how they keep track of set costs and so on. Find people, not just publishing people, who run a successful business in your area and pick their brains. You will be stunned at how much you will learn.

One Final Reminder:

Keep having fun. If this isn’t fun, if writing isn’t fun, what is the point? But just today, as I put up this second chapter, I got the proof in the mail for the new Poker Boy collection “Poker Boy vs The Silicon Suckers.” Even after all these years, that was a thrill.

Have fun.

————————————————

Copyright © 2012 Dean Wesley Smith

Cover Photo by Edward Fielding/Dreamstime.com

————————————————–

This chapter is now part of my inventory in my Magic Bakery.  I’ve talked about the Magic Bakery a few times in various posts, but just think of this column as a pie and I am allowing samples of the pie here. Understanding the Magic Bakery is critical to making good money as a publisher. So I will talk about it in these chapters coming up as well.

If you feel this helped you in any way, toss a tip into the tip jar on the way out of the Magic Bakery.

If you can’t afford to donate, please feel free to pass this chapter along to others who might get some help from it.

And I would like to thank all the fine folks who have donated over this last year. The donations and the comments both after the posts and privately are really keeping me going on this. Thanks!

Tip Jar: Go To Paypal

I admired her tremendously. Not only was she a fine writer, but she did some fantastic work helping new writers come into writing, not the least of which was her years of work as the main judge on the Writers of the Future contest. It’s a stunner that she is gone. She will be missed.

http://www.rookhousebooks.com/2012/04/25/k-d-wentworth-1951-2012/

And with his wonderful writing he lets you understand what it feels like to a person like me (or Kris) when we have spent thirty-plus years in the old system to suddenly find this new system. After reading his column, you might understand why every-so-often I just shout out, “I love this new world!”

So please, please, please go read his column, even if you are not indie publishing. (It’s Lawrence Block, for heaven’t sake.) And if you haven’t already, follow the links and buy a book or two that he talks about at the end. (The Scudder short story collection, The Night and the Music, is a personal top favorite of mine.)

Go read the column. You will be very glad you did.

http://lawrenceblock.wordpress.com/2012/04/22/all-changed-changed-utterly/