Posts tagged money

Think Like a Publisher: 2015… Chapter 5: Return on Investment

Chapter Five:

Return on Investment

As a professional writer, when I am asked by another writer what they would be better off writing, my standard and correct answer is “Anything you are passionate about. Any story that motivates you. Any topic that scares hell out of you or excites you.”

And when asked “What’s the best length in this new world?” my answer has been “Whatever length the story demands.”

Those are my writer-to-writer answers and they are correct. No second thoughts at all. Those answers come from the art of writing. Those answers come into play for all writers and should be followed where possible by all writers. Those answers will help a writer find their best work, their best art.

That is my opinion, my answers, and I am sticking with them as a writer.

Now… let’s switch hats and think like a publisher. Or better yet, the accountant working for a publisher. And that’s where this chapter is going to be a problem for some people.

This chapter is my attempt to answer all the questions I keep getting about what length is better because my writer answer sure doesn’t seem to satisfy some people. 

Indie publishers are, for the most part, writers first and foremost. So back to the advice I always give above. It is the right advice, the best advice to turn out the best stories, and that’s what matters.

But… let’s pretend for a second here to help you learn how to figure “return on investment” as if you are not a writer.

Some of my background here as a writer.

Can I write to length? Oh, heaven’s yes. You must have that skill if you work for any time in media of any sort. If a novel needs to be seventy thousand words to fit a contract, it better darned well be within a thousand or so of seventy thousand words. Period. Every time. No exceptions.

If I need to write a short story under six thousand words to fit a certain topic of an anthology, can I do it? Of course. Easily.

Would a book be better if I let it go to its natural conclusion as a writer? Most of the time I would say yes. But often when working with traditional publishing I didn’t have that wonderful freedom to do that. I had to hit word count within a certain time and at a certain quality.

That’s called being a professional commercial fiction writer. It’s a good job. And not a job that most writers can do, actually.

Being a professional commercial fiction writer takes the ability to mimic a voice in words so the readers hear the character’s voice. (Think trying to write the cadence and syntax of Kirk, Spock, McCoy, Picard, Janeway and so on in a way that readers hear the actor’s voices in their heads as they read your words.)

Being a commercial fiction writer takes the ability to spend long hours doing nothing but being creative. It takes the skill of being able to understand author voices and even mimic another author’s voice if you get hired to ghost write, which I did a lot as well.

Most writers are lucky to get to the end of a novel with anything more than a gut sense of what they did. Commercial fiction writers have to know exactly what we did, and why, and we do that to length, and on demand.

And the demand is usually for a very short deadline. Commercial fiction writers must learn extreme control of most aspects of fiction writing skill. (Which is why I can teach craft and help other writers.)

But all that said about my writing life, I still tell other indie writers to just let a story go its natural length to create the best art possible.

Granted, sometimes you can create art within the constraints of being a commercial fiction writer hitting deadlines to length. Not often, but sometimes.

Art is better left free to roam where it wants to go and for how long. And as an indie writer, you have that option. I now have that option, where I didn’t as a commercial traditional fiction writer.

And I love that freedom.

So what do you do as a publisher when you put on the publisher hat?

Can you pretend that because math says one way is better than another, one length of story is better than another, one genre sells better than another, should you push to write that way? Oh, heavens, NO!

But you must understand the business. As Kris and I have shouted over and over for decades now, writers are business people. Writing is a business. And an art.

We all must keep working on the art AND the business. Learning both.

So I am going to try here (for just a short moment) to pretend I am just a publisher, not a writer, and work out some expected return on investments. In a vacuum. Without any thought of being a writer. A publisher talking to other publishers who are not writers.

In other words, I’m going to pretend to look at this business like an accountant in a publishing company would look at it. (In very, very, VERY simple terms.) And again, remember, I am doing this chapter in direct response to hundreds of questions on this topic from writers who might think they are in control of their writing enough to write to length and to topic in a quality fashion. Chances are they are not, but at least I have given an answer.

If you have any fear that this post will change your writing in any way, just skip this one. Please.

What is Investment in Indie Publishing?

We covered all that in the first chapters. It’s expenses, overhead, and time.  Time is the critical element here, since the rest are pretty set per project.  So I’m going to just assume all of the overhead and expenses are wrapped into the total and focus only on time from here on out in for this post.

The time it takes to write a story or a novel.

(Publisher/accountant hat firmly on.)

Let’s say a product can be produced at a rate of 1,000 words per hour. Each hour is valued at $50.00. (Set your own.)

So it takes 10 hours for a 5,000 word short story to produce and post to sales channels .

Short story has a cost of $500.00. (10 hours)

A 50,000 word novel is 10 times as long, so $5,000 cost. (100 hours to produce and put out)

A 100,000 word novel is 20 times as long, so $10,000 cost. (200 hours to produce and put out)

(I said I was going to be simple, didn’t I? So don’t quibble on the small stuff, follow the logic and then do your own math for your own work and time and value of hours and add in all the factors you want.)

Income Projections

Before we go any farther, I need to lay out what I use as minimum sales numbers for this kind of mind game we are playing here with this chapter.

As I have said in the past and many writers’ numbers seem to back this up, the following sales figures apply if you have 50 or more titles up under the same name. (And yes, I know, genre and series help a lot.)

Assumptions of Sales for this chapter. (Again, this comes into play when you have a lot of titles under one name.)

Short stories average over all titles about 5 sales per month total through all sites around the world. (Average)

Collections average over all collections about 5 sales per month total through all sites around the world.

Short novels and novels tend to average about 25 sales per month total through all sites around the world.

Now I’m going to ignore all the details of pricing and percentages (again, I’m being simple here) and just assign a figure for gross income per sale per item. (Again, I have talked about this a great deal in other posts on my blog.)

Short story  $2.00 per sale gross.

Five-Story Collection $4.00 per sale gross. (Say $.75 per story per sale for a five story collection.)

Novel $5.00 per sale gross.

So to the math.

Short story: $2.00 x 5 sales = $10.00.

Then add in the amount per story from sales of collections.  $.75 x 5 = $3.75.

So that means you would get $13.75 gross income per short story per month total.

Novel: $5.00 x 25 sales = $125.00 gross income per novel per month total.

Say the novel is 50,000 words long and took 100 hours to write and produce.  Each short story took 10 hours to write and produce.

So to equate the two you would take the short story and multiply by 10 to get the same amount of time used on the novel.

Ten short stories = $137.50 per month gross income. (36 months to recoup the $5,000 investment in time on those ten short stories.)

One 50,000 word novel = $125.00 per month gross income. (40 months to recoup the $5,000 investment in time to write the short novel.)

If your novel is 100,000 words, it would take 200 hours to write.

Twenty short stories = $275.00 per month gross income. (36 months to recoup the $10,000 investment in time on those twenty short stories.)

One 100,000 word novel = $125.00 per month gross income. (80 months to recoup the $10,000 investment in time to write the novel.)

Summary of rough math.

If you take the writing side out for an indie publisher, it is clear from the math that writing shorter novels is better than longer novels and writing short fiction is the best when looking at only income.

36 months to recoup investment on short fiction

40 months to recoup investment on a 50,000 word novel

80 months to recoup investment on a 100,000 word novel.

Other factors:

— It has been proven that writing in series helps increase sales.

— It has been proven that some genres sell better in some forms than others.

— It has also been proven that new product out helps sell older stuff. (Which goes back to writing shorter novels and short fiction because you have more product on a regular basis.)

— Novels have better outlets in paper than short fiction.

— Novels can sometimes take off.

— Short stories can make you money selling first to good magazines and also will be great promotion for your other work.

So if you are mercenary and are only thinking like an accountant, writing short novels (40-50 thousand words) and a ton of short fiction in certain genres in series is the best way to go. You get the best of both sides.

That means turning yourself into someone like me who can write to length, in any genre, and quickly and knows story and fiction at such a deep level that you can mimic anything with words.

Yeah, that’s going to happen.

Considering your stories as an actual investment.

Understand, in the first part of this, I looked at your story as a form of inventory that costs will be returned at a certain point. That is how 99.9% of all writers think about their writing. “When will I break even?”

That, of course, forgets about the next 100 plus years of the story’s existence. But writers are always short-sighted and looking only to the next year, at best.

So that’s cost of inventory thinking, the “when will I get my money back.”

So what would happen if you actually considered your finished work an actual investment, like socking money into the stock market or some other retirement plan???

After all, in this new indie world, you retain all rights and those rights last for 70 years past your death.

So for fun, let’s go back to those numbers above and look at them as investment capital.

Take the short novel at $50 per hour and 100 hours of time. You have an investment in the novel of $5,000.

And over a year’s time, on average sales, you are going to make about $125.00 per month or about $1,500 per year on that novel at 25 sales per month. That’s a 30% annual return on investment. Wow.

And yet indie writers I know think a book is failing at those numbers. (It won’t make Amazon bestseller lists… Oh, no! Dean shaking head and moving on.)

So kick the sales down to only 10 books per month on the novel across all sales platforms (Average over a year). Making $5.00 per sale gets you $50 per month or about $600 per year. (Most new writers would think that a failure of a book. And it will never, ever make an Amazon bestseller list)

But what percentage of return is that on your $5,000 investment???

12% annual return.

Investors would kill for a regular 12% return on investment. Given enough investment, you can live on 12% return on investment.

Traditional publishers take a book and look at how fast it can return its costs of production so they can forget it, toss it away. Indie writers learned that from traditional publishers.

Smart writers (indie publishers) look at a book lasting far past their death and think of each story, each book as an investment in the future.

Now back to reality.  

Most indie publishers are writers first and the best way to produce good stories is write what we care about, what we love, what we are passionate about. If your novels go long, let them. If you hate short stories, don’t write them.

And the truth of the matter is that if you write great stories and novels from your passion and keep learning how to tell better and better stories, they also sell better. No math needed there. It’s a fact.

So this chapter was to answer a bunch of questions I keep getting about which is the best length to write in indie publishing.

Short fiction and short novels are the best.

But even better is to write what you want and say to hell with the accountants.

And have fun.

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Copyright © 2014 Dean Wesley Smith

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The New World of Publishing: The Big Hurry

Every beginning writer I know (including myself back about thirty plus years) is in a hurry.

Fact of publishing, sadly. But before two years ago, beginning writers knew that getting into publishing was going to be a long and hard road through the head-shaking methods of traditional publishing. Most writers who started down that road didn’t make it. And many who did make that first or even second sale quit shortly after, often because the process didn’t get easier, but actually harder.

Now let me be clear here. Like my much-missed friend Bill, I still consider a writer new until at least ten novels published. Most writers never make it to ten. Only a tiny, tiny fraction of us did in the old traditional system. Under the new indie publishing way, a ton more writers will make it to ten and far beyond. And that’s fantastic.

But writers need to understand some time factors involved in this business. Especially if the writer hopes to make a living with his fiction on either the indie or traditional road (or both roads). And understanding the time factors involved will allow a writer to keep writing and attempt to be patient and maybe make it to that tenth novel or beyond.

Compare and Contrast

There are a number of pretty major assumptions I am going to make in the following calculations.

#1 Assumption: I am going to assume that the writer is fairly smart and doesn’t go crazy self-promoting their first novel past normal Twitter, Facebook, and web site.

#2 Assumption: I am going to assume the writer just keeps writing and can finish a novel in six months. If you are faster, you can do the math.

#3 Assumption: I am going to assume the first novel is just a first novel and following books get better with practice. And the books are genre books, meaning if they sold in science fiction or mystery or romance, they would make about $5,000.00 advance.

#4 Assumption: I am going to assume sales are very low to start off on the indie side. And I count AROUND THE WORLD sales from ALL SITES, not just Kindle.

#5 Assumption: Even though I suggest writers do both indie and traditional in the real world, for the purpose of this article, the author either goes one way or the other. Not both.

Let me play some simple math games to show the point I am driving at. If I get any of these figures wrong, please correct me.

Step One: Finish First Novel. Genre Book. Ready to go on January 1st, 2012.

Traditional: Mail book to editors.

Indie: Put book up for sale on all sites.

Income while writing the second book.

Income: Traditional: No response in six months other than rejections. No money.

Income Indie:  Sales are slow because it is the only book up under that name. Maybe average 5 sales per month across all sites at $4.99 list price. $3.50 profit per sale. $3.50 x 5 sales x 6 months = $105.00.

Step Two: Finish Second Novel. Genre, Same Author Name as First Novel. Ready to go on July 1st, 2012.

Traditional: Mail book to editors. Keep first book in the mail at same time.

Indie: Put book up for sale on all sites.

Income while writing the third book.

Income: Traditional: No response in six months other than rejections on both books. No money.

Income Indie:  Sales pick up a little because a second novel is likely better than the first and there are two books under same author name. Maybe both books now average 10 sales per month across all sites at $4.99 list price. $3.50 profit per sale. $3.50 x 10 sales x 6 months = $210.00 per book. ($420.00 total for the six month period.)

Total income for first year (2012) of writing:

Traditional: Nothing

Indie: $210.00 + 210.00 + 105.00 = $525.00

Step Three: Finish Third Novel. Genre, Same Author Name as First and Second Novels. Ready to go on January 1st, 2013.

Traditional: Mail book to editors. Keep first two books in the mail, getting discouraged on first book and slowing down on submissions.

Indie: Put book up for sale on all sites.

Income while writing the 4th book.

Income: Traditional: No response in next six months other than form and personal rejections on any book. No money.

Income Indie:  Sales pick up even more because a third novel is likely better than the first two (called practice) and there are now three books under same author name for readers to find and buy. Maybe the three books now average 25 sales per month across all sites at $4.99 list price. $3.50 profit per sale. $3.50 x 25 sales x 6 months = $525.00 per book. ($1,575.00 for the six month period.)

Step Four: Finish Fourth Novel. Genre, Same Author Name as First Three Novels. Ready to go on July 1st, 2013.

Traditional: Mail book to editors. Keep first three books in the mail, getting even more discouraged on first book and slowing down.

Indie: Put book up for sale on all sites.

Income while writing the 5th book.

Income: Traditional: Sell book #4 for a $5,000 advance in November. One book deal. Three payments. No contract or money will come in before spring of 2014. So No Money.

Income Indie:  Sales pick up slightly even more because a 4th novel is likely better than the first three (called even more practice) and there are now four books under same author name for readers to find and buy. Maybe the four books now average 30 sales per month across all sites at $4.99 list price. $3.50 profit per sale. $3.50 x 30 sales x 6 months = $630.00 per book. ($2,520.00 for the six month period.)

Total income for second year (2013) of writing:

Traditional: Nothing

Indie: $1575.00 + $2,520.00 = $4,095.00

Step Five: Finish Fifth Novel. Genre, Same Author Name as First Four Novels. Ready to go on January 1st, 2014.

Traditional: Can’t mail book to editors because your contract for the 4th novel restricts you. Must sit on book and earlier books to let editor exercise options clause on your next work in the same genre under the same name. The company doesn’t even have to look at your option book until after acceptance of the first novel in the contract in the fall of 2014.

If book sold in November, contract will arrive by February 2014 if lucky. Payment will arrive in May if lucky. 1/3 of advance on signing. Acceptance of book will be 1/3 in the last part of 2014 and publication payment will arrive, if lucky, the last half of 2015.

Indie: Put book up for sale on all sites.

Income while writing the 6th book.

Income: Traditional: 1/3 of $5,000 contract, assuming no agent. Income total spring of 2014. $1,666.00

Income Indie:  Sales pick up slightly even more because a 5th novel is likely better than the first four (called even more practice) and there are now five books under same author name for readers to find and buy. Maybe the five books now average 35 sales per month across all sites at $4.99 list price. $3.50 profit per sale. $3.50 x 35 sales x 6 months = $735.00 per book. ($3,675.00 for the six month period.)

Step Six: Finish 6th Novel. Genre, Same Author Name for Indie as First Five Novels. Traditional author will switch genre and name to get away from option clause. Ready to go on July 1st, 2014.

Traditional: Mail new name and genre book to editors. No responses other than rejections. No response from your publisher before the end of the year on the option book under your contract which is one of your first novels already written.

Indie: Put book up for sale on all sites.

Income while writing the 7th book.

Income: Traditional: 1/3 of $5,000 contract for acceptance payment, assuming no agent. Income total fall of 2014. $1,666.00

Income Indie:  Sales pick up slightly even more because a 6th novel is likely better than the first five (called even more practice) and there are now six books under same author name for readers to find and buy. Maybe the six books now average 40 sales per month across all sites at $4.99 list price. $3.50 profit per sale. $3.50 x 40 sales x 6 months = $840.00 per book. ($5,040.00 for the six month period.)

Total income for third year (2014) of writing:

Traditional: $3,332.00 (assuming no agent and $5,000 advance. Book not yet published.)

Indie: $3,675.00 + $5,040.00 = $8,715.00 (Six books published with a 7th about to go up.)

Total income for first three years of writing: 2012-2014

Traditional: $3,332.00 (assuming no agent and $5,000 advance. Book not yet published.)

Indie: $525.00 + $4,095 + $8,715.00 = $13,335.00 for three years.

 

You can keep going if you want. But I can tell you that if you keep adding 5 extra sales per book AVERAGE and keep writing two books a year, by the end of year #5 you will be making in indie publishing over twenty thousand per year, if not more.

In traditional publishing you are going to have to sell more books for far bigger advances to make $20,000.00 after five years.

And in indie publishing at 5 years you will have at least ten books published, writing two per year. In traditional publishing you will be lucky to have three published.

And those of us old-timers in publishing know that I am being very, very generous on the traditional side in regards to time and sales.

Assumption I did not mention: The traditional side did not have a home run (meaning a huge advance) and the indie side did not have a home run, meaning hundreds of sales per month per book.

My Final Point

This business takes time. On both sides.

Also, those on the indie side, just because your book only sells ten copies on Kindle the first few months, stop panicking. In six months count all sites, like iPad, Kobo, Sony, and so on to see what the total for a book was for a certain month. After all the reporting is in for all sites. And then do the long-term math like I just did, adding a new book at your normal pace to see what that “low” number will turn into.

And it drives me nuts when a writer who has sold a hundred copies of a novel in a month on Kindle alone thinks that’s bad. Stop comparing yourself to other writers and just do the long-term math on your own sales. Those other writers who sold more aren’t writing, but promoting anyway, and will be gone shortly. You can beat them by simply keeping writing and producing more product and becoming a better storyteller.

Remember, indie writers function on long-term sales. Books don’t spoil.

Traditional publishers act like your book will spoil like a piece of fruit after a few weeks. If it doesn’t sell quickly and in large numbers, your book is a failure. You need to kill that thinking. Your book is inventory that can be sold over and over and over.

Books don’t spoil. They just earn money for you over time.

So stop being in such a hurry and focus on writing great stories. If you do that and just keep going, the money will come.

And when it does, it will surprise you because all you have been caring about is the writing.

Also, not thinking about sales all the time, not checking your numbers all the time, and focusing on only telling stories is a ton more fun.

Go have fun.

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Copyright © 2011 Dean Wesley Smith

Cover art copyright Philcold/Dreamstime
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This chapter is now part of my inventory in my Magic Bakery.  I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.

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!

Thanks, Dean

Think Like A Publisher: 2…Expected Costs

The first chapter in this new series 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.

In the first chapter I walked through the set-up of a publishing business. No costs to speak of. If you haven’t read chapter one, please do so now. You can find it under “Early Decisions.”

So here we go to step two of these first three basic chapters in setting up your indie publishing company.

EXPECTED COSTS

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, and Set Costs. All three areas are critical to figuring overall expected costs of producing a product.

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

Here we go.

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 layout the book in some free program, layout 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. (grin) 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 gardner 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 sinply job such as doing a cover would be like giving that gardner 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. In July (and again in October) Scott Carter and I will be teaching 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 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 who 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 totalled 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.

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 $39.00 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.

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. 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 starting to go 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 at some point down the road.

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.

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.

Coming Next:

How to Figure Income. And yes, that includes how to figure prices of books like a real publisher.  Stay tuned.

And thanks everyone, for the encouragement and donations. Very much appreciated.

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Copyright ©  2011 Dean Wesley Smith

Cover photo copyright © Vladimir Melnikov/Dreamstime.com

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And speaking about maximizing income, this is part of the income streams for me. And, to be honest, it keeps me going on these chapters. And anyone who donates a little to the Magic Bakery tip jar, I will send a free electronic book of all these chapters combined when I am finished.

And  speaking of the Magic Bakery, this chapter is now part of my inventory in my bakery. (Confused on that, read the Killing the Sacred Cows of Publishing post about making money with writing.) I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.

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!

Thanks, Dean

Think Like A Publisher: The Early Decisions

Okay, I’m starting a brand new series right now. I have no idea how long this series will be, and I will continue to do “New World of Publishing” chapters and “Killing the Sacred Cows of Publishing” chapters as topics arise. But there is so much to talk about when a writer decides to become a publisher, I thought I would just do these in a new series.

THE EARLIEST DECISION

One day, after following Konrath’s blogs, a writer suddenly thinks to himself, “I should just publish that unsold story myself on Kindle.” Uh, oh… Right at that point the writer has made the decision to become a publisher.

The very first decision to go into a brand new business.

Being a publisher is a very, very different job than being a writer. Very different. And a very different business. Basically the two jobs must come together in one form or another for a story to ever reach a reader. And in traditional publishing for the last sixty-plus years, the only game in town was to form a partnership through a contract with an established publisher to get your work to readers.

Then a few years back the traditional publishers seemed to suddenly release their total hold on the distribution of books to readers. Writers suddenly saw a way around traditional publishing, a way to control what happened to their work. So the writers started becoming publishers again.

History aside: This writer as publisher is nothing new, actually. Before 1950 or so, self-publishing was an accepted form of publishing. Only from 1950 to 2008 was it looked down on. Now it is accepted again. Only difference is the difficulty and delivery systems.

As electronic books started to gain percentage of total books sold, a very small, but very vocal group of writers sprang up that I call indie publishers. And then a few established writers such as Michael Stackpole and J.A. Konrath started talking to other writers about the money that can be made as an indie publisher, and the control it gives writers. And more and more writers started paying attention. Especially those of us with very large, very dead backlists that suddenly looked like gold mines in our file cabinets.

And here we sit now in early 2011 with electronic publishing expanding quickly, more new reading devices coming on board almost daily, worldwide reading of electronic books expanding faster than anyone can keep track of, and a bright future ahead of authors who decide to indie publish.

And a ton of problems coming to authors who indie publish and don’t understand they have taken on a brand-new business.

And everyone has an opinion about what is the right way or the wrong way to do the indie publishing. And a lot of writers seem to be ignoring many basic business principles of being a publisher. So I figured I would try to put all the different aspects of being a publisher in one place and let each writer at least make a decision from an informed viewpoint. (In this series I will clearly state what are my opinions, what are my suggestions, and what are just plain facts.)

About Me

Very quickly, here is why I feel I can talk about this stuff.

I helped start and was the publisher of Pulphouse Publishing Inc. Pulphouse was the 5th largest publisher of science fiction, fantasy, and horror for a number of years. Kristine Kathryn Rusch and I started the business as a sole proprietorship in 1987, which I owned. We switched it to a corporation in 1990, and shut it down to go back to full-time writing in 1995. Pulphouse Publishing Inc. dissolved officially in 1996, and Kris and I assumed all the company debts, which we then paid off over the next ten years. During that time I worked with many other publishers, including the publisher of Bantam books on many projects. We had 19 paid employees and a two-story office building.

I also edited for Pulphouse, VB Tech Journal, and Pocket Books.

Last year, as this new electronic publishing wave was picking up steam, Kris and I helped start WMG Publishing and we are working closely with the different people involved with WMG Publishing to first get our huge backlist up and to secondly grow into a decent mid-sized publisher of other writer’s work in this new world. Unlike Pulphouse Publishing, WMG Publishing is growing slowly. And taking its time to make correct decisions at the right time and in the right way. WMG Publishing has 145 different books and stories published as I write this.

Also, I have started over twenty businesses over the years, many of which are still thriving. I have started four different corporations and attended three years of law school, although I am not an attorney and nothing in these blogs should be considered legal or accounting advice.  I have been making my living as a freelance writer since before I became a publisher. (Trust me, Pulphouse Publishing did not make me any money. That is part of the mistakes I hope to not repeat with WMG Publishing.)

Early Decisions

Some of the earliest decisions a publisher has to make can be changed down the road easily. Some are difficult to change. So I’m going to break down some of these early decisions into basic groups. And keep in mind, there are no correct answers on any of these decisions. Just what you want to do.

EARLY BUSINESS DECISIONS

1… Pick a Name.

Yup, as a publisher, your business needs a name. This could be one of the hardest decisions to change down the road, so caution. My suggestion: Pick a name that is easy for everyone to remember, that is fairly short, and that sounds like a publishing house imprint. CRITICAL. Make sure the name is not being used and go get the domain address. Do not wait. If there is any chance of using a name and it is open, grab the domain address. Just you simply checking on it being available might cause someone else to buy it. Grab it quickly.

If there is no available domain address with a .com in your business name, pick a new name for your business.

2… Pick a Business Structure.

You basically have two choices. One, keep the business as a sole proprietorship. That means you own it all and on your taxes you file a Schedule C business form with your yearly taxes. Unless you are planning on growing your business very large or making a lot of money, this is the easiest way to go.

The second way is go to an attorney and an accountant and have them set up your publishing company as a corporation of one type or another, depending on your long-term plans. If you need to ask why you would want a corporation instead of a sole proprietorship, you don’t need a corporation. All a corporation will do is cause you more costs and get you in trouble.

3…Open up a dedicated checking account under your business name.

This is easy to do in both types of business. Most states for a regular sole proprietorship, you simply get a form from your bank called a “Doing Business As” form. (There are different names in different states, but most call it a DBA.) File that with the state and give it to your bank and you can open up the business checking account.  Then, as you have money flowing in from all the sales in all the different sources, have the money go directly to your business checking account. And take all publishing expenses out of that account as well.

For heaven’s sake, keep all your receipts, just as you do with your writing.

If you started a corporation, you will know what to do. If not, ask your accountant and think twice about starting a corporation.

EARLY BUSINESS STRUCTURE DECISIONS

Okay, you’ve got a business name, a checking account, and have decided what type of formal business you are running. Now you need to decide what kind of structure your business is going to take inside the publishing house. To determine that, ask yourself these simple questions and write down the answers.

Question 1: Over the next five years, who is going to do all the production work?

A) You do it all.

B) You do some and hire out contract work for other parts.

C) Other people do it all.

D) Combination of the above depending on the project.

If you are going to do it all, ask yourself if you have all the tools to do covers and the computers and the software to do them? Do you have the ability to design covers? Can you layout books for PDF files for POD publishing, both interior and cover? And if not, what is it going to cost and how long will it take to learn how to do all these things? Most tasks are not difficult, but there is a learning curve that takes a little time.

(An aside: I did some pretty ugly covers starting off with an old computer and no good software in helping out WMG Publishing. I started getting a lot better once WMG Publishing invested in a computer and new software for my office.)

If you are going to hire some jobs out, do you have the upfront money to do so? Or if you are going to hire everything done, do you have that kind of up-front money? (Welcome to being a publisher. Traditional publishers can spend a lot of money on your book before they ever earn a penny. You are now a publisher, not a writer. Expect up-front costs.)

Question 2: How much inventory do you have or will you have in the next five years? How many books are finished but unsold? How many short stories? How many novels or stores sold are now reverted to you?

How much new product can you produce in the next five years?

If you only write one book every few years and have no inventory, you don’t need to do any of this. If you have a number of novels, numbers of short stories in inventory, and can write two or three novels a year and some side stories, then mark that down. Publishers work on a “publishing schedule.” Start setting that up as well and be realistic with yourself.

Inventory is critical in any business. I will talk about inventory-in-business aspects of publishing in a later chapter.

Question 3: Editing and Proofing. Every publisher has editors and proof-readers. How do you plan on handling that? Do you have a good first reader? Do you know who you can hire for copyediting? Or just not do it? And if you want a copyeditor, can you afford the up front fees. Good copyeditors run from $50 to $1,000 per manuscript. Good, respected editors actually editing are more.

There are other basic questions, but for now that should be enough to get you thinking on the right track as a publisher.

Early Business Chores

As you are setting up your publishing business, there are numbers of just basic chores that need to be taken care of. I am assuming you plan on being both an electronic and POD publisher. If not, why not? Why make a decision so early on to limit your possible markets? Plan to do it all, so that means you have chores to do. And trust me, these are chores.

Chore #1: After you have your business checking account, so you don’t have to change these later, set up publishing accounts on Amazon, Pubit (B&N), Smashwords, and CreateSpace. (Yeah, I know, you might switch to LightningSource for POD later, but early on save the mistake money and do CreateSpace. Or do as I have done and set up accounts on both. Just practice on CreateSpace where you don’t get charged for every mistake.)

Chore #2: Set up a business PayPal account. Hooked to your business account if possible.  You will need this in more ways than you can imagine, including down the road putting shopping carts on your web site.

Chore #3: Set up a place-holder web site, even if it is under construction as WMG Publishing website is. You’ll get it fixed later.

There are other chores, like starting to explore how to get books in libraries and how to get ISBN numbers, but for now, just stay with the first three. I’ll talk about ISBN numbers and library sales in future chapters in this series.

Early Decision: What Kind of Publisher Do You Want To Be?

Okay, to keep this basic, there are three major types of publishers in publishing and I don’t see this model changing at all. In fact, I see it becoming stronger. You can be solidly in one category or actually can function in all three if your readers are clear. But my suggestion is pick one to start.

1) Traditional Fiction/Nonfiction Publisher

2) Discount Publisher

3) High-End Publisher

I will say right off that Pulphouse Publishing Inc. was a high-end publisher for the most part. In the late 1980s and early 1990s I sold some books for over $50.00 each and most of our books were signed and numbered and retailed between $20.00 and $35.00 each. Very high end, although we were trying to change it in the last few years with short story paperbacks and magazines, we never really made the shift before the end. What Cory Doctorow is doing is being a high-end publisher on his “experiment” book. He has one state priced at over $300 per book.

I will talk about each of these types of publishers and the different business models they demand in future chapters. But for now, here is a very quick summary of the three choices you have to make early on as a publisher.

High End: I believe that High-End publishers will make great money in this new world with all sorts of enhanced products. This new world is gold for high-end collectors books. But it will take a publisher who can publish top names, do enhanced production and books, and knows how to put out top quality leather and signed work. This area is difficult at best for a beginning publisher.

Traditional Publishing: Basically, this is the New York publishing model.  Books sell for all the traditional prices, go to the traditional outlets, and are bought by regular readers.  All bestsellers for the most part are traditionally published.  We have positioned WMG Publishing in this model. Traditionally Published novels will continue to be the vast majority of all books published and where the highest profit margins are per product sold.

Discount Publisher: This area is very large in the publishing world in general and has many large companies working it. The outlets consist of discount shelves in normal bookstores, discount mall stores, and other types of discount stores. Many books beyond the bestsellers that you see at Costco are discount books. In electronic publishing, the price being set by discount publishers is 99 cents.

In this area of publishing, the margins of profit are thin and the publishers depend on volume of sales to make even a decent profit margin. Very few traditional publishers have discount arms, but they do high discount at times to some stores like Walmart. That is different than discount publishing as a business model. Most discount publishers only focus on being discount publishers and go for the volume of sales.

Again, more on all three of these major types of publishers in future chapters.

As a new indie publisher, you want to decide what area of publishing in general you want to fit into. As I said, with Pulphouse Publishing Inc., I started as a high-end publisher and that was our plan from the start. It was only years later that we decided to try to move to the traditional model. And the move, once we were established as a certain type of publisher, was difficult at best.

Summary

That’s most of the basic early decisions you have to make once you decide to publish your own work. Get the business set up, do the chores, look at your start-up inventory, and then look hard and fast at what kind of publisher you want to be.

Being a publisher is fantastic fun. And to be honest, I’m once again having a great time playing on the publishing side of the desk. I never thought I would move back to this side of the desk, to be honest. But at the moment I am glad I did.

Stay tuned for more in this series as I walk you though step-by-step the different aspects of being a publisher, both the problems and the good stuff. And trust me, there is a lot of good stuff, not the least of which is the amount of money you can make. The traditional publishers in New York didn’t build and buy those huge buildings on their good looks. This series will talk a lot about how to maximize your income and your inventory.

As I said, “Great fun!”

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Copyright ©  2011 Dean Wesley Smith

Cover photo copyright © Vladimir Melnikov/Dreamstime.com

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And speaking about maximizing income, this is part of the income streams for me. And, to be honest, it keeps me going on these chapters. And anyone who donates a little to the Magic Bakery tip jar, I will send a free electronic book of all these chapters combined when I am finished.

And  speaking of the Magic Bakery, this chapter is now part of my inventory in my bakery. (Confused on that, read the Killing the Sacred Cows of Publishing post about making money with writing.) I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.

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!

Thanks, Dean

The New World of Publishing: Accounting


Warning: This will be a general post designed to help regular folk understand some real basics in indie publishing accounting, so publishing experts and accountants, please give  me a break. This is very, very general. Thanks!

Also, this is a long one. Sorry.

The term “Margin” is thrown around in so many ways, by so many people in publishing these days, I figured it was time to try to make sense out of the word and other basic accounting issues. In fiction publishing, that is. I’m not getting into stock margins or buying covered calls on margin or anything along those lines. This is about fiction publishing and accounting and profit margins and how to figure them.

Yup, lost about five hundred readers right there.

Here we go. There really will be a point in this for indie publishers, so ride with me.

Traditional Publishing Accounting and Margins

Starting from the top and working down.

Publishers and lines of books

Publishers (for the company or for an imprint) tend to like to make around a 4% margin of profit after all costs. More, they get happy, less, they get grumpy. And every company is different and some have different numbers, but most range in that area, so that is just a basic center number for conversation sake.

An imprint’s profit margin is figured (basically) by total gross receipts minus all expenses, including office overhead and salaries and costs of production and shipping. So ideally the company stays afloat and pays all bills and makes 4% of the total gross receipts. (Yes, I know, very simplified, but live with it.)

A Book

A single book is figured on the same formula as basically the entire line. (And it’s a giant guessing game. More on that later.) After a book goes through its life, the publisher looks at the total gross receipts for the book, take away all costs, including a percentage of the overhead and salaries, to get to a desired  4% net profit or profit margin. Some books are far, far more successful than that, most books are not, and many books lose money “on paper” for the company. About a zillion factors involved in the final per-book calculation that then gets fed into the overall calculation of the imprint.

Bestsellers have a far higher profit margin because of the set costs such as staff and overhead are factored over a lot more books than a 5,000 copy print run of a small book. But bestsellers also have more upfront costs and thus are a higher gamble for the publisher. Many lines make money by having a couple bestsellers that carry all the small authors and first-time authors who are losing the company money. Midlist authors are often the ones that can sell consistently at a 4% profit margin and don’t add or drain anything from the company.

Distributors

All distributors tend to try to work at a 5-10% profit margin where possible. Closer to 5% most of the time after all costs. Distributors are basically any company from Ingrams and Baker & Taylor to Amazon Kindle or Smashwords.  All distributors, although the electronic and online paper sales have combined distributor and bookstore in many areas. But ultimately they are distributors. (For the publicly traded ones, you can read their year-end reports to see the thousand factors that are taken into account. Again, I said I am being very simple here.)

Bookstores

Bookstores like to get as high a discount as possible from publishers. Often a bookstore will pay ahead and order a certain number of copies because that savings in shipping and a few percent higher in discount can make all the difference on staying alive. Bookstores get books from 32% to 55% discount. Their overhead in buildings, employees, utilities and such make it critical that they do enough in sales to cover the costs.

For decades new bookstores have been helped by the return system and the smart owners used the system perfectly. If a book didn’t sell quickly, they returned the cover or the book for a full refund and credit against another book they were ordering and the publisher and author took the hit for the store not selling the book. So new bookstores didn’t get caught often with dead inventory. (You want to see a store with dead inventory, go into any Borders this week. Take a look at the books that didn’t sell in December.)

Barnes & Noble had a great last year, with some decent profits. Amazon, as a bookstore, also had a good year. Most bookstores, the small independents, didn’t do so well even with the no-risk inventory and considered it a good year if they paid all their overhead and salaries without borrowing money.

Writers

I typed that and started laughing. There are a few authors working with traditional publishers who actually think in these terms. Very few. But most writers don’t know enough about business to even know how to figure their own profit and loss on a book project, or even work a profit margin, let alone consider themselves an actual business. They should, but almost none do, which hurts all the rest of us.

I know for a fact that if a writer actually did do the profit and loss structure of a project, including overhead and time and so on, they would fire their agent in a heart beat. Spending 15% of all gross income on an employee is the most outlandish cost in any business model I have ever run across. But we’ve been down that road in other posts.

Let me just say that it is very possible for a writer to run a simple profit and loss on a project and also on a full year of writing.  (Again I am laughing because I have such a low opinion of writers and their business knowledge. Sorry.)

Indie Publishing

Here is where things get confusing around the word “margin” to writers who want to be indie publishers, meaning publish their own work, or join a group working to publish their own works.

Margins for Indie Publishers

Very few indie publishers, because they are writers, have set themselves up in any kind of business structure. Or treat indie publishing as an actual publishing company. I have a hunch, as time goes on, we’ll see more and more that do. The ones that survive at least. An indie publisher is a publisher, just as any company in New York is a publisher. Same rules apply. And same basic accounting can and should be run.

An indie publisher needs to know costs and keep sharp track of them. Time spent, cost of production, cost of covers and proofing and so on. But more importantly, time spent by the writer on the creation of the project and time spent on the publication of the project should both be assigned amounts. Base costs. What is your time worth writing and indie publishing?

All those facts and figures are needed to figure out any real profit margin for an indie publisher.

For years I have done a profit and loss and figured profit margins for myself in my writing. I calculated that including everything, my time, my mortgage, my expenses, I needed to make $500 per day of work to cover everything. (Reverse calculation is $500 per day is 5,000 words per day times 10 cents per word.) For me, to make it simple, I use the $500 per day to cover my time and all my costs. And I figure ten hours in a day.

So figure your own. Add up all your expenses for a month, figure out how much your time is worth, and take the total from your money brought in (after the outlandish 15% agent fee) and that’s your profit margin for your writing. Or loss.

So using my way of calculating, which is very simple, a 30 day month has a base cost of $15,000. I subtract $15,000 from my income and get my profit or loss for the month. Then I also do a calculation for six months and for a year. Some years I have made a nice profit. And remember, my time is also worked into that $500 per day. So when my writing business makes a profit, it’s money earned above my hourly time wage.

Indie publishers have to do the same thing in some way or another. They have to figure all costs, including time, and then keep track of all income over a year and determine a profit or loss for the business. If your business is not earning at least a 4% profit margin, you are doing something wrong. (Maybe your pricing structure is off, which I will talk about in a moment. Or your expenses are too high, or you don’t have enough product out to actually carry the expense costs.)

Notice: It would be wise to get an accountant to help you set up your books to start with, especially if you plan on growing your indie publishing business as the years go by.

By the Story or Book: An Example

Notice I know pretty close how much time I spent when I put up a challenge story. (I am used to keeping track.)

My $500 per day is figured on 10 hours of work, or $50.00 per hour. Remember, that includes all my overhead including my share of our mortgage and so on. So if a challenge story takes six hours, it needs to make me $300 over the life of the story to break even. And more to give me a profit margin.

So let’s do a Profit and Loss Calculation on a simple challenge story to see if the work I am putting in is worth my time. And when can I expect a profit.

Story Costs: $300.00 total. (All overhead and employee hours worked into that number. No cover or proofing costs.)

Projected electronic sales: (5 sales total across all sites in one month for each state of the story.)

Selling the story as a single story for 99 cents.  $1.75 per month for five sales (net income after each site fees).

$2.99 5-story Collection: 1/5th of $10.00 or $2.00 per month allocated to the story.

$4.99 Larger 10-story collection 1/10th of $17.50 or $1.75 per month.

Total income $5.50 per month for the story. Or $66.00 per year. Projected profit in under 5 years.

Of course, I would need to track the story sales. But that calculation seems pretty reasonable in most publishing business structures.

(For a publisher doing a profit and loss in Traditional Publishing, a book is bought, but expenses have already been spent on the book before the author is offered a contract. Book comes out in two plus years, book might hit profit status in just under four years after first money is spent.) So under five years seems pretty reasonable to me, especially since after that five year period, in theory, the story will continue to sell and just increase my profit margin.

So that’s a profit margin and figuring a profit and loss for a story in indie publishing. Few indie publishers do that simple math.

PRICING OF INDIE BOOKS

I hate to go back into this area, but indie writers need to start thinking about pricing of books like a real publisher.

So here we go:

Electronic Pricing

99 cents at 35% = $.35

$1.99 at 35% = $.70

$2.99 at 70% = $2.10

$3.99 at 70% = $2.80

$4.99 at 70% = $3.50

You have to sell ten times the number of copies at 99 cents then you do at $4.99 to earn exactly the same amount of money.

So doing a simple profit and loss calculation on a novel that took 100 hours to write, the cost I would have into the book would be $500 x 10 days (at 10 hours per day) or  $5,000.00.

To make a profit selling the book at 99 cents, I would need to sell 14,285 copies.

If I priced the novel at $4.99, I would be in profit status at 1,429 sales.

If I managed to sell one per day total over all sites (30 average per month) the book would be profitable to me in under four years. Nice. And that’s assuming nothing went bigger. Having a $3.50 gross profit margin per copy sold helps me hit an overall book profit much sooner than a gross profit margin per book sale of 35 cents.

POD Publishings

Here where it gets really, really tricky for indie publishers. They want to keep the price of their book as low as possible. Duh, every traditional publisher wants the same thing. But unlike electronic publishing, you have more choices and more factors with POD publishing.

I hate the idea of short discounting bookstores. Short discounting is only offering a 20% discount on your book. That simply cuts off all sales for your book to bookstores and even special order counters. Bookstores will not order books with that low a discount. It really is that simple. Bookstores barely make it when they get full returns and 40% discount. They won’t bother with 20% (or short) discount.

So using a standard discount and CreateSpace’s nifty calculator and Pro Plan, here are some numbers. (Lightening Source is fine as well, just don’t short discount even though they offer it.)

Details of the Book: A standard 6 x 9 inch trim, 300 page book.

$12.99 cover price gets you a $1.14 gross profit per book in expanded (special orders from stores you don’t ship to) and $3.34 through Amazon and you can buy them for about $4 per book for direct sales to bookstores at 40% discount, so you make about $3.70 or so direct sale to bookstores. Those numbers are your gross profit margins per sale depending on how and where the book sells.

Now bump the price to a more logical $15.99 trade paper price. You know, about what traditional publishers charge for that size book. The expanded distribution jumps to a gross profit margin of $1.94 and the Amazon sale gross profit jumps to $5.14. And you make almost $6.00 per book on direct sales to bookstores.

So setting price is a cost calculation for a business to figure out depending on costs of the book, the amount of time and number of sales calculated to return the costs in a set amount of time.

A dirty secret: New York does the same guessing game, granted with more practice, but the same game. I’m not going to tell you which way to go, but doing the math for your costs will help you set a price which will eventually allow a profit margin in a decent amount of time.

Act Like A Business

I just shake my head at writers who set low prices for their books because of some unknown thing they heard on a blog post like this one. Or because another author used that price and it sounded right. Or because “everyone on the Kindle Boards is doing it.”

If you are jumping into being a publisher seriously, start acting like one. Track your costs to produce a product. And set a cost figure on your writing time. And your time to do covers and so on. And any other real costs. And if your computer lasts two years and you write four novels in two years, then each book needs to carry one quarter of the cost of the computer. And so on.

Get a real expense number, a real cost of producing a product. Then set your book price keeping that number in mind.

If you are planning for your book to hit a home run to make your money back, you aren’t being very real. I plan for everything I put up to bounce along the bottom, selling a minimum number of copies per month. Then I take my costs and work out at each price point how many copies I will need to sell to return my investment and start making me a profit in a decent amount of time.

I like to make a profit. I like to know when I will make a profit, and how many books have sold and so on.

Just like any publisher, I am setting up cash streams from older books repaying my costs to pay the costs of my overhead and the investment costs for new books.

It’s called business.

If you like the idea of this, but don’t understand it, it would be worth your money to hire an accountant to help you set up the systems for your business. It might be the best expense you will ever spend on your indie publishing business.

And you can expense that accountant’s bill out over all your books for a year.

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Copyright 2011 Dean Wesley Smith

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Okay, I admit it, I had issues at first with putting in a tip jar in the Magic Bakery. It was one of the “I have it made, why do I need to support my writing with tips.” A minor myth, sure, but still one that took me a few days and some talk with Kris to get past. And also, why put a tip jar in when I’m just trying to help people. But I figured I needed to get past that as well, so here it is.

And I also needed to start treating these chapters as part of my writing business instead of just a hobby.

And  speaking of the Magic Bakery, this chapter is now part of my inventory in my bakery. (Confused on that, read the Killing the Sacred Cows of Publishing post about making money with writing.) I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.

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!

Thanks, Dean


The New World of Publishing: Cash Flow


Okay, time to talk about that evil subject: Money. And more pointedly, money for fiction writers.

So many fiction writers these days banter around the saying that they can make more money indie publishing their work than selling it into the midlist in traditional publishing. And I’m not disagreeing with that, at least not for some. There are many factors to consider, including length of contracts, amount of advance, ability to do the work of indie publishing yourself. For some, indie publishing is right, for others not so good.

But so many of the discussions about indie publishing vs traditional publishing don’t take into account a very important, and sometimes critical aspect of money for a freelance fiction writer. And that’s timing of the cash flow. In other words: How Much? And When?

And trust me, this is complex and will seem odd to many, especially newer writers. But I will do my best to be clear and let you each decide on the path that is right for each of your books. And when you do decide on a path, you might understand the cash flow of that path.

Money: Traditional Publishing Style

I’m going to use a traditional midlist novel that will earn out around $20,000 total over its entire life. The book will start with a one book, $15,000 advance contract.  I am also going to assume, as 95% of all mid-list writers, there is an agent in the mix and agent sells the book. (Might as well play into the myth all the way.)

March 1, 2011: Book Finished, sent to agent.

May 1, 2011: Agent gets around to talking to you about the book, wants a few touches to help it sell better.

July 1, 2011: Book sent back to Agent. Agent holds book to not push into summer dead time.

September 15, 2011: Book mailed to five editor friends of agent.

December 1, 2011: Editor makes offer.

January 15, 2012: Offer confirmed as all other editors drop out.

April, 15, 2012: Contract negotiated and you sign. Payments split 1/3 sign, 1/3 acceptance, 1/3 publication

July 1, 2012: First signing check arrives for 1/3 of $15,000 minus agency fee. Amount: $4,250.00

Aug 1, 2012: Rewrite finished, book turned in.

December 1, 2012: Acceptance payment arrives. Amount: $4,250.00.

(In this time period the author will have to go over proofs and copyedits, so more author time spent. Also realize that the book has not been published, but the author has received $8,500 before any sales by the publisher.)

September 1,2013: Publication of Book.

December 1, 2013: Publication payment arrives. Amount: $4,250.00.

October 1, 2015: 3rd royalty statement arrives. Book earns out: Amount: $700.00

Each half year for the next two years until October 2017 checks arrive until the total is $5,000 in royalties minus $750 agency fees above advance are paid out.

Book has been out of print for almost a year at this point.

That’s the end of the money on that book. Your contract won’t allow you to get the rights back (IF you negotiated a good reversion clause) for three or four more years. If you screwed up and allowed the publisher to keep the electronic rights or POD rights, even selling only a few copies a year, you won’t see any money ever again on this book besides dinner money every year.

See why us mid-list writers are fast and write across genres and under many names? The pipeline for each book to spit out any money is very long.

Many mid-list writers will look at my example and think that I was being nice on some of those times. I was.

It can take a lot longer, and always does when you have a mortgage payment due. Publishers NEVER honor contracts when it comes to payments. Ever. I can write an entire novel faster than any traditional publisher can cut a check. And put the agent in the middle of things and it just gets worse. Payment can often take an extra three weeks because publishers batch payments to certain agencies, so they hold off paying until they have a large enough batch. And agents can take up to two weeks or more to move the money through and out the door to you. All part of the fun of traditional publishing.

Note: From finished book until first check was one year and four months. No books sold at that point. Total income for the author for book was $17,000 after agency fees over almost seven years. With a good contract, the author will be able to regain control of the book after about ten years. Bad contract the author will never regain control of the book, even though the book is out of print.

One more note: To earn $20,000 for the author and agent, assume the book was a $7.00 mass market paperback. Author got standard 6% plus other standard ebook royalties that added some. Average per sale to the author about 42 cents. Number of readers to earn the $20,000?  About 48,000 sales over the contract time.

Indie Publishing: The Cash Flow

Okay, same book, authors finishes on March 1, 2011. The book is good enough to sell to traditional publisher, good enough to find 48,000 readers.

April 1, 2011: Proofing done, cover done, electronic launched. (Assume cover as good as cover from traditional publisher.)

May 1, 2011: POD launched and electronic distributed to most sites.  Process is finished. Author does a little tagging, announces the book, and goes back to work on the next book.

First small money would arrive to the author in July, 2011.

So, let’s talk about sales. Should I use Hocking’s numbers or Konrath’s sales numbers? We can all hope, but let’s stay mid-list and in reality for most of us.

Since traditional publisher priced the book at $6.99, let’s go to the more standard $4.99 per ebook price and $14.99 trade paper. For both that means the author will make about $3.25 or more per sale. (vs 42 cents per sale traditional) Let’s say after a normal few months of a slow start, the book starts selling about 3 copies per day total across all sites.

Does that sound like a lot? Yes, if you are only looking at one site. Realize there are dozens of outlets. Amazon is the most talked about, but when you count B&N, Smashwords, Kobo, Sony, iPad, and all the smaller stores they supply, plus overseas sales both on Kindle and iPad and Kobo and Sony, suddenly the number of possible outlets can get high. All coming back through those major players. Overstreet goes to libraries and don’t forget your POD sales as well.

So across all those sites I am saying the book will sell 3 copies per day. Total. Earning the author about $10.00 per day or $3,650.00 per year.

And those sales numbers are low enough, it should maintain that number for a lot of years.

Over the same ten-year period of the traditional publishing contract, the indie sales would get the author $36,500.00.

More than double what the author would earn in the same period of the traditional book. And only have to sell about 11,000 books over the ten years to do that, compared to the 40,000 plus the traditional publisher had to sell.

So how does that indie-published money flow?

Well, like anything in publishing, delayed, but compared to traditional publishing, the money comes at light speed and regularly.

Book goes fully listed May 1, 2011.

Sales for May on Kindle will be in your hands August 1. And then monthly after that since they are on a two-month lag. B&N is the same if the author went through Pubit.

Sony, Kobo, Smashwords are all on quarter pay system. They pay one month after the quarter ends. But to get your money from Apple, it will wait it’s few months, then report it to Smashwords or your other gateway to their site, then Smashwords will pay that money a month after the quarter.

So in other words, a sale of your book on Apple might take up to six months to reach you. Again, there is a pipeline to fill. But within six months, the pipeline will be working.

On the traditional method, the author hadn’t even sold the book in six months, let along started to generate any money.

Summary

-Both traditional and indie publishing have time lags in the money. Indie publishing, given the same quality book, the same level of cover, is a much shorter time lag. And with indie publishing stores reporting in so many different ways, it takes some work to see how many books in a certain time period a book actually sold.

For example, if an author had a book up and wanted to see how many copies the book sold in January, the author might have to wait until June to get some of those exact numbers.

However, discovering sales is far worse in traditional publishing. There the author is lucky to be able to figure out royalty statements for how many books sold and were held as reserves against return in a six-month period a year after publication. And that’s if the author can get the agent to send the royalty statements.

At least with indie publishing, with a little patience, an indie author can find out how many books sold exactly in any given month.

–Chance of Larger Sales.

If a traditional publisher offers $15,000.00 advance for the book, it is slotted and would take an act of a deity to move it out of that range and its slot on the publisher’s list.

In indie publishing, the readers might find the book and start talking about it and if the book has something special a traditional editor missed, the book’s sales could explode. Notice that selling 1/4 of the numbers made the indie author twice the money. If an indie author actually found the same 40,000 plus readers the traditional publisher found in the example, the author would make $120,000 plus off the same book.

Why can’t that same explosion happen in traditional publishing?

Because a book is slotted and a press run set. Once set, the publisher thinks of the book as something that will spoil, not grow, so after a certain time, even with some growing demand, the publisher will yank the book. I know, makes no sense, but don’t yell at me, it’s part of the produce model of publishing. To traditional publishers, books spoil. (Of course, to some indie publishers stuck in that mindset, they think the same thing. If sales don’t happen fast enough, they think they should pull the book and rewrite it. Too stupid for words. Books do not spoil. Let them find their readers.)

— Indie Publishers Have to Stop Watching Numbers. With this newfound access to sales numbers, there is also a bad trap. It simply takes time for any decent sales to happen. Often beginning writers will never see any decent sales happen. Just because an author puts a book up for readers to find doesn’t mean the book is worth reading or that the book will sell even three copies a month, let alone per day. In my example I used a book that would have sold for a decent amount to traditional publishing and then put the same level of cover on it for indie publishing. If a book wouldn’t sell to traditional publishing because of a bad opening, bad quality, a bad plot, then in indie publishing that same book won’t sell much.

But it will sell some.

Yes, I said that. A few sales are better than no sales. Stop watching sales, leave the book alone, and work on becoming a better storyteller on the next book. In traditional publishing, a beginning author’s book would be getting rejections. At least with indie publishing, a beginning author’s book gets a little trickle of money.

Cash flow for writers is critical, especially those of us who pay our house payments with fiction writing.

This one aspect alone is why so many known mid-list professional writers are going like crazy to get up at least their backlist books in electronic form. I’m one of them.

The idea of having some regular income flowing every month is just a stunner. I’ve been a freelance fiction writer for almost twenty-five years now and trust me, a regular check for my fiction writing just seems alien. And even though I’m starting to see it happen as my indie-published pipeline fills up slowly, I don’t really believe the idea of fiction writers getting regular checks. I am completely used to the traditional time lags and large checks and painfully extracting money out of publishers.

Getting regular money from my fiction is something I’m going to have to get used to.

But I love the idea.

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Copyright 2011 Dean Wesley Smith
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Okay, I admit it, I had issues at first with putting in a tip jar in the Magic Bakery. It was one of the “I have it made, why do I need to support my writing with tips.” A minor myth, sure, but still one that took me a few days and some talk with Kris to get past. And also, why put a tip jar in when I’m just trying to help people. But I figured I needed to get past that as well, so here it is.

And  speaking of the Magic Bakery, this chapter is now part of my inventory in my bakery. (Confused on that, read the Killing the Sacred Cows of Publishing post about making money with writing.) I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.

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!

Thanks, Dean


Killing the Sacred Cows of Publishing: Only 300 Writers Make a Living

This myth is so solid, I hear it repeated over and over again. And just today, a person I follow on Twitter repeated it yet again, sending all her followers to a web site that had some writer say simply “There are only about 200 or 300 writers making a living at fiction.” With nothing at all to back up the statement or even a second thought about what that statement meant if true.

The number is total and complete hogwash. I’m going to lay out some facts. And I will use math and other ugly arguments to show you that this number is a total and complete myth. And I hope to maybe dive a little into why this myth persists. Why beginning writers need it. So hang on. This myth is as ugly as it is stupid.

Before I go anywhere, there was an article in Publisher’s Weekly tracking the top book sales in 2009. For hardcover fiction, they list about 138 books down to 100,00 copies in hardback, for mass market the book had to sell above 500 thousand copies to even get mentioned, and trade paperbacks are added at certain levels. Go take a look at the article on Publisher’s Weekly and then read on.

Now, if you took a hard look at those numbers and authors, you would realize that even with the same author having more than one book on the lists, there are around 300 different names on those fiction lists. I am not on that list anywhere, neither is Kris or any number of writer friends who make their living writing fiction.

For the moment, let me leave that point and back up.

What is making a living?

For the longest time, I considered making a living at fiction at making more than $100,000 per year. Then in three or four workshops, I started talking to writers about reality. The writers’ reality and the amount it would take for them to “make a living.”

Most of the writers I talked to thought they would quit their day job if they were making fifty to sixty thousand a year with their writing. A number said that their spouse earned half their income, so they only needed thirty or forty thousand a years to make it happen.

After taking that poll for a number of workshops, I decided that six figures wasn’t required for “making a living” at fiction writing. Which just added in a lot more writers into the mix.

But for this discussion, lets just leave the number at one hundred thousand a year from your writing. Math is simpler. And besides, hard to argue with that number as a decent living in these recession times.

Right now, most new writers are saying, “Oh, I wish.” Yup, I would have to in my early days.

In the chapter FICTION WRITERS CAN’T MAKE A LIVING I talked about the Magic Bakery and talked about a theory where this 200 or 300 number comes from. So please right now go read that again and then come back, because now I’m going to jump off of some of those points. (And in the actual book this chapter will follow that chapter.)

Okay, now to that ugly math I promised above.

In the summary of book sales from 2009 in Publisher’s Weekly, the bottom book in Hardcover they listed had sold 100,099 copies.

So, the author makes on average 10% on each book sold (allowing for discount schedules and other contract things) and the book is priced at $25.00 (for easy math), the author makes $2.50 per book. 100,000 books equals $250,000. (Remember, that’s the very bottom PW figured was worth reporting.)

And it was for JUST THE HARDBACK. Now, if you went to the previous chapter on this topic and read about how a book or story works in the magic bakery, you will understand that this figures does not count any other income source for this one book. Paperback, audio, ePub, overseas sales to other countries, and so on and so on. And don’t even think about the money for possible movie options.

So bottom line, any author on that list from Publisher’s Weekly summary is making a LOT of money per book, far, far in excess of $100,000 per year.

On one book.

If you count all the different authors on those lists, which I did not exactly, but at a glance I can tell there are at least 300 different authors who made those lists. Some more than once. (See why the top brand name authors hit the Forbes Top Income Earners lists?)

Okay, so we’ve dealt now with the 300 top authors in fiction. But what about all the rest of us.

Or what about the fifty to one hundred writers who only sold between 80,000 and 100,000 hardbacks and didn’t make the list? Or what about those hundreds and hundreds of poor writers who only sold in the area of 30,000 copies in hardback and can only dream about that top list?

Let’s take one of them, shall we, and do that ugly math.

Same 10%, same $25 price, so author gets $2.50 per book. Author “ONLY” sells 30,000 copies in hardback, author only makes $75,000 in HARDBACK . Again, not counting all the other sales like paperback and overseas and so on. Again, we are back over six figures for that one book easily. Hundreds and hundreds more writers pile into the total number of writers who make a living.

I am still not included.

So, what about the writers who are more normal in publishing then the folks playing at the top levels? How do we make a living? How do us “working writers” do it who haven’t hit with any big books, or books that even sell 30,000 in hardback?

Actually, pretty simply. We write a lot more.

Back to the ugly math.

Say a writer does a small genre book. Books sells nicely at 20,000 copies in paperback actually sold. Writer got a $8,000 advance for the book. $6 book at 6% is .36 cents per book. Income is $7,200 so writer gets no more money than the advance, but publisher is happy and writer sells another book to them, or two or three.

So writer can do four books a year and makes $32,000 on just the advances from those books. (Now, remember that magic bakery?) Maybe not the second year at this pace, or the third, but at some point the author will have built up enough inventory that more things are popping. At four years, the author will have 16 novels finished. Overseas sales happen on a couple of them, audio sales happen every year on a couple of others, maybe a small option on one of them from Hollywood, rights reverted on two and the books are now selling on Kindle and other income sources directly to the writers.

And the pace just builds up. As each year goes by, more and more factors in the magic bakery kick in until at one point you find yourself doing just fine.

That’s the group I’m included in.

But understand I’m a lot faster than four books a year. I write across genres, I ghost novels for writers, I write a ton of short fiction as well. I make money on all of that as well with my little magic bakery.

Am I unusual? Oh, of course not. There are far more writers like me than writers on that big Publisher’s Weekly list. Or playing in the big books just under the list. In fact, the majority of writers who make their living at fiction seldom, if ever make that yearly list. Granted, those brand names on that list get all the press, but the thousands of us just working along do just fine and dandy.

SOME WONDERFUL NUMBERS

Bowker reported that last year (2009) there were 75,000 publishers.

Bowker reported that last year (2009) there were 47,541 NEW books published through standard fiction publishers. (Not counting POD at all.)

Bowker reported last year (2009) that three were 29,438 new young adult books published.

(Get the full report here.)

That means that EVERY DAY through normal major publishers there were 213 regular fiction and young adult fiction novels published. (47,541 plus 29,438 divided by 365 days.)

Every day.

Let me repeat that one more time to let it sink in. 213 NEW FICTION TITLES EVERY DAY.

Ugly math: If a writer could manage four books a year, it would take OVER 19,000 writers doing four books a year just to fill what was published last year.

19,000 writers doing four books a year. Or 38,000 writers doing two books a year.

Yup, there are only 300 writers making a living writing fiction. SNORT! Anyone who repeats that number is just too stupid to do a simple Google search to find the real truth.

(And also Bowker announced there were about 250,000 POD books done as well in 2009, but they didn’t break then down as to how many were fiction.)

Still don’t believe the numbers? Want a test as to how many fiction writers there really are with your own two eyes?

Walk into a Barnes and Noble superstore and stand just inside the door and look around. Realize that most of those books you are seeing in that store will be replaced by the “turn” in less than a month. And the ones up front will change daily or weekly.

Now simply start picking up books and see if you recognize the author name. Up front you’ll find the brand names and the folks who are on that big list. But at the new release table how many names do you recognize?

Then walk the aisle of the romance section, the mystery section, the science fiction section, and then go to big section, the “fiction” section. Your eye will be drawn to the big names scattered in there, but look between them and the thousands of authors with books there THAT month. Most of their books will be replaced within the month by the same number of new books coming in by a different thousand authors.

And B&N can’t begin to carry every one of the six thousand new books in fiction being put out every month between adult fiction and young adult.

The truth: The publishing industry is a huge machine that needs product.

I have no clue how many thousands and thousands of fiction books a standard superstore holds, but if there were only 300 major authors making their living and writing one or two books a year, those shelves would be pretty empty, those stores soon out of business.

So, why do I think this silly number, this stupid myth gets repeated over and over?

My opinion only. (No math, no study behind this opinion.) Two reasons. First, I think it’s fear that causes this myth. And it works like this:

New Writer is afraid to actually take a chance and write and practice and put work out there in the real world. And if there are only 300 people making a living at writing, it is therefore impossible to do and so why should I even try.

In other words, those who hold that silly myth and repeat it need the excuse it gives them for there own lack of trying.

Second reason: Ego. New writer writes a book, sends it to an agent, no agent likes it, so therefore IT’S HARD to get published, and that has to be because there are only 300 people doing it. It CAN’T be the new writer’s fault, it can’t be because the writer can’t write well enough to even get into the 77,000 new fiction books being published in a year. It can’t be because no one who could actually publish the book has even seen it because of a myth the writer believes in with agents. It has to be someone else’s fault because the writer thinks their very first book is brilliant. Ego.

Well, no excuse. Over 200 new fiction books a day are put out by major publishers in JUST THIS COUNTRY alone. You stop making excuses and get past the myths and get your skill levels up and do four books a year, after a few years you are making a living. And if you write something that hits bigger for you and you end up on that Publisher’s Weekly list, you are pretty rich by most standards.

That only 300 people make a living at writing fiction is the stupidest and most destructive myth outside of the agent myths. Time to get past your fear and your own ego and chase your dream of making a living at fiction.

There are a very, very large number of us doing just that. After all, someone has to fill those shelves every month.

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Copyright 2010 Dean Wesley Smith
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This is now part of my inventory in my bakery. (Confused on that, read the Killing the Sacred Cows of Publishing post about making money with writing.) I’m giving you this small slice as a sample. I’m giving you a taste, but not selling any of the pie.

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

And I would like to thank all the fine folks who have donated. Once this book is done, I will send you a copy. The donations and the comments both after the posts and privately are really keeping me going on this. Thanks!

If you can’t afford to donate, please feel free to pass this chapter along to others who might get some help from it. Every week or so I will be adding a new chapter on the myths and sacred cows of publishing. Stay tuned. Upcoming are chapters on bestsellers, having it made, more on agents, and so much more. This business has a lot of myths. An entire book full.

Thanks, Dean


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Sign-up and more information under Online Workshops tab at the top of the page.

Classic Workshops

You can sign up for these and start at any point. They are the regular workshops, only you don't send in the homework and you can take them as fast or as slow as you would like.

They are half the price of a regular six week workshop.

Classic Workshops offered.

Making a Living... Classic
Productivity... Classic
Discoverability... Classic
Writing in Series... Classic
Genre Structure... Classic

Lecture Series

More information on these lectures under the Lecture Series Tab above.

#1... Heinlein's Rules... Dean Wesley Smith 15 videos... $75.00

#2... Read Like a Writer... Kristine Kathryn Rusch... 8 videos... $50.00

#3... How to Write a Short Story: The Basics... Kristine Kathryn Rusch.... 7 videos... $50.00

#4... Writer's Block and Procrastination... Dean Wesley Smith... 8 videos... $50.00

#5... Carving Time Out for Your Writing... Dean Wesley Smith.... 8 videos... $50.00

#6... How to Research for Fiction Writers... Kristine Kathryn Rusch.... 14 videos... $75.00

#7... Pen Names: Help With the Decision... Dean Wesley Smith.... 10 videos... $50.00

#8... Motivation: Starting Easier and Writing More... Dean Wesley Smith.... 9 videos... $50.00

#9... Practice: The Attitude and Methods of Practice in Fiction... Dean Wesley Smith.... 10 videos... $50.00

#10... Master Plot Formula: How and Why It Works Today... Dean Wesley Smith.... 9 videos... $50.00

#11... Prolific Lecture: How to Become a Prolific Fiction Writer... Dean Wesley Smith.... 10 videos... $50.00

#12... The Stages of a Fiction Writer: How to Know Where You Are In Learning and How To Move Upward... Dean Wesley Smith.... 11 videos... $50.00

#13... Starting Writing. Or Restarting Your Writing... Dean Wesley Smith.... 9 videos... $50.00

#14... Endings: How to Write Them and Understand What Makes a Good Ending... Dean Wesley Smith.... 9 videos... $50.00

#15... Audio Narration Lecture... Jane Kennedy.... 9 audio lectures... $50.00

#16... Your Writing as an Investment Lecture... Dean Wesley Smith.... 9 videos... $50.00

#17... How to Get Your Books into Bookstores Lecture... Dean Wesley Smith.... 10 videos... $50.00

#18... How to Think Like a Science Fiction Writer Lecture... Kristine Kathryn Rusch....11 videos... $50.00

#19... Why Some Books Sell More Than Other Books... Dean Wesley Smith.... 9 videos... $50.00

#20... How to Write a Page Turning Novel or Story: Basics and Tricks ... Dean Wesley Smith.... 8 videos... $50.00

#21... The Basics of Designing Science Fiction Covers ... Allyson Longueira .... 8 videos... $50.00

#22... The Basics of Designing Mystery, Cozy, or Thriller Covers ... Allyson Longueira .... 8 videos... $50.00

#23... Paying the Price: A Working Writer's Mindset ... Dean Wesley Smith.... 10 videos... $50.00

#24... Writing into the Dark: The Tricks and Methods of Writing Without an Outline... Dean Wesley Smith... 12 videos... $50.00

#25... Reviews: The Good, the Bad, and the Ugly... Dean Wesley Smith... 10 videos... $50.00

#26... Organization... Allyson Longueira... 8 videos... $50.00

#27... Confidence... Dean Wesley Smith... 10 videos... $50.00

#28... Stories to Novels... Dean Wesley Smith... 9 videos... $50.00

My Publisher

WMG Publishing Inc. is now my major publisher of all my coming novels, collections, and short stories.

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