This is the time of year many writers start to prepare for their New Year’s goals. What will they write? How many books will they release and at what times? Will they pursue something different or stay with the same series or genre? Where will they invest their time in 2018?
So many questions; and it can become daunting. I’ve found that the more I know, the more daunting it becomes. Back in 2011 when I simultaneously published a contracted fiction book and an indie book, I thought there was no doubt I would be a bestseller within two years. I was working toward my third novel and thought, for sure, that would be the time I’d hit a list. How exciting! How naive.
In 2014, I settled down (I had to because I was suddenly retired 4 years ahead of plan) and needed to seriously reassess how to make this new career pay off or go find something else. In previous careers, I knew how to look at profit and loss, create budgets, analyze what was working and what wasn’t. I’d both worked for large, established corporations and for startups. I’d been in business for myself and in Academia. Why hadn’t I applied those skills to my writing career? Two reasons: 1) I believed writing was a completely creative endeavor. I love to write and tell stories, so it was just a matter of finding the right story in the right genre at the right time and magic would happen. 2) One of the reasons I planned for my writing career to carry me into retirement and beyond was that I believed it wouldn’t take that much work. When I wrote short stories and had them accepted in magazines and anthologies, it was a fairly painless process. Spend a couple of days writing, another one editing and then send it off. Sure I got plenty of rejections, but I also got plenty of acceptances. Even my first couple of novels seemed fairly easy. They took longer and needed more editing, but it wasn’t painful. And I was writing those while working a job that required 50-60 hours per week from me on a regular basis
There are a lot of memes on the web that say: “Never look back, that is your past. Move forward to your future.” Or something similar. I’m a person who believes if you don’t look back with honesty and evaluate what happened and why, then your path forward will be more difficult. Because you will just keep trying new things without any experience to inform your deisions. Especially for authors, or any creatives, it is true that there is no one way that works for everybody. Though your books are products, they are not widgets. The process for creating that book is as different as each individual, and the outcome is also as different. You have to understand what happened in the past and embrace it for the learning experience it provided. Take what worked and move forward. Understand what didn’t work and learn from it.
I believe in the quote above: Moving on is a process; moving forward is a choice…Moving on is letting things happen; moving forward is making things happen. For three years I let things happen. Yes, I studied and learned. But I still believed in magic. I still believed in the outliers being the norm. To make things happen means having knowledge of what to do and why. To make things happen means hard work and persistence. That is what the past provides. That is what learning provides. Moving forward is not passive, it is active..
I’m pretty sure I was not alone in this belief that writing books is not at all like running a business. I had transitioned from the traditional, contracted publishing world where agents and publishers always did a kind of virtual pat on the head and told me to go be creative and they would take care of the rest. I figured that indie publishing would be that way too. Sure, I knew I had to pay for some up front things like covers and editing. I could do the formatting and loading myself. But then you left it alone and wrote the next book. Well, that didn’t work so well for me.
Turns out, writing IS a business. Whether you are traditionally published or indie published, if you want it to be a career that pays real bills on a regular basis, you have to treat it as a business. That means looking at income and expenses, profit and loss, and analyzing what is working and why so you can duplicate that success and build on it. It means keeping on top of the industry and it’s changes and making decisions–sometimes scary investment decisions–on what you will adopt and what you will not. If this isn’t something you are willing to do–either on your own or by hiring trusted advisors (a CPA was #1 on my list in 2014)–then chances are you would never make enough to consistently have a career that could pay the bills.
How Do You Analyze Income and Expenses? Profit and Loss?
There is a lot of depth to this discussion, some of which I honestly leave to my CPA. That’s why I pay her. However, there are three things you can look at yourself with a basic spreadsheet or a pad of paper with columns and a calculator.
- Which books are selling and which ones are not? This changes from month to month. So, the question is what has happened that makes one book sell and another not.
- What did I do to push a particular book or series and how did that impact sales?
- How much am I spending in time and in money to get a book out there? How much do I need to make to break even?
If you do this when you are starting out, it will scare you to death. And it should. It should let you know that you are in the investment phase and making no profit when you start out.
I’m going to do these calculations for my first indie book. I’m not even going to do it for my traditional book because that took four years of sending out before I got an agent and another year before I had a contract. So, even looking at 5 years of time spent without income would blow it out of the water. What is a fair value for your time? Even though my first published book was actually the fourth novel I had written, it still had a lot of learning and editing to do. I assigned the minimum wage in Oregon at that time which was $8.80 per hour. (Note: It is now $10.75 and $12 in the metro area where I live). If I had charged per hour what I was making in my day job, that would also not be fair because I had trained for years to do that–30 years in fact. So, I valued my writing as if I was starting over.
Writing novel took ~200 hours (I didn’t really keep track back then)
Editing took 20 hours (I was stupid, I didn’t pay for an editor then and it bit me in reviews)
Total Hours = 220 at $8.80 per hour = $1,936
I paid for a full wrap (print) cover design = $150 (the ebook front cover was included in price)
Formatting I did myself = 4 hours at $8.80 per hour = $35.20
Loading to vendors = 2 hours $17.60
Paid for a blog tour, which was all the rage then = $75.00 (I don’t remember how many hours I spent answering questions in the blog, but it wasn’t much because the truth is the same 10 or so people followed me throughout the tour and asked similar questions)
Total Expenses = $2,213.80
I began pricing the book at $4.99 on the advice of some friends. However, I don’t get to use that number to determine my breakeven point. Because at the best rates from a vendor I made ~$3.50 per book (remember 70%). Divide cost by per book rate and that meant in order to breakeven on my costs, I needed to sell 633 e-books. That first year I sold 283 e-books. However, I did sell 26 print books making $135 after print costs and 40-60% to vendor is deducted. So, my total income in the first year was $990 plus $135 = $1,125.50 for a loss of $1,088.
Just as a comparison, my trad book with a small press that year netted me less than $500.
Some of those depressing numbers have to do with the state of the industry back then, as well as my lack of knowledge on what to do that might work. It also has a lot to do with not having any other books in that genre available.
Let’s compare this to a release in April 2017 of a novella. This was in a series, where I already had 3 other novels and a novelette. I also had spent the year building my mailing list and a street team. I did not pay for any ads. I did not do a blog tour. What I did was push to my social media and to my email list.
Total costs for my time writing and editing, and my time managing ARCs (my time cost is now at the minimum wae of $10.25 per hour which was the 2017 rate in Oregon) = $425
Cover Design = $125, Editing = $350 Total Cost = $900
Why the lower cost? I write faster and cleaner than I did when I started. Also my novella was 35K words vs 75K words for my 2011 novel.
Launched at 99 cents to my street team. Download of 284 books. = My income $93.72.
Two days moved price to $2.99 and over next two weeks sold 2,533 books all ebooks. Income $5,301. Total income in first month = $5,394.72 Profit = $4,494.72 I haven’t calculated it for the year yet.
That is just on that book. There has also been sell through to other books in the series. I haven’t done the annual calculations yet. The point is it took time, patience, paying attention to what needed to happen and doing those things. Now, if I could make this every month I would be at my $50K goal. But I’m not because to repeat this means I would have to put out a new book every month and probably in this same series.
So, what did I learn?
2011 to 2014 were the naive years. Even though I knew a lot, I wasn’t implementing. I was in the glow of being a “writer” not the reality of being a business. 2014-2016 where the transition and experiment years. I learned to move from writer to author entrepreneur, or as Joanna Penn calls it Authorpreneur. I learned what I need to give up and where I need to focus. I learned a lot about balance and imbalance between a career and a life. 2017 (actually 1/2 of 2017) I finally put it all together and saw what the work of the previous 5 years had done.
- Having a mailing list makes a difference (I’m currently at 12K but only half of that are the readers in the genre of that novella, about 6K). It probably cost me around $1,000 to build that mailing list–Facebook Ads, offering a free book, taking a course to learn how to do FB ads. Click through to sales pages from my mailing list was about 22%. So, probably 1/2 of the total book sales. However, that cost will continue to pay off in book after book.
- Having a street team makes a difference. It was my street team and my ARC team that did ALL of the reviews in the first week. I had 125 people on my team then, so more than my team took advantage of the 99 cent reduced price. Other reviews came later. It was people buying at the reduced 99 cent level that made a difference in getting the paid numbers up in the beginning so that when it went to regular price it could take off. What do I spend on my street team? About $50 per month in a variety of giveaways, birthday celebrations, etc.
- Having a decent social media following makes a difference. My social media following back then was probably 800 on FB and 4K on Twitter. It is now significantly larger because I’ve worked more on it. How much time to I spend on social media posts? About 10 hours per month = $102.50
- Having a backlist in the genre makes a difference. It is hard to put a number to that today, as I haven’t calculated it. But my guess is that 1/3rd of people who buy the new book go back to buy at least one more book. It may be more.
- Books do not stand alone as a single profit entity, they are related. When one book does well, follow through to others may do well too. Therefore more books means more profit, particularly when they are in series.
Moving Forward What Does it Mean?
- Continue to invest in building my mailing list and my street team.
- Continue to invest in communicating with my readers.
- Continue to invest time in social media. It is a small investment of my time compared to payoff.
- Accept that I am a three genre writer and that means that different book releases may payoff differently. Romance will pay off better because I have the most books in that genre. Fantasy may not pay off until the third book is out and I have a solid plan for where that is going. Nonfiction will continue to payoff but my mailing list numbers there are not as large.
- Focus on writing more in each of my series. Write more books in 2018 than I did in 2017. Automate as much as possible to cut down on time not writing. Make strategic investments in people and/or software that adds to profit.
I’ll share my goals next time. What my schedule is going to be for 2018. I always have a schedule and I always fight to keep to it. I rarely stay exactly to schedule. Opportunities come up that make sense. To put it in my schedule means either something else is pulled out, or I have to write faster or be more efficient to keep both of them. That is another value of entrepreneurs. You DO have a plan, but you also make space for change. Some change are challenges that impact your goals–health, family, sudden unplanned costs. Other changes are takin advantage of opportunities. But to do that you have to understand what the impact is on your goals as you evaluate whether to do it or not. Every challenge is different. Everyone has a different tolerance for how much change they can incorporate in their life. Review the first quote on this blog. Balance is moving forward. You cannot move forward without some change.
What have you learned in the past year? Are you satisfied with what happened? Is there anything you would change?
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