Balance Sheet for Conmergence
I'm hoping to have the ebook edition of Conmergence up by Monday. I was going to bring the POD and ebook out at the same time, but I decided it's less stress to do it this way.
I promised I would log the steps of my journey for those interested. The big step I took this week was setting up a business account so I can keep my writing expenses and income separate from my personal accounts. It's too expensive to incorporate yet, although that is safer, so I have a sole-proprietorship. However, having a separate account should help me out at tax-time. I deposited $150 to maintain the account. Good practice would have been to deposit the money I needed in the account, then draw out my expenses. I haven't done that. I won't take any money for expenses out of the account until I see money actually going in.
I registered on Amazon's CreateSpace program under my business name and linked the royalties to directly deposit in the account.
I have kept an ongoing balance sheet:
Production
Publishing and Distribution
Promotion
I budgeted a maximum of $1000 and there are still some expenses I haven't had to pay for yet, but probably will. However, I originally thought editing would be $400. I was delighted when it was less. (Probably because a lot of these stories have been published before and needed minimum editing.)
Now, how much do I expect to make? The real answer is I HAVE NO CLUE. But that's not business-like, so I'll give you an OMAF (Out of My Arse Fact).
I read that one can expect a sell-through rate of about 3% on an average list. I have a list of about 1000 people -- that is how many people I can reasonably and reliably expect to tell about my book. If three out of every hundred who hear about it actually buy the book, I will sell thirty books.
Yes. Thirty. That's how many books I expect to sell.
I will be making $2 (net) on each ebook. So I expect to make $60.
Hm.
60 - 340 = -280
That leaves me in the red to the tune of $280. This may be why my husband objects to my business plan.
I need to sell 170 books to break even.
Certain factors could improve this picture. I will do a blog tour, to try to tell more people about the book. And if readers like the book and start telling friends about it, that would be wonderful. I have no way of controlling word-of-mouth, besides trying to write as compelling fiction as I can, and packaging it as beautifully as I can afford. Even if I never earn out my advance (so to speak) I hope to give those who do read the book an enjoyable experience and a lovely object of art.
Another way I could do better is if I had a higher buy-in from my list. If out of my 1000 something internet buddies, there was buy-in rate of 20%, I could sell 200 copies, make $400 net, cover my costs and make $60 profit.
Bottom line, I don't expect I can make much more than lunch money on one book. That's why I already have plans to bring out more ebooks.
Of course, I hope my sales of Conmergence will be better than I've estimated. With ebook sales increasing by 193%, from $89.8 million for 2009 to $263 million in 2010 this is a great time to publish an ebook. But other people's success doesn't guarantee mine. Conmergence might do worse. I imagine it's possible a month could go by and find me selling only 3 or 4 copies. If that happens, I will cry. But I won't give up.
I am trying hard to behave like a grown-up and approach writing as a business venture, and I hope one day it will help me support my family. But I am still an artist, one with more hope than financial sense, and I'll keep trying even when a realistic look at the numbers dictates quitting now.
I promised I would log the steps of my journey for those interested. The big step I took this week was setting up a business account so I can keep my writing expenses and income separate from my personal accounts. It's too expensive to incorporate yet, although that is safer, so I have a sole-proprietorship. However, having a separate account should help me out at tax-time. I deposited $150 to maintain the account. Good practice would have been to deposit the money I needed in the account, then draw out my expenses. I haven't done that. I won't take any money for expenses out of the account until I see money actually going in.
I registered on Amazon's CreateSpace program under my business name and linked the royalties to directly deposit in the account.
I have kept an ongoing balance sheet:
Production
Cover Art: $15
Interior Design: $10
Editing: $175
Subtotal: $200
Publishing and Distribution
Amazon Pro: $40
Promotion
Total: $340
Webpage: $100 (one year at Wix)
Booktrailers: $0 (so far)
Subtotal: $140
I budgeted a maximum of $1000 and there are still some expenses I haven't had to pay for yet, but probably will. However, I originally thought editing would be $400. I was delighted when it was less. (Probably because a lot of these stories have been published before and needed minimum editing.)
Now, how much do I expect to make? The real answer is I HAVE NO CLUE. But that's not business-like, so I'll give you an OMAF (Out of My Arse Fact).
I read that one can expect a sell-through rate of about 3% on an average list. I have a list of about 1000 people -- that is how many people I can reasonably and reliably expect to tell about my book. If three out of every hundred who hear about it actually buy the book, I will sell thirty books.
Yes. Thirty. That's how many books I expect to sell.
I will be making $2 (net) on each ebook. So I expect to make $60.
Hm.
60 - 340 = -280
That leaves me in the red to the tune of $280. This may be why my husband objects to my business plan.
I need to sell 170 books to break even.
Certain factors could improve this picture. I will do a blog tour, to try to tell more people about the book. And if readers like the book and start telling friends about it, that would be wonderful. I have no way of controlling word-of-mouth, besides trying to write as compelling fiction as I can, and packaging it as beautifully as I can afford. Even if I never earn out my advance (so to speak) I hope to give those who do read the book an enjoyable experience and a lovely object of art.
Another way I could do better is if I had a higher buy-in from my list. If out of my 1000 something internet buddies, there was buy-in rate of 20%, I could sell 200 copies, make $400 net, cover my costs and make $60 profit.
Bottom line, I don't expect I can make much more than lunch money on one book. That's why I already have plans to bring out more ebooks.
Of course, I hope my sales of Conmergence will be better than I've estimated. With ebook sales increasing by 193%, from $89.8 million for 2009 to $263 million in 2010 this is a great time to publish an ebook. But other people's success doesn't guarantee mine. Conmergence might do worse. I imagine it's possible a month could go by and find me selling only 3 or 4 copies. If that happens, I will cry. But I won't give up.
I am trying hard to behave like a grown-up and approach writing as a business venture, and I hope one day it will help me support my family. But I am still an artist, one with more hope than financial sense, and I'll keep trying even when a realistic look at the numbers dictates quitting now.
Comments
By holding out for, I mean twitching in anticipation of. I want to hold than insanely great cover in my own two hands.
BUT I have kept account in a spreadsheet of every single purchase I've made for the book. It is organized. :)
I'm going to buy the print version as well as the Kindle. I already bought the Kindle and THEN saw your post to not buy it. Sorry!
Don't worry about what you've spent so much as what OTHER positive things you get from doing this. I pretty much have CINDERS to owe to my book deal with Rhemalda for MONARCH. I wouldn't have found out about them at the time I did, if at all.
That, and CINDERS has gotten my name out there anyway, and now I've got some back list for when MONARCH comes out because THIRDS will be out by then, as well.
Starting your own business is always going to cost you at first. I think you're being smart and adult about everything. :)
I have to sell over 1700 copies of my novel to break even!
You can do a guest post on my blog, if you like! Probably better to do it after I release my full-length novel when my blog will hopefully increase in readership.