Business Resources for Authors

Why Go Indie?

by Suzan Harden

“Do what you love and the money will follow.” — Marsha Sinetar

Why have so many writers slung on the indie mantle? In a word—money.

For reality’s sake, let’s look at a typical mid-list author, i.e. NOT Stephen King or J.K. Rowling. The simple breakdown goes like this:

Scenario A:  Writer sells first book to traditional publishing company (“TPC”) and contracts for 8% royalties (which is actually high for a first novel, but let’s roll with it) on a mass market paperback book (or MMPB). TPC sells the book for a suggested retail price of $7.99 each. (This is a very simplified version of what really happens. There’s a complex system involving distributors, buyers and retail stores.) This means Writer gets eight cents out of every dollar, or in this case, she’ll get $0.64 for every book sold.

Scenario B:  Writer publishes her own book on Amazon, who takes a 30% cut to cover their overhead plus a $0.01/kilobyte transmission fee. Writer’s book is four kilobytes (roughly the size of a standard 90,000-word novel), and she sells her book for $2.99. Now, Writer gets $2.05 for every book sold.

Writer would only have to sell one Scenario B book for every 3.2 Scenario A books to make the same amount of money.

If you want a more extensive take on numbers, check out Dean Wesley Smith’s blog post on The Math of It All, a breakdown of what it takes to make money at indie publishing. (For those who may not know, Dean is an award-winning author, a former editor with Simon and Schuster, and a publisher who’s been in this business for 30+ years.)

Another thing to consider is “the long tail” as Dean puts it. Digital books are not removed from the virtual shelf to make room for incoming shipments like they are in a physical store. In other words, your book can literally NEVER GO OUT OF PRINT. By making your book available FOREVER, you could conceivably be making money FOREVER.

Having the math thrown in my face is exactly what happened to me. My husband started researching the business side of things in the fall of 2010. (What can I say? He’s the supportive type.) He asked me pointblank what a traditionally published critique partner was making in terms of royalties. I told him. Then Mr. Practical stared at me like I’d grown a second head and said, “Why the hell don’t you indie publish? You’ll be farther ahead.”

Sometimes you can’t argue with common sense.

While you may be ahead of the game on a per book basis if you indie publish, there are a lot of other things to consider.

  • Do you have the time and energy to run your own publishing business?
  • Are you willing to educate yourself on aspects other than craft in order to succeed as an indie writer?
  • Do you have the seed money to get your business started?

“Wait!”  y’all are shouting. “Money? What about Yog’s Law?”

Yes, Science fiction writer James D. Macdonald is totally correct. Money SHOULD flow to the writer. But guess what, folks? If you decide to indie publish, you’re now the publisher, not just the writer. And You the Publisher will be in the prime position to make sure You the Writer doesn’t get screwed. BUT (and this is a very big ‘but’ as shown by the capital letters) there are NO GUARANTEES that You the Publisher will be able to make money for You the Writer. And You the Publisher will definitely have to cough up some dough to cover some production costs.

One of the major pluses of indie publishing is there’s a lot you can do yourself if you’re willing to learn. And I’ll definitely give you some tips on saving money and cutting costs where you can.

Which brings us to the reason for creating a business plan.

Every business, even a publishing company, should have a business plan, a guide to what you hope to accomplish, how the daily business will be done, and what the business is looking at in terms of profit and losses.

Just remember that a business plan is a living, breathing document. It will need to change as external factors and your own desires change.

So get out your pen and paper (or your laptop) and let’s get started!

I.  The Executive Summary

This a fancy name for ‘What I Plan to Do’. Most business plan guides suggest doing this last and working on financials first. To me, that’s like a New Yorker putting all her time into planning a car trip, then deciding to go to Hawaii. A little back-ass-wards, right? That doesn’t mean you shouldn’t refine it later when you got the details down.

Here’s an example from my own business plan:

Original Version:  I will publish my fiction in both e-formats and print format through multiple retailers with the ultimate goal of making a living from my fiction.

Current version:  Angry Sheep Publishing will publish approximately four new urban fantasy and/or erotica books in both e-formats and print per year with the goal of making X dollars per year.

See what’s the same and what’s different?

When I practiced law, I used the Small Business Administration’s business plan template, but you’ll see from looking at it, it’s geared more towards the manufacturing and service industries. Over the next few days, I will discuss the tweaks I made to make the template a usable outline for an indie start-up and give you some resources to check out.

Continue to Creating a Business Plan for the Indie Writer #2: It’s a Business; Treat It Like One

Why Go Indie? was originally posted on Pitch University in August 2011. Suzan Harden revised the article in April 2012 for inclusion here. 

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