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F is for Finances

When someone sets out to become a self-supporting indie author there is a lot of discussion of finances. Discussions about being debt-free, having a healthy buffer, and even paying off the mortgage are common. None of these is bad. Doing a Total Money Makeover, at least to the debt-free except the mortgage and six-month emergency fund, would be the minimum to have done when purposely stepping out on your own.

That’s not what I want to talk about today.

When I look at the head at my journey to being a self-supporting indie author, I see it as building a business. The business’s product is a packaged version of my intellectual property. Writing will not be the business, or at least not entirely. While over time the packaged version of my intellectual property could be very broad, mostly through the sale of limited rights 1, the initial output will be various books, both eBooks and print on demand hardcopies. I might, might try to place some hard copies in local independent booksellers or sell them at cons, but the majority of these sales will be online.

So, I’m going to be in the book-making business. What are the start-up costs? It is easy to think they are free, but that is not the case. We need to be ready to purchase things in two broad areas before we can produce even one book. After the first book is produced we have another possible major purchase. Those three things are the machinery to make eBooks and files for POD books, the inputs that make up those books, and possibly advertising.

The machinery for book creation is pretty simple: something to edit the text in, something to edit covers and other images in, and something to put the text, the cover, and other images together with some formatting. These can range from free and open-source software from text editors and wordprocessors such as vim, emacs (I am writing this in emacs) or LibreOffice, image editors such as GIMP, and publishing software such as Scribus or a TeX setup of some sort. You can buy expensive software such as Word, Photoshop, and Vellum. Products like Scrivener combine two or more of these functions.

I write in vim and emacs, although I do own Scrivner. I’ll probably do any image manipulation in GIMP. I’m working on creating various book formats in LaTeX. Many people might decide not to develop the technical skill involved with those free programs. I have used vim and emacs professionally for years, decades in the case of vim. I have also used LaTeX extensively.

You also need a computer to run all this software on. If you don’t have one, learning some basics of Unix and using Linux and free software means you can run on older machines; people are now retiring. I have a very low-end Dell Laptop as my out and about computer. It was $300 new and runs all but GIMP fine. I haven’t tried GIMP on it, but I suspect it would suffice, if slowly.

So, to get into the business you need maybe $500 of equipment, at a minimum, if you use free software and low end, used equipment.

What about inputs? Well, if you’re interested in being an indie author the biggest input is your writing. While that is free in monetary terms, you need to manage its cost in time. Guard writing time carefully and keep it separate from business time. You’re going to be wearing two hats and keep them separate.

Buy two hats and switch them out if you need them to keep you in the right mindset. Call that $20.

You need a minimum of two images, maybe three. The obvious two are a cover and an author photo. The other you might want is a logo.

Have someone take a nice picture on your cell phone. My author photo was taken by C at the local Krispy Kreme. I also used it when my day job started requiring photos in your Outlook profile. It got compliments, so even a well-manipulated cell phone photo has potential (although she might have used her actual 35mm camera).

Covers are the hard part. You can either pay for one, which can range from $300 and up. Like everything, you get what you pay for. You can also buy some stock images and make your own via various image effects. There are lots of tutorials and at least one cover maker online. With the latter, you are going to be spending at least $25-50.

My intent for my first few books is to go the minimal viable project route and do my over covers. I’ll explain why when I get to advertising.

The final input you need is editing. Yes, you need editing. There are three kinds, proofreading, copy-editing, and developmental editing. The value of proofreading should be obvious. Having someone not you hunt down typos and grammar errors is going to be much more effective in even one pass than ten by you. There are books and methods to self-proof work, but I think it is worth the cost. A copy-editor does more in-depth work on the body text. I’m still torn on their value. I am still working on getting reliable numbers on either of these services. I suspect you’re looking at a $600 minimum for the most basic proofreading.

Last we come to the developmental editor. I hate to say this because I have a friend in the later business, but I cannot justify the cost of a developmental editor for a first book. My friend’s rates are $4-8 per page, so a development edit is going to be $1000 or more for a typical book. A new indie author, with no track record, is going to be pushing it to charge $4.99 per ebook. At Amazon’s rates, the 287th book will pay off the developmental edit. That’s before the cover is paid for or the proofreading and copy-edit.

The question is: will the developmental editing of this book sell 300 or more copies than would have sold without it. I remain unconvinced that it will over a reasonable time horizon. Remember, a dollar a year from now is worth less than a dollar today, yet most books do the majority of their sales the first year they are in print unless you develop a following. Anything that pushes your book earning out its costs past the one-year horizon is hard to justify.

A developmental editor can lead to a better book, but I question if they can lead to a higher selling product. If you are selling to a publishing house and they assign an editor they pay for who is willing to work with you, grab it with both hands. When it is your business taking the risk, ask lots of questions and for some proof that their contribution appears on the bottom line of your profit and loss statement as well as on the printed page.

Doing cost/benefit analysis leads us to advertising and why I do not see its value on the first book. If you only have one book to sell, spending a $1 getting someone who hasn’t read it before to read it is a big cost. I think you are better to husband your cash and advertise when you have several books available. Not every reader you sell with an ad will convert to multiple sales, but when you get one isn’t it better to sell them 10 books for that $1 than just one?

I think there is similar logic to the developmental editor. When you’ve established a back catalog and have decided you’re ready for the book you’re going to spend money to push, then spending the money on pulling out all the stops. As a reader, I’ll forgive clunky books from authors I’ve already bought into, especially if I know they are older than the books that made me a fan. However, I need to have bought in.

This might also be a good time to buy some quality covers on early works, especially ones related to the one you tend to advertise.

That brings me to my big finance thought on having an indie author publishing business. Your income from your early books, published while learning your craft and building your mailing list, isn’t free cash. The only outside use should be that debt payoff and buffer building I mentioned way back in the beginning. All the other cash should be retained for investing in the future. If you can’t afford a copy-edit on the first book, then do without, but save the money so book three or five or whenever you’ve saved enough can have one. Even go back and get a good copy-edit and proofreading on the first and release an “Author’s Prefered Edition” at some point.

When you add my numbers up. Even by learning to use open source software and substituting your labor for spending money on covers and layout, which does slow do producing not just this book but all its successors you’re looking at start-up costs in the $1200-$1500 range even with skipping all editing beyond basic proofreading. It’s daunting.

Just don’t let not being able to afford these “must-haves” stop you from starting. After all, the unproofread, lackluster cover minimal viable product mindset is what led to “20 Books to $50K”. Following that example, though, means reinvesting the profits from the early books into improving their successors and even them.

F is for finance. If you want to be a successful independent writer personal finances are only the beginning. You are starting a business and you need to be smart about its finances as well.

  1. See Dean Wesley Smith’s The Magical Bakery for more[]
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