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Category: Business

And when I die…

Posted in Business, and Just for Writers

Image of steps for business succession planningAnd when I die,
and when I'm dead, dead and gone,
There'll be one child born in this
world to carry on,
There'll be one child born
to carry on.

–Laura Nyro

Let's talk about estate planning for independent-author/publishers. Not a fun topic, I know, but there's no point shoving our heads into the sand in the enthusiasm of the young indie-author revolution and pretending that we're going to live forever.

Business succession planning

All businesses face succession issues — who will take over for key managers and employees. In larger firms, this is just a normal plan, part of the annual review of the business's readiness to handle change.

Family businesses have additional challenges — what will be the role of the family members in the business once the founder dies or retires? Will they run the business, or will they just own it and let others run it? Will they sell it, and how?

A business is an engine for making money. Without the right people in place to make it work, or someone to sell it to, it falls apart.

We indie-authors/publishers are typically one-man businesses. We don't think in terms of key employees, since we haven't got any, but we are ourselves the key employee, and we need to make plans for what will happen when we are no longer able to run our business. And if we've managed to grow large enough to have actual employees, we have the same issues as any other small business. We need a business succession plan.

Broadening your business

Posted in Business, and Just for Writers

Chart of men building a business from the ground upResting on your laurels

You've climbed that first hill. Congratulations!

You've written a book or several, you've presented the world with a few well-written, well-formatted, well-edited stories, and you're settling into a world of writing, pleased that you've come some distance up the path from your initial indie panic at all the different skills you need (not least your writing skills).

Your pencils are sharpened and you're ready to really bear down on the writing process, now that you have a handle on it and know how your books will actually make it into the book retail trade, and who you can call upon for extra help when you need it for covers, etc.

STOP. WAKE UP.

What is it we find backward about traditional authors and author-wannabes? The notion that all they need to do is write, and someone else will take care of all that stinky stuff like marketing and all the business issues.

Is that what you want to do?

Don't forget — you're not an indie AUTHOR, you're an indie AUTHOR-PUBLISHER. You don't get to just disappear into your writing and hope that everything else can just follow the initial methods you've chopped out of your research for how-to-publish, as though that were something static and unchanging.

No, that's just the FIRST step.

Tracking your book sales

Posted in Business, and Just for Writers

An image of chartsOne frequent question from new independent writers is “What tool can I use to track my book sales?” They're looking for the right tool to fetch and consolidate all of their sales data.

In genealogical circles, a similar question is “Who can tell me about my family's ancestry?” and it's the subject of an amusing and sardonic tall tale that tells of the search for the file that contains all the answers.

The same answer applies to both: “Sorry, buddy, you gotta do all that work yourself. Nobody's already done it for you.”

If you're only distributed by one retailer, like Amazon, or you're using one of the current tools that make a serious effort to capture some (but not all) of your unit sales — and that satisfies you — then this is not the article for you. I won't be critiquing the currently available tools because none of them can provide a single platform for tracking ALL your sales in ALL your channels, nor provide you with all the information you want to track, if you can.

You're going to have to build that yourself.

Let's start by exploring what, in an ideal universe, you would want to track about your book sales over time, and why.

Goals

The devil's in the details…

Sales by month (units and $)

Surely it's not too great a burden to go to each of your channels just after the end of the month to get your basic numbers. For me, that's

  • Direct: Amazon, Barnes & Noble, Kobo, Smashwords
  • Distributors: (Kobo, Smashwords), PublishDrive, StreetLib, IngramSpark, and AuthorsRepublic (audio).

But that doesn't really tell you much except what to expect on a royalty statement when you get paid. Nor does it account for other kinds of sales, such as direct sales at a book fair, books sold on consignment in local stores, or your ecommerce sales. So that's incomplete.

And it also doesn't provide the information you need to draw trend and analysis data, unless you keep such details as Title, Format, Price, Language, etc.

For marketing and promotional purposes, you also want to see the details of “which retailer” for the distributors, as well as the country.

Financial Systems

Then there's the question about what level of detail should get into your actual accounting system, vs tracking and analysis. After all, when royalties arrive, you have to record them somewhere. Your accounting system is where you track money, but it's not a good place for all the non-financial detail. It cares about monthly sales by royalty payer, not the details about individual channels.

You need two levels of information:

  • Simple per-royalty-payer financial information and physical inventory tracking (those book boxes in your garage)
  • Highly detailed sales information at the deepest level available from your channels and distributors

Evaluating your business

Posted in Business, and Just for Writers

Image of financial tools and resultsAs authors and publishers, we hear a lot about new tools intended to improve the performance of our business in areas like marketing, formatting, distribution, outsourcing, and so forth.

What I'd like to see more of is articles about how to evaluate our businesses, to look upon our activity as authors and publishers just as if we were a small factory.

What that means is being able to ask questions like these:

  • Is our business model sound?
  • Is it improving over time?
  • Is it covering all of our costs, including those not specific to individual titles?
  • Are we actually making a profit, and how long should we expect that to take, after starting the business?

It's not just a matter of counting our sales at the end of the year.

What's the point of financial analysis?

An Income Statement isn't just a tedious document that old-style businesses put together — when done right, it's vital and important information to help you direct your spending and efforts.

I've been a Chief Operating Officer and a Chief Financial Officer for several small-medium businesses, both public and private — all of them young (1-10 years old). I'll use accounting terminology from the USA business world, but all countries do similar things though the terms may vary.

I'll focus on three ways to look at our businesses, and the data we need to support that.

1. Gross income — your business model

When we start as indie authors, we generally focus on the creation of work to publish (I'll call that “books” or “titles”, whatever you may be writing), and the delivery of that work to distribution and retail publishing channels.

Over time, many of us develop additional ways to earn income. As an example, I have the following channels today, in various stages of maturity:

  • Creation and sale of 24 titles (my own books)
  • Publication of titles for others (publishing work, several imprints)
  • Consulting work for colleagues
  • Speaking engagements

Each of these is a “line of business”, with its own costs and income. Some are relatively predictable while others are not, but all can be grown by marketing, if that seems like a worthwhile investment.