Taking Care of Business – What Do You Do When You’re Not Writing?

 

So, you finish your first draft of your second novel and you take a brief break before editing. How do you take care of the business of being an author? Here are 13 tips on Taking care of business.

What is there to the business of writing and selling your books? Don’t you just post your book to Amazon, Ingram, Barnes & Noble, and watch the money roll in?

Let’s assume the best and the money is rolling in: your books are selling like $1.00 iPhones. Where’s the money going? How much is going in? What are you paying in royalties to these web site sellers?

In other words, before you sell a book online, you need a bank account to hold the incoming money. And it’d be nice to track how many you sell, how much money you get, and how much you pay to your seller(s).

Suppose you say, “I hate computers! I’ll print my books and sell them from door to door!” Great! How many will you print? Who will print them? How will they be shipped? What is the total cost per book for each one shipped? How many do you have to sell to break even? To earn $10,000? $100,000? How long will it take to reach that many? What number of books do you order each time?  Do you have enough money? And finally, do you have enough storage space?

So Andy, What Are the Answers to “Taking Care of Business”???

Every author has to answer these questions. Here are my answers. Ask me, I’ll give you a free copy of my spreadsheet that I use, complete with formulae.

1. Where’s the money going?

First of all, track every receipt. Have a paper or electronic journal where you enter every sale–especially cash receipts.  In the flurry of sales at an author appearance it’s so easy to pile bills in your wallet, pocket, or purse and forget how many books you actually sold. I use this Excel spreadsheet and keep my book receipt cash is a separate pocket or envelop.

Here’s what my sales spreadsheet looks like:

2. How much is going in?

My spreadsheet also answers this. Look at column H, Revenue/Royalty. This is the money you get.

3. What are you paying in royalties to these web site sellers?

The answer is in column J, discount/commission. This is the percentage you pay to the seller, off the retail price.  For Zombie Turkeys, the retail price is $12.95 for the print book and $2.99 for the ebook.

Bank account details

I created a savings and checking account devoted to my book business.  Then I incorporated in Illinois as a limited liability company, corporation sole. I set up Amazon and Paypal to route to my checking account. Finally, I created a merchant account to handle my credit card sales

More Questions and Answers

4. How many will you print?

I created a chart in my spreadsheet comparing Amazon and Ingram prices. Those are the two low cost printers on the internet. Here it is:

I computed my profit and cost per book for various quantities printed. I decided to print fifty, because I didn’t want too much money tied up in inventory. The green line (Amazon profit) is higher than the blue Ingram profit line at fifty, so I ordered the books from Createspace. The two suppliers are equal at 250 and higher than that, I’ll go with Ingram.

5. Who will print them?

This chart also shows the two printers I picked. There are a lot of printers out there, these are just the best I’ve found. I looked at about five. When you get this free spreadsheet, you can put in your own numbers.  Here’s the rest of this sheet:

6. How will they be shipped?

Normally, I just look for the cheapest price. I made sure to bake the shipping cost into my price per book from the various printers.  Sometimes you need an emergency shipment to get books fast, especially if you carry low inventory, like I do. Then you’ve got to recompute the best deal with the more expensive shipping.

7. What is the total cost per book for each one shipped?

In my spreadsheet I add the book cost, the shipping cost, and taxes and divide it by the number of books I’m ordering. I did this for various order quantities to create the chart you see above.

8. How many do you have to sell to break even?

Simply divide the per book cost  (column I) into the total cost of the shipment (column F).  That’s your break even quantity

9. To earn $10,000? $100,000? Divide your per book cost into any number you wish to find how many it’ll take you to reach any revenue number. Or you can compute how many books you must sell to reach $100,000 profit. Your profit margin is your selling price, minus discount or commission, minus printing cost. See column G in the profit and cost analysis sheet.

10. How long will it take to reach your goal?

Here you take a look at your rate of sales. Say you sell 10 books a day and you need 10,000 books sold to make $100,000. That’ll take you 1,000 days, or about two and a half years.

11. What quantity do you order each time?

How fast will are you selling books? If I’m selling a hundred a day, I’ll order thousands of books.  If it’s only one a day, it’s fifty. The point is, you don’t want your money tied up in books you don’t know when they will sell.

12. What can you afford to buy?

If you only have limited cash, you won’t be able to order thousands of books. Order what you can afford.

13. Can you store the books you order?

Another factor is you must store the books you buy. A thousand books take up a lot of room.

Finally, how do I get your spreadsheet?

First, subscribe to my newsletter here. That way I’ll have your email to send it to you.

Secondly, send me an email or message requesting it.  I’ll send it to you!

Signed,

Andy Zach