Deb Simpson : Your Book's Bottom Line – The Cost of Book Development
Your Book's Bottom Line
Birthing a Book: The Cost of Development
By Deb Simpson
"How is your book doing? Making any money yet?"
Did you know?
• Book sales are considered to be income, reportable to local, state and federal agencies. • Self-published authors are operating a business (whether they declare it as such or not) and local, state and federal laws, licensure, and taxes may apply. • Authors need to know how to keep records of sales, promotions, donations, etc. • Authors may need the services of an small business accountant and attorney. • Authors may need to consider establishing a licensed business entity to separate their personal finances from their author related finances.
These are the questions frequently asked of authors. Many people believe that writers benefit financially whenever their written works are published. All too often, this is not true. In fact, many of us write and publish for reasons other than income: to support causes we care about, to share unique experiences, or simply to leave a legacy. Whatever our reasons for writing, we still need to know whether our earnings exceed our expenses, and whether our book sales result in profit or loss.
For a writer, every moment is an opportunity to write, to create. When those precious tidbits of time are consumed by counting pennies rather than creating poetry and prose, a writer may fear loss of the muse or loss of momentum. So, how do we keep the required drudgery of bookkeeping for our books from stealing our writing time?
This is the topic of "My Book's Bottom Line", a four-part series of short articles designed to provide writers with tools to simplify financial tracking and shorten the time spent on these mundane but necessary tasks. This article will focus on book development costs, an area often forgotten in an author's accounts.
When we think of developing a book, we generally think of the author's time and effort, not the real tangible costs involved in creating and protecting a written work. This may include any of the following types of expenditures (specific to the book under development):
For example: the development costs for my children's book Pink Place & Blue Blaze, A Special Edition included the purchase of art supplies used for the book's illustrations, while development costs for my poetic memoir One Moment, One Memory, One Motion included the payment of royalty fees for artwork used to complement the book's poignant poetry. The development costs for these specific works ranged from $200 to $500. This cost needs to be considered in the final tally of my book's bottom line.
This can be done using pen, paper and a calculator; or in a simple spreadsheet (such as Microsoft Excel). I use Excel as my tracking tool, as it is easy to set up, can be updated quickly, and can provide me with a summary snapshot in moments, without relying on my math skills! For ease in presentation, I am providing the example below in a table format. However, I will be providing a link to a FREE preformatted spreadsheet on my website, at the conclusion of this four part series.
Example: Development Costs for Pink Place & Blue Blaze, A Special Edition:
Why do I need to consider these costs in my book's bookkeeping? If this book sells 100 copies, then the development costs for each book sold equals $5.54. If the book sells 1000 copies, the cost per book is only fifty-five cents. As you can see, the development costs must be considered to determine my book's bottom line.
The next installment of this four-part series will focus on promotion costs, marketing, advertising, book reviews, promotional items (bookmarks, etc) and promotional events (book launch parties, signings, etc.) related to getting your book known (and hopefully sold!). •
Authors: The sidebar to this article provides a few key reminders about seeing your books from a financial and legal perspective.
© 2011 Deb Simpson. All rights reserved.
Deb Simpson writes fiction, nonfiction, and poetry. She's been employed in the healthcare industry for more than twenty years and holds a degree in Business Management. More »