“Budget” is not a bad word.
Okay, so it brings to mind images of serious, scowling penny-pinchers who drain all the fun out of life by demanding that 99.994% of your income goes to paying down debt and saving for a rainy day.
But really, a budget can be the thing that unlocks a lot of opportunity in your life. It sets out a plan for where your money will go, letting you think about more important things (like writing) and, crucially for an author, lets you set yourself up for success with your next book launch.
Viewed from that perspective, a budget is an essential planning tool on your publishing journey—it lets you know how much actual profit you’re making from your books.
And that means that instead of being a ball and chain preventing you from having any fun, a book budget can turn into the very thing that liberates you from your day job and from your financial worries by allowing you to flourish as a full-time author!
Why Do I Need a Budget?
Simply put, you need a budget to see where your money is going. That lets you figure out how to save money when the numbers aren’t adding up, and it also lets you see when you start to make money—it puts the break-even point in clear black and white in front of you.
You don’t have to spend a whole lot of money to self-publish a book, even one that can compete with traditionally published books in terms of editorial and design quality. In fact, depending on your choices, you can spend as little as $200 to $1,000 to get started.
But you should know where you’re spending that money so that you can prioritize the things that really matter to you, like great editing or a world-class cover design.
By creating a budget, you can see what money absolutely needs to get spent and where you might need to brush up your skills, saving money through DIY efforts.
Then, once your book is in the marketplace, you can track your sales and apply that revenue against your expenses. You’ll be able to see at a glance when you’ve paid off the up-front investment you made in producing your book.
And that data can help you out down the line! As you write more books, you’ll learn more about what resources you have to accelerate reaching your break-even point, such as good relationships with editors or marketing strategies that have a great return on investment. You can try new things and, through the magic of budgeting, know that you have enough money to cover them while still carrying on with production of your next book.
Really, having a book budget makes the entire production process smoother and clearer. You know how much money you have available, what you need to spend, and what you need to bring in to recoup your investment. Then you can take that money and apply it to a new book to exponentially increase your results.
With smart budgeting, you can build on each book’s success to become more and more profitable, building your sustainable author career!
Essential Book Budget Categories
Every author’s experience is a little different, but nearly all books should have a few elements in common on their budget.
Development
There’s a lot to developing a book, mostly the various levels of editing: developmental editing, copyediting, proofreading, etc. The editing for your book is one of the largest items on your budget, and it’s one you shouldn’t skimp on.
You can do a lot of prep work to help reduce the cost of editing—by learning to edit your own work, you can correct many problems before sending your draft off to a professional editor. You can also rely on friends and acquaintances as volunteer beta readers or draft editors, to help you work through issues with plot, pacing, and structure as well as finding typos.
However, you shouldn’t rely on volunteers for everything in editing. Your best friend’s ex-roommate might have been an English major in college, but that doesn’t mean he knows the first thing about doing developmental edits for a manuscript to help tighten it up and polish it.
And readers can tell the difference. One of the main complaints readers tend to make about self-published books is that they don’t feel professional—and by that, they mean they don’t feel like they’ve been carefully edited to eliminate gaps in the narrative, streamline wordiness, stamp out repetition, and so on. And that isn’t even getting into issues with typos or homophone confusion!
So spend the money to hire a professional editor. Even if you’re just looking for basic copyediting, it’ll be money well spent.
You can always save some cash by getting your readers to proofread the final book in exchange for a free advance copy—while professional proofreaders are incredibly effective, it’s better to spend your money on a developmental or copy editor.
Other developmental costs include the fees for any photos you want to include in the book, permission fees for using song lyrics or other copyrighted materials, and so on.
Design
The design of your book sets you apart from the crowd. The cover draws readers in, the interior design creates an enjoyable reading experience, and the typesetting and formatting subtly demonstrate the professional polish you’ve put into your work. This is a key budgeting area for any indie author who wants to look as good or better than a Big Five book!
Cover Design
Cover design is a critical component of a great book that will knock readers’ socks off.
This is another place where you should budget the most you can reasonably afford, because cheap Fiverr designs or generic covers from a “cover mill” that churns out hundreds of designs and then just plops your title on it won’t impress your audience.
Does this mean you have to spend $2,000 on a cover drawn by hand by a famous artist?
Heck no!
It just means that you’re best off having a cover custom-designed for your unique book, using images and fonts that match up with your themes and that won’t look like 30 other books on the market.
A quick search on Upwork or Google can yield plenty of cover designers to choose from, at very reasonable rates. But be sure that the designer knows the specifications you’re looking for when you get a quote—you want to be sure that you’ll be getting a huge, well-crafted ebook cover, for instance, or that your print designer knows what CMYK is and can adhere to the bleed and trim standards set by your printer. Believe it or not, plenty of designers today aren’t familiar with print standards and this can cause you a lot of budget issues if you have to upload revisions!
Typesetting
In traditional publishing, “typesetting” refers to laying out a book’s interior for print. Today, it’s kind of a general category that refers to prepping your book for whatever format it’s going to be displayed in, whether that’s digital or in print.
Again, it’s important to have a professional-looking book, because otherwise readers will point out errors in reviews, potentially turning off other buyers.
But basic typesetting for a novel or a nonfiction manuscript that doesn’t include a ton of images or complex formatting isn’t too expensive, and this is one area where you can learn to DIY.
Microsoft Word and Pages for Mac aren’t really the best tools to use for producing a professional book, either in digital or print form, but they’ll do the trick when you’re first starting out.
And you can always hire out the typesetting of your book, budgeting for work done through Upwork or for buying a handy formatting template online.
Production
Production covers an awful lot of ground in a book budget. This could mean something as simple as “uploading your ebook to Amazon” or something as complex as “having 5,000 paperback copies printed, bound, and warehoused.”
In most cases, you can minimize your production costs by using print-on-demand services like CreateSpace or Ingram Spark. Such services let you deduct the cost of producing a print book from the sale price of the book, so you don’t have to pay up front for printing.
On the upside, no huge printing bills! On the downside, the cost to produce each book is much higher—anywhere from $3 to $10 per copy, as opposed to about $1 for a standard traditional print run of paperbacks.
Some print-on-demand companies charge a setup fee for your book, such as $75 to upload, but then offer lower prices for printing actual orders. One way a budget can really help you reach profitability as an indie author is by allowing you to compare the profit you’d make on, say, a CreateSpace book versus Ingram Spark. You can compare the revenue you’d receive per book from each company based on its estimated production costs and whether there’s a setup fee.
When working with a print-on-demand company, you’ll often be able to choose a digital or “soft” proof instead of a hard-copy proof, saving anywhere from $5 to $40 in the production process.
You won’t have a physical copy of the book in your hands to check for errors, but careful reading of the supplied PDF proof can usually ensure that you don’t wind up with any expensive mistakes that need to be corrected.
If you’re feeling antsy about how your cover will look like in glossy stock or whether the font will be legible at 6×9 inches, then go ahead and order a physical proof. Just be sure to budget for it!
You’ll also want to budget for buying your ISBN in this category, to ensure that your book has all the metadata it needs to be sold in any channel possible. Plan to formally register your copyright? Budget for it here.
Production costs can also include the cost of producing an audiobook to go with your ebook and print editions. This isn’t a strictly necessary cost, and you might be able to find audiobook creators on ACX who are willing to work for a share of royalties rather than an up-front fee, but if you plan to offer audiobooks of your work, you should be sure to budget for it here.
Marketing
The marketing section of your book budget is one of the hardest to pin down. You know you need to spend money on editing and design, and you can probably save some dollars by getting hands-on with the typesetting. Production expenses can often be trimmed by paying via deductions from sales through print-on-demand or by hiring audiobook specialists who will work for a portion of royalties.
But marketing? This section could expand to eat up all the money you have available and more!
Thankfully, there are great free and low-cost marketing tools available to help today’s authors. So your budget here can actually be pretty tight.
However, you should definitely include some money for Google ads, Goodreads ads, and paid promotions elsewhere, like on BookBub or Buck Books. You may also want to include some money for swag like free bookmarks to give away, or even for custom merch like tee shirts or mugs.
This would also be the place to budget for virtual book tours, paid book reviews, or hiring a PR manager for your book.
Sample Book Budgets
So what does all this look like in practice?
Check it out!
This document is a basic expense tracker, allowing you to budget out the costs involved in producing your book. Your book may not include some of these costs or it might add others, depending on your needs. Feel free to modify it for your next title!
To go one step further, turn that budget into a publishing P&L, or profit and loss statement, that tracks your income from sales against what you’ve spent to produce the book.
That looks like this:
5 Key Budgeting Uses
A basic budget is good for a lot more than just planning out your expenses. Check it out!
1. See when you’re profitable
Knowing when you’re making money is the single best use of a budget!
Ideally, you want to be making money, rather than recouping expenses, as quickly as possible. For instance, if you make $3,000 in sales, you’re doing better if your book cost $500 to produce than if it cost $1,000—you’re profitable faster.
By knowing exactly what you’re going to spend, you can see how many sales it will take through what channels to become profitable. You can also track your sales stats against your budget to know exactly when you’ve hit that tipping point in the real world and started making a profit.
With this knowledge, you can start making changes to how you produce books in the future to reduce your expenses and increase your sales potential and revenue, accelerating the growth and profitability of your writing business.
2. Allocate production money
If you know you have $1,000 available to launch your next book, having a budget spreadsheet set up is a huge help for figuring out where to spend it.
Just plug in the numbers for each area and see how your totals come out. Are you over budget in one area? See if you can trim down another. Maybe you can’t afford to hire a professional proofreader this time; strike that item off the list and get some friends to do it so that you can pay for the amazing custom cover that will grab readers on Amazon.
3. Compare print vendors
Plugging in printer fees can open your eyes to where the best value is. Sure, CreateSpace doesn’t charge upload or setup fees, but do you get more for your money by paying $50 to Ingram Spark to produce your book?
Run estimates of the revenue you’d earn with each through your budgeting spreadsheet and you might realize one is better for your sales strategy than the other, in terms of expanded distribution, incoming revenue, etc.
4. Try new marketing strategies
By playing with your marketing allocations, you can try out different strategies and evaluate which has the best return on investment for your books.
Some people get great results from Goodreads ads—give that $100 on your budget and see if you start making more sales from Goodreads. If it doesn’t work, reallocate your marketing budget and try spending that $100 on Facebook ads or a Buck Books promotion instead.
By keeping track of what you’ve spent and the revenue you can directly tie to that spending as part of an ongoing book budget, you can plan future releases for maximum impact as well as enhancing the sales of your current books.
5. Reconfigure your sales strategy
When you have a solid budget made up for your book, you can expand on it to create a profit and loss sheet, or a P&L. This tool is used by traditional publishers to estimate what profit a book will generate in the first year it’s on the market.
But you can use it to figure out whether you should be pursuing different sales strategies. Will you make more money by going exclusive with KDP Select? Should you add library accounts to your mix? You can plug different numbers into your planning spreadsheet to see what would happen.
No comments:
Post a Comment