I’m going to be a little ranty today and this may not apply to all my readers, so apologies in advance for that. This post is geared towards any writers or other creative types or self-employed types that are making money through sales of a product.
Was that vague enough?
Basically, I’m going to focus on writing here. But it can apply to others. And the key is that it doesn’t matter if you’re going the “traditional” route and selling stories to magazines and books to publishers or if you’re going the “indie” route and selling via Amazon, Createspace, or in person.
The point is, once you start selling your product, you are running a business. And you need to treat it that way.
Given my background (MBA, self-employed father, etc.) it’s second nature to me to think of my activities as a business and treat them that way.
How? Well, for starters, by KNOWING WHAT I EARNED LAST YEAR.
Yep, I just shouted that. Because there was a snafu this year with Amazon’s 1099’s. Didn’t affect everyone, but did affect many. Basically, they sent out 1099’s with the wrong amount on them. And the discussions I saw around that make me cringe.
First, there are the authors who had no idea what they earned last year. None. They got the 1099’s and assumed they were correct. It appears some of them still don’t know how far off the 1099’s were because they haven’t gone back to their bank accounts and added up the numbers even though they’ve now known for a couple weeks that the original numbers were wrong.
We’re talking people making thousands of dollars a month from their writing and they have no clue what their income was last year.
Me? I have a spreadsheet that lists every payment I received last year. I knew as soon as I compared the spreadsheet to my 1099 that it was wrong.
Second, there were people advising that you just use your own numbers and don’t worry about it if you get a 1099 or not. Problem there is that you do not want to report less money received to the IRS than the people who pay you report to them. (And with Amazon they report more than they pay you on foreign sales due to some currency conversion fees. So you can’t just go ahead with your numbers.)
Another example. Last year I negotiated for my DC contract that my client would pay for me to take the pup and drive out there and that they’d pay for us to drive back when we were done. I negotiated a flat fee each way. I assumed it would be treated like an expense reimbursement and never show up on my 1099, but it did. If I’d just filed my taxes without looking at that 1099, I’d probably be facing an audit from the IRS for under-reporting my income.
Once you turn this into a business, you have to treat it like one. At least, at a minimum, for tax purposes. Know what you earn. (And what you spend…)
Better yet? Run your business.
I saw someone else post about not checking their sales for the next year. Now, granted, with trade publishing this kind of happens anyway. But, wouldn’t it be good to know things like:
1. Which of your titles sell right out the gate? (So you can write a follow-up or related story or novel. I did that and am glad I did.)
2. Which days you should publish on? (It does affect sales.)
3. Which advertisements or promotions led to increased sales and which didn’t? (So you don’t throw good money after bad.)
4. Which series are growing and which aren’t?
5. What your conversion rate from one book to another is? (You may have a great premise that draws people into the first one, but something in the writing keeps them from continuing.)
Etc., etc., etc.
I can see not checking sales if you’re not working it as a business. If you’re going to put out one book a year and not promote in between, then, yeah, don’t check sales. They’ll probably be zero six months out.
(And if they aren’t zero and you aren’t on top of that you’re losing an opportunity. Says the person who just argued the other day for the slow approach and not being now, now, now, about publishing. I know…I have issues.)
If you are actively promoting, publishing, updating, etc. you should track your performance. Figure out what works.
And if you’re going the traditional route, how about:
1. Who has your stories?
2. Who has agreed to publish your stories?
3. Who owes you a contract?
4. Who owes you payment for a story?
5. When a story is going to come out?
6. What rights you’ve sold for each story/novel? Who to?
7. Who owes you royalty payments? When should those arrive? How much were they last time?
To me the money thing is a must. I don’t care if it’s $5 or $5,000, if someone owes me money, I have that written down and will follow-up until I get that money.
And knowing where my works are available or where I’ve subbed is essential, too.
But that’s just me I guess.
To each their own, but…come on.