Why Indie Authors Need a Business Hat

by | Feb 8, 2016

When best-selling romance writer Sharon Hamilton quit her day job to write full time, she thought she was leaving the business world behind. After 25 years running her own real estate agency, she was sure she could “wing it” when it came to the business side of publishing her own books. But when Hamilton started selling books by the tens of thousands, she was caught in a bind.

“Unlike being a realtor, where the training is available, I found it difficult to find the good business information for writers,” Hamilton explained. “But I didn’t want to take time and attention away from my writing to set up and run a business.”

Sound familiar?

Many writers who dive into self-publishing are surprised to discover they are running a business. They have questions about incorporation and business licenses. They wonder what to do about sales taxes. They fear hiring editors, designers, and other freelancers.

Most of all, they don’t want to take time away from writing to figure it all out.

Sure, there is a lot of information scattered across the internet, but who has the patience to sort through such clutter? How do writers distinguish between useful insights from utter nonsense?

A few months ago, Joel approached me to see if we could put together a way to help authors through the process of setting up a publishing business quickly and easily. After 30 years of practicing business law, I knew the subject well, and I thought that we could do that, and got to work.

What would this help look like? What would be the ideal solution for today’s busy indie authors?

It seemed to me that it would have to include help with the critical tasks involved in setting up a business, including:

  • Deciding whether to form a corporation or limited liability company
  • Developing a realistic budget or a full-blown business plan
  • Choosing an imprint name, including where to search for possible conflicts
  • Obtaining business identification numbers, permits and licenses
  • Purchasing ISBNs
  • Setting up bank, PayPal and other business accounts
  • Accepting credit cards
  • Keeping track of income and expenses
  • Retaining business contracts and records
  • Understanding tax reporting and payment obligations
  • Financing through crowd-funding and other options
  • Hiring freelancers
  • Buying Insurance
  • Growing a business beyond the book

And it would be an even better solution if it included form contracts for hiring editors and designers, samples of key documents such as a release and a privacy statement, and a spreadsheet for helping you keep track of income and expenses.

That would really be something a lot of authors could use.

Are Authors In Business?

Some of you may be asking, why set up a business? There are many advantages to adopting good business practices, especially if you are self-publishing.

  • You’ll have more time for writing. You’ll save yourself hours of frustration digging through piles trying to find information.
  • You’ll be ready for success. As your sales increase, you will be prepared to measure and manage that growth.
  • You’ll avoid losses. If you have a better handle on cash flow, you’ll know when your expenses are getting too far ahead of your income.
  • You’ll know what works. If you have a method of tracking sales, you’ll know which marketing efforts paid off and which were a bust.
  • You’ll avoid mistakes, like forgetting to collect and pay sales tax or to deliver 1099s to freelancers.
  • You’ll save on taxes. If you operate your writing venture as a business, you are more likely to be able to deduct writing expenses from your non-writing income and reduce your tax bill.
  • You’ll feel more legit. If you don’t treat your writing as a legitimate business, then no one else will, particularly the IRS.
  • Your heirs will thank you. If you are hit by the proverbial bus, your heirs will appreciate your organization.

As Hamilton discovered, by setting up her business and operating it with a little discipline, she had more time, more focus, and more “mojo” for her writing. She has gone on to become an NYT and USA/Today bestselling author and is most known for her SEAL Brotherhood series.

Free Webinar on Thursday

On Thursday Joel will host me on a free webinar called “Why Authors Who Want to Self-Publish Need a Business Hat.”

In this educational presentation you’ll learn about subjects like:

  • The steps needed to enter the business of self-publishing
  • Developing a realistic budget, a full-blown business plan, and your tax options.
  • Working with vendors, editors and hiring freelancers, and other contract-based workers.
  • Purchasing your own ISBNs,
  • Setting up bank, PayPal and other business accounts,
  • Accepting credit cards, and
  • Keeping track of income and expenses.

At the end of the webinar Joel will show you the solution that we came up with to help you set yourself up as a self-publisher. We call it “Publishing Business in a Box” and there’s nothing else like it anywhere. Join us live, and I’ll see you on the webinar.

When: Thursday, February 11, 2016 at 1:00 p.m. Pacific (4:00 p.m. Eastern)
Webinar registration: Why Authors Who Want to Self-Publish Need a Business Hat
Format: Presentation from 1:00 – 2:00, followed by Q & A with Helen 2:00 – 2:30

 
Photo: bigstockphoto.com

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7 Comments

  1. Allan Pos

    Why is outsourcing an integral part of your business? Check out this here to learn about new opportunities for your company. They are a global SaaS customer service company, can find out this here the most effective solutions to improve metrics such as customer satisfaction, turnaround time and first call resolution. I hope that professional 24/7 support can turn any business from good to great. That’s why I only take employees for my center from there, in my experience they are the most qualified and know how to communicate with customers.

    Reply
  2. Amy

    I just discovered this post, and am in serious need of this information. Is there a recorded version of the webinar available, or perhaps any dates in 2017 when you will run it again? I would really appreciate any help you can offer.

    Reply
  3. K

    Hi, Helen. Since you mentioned imprints, I’d like to ask about them. I read that there aren’t any legal steps for a self-publisher to take to create an imprint (which has to be done to purchase ISBNs, so it can’t really be skirted). It seems like the author would only need to create a business for the name if they intend to accept payment under it. Is this correct? Thank you!

    Reply
  4. Michael N. Marcus

    I seldom wear hats but I’ve had my own tiny publishing company sine 2008 — a reaction to horrors dealing with ‘real’ publishers.

    I’ve witnessed and advised many writers who wanted to become publishers. One of their most common mistakes is choosing a bad name for their companies.

    Fortune 500 companies often spend hundreds of thousands of dollars and many months to develop names for household products, cars and websites. It’s possible to do it in less time and at little or no cost, but be careful.

    Here are some tips:

    (1) Pick a name that sounds substantial. If your name is Joe Smith, don’t use “Joe’s Book Company.” “Smith Publishing” sounds a little bit better, but I recommend not using you own name in the company name. When you write a letter on your new letterhead, it’s better if the name in the logo at the top is not the same as the name in the signature on the bottom. Let people at least think that there might be more than one person on your staff.

    (2) Don’t use a name that’s too limiting. You may think you’ll publish books only about car repair, ballet or vegetable-growing, but a too-specific name will hurt your chances to expand if you change your mind later. It may be tough to market a sci-fi book if your company name is “Ballerina Books” and your logo is a tutu or ballet slippers.

    (3) Don’t pick a name that’s already in use. You probably don’t have to pay a lawyer to do a trademark search, but at least do a web search with several search engines, and check Writer’s Market to make sure that no other publisher is already using your proposed name.

    (4) Don’t pick a name that sounds like another publisher. Calling your new company “Random Home” or “Random Books” will invite a lawsuit from Random House. I don’t know if Esquire Publications has been sued by Esquire Magazine. Be cautious about using the name of another company even in an unrelated field. Although Cadillac pet food and Cadillac cars coexisted for years, the Toyota Motor Company sued the company that intended to market Toyota recording tape. You could go broke defending a lawsuit.

    (5) Pick a name that works with a logo. It could be an actual photo or drawing, or just interesting typography. It’s nice to have more than a name to put on your books, business cards, letterhead and website.

    (6) Unless your specialty is grunge or mayhem. Try for a name that sounds pleasant. I named my company “Silver Sands Books,” after a local beach.

    (7) Try for a short name. It will be tough to fit “Xylophone Publications Internationale of Philadelphia” on the spine of a thin book. Also, the longer a name is, the more likely it is to be spelled wrong in emails and web searches.

    (8) Register the name in the local municipal office that registers names, often the town clerk’s office. You will get an “assumed name” certificate or a DBA (Doing Business As) certificate. Even if you are not incorporating as “ABC Books, Inc.” you should get a legal document to prove that you have the right to use the “ABC Books” name. You’ll need that paper to open a bank account in your new business name. You should also consider registering your business name and logo as a trademark with the Feds. Ask an attorney about it.

    (9) Start using the name. Even if your first book is six months away, establish a website immediately to announce your planned books and talk about your company. Send out a press release to announce the new business. Order business cards. These simple and inexpensive activities will help establish “prior use” if another company later wants to grab your name. Within a few weeks of registering your name, you’ll probably start to receive letters from local insurance companies and accountants and the Chamber of Commerce who pay your local government to receive lists of new businesses. Even if you have no plans to use their services, the letters addressed to your business may help to establish legitimacy later on.

    (10) Get a business-like email address. “[email protected]” is more impressive than [email protected].

    (11) For your website and email address, avoid hyphenations and top-level domains other than “dot com.” The more unusual your company name is, the more likely you are to get a dot com web address.

    Reply
  5. Dan Sofer

    Thanks, Helen and Joel!

    Request: can you cover the business topics from the point of view of writers who are not US residents/citizens as well?
    For example, the feasibility/pros/cons of setting up a US company.

    Reply

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