The title of this post has been my mantra since I decided to indie publish. I emphasized it when I wrote a few guest posts for other bloggers on developing a business plan for indie publishing. I was reminded of it during a discussion on the comments on Monday's post (definitely one of those cases where comments went off on a side tangent).
Regardless of whether you go the trad-published, indie published, or hybrid routes, you are self-employed. You are operating a small business.
I think that's where a lot of writers make their mistakes. Writing is not a business. To them, it's art. It's a dream. It's the lottery.
Which it may be all those things to you. But when you are offering your writing for money, it has now become a business, too
And like any business, you, as the owner, have to keep a handle on your overhead. Otherwise, your business is going to failure.
Statistics on business success/failure vary. Under some outdated information, the U.S. Small Business Administration estimated over fifty percent of new businesses failed in the first year. With the widespread use of computers and access to relevant information through the internet, the failure rate is probably much closer to Canada's four percent failure rate in the first year.
When it comes to a new business failing, the two biggest reasons are lack of adequate planning and lack of adequate capital. And believe me, the two go hand in hand.
So going back to Monday's discussion, here's part of how I planned for adequate capital. I don't NEED caffeine while I write, but my work habits are deeply ingrained from my days in IT. That means my brain goes into work mode if I have a caffeinated beverage sitting next to my computer, like the black tea sitting next to me right now. (Even with electric for the microwave and dishwasher, the cost of the mug of tea is less than $0.05.)
From a business point of view, it's not worth the time necessary to retrain my habits. (I generally assign $10/hr to my time because it's easy to calculate.) Therefore, I've added caffeine into my business budget.
Generally, I buy soda, tea and coffee from the grocery store. I search out sales and add in coupons to keep that budget under control. For example, even if I buy Starbucks coffee and sugar-free peppermint mocha creamer at the grocery store, it still comes out less than $0.20 per cup.
But I also budget for the occasional trip to a restaurant or café. Occasionally changing my work environment can trigger additional productivity. (YMMV on that one.)
However, there's the question of drinkability when I venture outside of the house, which is why I don't go to McDonald's. I swear the only time I've ever tossed a full cup of coffee in the trash, it was a McDonald's peppermint mocha. I shudder at the memory even now. Blech!
And if I'm not in walking distance, which I never am, I have to factor in gas money.
So in Houston in December, I would go to one of the closest Starbucks (2 miles away so roundtrip is 4 miles) and get a venti peppermint mocha. That's $5.25 for the coffee, $0.50 for the tip, plus gas at $3.00/gallon and a car that gets 20 miles/gallon.
$5.25 + $0.50 + $0.80 = $6.55
Lost writing time is only 10 minutes or $1.67.
$6.55 + 1.67 = $ 8.22
In Ohio in December, the cost would remain the same except for gas. Bowling Green, and the closest Starbucks, is twenty miles away. That adds an extra $6.00 to my overhead compared to the $0.80 for gas in Houston.
$5.25 + $0.50 + $6.00 = $11.75
Oh, and I lost an hour of writing time on the drive to and from Bowling Green.
$11.75 + $10.00 - $21.75
So my overhead has now nearly tripled for the sake of my peccadillo. Not good business, folks. Not good business at all.
To put it another way, I'd have to sell eleven books to cover my trip to Bowling Green compared to the sale of four books covering one trip in Houston.
This is exactly where most business people lose their way. These little costs add up. If you're not selling enough to cover your costs, your business will go under.
It's why I dreaded seeing statements from new writers about how much they spent on cover art, editing, etc., back when I put out by business planning series in 2012. So many of these folks are having to go back to their day jobs now because they spent way more money than they had coming in.
This is not to disparage one of DH's mantras, "You have to spend money to make money." However, I do believe it's in your best interests to find the best quality at the lowest price.
Remember, selling your stories means you are now in commerce, not art. If you want to keep writing full-time, you've got to keep that overhead under control. Writing is a business. Treat it like one.