And I wouldn't have posted at all if a few things hadn't happened this week that built into a crescendo when other acquaintances have asked for non-writing business advice.
Over the course of my life, I've been an IT project manager. I had to put together time and budget estimates for completing software. I've acting as a sounding board when my husband and his partners bought a software consulting firm. I've owned my own law firm.
Now, I own my own publishing company. I write up and spreadsheet sales and forecasts and projections and budgets.
And apparently, I'm the only one.
Or at least, I haven't anyone who truly treats writing and publishing as a business.
Let's talk about ROI again, that is a return on investment.
(If you want to see my rants concerning ROI in 2014 and again in 2015, feel free to do so.)
To review:
The return on an investment is when you divide the gain of the investment minus the cost of the investment by the cost of the investment. Or
ROI = (GOI - COI)/COI
It's approximately 90K words. At the time, I wrote about 500 words per hour, so it took me approximately180 hours to write the story. Let's say I, the publisher, paid me, the writer, $10 an hour.
DH did the photography for free. I bought food coloring, corn syrup, a dozen white roses, and a pewter pentacle. My costs were approximately $45. Plus it took me a couple of hours to play with Paint.net to create alter the cover picture and add the text, so add another $20 for my time
A friend and I edited each other's novels over coffee, so throw in $10 for my Starbucks card.
I know just enough HTML to be dangerous so I formatted this myself using freeware.
My costs of investment? $1800 + $45 + $20 + $10 + $0 = $1875
Therefore, my ROI for this book is ($404 - $1875)/$1875 = - $0.78
Not good, right? What did I do wrong?
Well, it's an obviously homemade cover, and the formatting, while adequate, wasn't pretty. Competition grew over those five years. I undercut myself on pricing. Add to that a bunch of personal shit so I didn't pay enough attention to my business from the end of 2013 to 2016.
Then I uploaded the new version to Amazon about a year ago for a test run. I'll compile sales in January of 2018 so I have a healthy year's worth of data.
If you've noticed, I haven't added any numbers for advertising. Why?
Because advertising has been budgeted for 2018 once I have all the Bloodlines books released. Frankly, I'll treat advertising as a separate ROI calculation as well as a production cost ROI.
I see too many indie writers through good money with absolutely no fucking clue of what their ROI is. How do I know this? Because I ask.
So one more time--writing is a business. Treat it like one!
I'm pretty sure the WMG crowd knows what their ROI is. And a few other writers from that peripheral group probably do too, although I haven't asked. But yeah, most writers are hard pressed to track income and expenditure numbers, much less do any calculations with them.
ReplyDeleteI think a lot of people believe that getting all "businessy" isn't worth it unless you can afford to move up a level of magnitude in your expenditures, so they ignore it. Too bad, but it's an education thing.
Angie
The difference with WMG is that the principals have owned, and still own, other non-publishing businesses. Also with the number of books they have out, they'd actually qualify as a medium-sized publisher. Most indies would be considered micro-publishers. I would consider WMG an exception to the rule.
DeleteOn the other hand, I've seen solo indies with no business plan, price their books at 99-cents, and drop $5K a month on advertising. Then they wonder why they aren't making money.