As an author all you want to do is create. No one told you that you were about to become a small business owner. An entrepreneur. A solo-preneur. Not once in all those fantasies of a laptop angled just right in front of the window of your office over looking the lake in your picturesque log cabin, or your flat in Manhattan, did you picture yourself having to do a P&L report or a cash flow projection.
Today, I am here to burst your bubble. If you want to be successful, you must run your writing career as a small business. You must track cash flow to determine your next business move. You must file taxes and you must take every nuance of the business end of writing as seriously as your take the works you type on the screen. If you do not, you are doomed to be classified as a hobbyist author by the IRS, by money lenders and by investors. If you want to buy a house some day and the bank asks what you do for a living, and you say “I’m an author”, you had better be ready to back that up with proof you take yourself seriously if you expect them to.
Yes, authors must abide by the laws and practices of small business ownership if they are to succeed and turn a profit. There are many resources that share best Small Business practices, however I want to share this amazing article by Forbes about the 5 things that will Sink a Business, because authors, YOU ARE A BUSINESS, whether you know it or not.
Here is my take on each mistake…
Bad accounting – If you don’t keep track of what is coming in versus what is going out, you won’t be able to make wise decisions about growth. Deciding on your next step. This is every bit as much true for deciding which book to write next as it is for car companies to decide which car to design next. Being a creative is not an excuse to ignore the bottom line, unless the IRS is right, and you are a hobbyist.
Combined bank accounts – You may not be making much money at first, but if you get in the habit of doing things the right way from the beginning, as you grow and you have to pay yourself as well as your personal assistant, it is easier to learn to manage two accounts and the flow through when there is only $100 bucks flowing than when there is $50,000. Start on the right foot now and learn as you grow.
Poorly priced products – This is a pet peeve of mine. I understand why authors give books away. And I agree it can be a powerful tool. However, you spent a good portion of your life writing and working that novel into a master piece, I think turning around and telling your readers it is worth $0 is a mistake. You don’t see Ford giving away thousands of cars in an effort to get their patrons to buy the next one. How is your effort any less valuable? Some authors swear by it, but from what I have seen is that sort of thing attracts people who would not pay for a book no matter how good it was. That’s just bad business.
Non existent investing – In the beginning I am all about doing things on the cheap, however at some point you have to be willing to invest in yourself. If you don’t find value in what you are doing, how can you expect others to? Authors invest in themselves by taking classes to learn new things, paying for resources and paying for services because you cannot be the best at everything.
Non existent online presence – There are many small businesses that just don’t want to do this, but we all know, especially in the publishing industry. Brand is key, and your online brand is everything. You are not just selling books, you are selling your author personality. That is how you build trust and repeat business.
But don’t take my word for it, read what Forbes has to say about it here and remember, you are a small business. It’s time to think like a business owner.
Today, I am here to burst your bubble. If you want to be successful, you must run your writing career as a small business. You must track cash flow to determine your next business move. You must file taxes and you must take every nuance of the business end of writing as seriously as your take the works you type on the screen. If you do not, you are doomed to be classified as a hobbyist author by the IRS, by money lenders and by investors. If you want to buy a house some day and the bank asks what you do for a living, and you say “I’m an author”, you had better be ready to back that up with proof you take yourself seriously if you expect them to.
Yes, authors must abide by the laws and practices of small business ownership if they are to succeed and turn a profit. There are many resources that share best Small Business practices, however I want to share this amazing article by Forbes about the 5 things that will Sink a Business, because authors, YOU ARE A BUSINESS, whether you know it or not.
Here is my take on each mistake…
Bad accounting – If you don’t keep track of what is coming in versus what is going out, you won’t be able to make wise decisions about growth. Deciding on your next step. This is every bit as much true for deciding which book to write next as it is for car companies to decide which car to design next. Being a creative is not an excuse to ignore the bottom line, unless the IRS is right, and you are a hobbyist.
Combined bank accounts – You may not be making much money at first, but if you get in the habit of doing things the right way from the beginning, as you grow and you have to pay yourself as well as your personal assistant, it is easier to learn to manage two accounts and the flow through when there is only $100 bucks flowing than when there is $50,000. Start on the right foot now and learn as you grow.
Poorly priced products – This is a pet peeve of mine. I understand why authors give books away. And I agree it can be a powerful tool. However, you spent a good portion of your life writing and working that novel into a master piece, I think turning around and telling your readers it is worth $0 is a mistake. You don’t see Ford giving away thousands of cars in an effort to get their patrons to buy the next one. How is your effort any less valuable? Some authors swear by it, but from what I have seen is that sort of thing attracts people who would not pay for a book no matter how good it was. That’s just bad business.
Non existent investing – In the beginning I am all about doing things on the cheap, however at some point you have to be willing to invest in yourself. If you don’t find value in what you are doing, how can you expect others to? Authors invest in themselves by taking classes to learn new things, paying for resources and paying for services because you cannot be the best at everything.
Non existent online presence – There are many small businesses that just don’t want to do this, but we all know, especially in the publishing industry. Brand is key, and your online brand is everything. You are not just selling books, you are selling your author personality. That is how you build trust and repeat business.
But don’t take my word for it, read what Forbes has to say about it here and remember, you are a small business. It’s time to think like a business owner.
