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Category : The Business of Writing
Someone wrote to ask, “Is it a big deal if my book doesn’t earn back its advance? What percentage of books earn out? And does a publisher lose money if a book doesn’t earn out?”
I frequently get questions about advances, and to answer them I need your patience… Let me answer this with hard numbers, so that I can make my case. It will take a couple minutes to run the numbers.
First, you always want your books to earn out. Every time. If your book earns out, it means your book is selling, the financials on the book aren’t going to be an ongoing concern, and the publisher is happy and is going to want to work with you again.
But second, keep in mind that only about 25% of books earn back their advance. That number goes up and down according to the year and the economy, but over the years that’s been the figure publishers have used. Which means that of all those books out there, roughly three quarters of them are in the red. That can give you a bit of perspective. (That said, remember: with the massive growth of ebook publishers and smaller houses that pay no advance, there are many more books on the market in which the author was paid nothing — he or she is earning all their income on sales.)
Third, to answer your question about a publisher losing money, keep in mind that every business can lose money. Retail shops, service business, investment firms, everyone. If you own a shoe store, order in shoes that don’t sell, and then have to drastically reduce prices, you can lose money on each pair sold. That’s business, and publishing is no different. The publishing house pays out an advance, they pay an editor, hire a cover designer, buy ink and paper, pay a printer, and cover overhead such as the light bill
We’ve been talking about “making a living at writing,” and I had several people ask what essential tools are needed if someone is going to do more than just type up a manuscript at home. A fair question…
I suggest there are nine essential things every writer needs:
—A time to write. That is, a set time when you’re going to sit down and write every day. When I decided I was going to make my living at writing, I had a regular job, so I got up early and sat down at my computer every day from 6 to 8 in the morning. I’m not a morning person at all, so this was a sacrifice… but I had three small children, and it was the only time when I thought I could get uninterrupted writing time.
—A place to write. You may need peace and quiet, or you may do best with the buzz of a lot of people around. You may like music playing, or you may insist on silence. Some writers use a spare room in their house, others want to take in the atmosphere at Starbucks. But whatever the exterior trappings, most writers do best if they have one place and one time, when they KNOW they are going to write.
—A project to write. When you sit down to write, you’re not journaling or searching for your muse — you’re working on a project. It might be a blog post, or an article for a website, or the next chapter in your book. But when you start, you know exactly what project you’re going to work on.
—A writing goal. Many writers set a goal of creating 1000 words per day. Others set it much higher. When I was writing full time, I had a goal of a chapter per day. The trick is to set some sort of goal, so
The other day we were talking about making a living at writing, and I had a couple of people suggest good ideas (check the comments section) and ask a couple great questions. I’ve talked about the importance of having a place and a time (among other things), but let me suggest there’s one other thing you’re going to have to learn to do if you are to take the next step in your writing career: learn to think quarterly.
This may be new to you, so hear me out… Let’s say your goal is to make a part-time income with your writing — say, a thousand dollars per month, so $12,000 for the year. That would be enough to suggest this is a real part-time job, and not just a hobby. It’s a realistic goal for many writers. But it can be daunting to think you need to earn $1000 this month. So here’s what you need to know: Many writers find it far less daunting to think in terms of quarters. In other words, you don’t need to make $1000 this month — you need to make $3000 over the next quarter. Sure, the math is the same, but the fact that you have the extra time allows you to shift your priorities around, and give yourself enough breathing room that you can earn the money. So don’t think the pressure is on you to make all the money NOW — assume you’ve got a three-month goal.
By the way, the federal government already thinks that way — it’s why they ask self-employed writers and editors to pay quarterly taxes instead of monthly. Writing income never arrives on a monthly basis (with the exception of earned royalties from Amazon), but it’s fair for a writer to plan for a decent paycheck four times per year. So move your projected income into quarterly groupings, lowering the pressure, and give yourself
Over the past few weeks we’ve been answering questions about writing and agents, and while reading over the questions, I’ve heard from several people who asked, “What advice would you give to someone who wants to make a living at writing?” I love the question, and it’s one we’ve tackled here before. Some of my thoughts:
—Have a time and a place for writing. If you really want to make a living at this, then treat it as a business. Get up, get dressed, and go to the office (even if your “office” is a little desk in the corner of your bedroom). You need to show up to the office every day and write, so have a start time. My world changed when I read an interview with the great American writer Tom Wolfe, and discovered he started getting up every morning and putting on a white suit to go to his office (even though his office was in his home) just so he could begin to think of his writing as a “job.” He started at 9, an alarm went off at noon so he could take a lunch break. A time and a place — a great start to making a living with writing.
—Keep your mornings protected for writing. Move your other work to the afternoon, but write every morning.
—Group similar activities. If you do all your phone calls back to back, you’ll get through them faster. Ditto emails, snail mail, budgeting, project planning, looking over proposals, etc. Stick all the activities that are the same into one block of time, and you’ll get through them more quickly.
—Organize your day first thing every morning. If you have a plan, you’re much more apt to stay focused. So at the start of each day, make a list (or check the list you made last night) to give yourself an advance
Some wrote to ask, “I’ve been told we should have a launch party when my book comes out. Is that a good idea? And what what makes a good launch party?”
I think a book launch party is a great idea — it allows an author to involve friends and acquaintances in the release of the book, is an easy way to garner some local media, and can help you kick off book sales. (Besides, it can be great for an author’s ego, if done right.) Let me offer a couple of suggestions to help make it a success…First and most important, you want to make sure you INVITE people. In other words, don’t sit around and hope people show — be proactive and make sure you get a house full. That means you need to find a big group who can be supportive, like your local writer’s group, you church congregation, the organizations you belong to, all your relatives, people at the clubs or sports you’ve joined, and all your fans in the region. Pick a venue you can fill up, since getting 40 people in a tiny bookstore makes it feel like a great party, but getting those same 40 people in a huge shopping mall gallery can feel empty. Determine a definite start and end time, and make sure everyone sees it’s a celebration. Again, you’re trying to get the word out, and get commitments from some folks to attend.Second, if you really want to make people show up, offer an incentive — books at a discount, or free chocolate, or wine and cheese (a few big boxes of wine don’t cost much and seem to bring people out of the woodwork). If you can’t do wine, ask a couple people to bring their latte machines and offer free lattes to everyone. Your only expense is the price of coffee. But have something that is
Someone wrote and said, “I get a royalty report twice a year from my publisher, but I don’t really understand it. What tips can you give me for reading a royalty report?”
I swear some companies hire Obfuscation Technicians, just to try and make royalty reports hard to decipher. And remember, each company has their own format for royalty statements, so it doesn’t always pay to compare, say, a Hachette royalty report to a HarperCollins royalty report. Many authors simply get confused when trying to dig into the details of the thing. Even an experienced author will complain that the Random House statements don’t look anything like the Macmillan statements, which are different from the Simon & Schuster statements. And, unfortunately, some of the smaller companies seem to be purposefully trying to make them impossible to read. (One mid-sized publisher just revised theirs — and they are now worse than ever.)
In addition, there are some companies that do a good job of breaking things down (like Harlequin), but may not do a good job of aggravating the numbers — so you can see a book did great in large print, but you can’t actually see how many copies it has sold overall. Some companies do a wonderful job of telling you how your book did this quarter, but they fail to include life-to-date information. Ugh.
With all that crud in mind, there are about ten questions I need to keep whenever I approach any royalty statement…
1. Who is the author?
2. What is the project?
3. How many copies sold?
4. In what formats?
5. What was the royalty rate(s)?
6. How much money did it earn this period?
7. What was the opening balance?
8. How much is being paid now?
9. Is any being held back? (a provision allows the publisher to retain some of the earned money in case of future returns)
10. Is any
This question came in: “Ever since my book released, I’ve been asked to speak several times — sometimes at large venues, sometimes at very small places. My problem is that I don’t know what to charge when I speak. A flat fee? A sliding scale? Is there some guidance you can give me?”
This is a question we’ve talked about on the blog a few times. Happy to begin the conversation. Okay… start to think about creating a matrix for your speaking events.
Okay, I think the first thing you have to determine is your base pay. How much is your base pay for a one hour talk? For a beginner, it might be $100. I’ve worked with some big-name celebrities that were changing $10,000 for a one-hour talk. (Nice work if you can get it.) But let’s say your base pay is somewhere in the middle — let’s say yours is $500 for an hour, or $300 for a half hour. If you are offered, for example, $300 for speaking one time for 30 minutes to a small group, but it’s a conference and they also want you to speak a few other times, you just have to map out the extra costs. Or say they want you to speak once to a large group for an hour ($500), then lead a workshop to a smaller group for ($300 to $500?), then sit on a panel ($150?). By thinking of your base pay and the number of times you speak, you can pencil out the fee pretty quickly.
Of course, it might take an entire day, and some speakers do a minimum daily rate. So let’s say you set a daily rate of $1000 — that makes it easy to know what to charge. And you have to fly to Atlanta to do it, you add in travel costs, so you can say to them, “That will be a
We’ve been doing our “Ask the Agent” series for a month now, and I still have a handful of questions to get to. Someone sent this: “I hate talking money when it comes to my writing. I wanted to do this for the art, not for money! How can I get over my reluctance to talk dollars?”
I realize some authors are reluctant to talk about money issues, but it’s necessary if you’re going to get to know the business. When I was a free-lance writer, I noticed that publishers (both magazine and book publishers) tended to put me on the bottom of the pay ladder because I was a small free-lancer. I once called a publisher to complain that I hadn’t been paid, and the response was, “Oh. Yeah. Sorry. Guess we’ll get you next quarter.” To them, it was a measley $1500 they owed me. But to me, it was MY HOUSE PAYMENT that month. So, yeah, I eventually got over my reluctance to talk money with publishers.
But if you’re going to talk money, that means you have to know what you’re worth (in terms of money-per-page or money-per-hour), and you have to be able to share that with others. The good news is that it gets easier to talk about when you have a pretty good feeling of your value. I mean, if you know you should be making $3000 per month, and the publisher asks you to work on a freelance project that will take two months, it’s much easier to say, “I’ll need to make about $6000 for that project” than to take a wild stab at a number.
So let me suggest something… Figure out what you’d like to make from your writing in a year. (You need to be reasonable. Don’t say, “A million dollars” unless your name is James Patterson or George R.R. Martin.) Let’s say you think it’s reasonable for
We’re doing “Ask the Agent,” when you can ask anything you want of a literary agent. Someone wrote to ask, “What do I do when I get a negative review on Amazon? I just got a terrible review on my most recent book, and it’s not fair.”
It’s one of the things unpublished authors don’t realize… once you put something into print, it’s there forever. If you say something stupid, you’re stuck with it. You can go to the person and apologize, but the words are still out there, waiting to be discovered by millions of other potential readers who will never get to hear your personal explanation or apology. I know… I’ve been there.
Writing is a scary thing.
I’ve often done fairly blunt assessments of books and events in publishing, and at times I’ve hurt people’s feelings. But I never set out to do that. I mean, it’s not like I saw the book, didn’t like the author, and decided to toast them just for fun. When I’ve said something was weak or badly written, it was because I was trying to offer an honest evaluation of a project. But that’s not universally practiced. Let’s face it — plenty of people ONLY want you to stay something nice. Or to say something awful.
So if you’re asked to review a book that’s bad, what are you supposed to do? Lie about it? It seems to me like the best thing to do is to be honest but as gracious as possible, speaking the truth (or at least the truth as you see it) in love.
Unfortunately, a bad review like that can hurt an author’s career (to say nothing of the author’s feelings). So I find that when I’m asked to review a book for a friend, I tend to simply stay away from reviewing a book I didn’t love. That means the title will get a falsely-positive
Someone wrote to ask, “Can you explain how an agent gets paid? Does the publisher send the author’s checks to the agent? Or does the money go to the author, who writes the agent a check? And is all this done before or after taxes?”
Happy to explain this. Traditionally, when it was time for the publisher to send money, they would send the entire amount to the agent, who would then deduct his or her commission (the standard is 15%) and send a check for the balance to the author within ten days. This was the system that was in place for years, and many agencies still work with that system. The strength of it is that the agent knows the author has been paid, and paid the full amount. This is all pre-tax money, so at the end of the year the agent would send a 10-99 form to the author, detailing how much money was paid.
When I started working as an agent 18 years ago, I was working for Alive Communications in Colorado, and they used a different system — divided payments. With that system, the publisher cuts TWO checks. The first is sent directly to the author, for 85% of the deal. The second is sent to the agent, for 15% (along with some sort of evidence that the author has been paid his or her amount). To my way of thinking, that was a better system. The author got paid faster. There was less bookkeeping for me. I didn’t have to fill out the 10-99’s. And, most importantly, I would never get a phone call from an author saying, “Hey, you big doofus — the publisher says they sent you my money two weeks ago! Where’s my check?!” I’ve found too many fights in business occur over money, and I prefer that the authors I represent feel as though we’re on the same side,