Our Best Practices for Paying Authors

When we first began as a small print press association, we had no experience with accounting. But, as with all small businesses, creating something sustainable and financially sound requires good budgeting and accounting practices. If you don’t know where your money is spent, to whom its going, and where you have to send taxes at the end of the year, you could get yourself into a lot of trouble – with both your authors and the IRS.

We did a lot of research on accounting for book publishers and small presses when we started out – everything from paying our authors to finding a good software. Now, we have a bunch of knowledge about this stuff, but not much to do with it. So, dear reader, we are passing this accounting guidance to you. Below, you’ll find some of our tips for the financial side of running a small press. Use them well.

Know the Difference Between a 1099 and W2

If you run a small press, you’ll need to understand the different types of workers. We’ll use a publishing house as an example. The people who work directly under you – editors, readers – are W2 employees because they work for the publishing house. Your authors – the people whose books you publish – are 1099 contractors. They essentially provide your business with a service, and you compensate them in the form of an advance or other payment. They are not employees of the publishing house, so they receive a different tax form.

Understand Your Budgets

Budgeting is more than just keeping track of your money. You’ll need to understand your business’s cash flow, growth, and potential profit. Do you want to focus on building the size and cash flow of your business, or are you satisfied with your current load and expenditures? Do you want to focus on making profit, or do you want to run a bare-bones operation with few expenses? These are questions you’ll need to answer before embarking on your journey as a small business owner. Importantly, you’ll want to figure out how you want to handle royalties for authors. These are an expense that can be easy to lose track of during the course of the royalty period. You’ll want to invest in a software tool that can help you manage royalties across several authors and payees.

Get a Software that Works

A small publishing press will have a disproportionately difficult time filing taxes. Even if you have only one or two employees (i.e. those who receive a W2) form, you will, ideally, have a number of writers who need to receive 1099s. On top of that, you’ll need to both manage royalties and have a payroll tool that can handle both direct deposits for employees and check processing for authors. You’ll need a tool that can handle all of those payroll-related tasks while also assisting with business-related forms and taxes. Find an accounting software for small businesses that takes all of this into account. << That is the one we use, but there are others. AMS was the cheapest we could find. Every penny matters!

Writing a Great Author Bio

Picture it: You’ve written your book. A small press picked it up, and they’re handling everything from pricing to distribution. You’re called in every once in a while to weigh in on important decisions, but for the most part, you’re letting them take the reins. Then, just before it goes to press, your publisher gives you a call. I can’t believe we forgot – we need your author bio. You search your hard drive for something you might have written years ago, but you have nothing to work from. She wants it by the end of the day. What do you do?

Don’t stress out. Of course, nobody (except you lucky memoirists) likes writing about themselves, but the author bio is fairly simple. In fact, it’s almost formulaic. You’ll need to present specific information and take stock of what’s important to your target audience.

To start, take a few minutes to write down any credentials you have, related to either your work or personal life, that showcase you as an authority figure. Do you have a degree in writing? An area of expertise? Have you been published elsewhere? The purpose of an author bio is to build trust between you and the reader. What are you offering them?

Then, using this information, write your bio in the following order.

Your byline – Include only your name and the name of the book you just authored. Write it in the third person.

Build engagement – Pull out the paper you used earlier. What information do you want your readers to know about you? What are your credentials? Why did you write the book you just completed?

Incorporate a personal touch – This is where you include where you are based, if you have a partner, if you have kids, or what you like to do for fun. Admit as much or as little as you are comfortable doing.

End with a call to action – Where can your readers find you? Do you have a website? A popular Twitter account? Include these at the end.

 

And that’s it! Ideally, your bio should be somewhere between 75 and 125 words. Play around with phrases and wording, but in all, this should take only a few minutes. Crisis: averted.

How to Price an eBook

The publishing industry can be a tough place, and some small presses are transitioning to digital-only releases. Fear not! Data show people are more likely to spend money on an eBook than on print. That might have to do with convenience (you can download it whenever you’d like!), but more likely, it has to do with the price point. On average, eBooks are a lot less expensive than printed books because they don’t have to account for printing costs. That said, you’ll still need to perform some careful calculus before settling on a number. Here’s what you should consider.

 As the author, you will make a royalty on each purchase of your eBook. These royalties are a percentage of the eBook’s retail price, but the percentage will change depending on the online retailer and the list price. Amazon takes some of the lowest royalty percentage payouts (35%), and the Apple iBookstore takes some of the highest (70%). However, these numbers change depending on your price.

Most online retailers will provide higher royalties for books priced between $2.99 and $9.99, so that’s a good price range to stay in. The most commonly purchased eBooks range from $2.99 to $3.99, with $3.99 being the most popular. However, you should understand that pricing your eBook higher could mean making more money selling fewer books. Which is more important – getting your books into more hands, or making more money off a few books? It’s not always that simple, but it’s something to consider.

When pricing, you should also consider length and the perceived quality of your book. Readers often expect shorter books to be priced cheaper. With fiction and some creative nonfiction (memoirs and essays, mostly), this means that eBooks shorter than 50,000 words are expected to be priced around or under $2.99. Longer books should almost always be priced higher. To that end, you’ll need to consider pricing psychology. Low-balling your work risks conveying the idea that it is of a lower quality. In almost all cases, we advise against pricing your book at or under $0.99.

As with pricing print books, the press you’re working with will likely weigh in on how much you should cost. As always, you should be prepared to argue for yourself and your work. If your publisher suggests something you dislike, let them know – and use this material to make your case.

 

Setting the Right Retail Price

When you publish a book through a press, large or small, they will make or advise you on a few key decisions. As scary as it may sound, book pricing is one of those decisions.

Pricing is rarely a consideration when you publish a book. Most likely, you haven’t even thought about this until just now, reading this article. That said, pricing is one of the most important decisions you can make about your book’s public life. It will determine whether people read it, where you can sell it, and how much you (and your publisher) can make from those sales.

So, how do you set a competitive retail price? You’ll need to consider a few key factors. Look around at comparable books and their prices. One of the biggest mistakes you can make is setting your price too high compared to your competitors. Put simply, this will reduce the likelihood that anyone will buy your book, no matter how special you may think it is. Once you’ve settled on your specs (e.g. trim size, paper weight, page count, &c.), you can start to do some research at your local bookstore or an online retailer.

Next, you’ll need to figure out your print cost. This is one of the most important factors to consider in this decision. You don’t want to price your book so low that the printing costs eat up your royalty payments.

Now, you need to consider genre. If you’ve written a nonfiction book, it makes sense to price the book slightly higher than you might for fiction. You’ve likely spent yours of researching and interviewing in addition to writing, so you want to factor in your labor costs. If you’re publishing fiction, the more important variable is page count. A good rule of thumb? If your book is a 375-page novel, it’s reasonable to price it at $16.95 — that’s what most new fiction costs, anyway.

If you’re working with a publisher, they will either recommend a number or make the decision for you. That said, you should arrive at that meeting knowing your stuff. Come prepared with as much information as you can get – you want to be fairly compensated, but you also want your book to sell!

Book Covers Should Rely on Genre, Not Trends

It’s no secret: An attractive, eye-catching cover is the secret to its initial success. Every day sees thousands of new books entering the marketplace, and an eye-catching cover makes it that much easier to market and sell. A cover is the face of a book, your best chance of drawing someone in to crack it open.

New technological advances have made book covers more critical than ever. Now, stores use visual merchandising software to train the eye to find the products they want – or, rather, the products the stores want them to buy. This is true of almost every retail environment, but it hits especially hard in bookstores. While nobody, especially small presses, wants to admit to judging a book by its cover, that’s exactly what we do.

This is why it is essential to choose a cover design that fits your book. Now, it’s not enough to just have a well-designed face. In the past few years, cover design trends have converged into a cohesive brand. If you’ve walked into an independent bookstore recently, you’ll see what we mean. Nearly every novel has bold typography, a minimalist design, utilizes hand-drawn letters, and includes some type of collage. Don’t trust us? Check out a few examples.

As a result, you should consider several variables when determining your book cover. You of course want it to look professional. It should convey all the information you want a reader to know, including the title and mood of the story. However, neither of these factors is the most important. This title belongs to the book’s genre.

In some cases, it is critical to have a book stand out from others – perhaps in relatively streamlined genres, like memoir and literary fiction. In these cases, the design needs to immediately convey what the story is about and something about the reading experience – whether it will be fun, thrilling, or emotionally heavy. You’ll need to set the tone before the design process, figuring out what aspects of the story you want to put front and center. The goal, here, is to be as unique as possible.

In other cases, you’ll want the cover to rely on genre themes. This is especially true for mystery, horror, and romance stories. This indicates to the customer that they have found exactly what they want before even needing to crack open the book. In these cases, draw on genre themes and incorporate elements of the story to create an individual but instantly recognizable cover.

Regardless of genre, we can’t overstress the importance of a well-designed cover. It should look professional and say something about the book. Only then will a customer pick it up off the shelf.

All Things Literary