Yes, the “B” word. It strikes fear into the heart of every Visa Card carrying American. However, for the small business owner, it had better be an integral part of your Business Plan.
“Ron!” you protest, “you’re in the wrong blog! We’re writers, not business owners.”
Wrong. Here’s rule…um…#212: If you’re taking yourself seriously as a writer, you have to convince yourself that this is your business. Otherwise, it’s a hobby. And a business must have a budget. Even if you have no income from your business yet, you must plan. If you’re not taking yourself seriously enough to do that, how do you expect an agent or publisher to do so?
Don’t know how to make a business plan or budget? Sure you do. A business plan is nothing more than a statement on what you intend to accomplish and the steps you’ll take to get there. So write down those lovely little steps. Need help? Okay, here’s a general outline for a novelist:
Goal: to write and publish 1 novel per year with sales of 5,000 copies the first year and a 10% increase in sales for every year following. (Yes, I realize this is simplistic, but rule #16 said to keep the blog entries short. Expand as necessary.).
Assumption: $3000 advance for the first novel with no royalties (Income).
Training: $1000 (conferences, air-fare, lodging, seminars, etc.)
There! Wasn’t that easy? What’s that? I used up all of your advance? Darn right I did. Remember: you are a small business. I challenge anyone to find a small business owner who actually made a profit his or her first year. In fact, most take a loss. Most of you are currently taking a loss. Notice there is no line item that says “Run out and buy a new laptop.” If you must, it goes under Materials. But unless you’re down to writing with sharpened chunks of coal, I suggest you hold off on that.
I’m going to continue on this topic Friday. Your homework is to come up with a budget for this year and your first year as a published author. I don’t care if you think you’re five years from publication. Get it down on paper. Take my abridged budget and expand. Add topics and put in details for each heading. Break down the materials into paper, envelopes, whatever. Marketing, of course, can be broken down into a long list of sub-categories. Guess at those numbers for now, but, as you can see, you’re biggest expenses will always be marketing and training. Good thing you don’t have to worry about production (unless you go the self-pubbed route).
Get budgeting. I’ll see you Friday.