Wednesday Writerly Ways ~ Surprise! You Are a Business

This week, as you might have noticed, I'm talking about the business end of writing. Surprise! As a published author, you are a business. As a business, there is a long laundry list of what you have to know about being a business entity. Most of it you already know, but some you may not have thought of.

• Production
• Scheduling
• Promotion
• Distribution
• Accounting and tax laws
• Business license
• Marketing

I hear you groaning out there. And you only thought you had to write a good book. You knew as an indie or traditionally published author, you'd have to do marketing. Even if you are traditionally published there are things you have to do to promote yourself. You'll attend conferences, meet the author events, public speaking events, and book signings.

I'm not going to take these in order. I'm going to hit your panic buttons first. Over the course of a few Wednesdays, I'll cover the other topics list above and even combine a couple.

Public Speaking/ Promotion

Putting yourself out there is not for the faint of heart. You'll be in a room full of strangers all eagerly awaiting to hang on every word that comes out of your mouth. Sounds scary, huh? Relax. Just remember a couple things when faced with a room of dive, ten, one hundred, or several thousand strangers and no, I'm not going to say picture them all naked. That could make you sick in some cases...

• Breathe -Everyone has a sense of uncertainty when faced with a room full of strangers. Plaster a fake smile on your face, if you have too. Before long, your smile will be genuine.
• You know at least one person there or maybe two- the coordinator that made the arrangements so it is not a room of total strangers.
• Strangers are people you haven't met yet. Usually before an event there is a general chat session while things are being renailed down. Walk up to a small group of maybe two or three people like you would do at church to welcome new members. No pressure. You don't even have to mention that you're speaking or the anything. Just some general chit-chat.
• You may have your speech written out on cue cards- don't. Instead put one word on each card and a couple of touch points. 
• You are the expert on your book. You lived, breathed, sweated and cried about it for months if not years.  How many parents cannot think of something to say about their babies? This book or books are your babies.
• You are not talking to a group. You are talking to this person or that person that you already met.
• They all want to be you. That's why they came. Of course, they could have come for the rubber chicken and the overcooked roast beef served at dinner also.
• These people took time out of their busy lives to be here, to learn from you, and meet you because you wrote those books or that book. They are there to support you as an author. They are friends and fans you haven't met yet.

Do you look at events any differently. I've had decades worth of public speaking events.

The hardest one for me was a television spot for the Arthritis Foundation. But I practiced the above. I'd made a point of meeting the person beforehand that was holding the microphone and the camerman. The hard part was looking at the camera alone after I was given the microphone.

I had talked to a couple of actor friends I know, some are quite famous now, about how to ignore the camera and speak naturally. The best advice I got was carry something I cherished with me to place above the lens. I talked to the cameraman, and he agreed to placed my ceramic teddy bear on top of the housing. The teddy bear was one I'd used as a focal point during Lamaze childbirths with my older two girls. It worked. I got through the speech exactly as it was scripted.

Other times, a small object will do. I used to have a key shaped stick pin I'd wear on my jacket, until the pin broken from too much wear and tear. It was my personal key to success. It was a reminder to me that if I wasn't successful, I would not have been asked to speak. Now it's a pen my mother bought me over thirty years ago when I published my first article. She told me at the time, "You'll be signing autographs with this pen on day."

Ya gotta love mothers for their undying love and devotion to their children.The only book I ever autographed with it was hers. It's too precious to me for daily use even more so since her death in 1988.

Are you afraid of appearing in person and talking to strangers?

Keep writing and loving the Lord.

Tuesday Tumbling Term~ Business

As I take my darling hubby for yet another series of nerve burning procedures, I hope you continue to enjoy tumbling term for indie authors.

Wow I just noticed a bump in my following list to 55 of y'all. A big hop in numbers since January 2013. Welcome to all just joining me on my regularly scheduled station.

Tuesday's Tumbling Term for indie authors is Business.

busi·ness
noun
1. an occupation, profession, or trade: His business is poultry farming.
2. the purchase and sale of goods in an attempt to make a profit.
3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.
4. volume of trade; patronage: Most of the store's business comes from local families.
5. a building or site where commercial work is carried on, as a factory, store, or office; place of work: His business is on the corner of Broadway and Elm Street. 

I'm am constantly surprised that writers don't realize they are a business.  They write every free moment they can, even for years,and publish their work. Sure it might be pleasurable to them, but if they publish they are a business too.

Even if a writer publishes their work for free, it's still a business. Yep, that's right. Although in the true nature of the world you should try to make a profit. There are expenses related to creating that manuscript. It's a tax deduction even if you do not make a profit.

For some, it's a marketing ploy to give away copies of their books to...

• Get people to read a newbie author. They may offer the first of a series of books for free and charge on an increasing scale for each subsequent book.
• They will limited the amount of time or copies. I did this with The Author Business. I offered this guide for free, but only the first 2,000 copies. After I reached that number, I charged $0.99. They may even host giveaways on their or other sites.
• The author is unsure what the value of their book. OMG if this is the reason, take a look at what your competition is doing.
• Ultimately, to build readership.

I mentioned a marketing ploy, at tax time these "costs" are deduction against revenue on your Schedule C form. Even if the reader would have paid nothing for the book it has a value. How much would you have charged for the book? If you go by the e-book standards between $0.99- $5.99.

The Amazon KDP Select program is making a killing by this option. They select certain books of published works within their program and offer it free for a couple days during this period. This will also be a deduction. But if memory serves, payment is calculated by the number of downloads from their library so you could actually make money. It's been a while since I looked at this program.

Either way, whether you make money or not publishing your books...you are a business. When you are just starting out as a self employed author, you probably used your Social Security number. That's fine. That's how many small businesses start out. You didn't have a huge outlay of cash to set up a company. Maybe you published one book to test the publishing waters of indie publishing.

Once the monies start rolling in, this could take a long time or as little as 30 days, so much so, you might have to hire an assistant. That's when doing business is a little bit trickier. You still could be a sole proprietary business based on your Social Security number. In the years I've spent doing tax preparation, I've seen companies with upwards of twenty employees and millions of dollars in income operate this way. But it gets riskier and every accountants nightmare.

Another line of thought is to formed a LLC or S Corp. Yes you will be paid a salary, but you will also be protecting yourself from lawsuits. Yes even writers get sued. Dan Brown spent YEARS in court over Da Vinci Code. Your salary is yours, but the corporation pays all the bills.

As an author, have you considered yourself as a business?

Keep writing and loving the Lord.

Monday Mailbox~ Self Employment

Today is Monday and time to answer your questions.

Jo, You came from a business background. I got a shock when I took all my 10-99s to a tax professional this year. I am a business! How do I prevent my sticker shock when filing for 2013? JG

Good question! I wrote a guide on the business aspects of indie publishing. Originally it was free at Smashwords and I gave away the first 2,000 copies. Now it's priced at $.99. Eventually, I will get around to completing the full book when my mind heals some more. This guide now has a 5 star rating.

Most indie authors and traditionally published authors have the problem of not looking at themselves as a taxable business operation according to the IRS (Internal Revenue Service). AND if you are lucky enough to live in...

• Alaska
• Florida
• Nevada
• South Dakota
• Texas

There is no state income tax to worry about. You lucky dogs. <G>

The 10-99 gives a specific amount you earned from your publisher(s). This amount is the taxable income you have to pay taxes on if its over $500. Believe me, I've prepared and gotten a few thousand of these every tax season for 15 years.

Think you can just not claim them, nope a copy is mailed to the Social Security Administration and sent to the IRS before the middle of January each year. They will send you a nice letter, at first, reminding you that you forgot to claim this income and they want their money. If the government OWES YOU money, they don't care, but if you OWE THEM money, they'll hound you about it and even seize your bank accounts.

I always thought it was wrong that you could only file 3 years worth of back taxes for returns, but they can demand payment for up to 7 years on back taxes. This year, I finally disposed, shredded and composted the last of my business consulting records from when I was in business. I was required to keep all documents for ten years!

I live in Georgia and I know my tax rate. Between state income tax and federal combined, the percentage is roughly 13.7%. Find out your state's tax percentage. Now for 2012, the federal tax rate changed taking a bigger chunk out of everyone's pocket. We found ourselves in a larger tax bracket. Higher bracket equals higher tax rates. So much for Obama's campaign promise of only taxing the rich. <sigh>

That's why as a general rule, every time I get a royalty check or payment for services rendered I withhold 20% of that income. It gives me a cushion for increases. I put it in a savings account to draw interest but I do not withdraw any until tax time. I'll round it up to the nearest dollar if need be. For a simple wedding I may have gotten paid $25, but $5 went into this account religiously.

As a published author, I am self employed. I run a business. Whether you use your Social Security number and set up as a DBA (doing business as), in other words, a sole proprietor or LLC (limited liability corporation), or S Corp (incorporated under sub-chapter S of IRS code). There are various tax advantages for each LLC or S Corp that don't apply to a sole proprietorship.

Why am I talking about this now that tax season is almost over? To give you time to plan for 2013 tax season, of course.

Keep writing and loving the Lord.

More Self-Help for Indie Authors- Market Shares

On Tuesday and Wednesday I talked about the business ends of self-publishing and being an indie author. I'll continue that thread today. Today's focus is more about the entrepreneurial spirit of being an indie author. Today's topic is analyzing data and market shares, and why you should care as a writer.

I know many of you have tried being traditionally published. I'm not knocking it. I traditionally publish also or at least did in the past. I know there is a swing towards being an indie author with traditionally published author. So much so that traditional publishers are hurting financially to the point of lawsuits and bankruptcies.

As a child and young adult, I spent hours in brick and mortar bookshops and libraries. Now, the internet makes it so much easier to find what you want from the comfort of your home. With electronic media such as twitter, Facebook, and Google+ you don't actually have to meet up with friends to chat.

I had another author friend ask me about GoodReads. I've been a member there for about a year now like most of the social medias. GoodReads is a different animal all together. It's all about the reader. You can promote your books as an author, but more importantly it ties you in with other readers. For me, I developed a fan page there also. It's not getting a whole lot of activity but that's okay for me. I'm chatting away with other readers about books I read and write.

It's market research. I know many writers do research into the markets they are writing in whether they are traditionally published or self-published.

It shows the writer who reads what and what they thought about it.  This is important. In the old days you'd have to hire a market research firm to get this valuable information for big bucks. I know I've done it and charged the big bucks to do it. It's like Google Analytics. With GoodReads I can speak to readers one on one as well as other authors. What works and what doesn't. It saves time. You can develop an email list of those who are reading you as an author for your next novel. It's a back door look into the publishers' confidentiality clause. It's what standard publishers do so well.

Do you know the market for your books? Okay, say it's romance. Ah, but what kind of romance is it? Paranormal? Historical? The Barbara Cartland type? The steamy erotica type? There are a whole host of sub genres in one category. Do you know who your market is? Doh! Women, right? Yes, but what are their age brackets? What nationality reads more romances than any other? What is their educational background? This is data all necessary for you to figure out who makes up your readers' market. You wouldn't sell a teenie booper romance to an elderly woman, would you? No of course not, you would hit the tween market.

Wouldn't you want to cultivate that particular market? This is what most agents say "know your market." This is not necessarily a broad area. It could be a specialized market niche. Say you write a military based how-too book. Housewives on average will not buy it. The language you use in the book wouldn't be warm and fuzzy...it goes over most men's heads. You'd get this kind of look from them. ----------->

As an indie author you have to know who your audience is and how to reach them. It's building your "platform." It's creating a mailing list. It's letting those who would possibly buy your book know who you are and what you've written. Most writers do not see the sense in wasting their time on twitter, Facebook, GoodReads, Google+, etc because they don't see results instantly. Social media is not about sales...it's about the possibility of future sales and building relationships with readers. Like this blog does for other writers. You may have few viewers at the present time, but it grows.

For traditional publishing a successful internet platform is 5,000 hits a day is optimum. But for the indie author it's a growing experience.

Keep writing and loving the Lord.

The Real Wednesday & the Indie Author

Yesterday I posted my blog early which I'm usually a day late and a dollar short so this is an improvement. The issues I spoke of is true and couldn't wait in my mind. But today, I'll continue the theme of entrepreneurial spirit as an indie author. I will hit each issue in the following weeks in entrepreneurship as an indie author. and am looking at hitting this side at least once a week.

As an indie author you are an entrepreneur. You are self employed and as such, you are responsible as any other business person out there. Like it or not this involves a number of hats you wear that you didn't count on...like accounting, marketing, and branding yourself to you customers. It's a whole 'nother ball game.

In The Author Business: The Practical Guide to the Business of Being a Self-Published Author. I talk about some of these pitfalls and other hats. For example taxes and accounting. There are tons of books about how to write and publish a book, but after you get your first royalty check you become a sole proprietorship. Or if you are a larger entity, a LLC, or INC (limited liability corporation or incorporated).  For this blog I'll focus on the Sole Proprietorship. That's what most of us are to begin with anyhow. Many of you new readers may not know that I have a MBA and worked as a marketing and accounting consultant for fifteen years. So I wrote/write this with experience.

When you uploaded your first book with Amazon or wherever, they asked for your social security number, didn't they. You had to choose what kind of taxable entity you were. They issue 10-99's at the beginning of each year for all those royalty checks they sent you. I use the US equivalent here because I live in the US. It is important to know your tax laws or it will come back and bite you in the butt, if you are not prepared.

I'll use my figures here as an example. I had four books published with Amazon,CreateSpace, and Smashwords (Barnes and Noble, Diesel, etc are part of my Smashwords accounting)last year. My income from my books was almost $5,000. Not a lot but just enough to put me in a higher tax bracket or two. Considering I'm an unknown quantity as far as fiction goes...that's not too shoddy.

I belong to an organization which donates books to military overseas for free. It's just my way of supporting the armed forces and their families which I strongly believe in. The purchase price of the book remains the same even though I donated them for free. This is counted as a deduction from my income. I do this through Smashwords coupons. This also goes for books you buy for reviewers, friends, and family...remember one person will tell ten. It's all advertising, promotion, or a charitable donation.

The cost of internet, which is how I write, promote and publish my books comes off as an advertising expense. If I drive to a book store for a book signing...another deduction under mileage or actual vehicle expenses. When I buy photo paper for bookmarks, printer ink, regular paper, etc it's an office expense. When I bought my new computer and monitor they were deducted and depreciated over the next five years. My writing software, Word, was a straight 179 deduction. When I attend conferences, it's a straight deduction under professional/trade. When I teach a seminar, that's income but it also has its expenses also like travel, meals, lodging etc.

Now, yes, if you make over $500 profit you will have to pay self-employment taxes, but there is a little line on page one which allows you to take half of that right off the top before your adjust earned income is calculated.

Keep every receipt whether it is income or a possible deduction for your end of the year accounting. Now, if you are a hugely famous author...you probably have an accountant. For me, I save money and do it myself. The total amount I earned was zero taxable dollars from last year. Want to see how I did it? The pamphlet is available at Smashwords.com and will cost you $0.99, but it wills save you hundreds. I know tax season is officially over as of April 15th, but you need to start planning for next year. While I'm not against paying my government for the privilege of living in this country, I also want to keep every penny.

Keep writing and loving the Lord.

Blogs, Business, and Books

I realize many of my readers do not know me from Adam other than what I blog, tweet, post, or facebook and that's okay. This is what all this stuff is about. It's a selling tool, yes, but its is a basic way of meeting new people.

In today's society it is acceptable to "meet" people, sell to potential customers, and help other people virtually. For example, did you know I spent fifteen years of my life building a rather lucrative international business and marketing consulting firm? I may have mentioned bits and pieces about it over the past few years.

If you are a member of the AOL Books and Writer's Forum, like many of my followers are, then you've seen me pop in and out over twenty years. I feel fortunate that this site has grown and survived over the year through multiple transitions when so many have fallen by the wayside. It's here if you want to pop in and meet authors and readers.

Even Blogger has changed several times since its birth.I've had several blogs over the years on various topics including being an author...like now, I have this writing blog and also a ministry blog. But like forums and social media sites, its a way to connect with people you may never actually meet.

I found a couple of interesting retweets or is it chirps on twitter yesterday. One really struck my fancy since this is my year of trying new things via the internet.

I jumped on the S.H.I.N.E blogging challenge, 100 blogs for the last 100 days of the year. To join click here. Can  you believe there is only 100 days left in 2011? The year zoomed by. Today is the start of S.H.I.N.E so this is blog #1.  A lot of interesting marketing and publishing tidbits on Julie Issac's Writing Spirit site so I invite you to take a look.

Through this site I reconnected with an old author acquaintance that I had not spoken to in a long time, Bob Mayer. He is one of my favorite military/sci fi and nonfiction authors. I met him at a writer's conference way back in 2000. In the video interview link I listened to what he had to say...like me he has now gone indie! He bought back the rights to over forty of his titles and republished them. In this I applaud him. I haven't bought back my nonfiction rights, yet.  That's my project for 2012. I've spent a year researching and testing the indie market, and my research is almost complete. No, I do not jump without looking first.

While he was promoting one of his nonfiction courses in business operation as an author. A kernel was born. Don't you just love when that happens? With my experience with business and marketing, who better to talk about the business end of being an indie author, other than Bob, than moi? Haven't I always said XYZ is a fabulous chef, mechanic, HVAC repair person, but they don't know squat about running a business? 75-80% of all new businesses fail within the first five years. It made my consulting firm grow by leaps and bounds. To help businesses start and continue on the right foot AND be an author at the same time is a match made in heaven.

Et Voila! I put together a small business pamphlet for American indie authors on the business aspects of being an indie auuthor. "The Business Author: A Practical Guide to the Business of Being a Self-Published Author." No, you say. I don't run a business...I just write books. But you sell them too. Uncle Sam wants you! He is holding out his hand with his greedy fingers twitching, saying "Gimme!" Yes, you are an author and a sole proprietor business. If you were a standard published author you would receive a 10-99 for income earned over the year from your agent or publisher and an itemtimized statement of expenses. But this covers the indie author without representation.

These are cold, hard facts. If you live in the U.S. of A, the government wants their share of your earnings. This pamphlet does not cover marketing or how to write your book. There are plenty of resources for this type of thing on the shelves and web. And almost nothing about the running and implementing the writing business. This covers the financial part of being an indie author...the taxes, the income, the deduction, and the accounting. Your responsibilites as a tax paying citizen. I always talk about the hats we wear in life. As an indie author, this is another one. I hear you groaning out there. What another one? Yep, make it the red one with the white band and blue feather.

I figured if you were bold enough to self-published your book and rake in a higher royalty rate, you might also do your own taxes. It's one of those things nobody talks about and they should. This covers the basics of accounting and financing facts about running a business. Like it or not, if you sell books, you are in business and tax season is right around the corner. If you've been an indie author for over a year, you know what I'm talking about. It can be a major headache!

So what's the bottom line? This pamphlet is a free download at http://www.smashwords.com/. Get it today here. It's a short e-read at 3K. Don't be caught with your pants down April 15th.

Keep writing and loving the Lord.