M is for Money
M is for Money.
Do you write for money? If you’re a professional writer, the answer is almost definitely, “Yes.” (Of course, if you’re writing to preserve a story for yourself, your family or your friends, you might not have any intention of earning any money. You’re also probably not reading this post as a writer.)
“Money” is a dirty word in many circles. Most people are socialized not to talk about financial matters in public; we don’t share how much we earn (never enough!), or what we paid for our latest extravagance (often too much!), or what percentage of our income we’re reinvesting in our business. As an author, though, you need to focus on money, because money is a proxy for many important career decisions.
Stories regularly appear in major mainstream publications about authors who earn vast sums of money through their publishing careers. Sometimes these financial superstars are first-time authors who hit it big. Sometimes they’re authors who have generated dozens, even hundreds, of publications over many years, steadily developing a following. Sometimes they’re entrepreneurs who developed new business strategies, creating new markets or expanding existing ones in previously unimagined ways.
Many non-authors read these articles and assume that all writers are wealthy. Like Stephen King, we all must be making major donations to our hometown’s infrastructure, funding libraries and swimming pools. Like James Patterson, every single one of us must be sponsoring millions of dollars in annual gifts to bookstore employees. Or, at least, we could, if that’s the way we chose to spend our filthy lucre.
The reality, of course, is that most authors earn far less than the superstars. Some studies indicate that—on average—fewer than 100 copies are sold of each ebook published. Print books, especially self-published ones, do worse.
But authors aren’t immune to speculation about other writers’ money. Many believe they’ve failed if they don’t reach certain outsize benchmarks. They become disappointed with their chosen career and frustrated with the market.
The rational writer sets financial goals before launching a book. She examines the marketplace, studying how books in her genre typically sell, at what prices, and in what amounts. (A collection of abstract poetry might be a breakout success if it sells 100 copies in a week. A contemporary romance with the same level of sales would be unremarkable.)
The rational writer develops financial expectations based on facts rather than hype. Those facts are not necessarily easy to come by. Few competitors will say exactly how many books they sold at which price points over what time period. But the more information an author can glean and the more details she can pin down about dollars and cents, the more realistic she can be about the success or failure of her writing career.
Advance or No Advance?
Money—and analysis of monetary needs—can also help authors make one of the most basic publishing decisions for their work: Whether to be traditionally published or self-published. Traditional publishers often pay an advance, money up front that is separate from royalties on sales of individual copies of your work. If you need a chunk of money at a specific time, then you may choose to pursue a traditional contract with a publisher who can pay you a lump sum, even if that sum means your royalty payments will be deferred (or possibly never arrive.)
Within the traditional publishing world, some contracts obviously offer a large advance and some offer smaller advances (with the anticipation that the advance will be earned out sooner and royalties will roll in earlier.) Authors might prefer a large advance because that payment is certain; a publisher can’t demand that you refund payments, even if a book flops. Authors who prefer large advances often argue that their publishers are more invested in their careers; they’re more inclined to spend money on marketing and publicity to recoup the cost of the advance.
Other authors, though, prefer smaller advances. They believe they’ll be more attractive to a publisher if they consistently “earn out” their contracts, if they generate enough sales to cover their advance and quickly move on to receiving royalty payments instead. They prefer to be seen as team players, taking a risk with all the other professionals involved in bringing the book to market.
By contrast to the traditional publishing advance calculations, self-published authors have zero guaranteed income from their books. Nevertheless, they’ll enjoy a higher royalty on every single book sold. With the option of keeping a book in print as long as the author desires, the self-published author can receive “long tail” income—royalties that pay out for years, even decades, longer than a traditionally published book would pay.
The best financial decision will obviously depend on an author’s given monetary situation. (Of course, there’s also the factor that traditional publishers might not choose to accept a particular book, but that’s the subject of other posts…)
Genres—Stay or Switch?
Money also functions as a proxy when authors decide whether they should continue writing in one genre or experiment in others. An author might sell very well in one genre but only poorly in another. She then faces a decision: should she continue to write in the poorly selling segment of the market?
Of course, many factors might contribute to this decision beyond the financial bottom line. Authors might diversify their writing in anticipation of market changes. They might simply enjoy a new corner of the writing world. They might be experimenting with find a new voice, accepting one or more less successful work(s) as they hone their skills.
But if all other things are equal an author will likely choose a genre where she sells well. Money shapes the artistic direction.
Many of us would love to believe that we write for a sense of artistic fulfillment, that we create entertainment and/or art for our own enjoyment and for the enjoyment of our readers. But the rational writer understands that there’s more at stake. Dollars matter. Addressing those financial realities head-on can ultimately lead to greater career satisfaction.
(Elsewhere, I’ve written extensively about tracking money in your writing career. I’ve provided spreadsheet templates for authors do track their income and tax deductions. There are expert accountants and lawyers who can give personalized advice about money matters, based on an individual’s specific financial needs.)
So? What financial studies have you undertaken to bolster the launch of your next book? Have you reviewed how other books in the genre are doing? Do you know how they’re priced? Do you have a general sense of what’s selling and what isn’t? Have you read articles by authors who share their finances? Have you spoken with peers in general or specific terms about your financial foundation? What steps have you taken to control the financial end of your career?