Setting and managing your budget is an integral part of the whole process of self-publishing. Many of the decisions you make about design, printing, marketing and distribution will directly affect the balance between your income, total expenditure and what your profit margin will be. Self-publishing doesn’t mean that you have to do everything yourself and it doesn’t mean your aim is to make any profit. Even if your objective is just to break even financially, the biggest influence on cost at this stage will be how much of the work you do and how much you pay for. Each of us has our own collection of skills and strengths so there is no single blueprint. A critical part of budgeting will be deciding what you can do to the quality level you want, and what will merit the cost of employing an expert.
Budgeting your project from beginning to end is best done by carefully examining each stage in the project and considering the costs associated at each of those stages. To help guide you through this process, the following information is provided in six sections. While we recommend that you read each section thoroughly, you can also choose to jump to a specific section, depending on where you might already be in your particular publishing project.
- Budget: Getting Started
- Budget: Design
- Budget: Printing
- Budget: Marketing
- Budget: Distribution
- Budget: Moving On
Budget: Getting Started
Becoming a publisher
If you already run a business, you’ll know most of what’s included in this section. If you don’t, then be aware that, in self-publishing, you are creating a business and you will need an Australian Business Number (ABN). You may also need to register for GST but you should seek professional advice on all aspects of this from someone with professional accounting or business experience. Setting up your business early on will ensure that you are able to claim expenditure against income for tax purposes.
Setting your budget
Before you make other decisions, ask yourself two key questions: ‘How much do I want to invest?’ and ‘How much can I afford to lose?’ Hopefully you will make a success of your publishing venture, at least recover your investment costs and, at best, make a profit but it’s also possible that you could, in a worst-case scenario, lose all your investment if your book does not sell in sufficient numbers.
As with all new business ventures you will need a budget plan
If you’ve never used one, it’s worth taking a look now at the ways a spreadsheet could help you. If you need help, find someone who can set one up for you and teach you how to enter and modify data so you can see first-hand how this kind of software helps with modelling (the ‘what if?’ part of the process) and keeping ongoing totals as you move forward into printing, marketing and selling. A spreadsheet is a very useful investment of time and cost because it ensures that you can monitor and modify your income and expenditure as your publishing plans develop. It will allow you to add expenditure as it is planned or occurs and to model the effect of the choices you make during the design process. It will be essential to maintain the spreadsheet and include even small expenses. You will have many small amounts to pay out that easily become financially invisible but they can add up to large sums.
Setting the retail price
Whether you use a spreadsheet or not, you will need to make a decision, at least a temporary one, on the retail price of your book. The price can be modified later but without it you will be unable to calculate whether you will even cover your production expenses.
Throughout the process of publishing there are costs when you employ someone else but also benefits to weigh against them. Make sure you get either a full quote or an estimate of any fee before commissioning so you can view the impact on your bottom line profitability, for example by adding a value into your spreadsheet.
Areas where you may decide to employ a professional are editing, proof-reading, cover design, main design and typesetting. The way you use professional help or not will depend on your own confidence, expertise and budget. For example, you might want to use an editor to do a structural edit of the complete manuscript to give you a professional perspective on major editing needs but feel able to do the final copy edit yourself.
I had no idea where to start in looking for an editor. I began with a long list of names collected from an Internet search then went through each editor’s details to select those who had a specific interest in the kind of book I’d written. I used that shorter list to pick out editors who wrote well about themselves on their own information page, in an interesting and accurate way. That seemed like a good recommendation for someone who would be advising me on my own writing. I ended up with four names and I think all of them would have done a good job for me but I contacted the person whose photo showed the kindest eyes. A logical process at the outset and then an emotive choice - but it worked for me. An editor will probably ask to see part or all of your manuscript before deciding whether or not to take the work on and the fee quoted will reflect how much time the editing is likely to take.
Copyright and release agreements
At the writing stage, you may already have chosen a selection of images or other content for which you are not the owner of the intellectual property. Before you finalise which images to include, make sure you have secured the relevant permissions or release statements from each copyright holder because there may be costs. Be aware that you may have to pay a fee to use quotes, photographs or other images. You can’t assume that pictures or information obtained from sources in the public domain, such as on the Internet or in libraries or museums, are copyright free. Even if the content you want to use is owned by friends it is best to obtain their written consent for use in a commercial context. If someone gives you a copy of a photograph, you may still need to ask their permission to use it and get written confirmation. The costs, often relatively small, can quickly add up and need to be entered into your budget calculations so you can make sure the growing total will not mean you publish at a financial loss you aren’t prepared for.
If your book includes a lot of quotations or images this can be a very time-consuming task and a complicated one. You’ll need to locate and contact the potential copyright owner of each item. I found that most sources were very helpful and, because I was self-publishing, they usually charged me the smallest fee they could. I learned the important difference between ownership of content (such as the words in a text) and the image of that content (such as a photograph of an old document or the designed page of a text). I also learned that the laws on copyright and ownership of intellectual property are not the same in all countries so you may need to check if you are using items in an Australian publication that originate elsewhere.
The weight and dimensions of the final book are important when you consider distribution costs. Check the Australia Post website to see how your book fits within the dimensions and weight limits. Just a few grams or millimetres can make a considerable difference to postage cost. If you’ll be selling books yourself in response to requests by phone or email, for example, you will need to consider whether postage is included in the book price or as an addition and passed on to the customer as an added delivery charge. Postage costs can be considerable when supplying multiple copies to bookshops if you are unable to deliver them by hand.
My book was unusually heavy for its size because of the paper we chose and that meant it was unhelpfully expensive to post. We often absorbed the cost of postage ourselves by charging a customer less than the rate we actually paid. Thinking back, we could have looked for lighter paper that gave a similar high quality of finish.
Colour images can make a book much more attractive and can add information that enhances the text. Even so, you may have to think carefully about how important they are to the final product and balance that against how close you’re getting to your budget total. Within the main body of the book, single colour images on a page add considerably to the printing costs but blocks of full colour pages are more economical. Talk to your printer about the number of pages on each printed sheet. Your spreadsheet will allow you to model the effects of any choices.
I had a large number of colour images on my wish-list and the printer advised us about how to include them in a cost-effective way that would also keep the colour pages securely bound with the rest because sixteen pages are printed on a single sheet. Placing each colour page exactly where it matched the text would have worked out too expensive for us so we used a less costly approach, two blocks of eight colour pages spaced according to the printer’s suggestion.
Registering your ISBN: International Standard Book Number
One of the final parts of the design and layout is the inclusion of the ISBN. This has to be registered and purchased together with, if desired, a bar code that bookshops will be able to use with their electronic sales systems. The ISBN is included on an information page at the front of the book and on the back, and the barcode added to the back cover.
Tip: you can buy more than one ISBN at a time and you don’t have to use each one. If you plan to publish the book in another format, such as paperback/hardback, eBook or audio book, you will need a different ISBN for each.
Your first print run
When you selected your printer you will have obtained their quote for the number of books to be printed. The larger the print run, the cheaper each copy will be, but the higher your upfront investment. There’s a balance to be found between reducing costs by printing more and being realistic about projected sales but your decision needs to fit your budget. You don’t want to be left with large numbers of unsold books you’ve already paid for.
Our non-flexible budget meant we had to be cautious about how many books were printed but we also went with a certain level of confidence that they would sell, even if it took a few years. We’d invested an amount that wouldn’t leave us in financial difficulty if our optimism turned out to be wrong. Sales in the first few weeks really took us by surprise so we had another difficult decision then about the second print run. Should we print even more or had we already flooded the market?
Unless you are using a distributor with their own storage space, remember that you will need to arrange shipment from the printer and you’ll also have to find a suitable place to store the books. The space you require for storage will depend on the size and number of books printed, as will the delivery cost.
We had no idea at all what 1500 books in boxes of ten would look like. On a visit to the printer, I asked to see what our print run would look like as a pile of boxes. Only then did we know whether we could find space to store them at home or whether we’d need to add storage into the list of costs. Our distributor took a few boxes from us at regular intervals and we delivered them to her by car or via friends who were visiting Perth, which reduced those costs.
A copy of every book published in Australia must be lodged with the National Library of Australia in Canberra. If the book is initially published in Western Australia, an additional copy must be lodged at the WA State Library in Perth. A legal deposit is required in all states and territories except the ACT where it is still advised. The cost of those free copies and any postage needs to be added to your budget calculations.
If you want to actively market your book then you should consider sending out review copies. You could send your book to individuals who work in radio, television, newspapers and magazines (including online) and book reviewers. Some reviewers publish popular ‘blogs’ on their websites where readers look for information and recommendations about new books. There may also be organisations who have a particular interest in the subject of your book. Each review copy you give out has a cost attached which includes the fact that the book is ‘free’ but you are making sure that you stand the best chances of getting a good review that will give you additional publicity, get your name into the world of readers and have a positive impact on sales. As the total on your spreadsheet grows, you might be surprised how many ‘free’ books you are providing and how that cost to you mounts up.
I didn’t feel confident so I only sent out about five review copies and I wish I’d sent more. The people I wrote to were kind and encouraging, and some of the first good reviews came from them. I contacted the individuals beforehand in a very short email and asked whether they’d be willing to receive a copy. It seemed polite, knowing how many books land on reviewers’ desks each week, and it also helped to let them know the book was on its way. The cover is quite distinctive so I included a small image of that in my email, in the hope they’d recognise it again when the book arrived.
Gift copies and reduced price copies
Your friends and family will be interested in your publication and will be keen to celebrate your achievement in reaching publication point. You might want to give your books as gifts or sell them to friends at a significantly reduced price. If you don’t continue to include these ‘freebies’ and discounts into your calculations, for example by adding them to your spreadsheet, then the total cost to you could become an unexpected ingredient in your final balance.
Organising a book launch
There are lots of personal reasons why you might want to have a launch for your book but there are also financial aspects to consider. The event can be an opportunity for direct sales at full market price, rather than the discounted price you offer to booksellers. Some expenditure is obvious (hiring a venue or a caterer to provide refreshments) but everything needs to be included. If you organise the food and drinks yourself, add your shopping bill to the budget and include any costs from advertising the event. If you hold the launch at a bookshop, you’ll need to agree on the shop’s percentage discount for any sales on the day and discuss who will be responsible for what, including publicity. Any free advertising materials will always be appreciated. If you provide posters, postcards or bookmarks, for example, these are marketing costs, even if you design and print them yourself. Coloured ink cartridges for your printer at home are far from cheap.
Competitions and Awards
There’s no doubt that being long-listed, short-listed or winning a literary award or prize is a very powerful marketing tool. Entry requirements and costs vary but you’ll find that many competitions will ask for multiple free copies of your book. If you enter more than one category for an award you may need to send anything from 6 to 10 copies for each category, so these ‘invisible’ costs and the postage need to be added to your budget calculations.
Tip: be aware that some major awards are not open to self-published books and that isn’t always obvious in the main advertising copy so check the small print in the entry criteria before you send off your books.
Websites and social media
An online Internet presence can be a powerful marketing tool when used effectively. If you are going to invest in having your own website then you need to buy and register a URL (e.g. bernicebarry.com) and pay for ‘hosting’, the service that will hold your website. Unless you are technically confident you will also need a web designer to create your website. A single website can serve as a publicity tool for your book and allow you to promote yourself as an author. It can also be a place where you put your news, information about forthcoming events and, if you want one, your ‘blog’.
Author talks and other events
If things go well, you’ll soon have the pleasure of receiving invitations to talk to groups such as book clubs, writers’ groups, libraries and interest groups. If you’re able to sell your book at these events they may generate some income but don’t assume that you will make a financial profit at each one. They are a valuable part of your marketing and a rewarding, enjoyable way to meet your readers and get feedback from them but bear in mind that you may not receive any payment or expenses and a packed room doesn’t automatically mean enough sales for you to break even if you’ve travelled a distance. Goodwill and relationships are involved here so it will be your own decision how often you attend events that, in the end, may cost you money.
You might just be the proud recipient of an invitation to a writers’ festival but otherwise you will need to market yourself to the organisers. Find out when their submissions open and what the requirements are. Festivals will usually pay a fee and may also contribute to travel costs. They’re also a great way to promote yourself and your book and a wonderful opportunity to network with other authors.
When you start receiving invitations to talk about your book it’s rewarding and exciting. You meet your readers and it’s another strand to your marketing but keep an eye on the costs you accumulate as time goes on. Booking events usually means difficult decisions for me because I live in a very rural area. Home is a 600Km return journey from Perth. I quickly began to realise that going to events and doing talks was going to be a balancing act between my eagerness to take part and how much we could afford to fund the trips ourselves. In the first year, the more successful and well-known my book became, the more I spent on travel and accommodation. There was huge personal enjoyment and professional satisfaction, of course, but it was unusual to be offered a fee or to be offered the cost of my fuel for the journey. Groups who invite you will often believe you’ll cover your costs (and probably make a profit too) from any books you sell at the event. If you need to manage your ongoing balance for all the events and talks you do, work out how many additional books you would need to sell at the event to cover the costs of each trip. Bear in mind not just the size of the audience but also that people will often bring with them a book they’ve already purchased, for signing.
Now that I’m more confident, I ask larger groups and organisations whether a contribution to my travel costs is available before making a decision and, for small groups, I always decide on an individual basis because I know that many have no funds available. I no longer sell the book myself at events so it’s sometimes a decision about just paying the costs myself, and not just a financial decision. Talks, promotions, book-signings and other gatherings are very good ways of thanking the booksellers, readers and others who support me. Without them I wouldn’t be a published author.
Bookshops and other outlets require a discount on the retail price. It’s their profit margin for selling your book so, if you sell through bookshops, your income from each book will be significantly reduced. The discount is negotiated with each bookseller but, generally, expect to give from 40% upwards. Out of the approximate 60% of the retail price you receive, you will have to cover all your production, publication, distribution and marketing costs, as described in this section.
The benefits of using a distributor are great, in terms of the range of outlets for your book and the saving on your own time but the distributor will also take a fee for their work, further reducing your own income for each book.
The most evident costs are postage and packing, and fuel, plus depreciation on your vehicle for deliveries, but your own time is also a consideration here because this can be a time-consuming part of self-publishing and that’s worth thinking about when you decide whether or not to employ a distributor.
If you are distributing the book yourself, or even if you have a distributor, you will need to be able to store your stock of books. If you haven’t stored large numbers of books before, find out from the printer how much space your delivery will take up. When the boxes, perhaps on a pallet, are delivered to you or your place of storage, how will you unload them? You’ll need a secure and dry store protected from insects and vermin. It’s not a pleasant topic but termites and rats love paper! How will you get the required number of books to your sales outlets or your distributor? Each step in this chain has a cost attached which needs to be accounted for in your financial balancing, for example on your spreadsheet.
Budget: Moving On
Hopefully, there will come a point where sales are so good that you’ll need to order a reprint. Check with your printer what their turnaround time would be so you can be sure not to be left with a gap in availability. The biggest question is, ‘How many this time?’. It has to be an informed guess about the future, taking the current pattern into account and the surge of interest that will have boosted early sales. If you can afford the investment, you might decide to go for a larger print run, reducing your cost per book and you’ll also be better off because you won’t be paying a second time for any editing or design work you had done.
Whether your book sells well or not, you can decide to make changes in your circumstances at this stage, affecting your overall income and profit margins. For example, if you’ve been doing all the distribution yourself, you might want to find a distributor willing to take over part, or all, of that work. If your book has sold really well, and you no longer want to self-publish, you could look for an agent to submit your manuscript to publishers or do that yourself. Other options are selling the rights in other territories or selling rights to the film/eBook/audio book but you would need evidence of good sales figures to back up your optimism and persuade a publisher that this would be a good investment. All these decisions have financial implications because every link in the chain will take a percentage of each book’s income. If you decide to look for a publisher, there is the potential to reach a much wider audience, with higher sales figures, but your own income per book will be very considerably reduced.
You’ll have the usual costs for distribution and some costs for your continuing publicity, though the nature of your marketing might change slightly as you move into another phase of promotion where you are becoming known as an author. Maintaining an online presence has both a financial and a time implication.
Within a few months, we realised we really had become a publishing business. I received enquiries from writers about publishing their books, from editors looking for work and from people wanting to meet for advice about self-publishing. We knew we wouldn’t be able to keep up with the demand for the book, especially from other states. Enquiries and orders began to take up more and more time and we didn’t feel equipped to send orders interstate. We were advised to use a large, national distributor but that would have meant printing in much bigger numbers and we didn’t want to invest financially on that scale. My first and biggest objective was still the same. I wanted the story I’d written to reach as many readers as possible. Good sales figures encouraged us to take a risk at that point. In the hope that a publisher would be interested in taking the book on, we did a smaller second print run of 1000, not a bigger one. We hoped we would end up with enough books to meet ongoing orders if I was lucky enough to get a publishing contract quite quickly, but not have too many of the self-published edition left unsold. When the new publisher’s edition of your book is coming out, they won’t want to be competing with you for sales. They’ll probably ask you to withdraw the self-published edition from the market at an agreed point.