The final section in the author’s business plan is the budget (in a standard business plan, this would be called “Financial Factors and Statements).
The author’s budget may be simple or may be very complex, depending on a number of factors. Among them: whether the author decides to publish traditionally or independently and on how much of the marketing work the author intends to do on his or her own.
When preparing the budget section, you should list each cost you will or may incur in the publishing, distribution, marketing and sales process, a date when each expense must be paid, and the total costs for the relevant project. It’s okay to work from estimates, but hard numbers are essential.
Researching costs and preparing a budget (though loathsome for many creative types) helps you establish how much the publication process will cost – which helps independent authors set price points and helps all authors decide how much (if anything) to spend on marketing efforts.
Authors’ production costs fall into two primary categories:
1. Production Costs. Paid editing services, software and technology costs all fall under “costs of production.” Independent authors may also choose to pay for digital conversion to e-book format, cover and/or interior art, and costs associated with POD presses or other aspects of publishing and distribution.
“Costs of Sale” (Amazon or other online retailer fees, shipping and handling, distribution costs, etc) also fall within the “production costs” category. Some authors split these out into a separate section called “Distribution & Fulfillment” but that’s a matter of personal choice.
2. Marketing and Promotional Costs. This includes advertising, travel costs for author appearances, giveaways (review copies and reader contests), publicists hired by the author, and any other sums the author may or will spend on marketing and promotional activities. These numbers may vary widely, but both traditionally published and independent authors will have these costs – and need to plan them wisely.
Using concrete numbers will help you stay on budget and control your costs. It also allows you to track what expenditures “work” to help your sales and which ones don’t - making the budget helpful in planning your next work also.
Do you make a writing budget? What tips do you have for others writing a business plan?
If you’ve never written a business plan, do you find this encouraging or scary? Hop into the comments and let me know!
For those who may have missed an installment, here are links to Part 1 (the Overview), Part 2 (Writing the Dreaded Synopsis), Part 3 (On Pre-Release Marketing Mountain), Part 4 (Marketing for Release Weeks), Part 5 (The After-Party: Post Release-Phase Marketing), Part 6 (Know Thyself! Making Comparative Analysis Work for You), Part 7 (Time for Success! Creating Author Timelines), and Part 8 (Who Does What For How Many Oreos – Operations and Management)