The final section in the business plan for your book is the budget (in a standard business plan, this section is usually called “Financial Factors and Statements).
The budget for your book may be simple or highly complex, depending on a number of factors, including your publishing path. Marketing and travel budgets are part of this section also, as are any other book-related costs the author will bear.
Note: Traditionally published authors do not bear ANY of the costs of publishing, sales, or distribution, and do not pay the publisher’s editing costs. Self-published authors are responsible for all of the costs of publishing their works, which generally includes the cost of editors, cover design, and printing.
When preparing the budget section of your marketing plan, break the publishing process down into production costs, distribution costs, and marketing costs. Under each section, list every cost you will or may incur in that part of the process, along with estimated dates when each expense will be paid (or due). At the end, establish total estimated costs for each phase of the publishing and marketing process. It’s fine to work from estimates, but the closer you can get to “real numbers” the more effectively the budget will work for you.
Leave comment space beneath each expense, so you can make notes about how well (or poorly) the money worked for you. For example, if you loved a cover designer’s work, you can note “definitely use again.” An advertisement that didn’t generate many (or any) sales might pick up a “15 sales / inefficient” notation. Try to use hard numbers here too, if you can, because they’re most effective at helping you evaluate costs in the future, when memory fades.
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.
Generally Authors’ costs fall into three primary categories:
1. Production Costs. For traditionally published authors, this part of the budget tends to be substantially lower, whereas self-published authors have more production expenses. This section includes paid editing services, software and technology costs, and any other author costs relating to the book’s creation and production.
2. Distribution Costs. Distribution roughly equates to “Costs of Sale,” and refers to anything the author pays to get the final book into readers’ hands. As with production costs, self-published authors will have more to list in the distribution section, while traditionally published authors usually have none (or few).
3. Marketing and Promotional Costs. The marketing budget includes everything from advertising to travel costs, giveaways (review copies and reader contests), publicists paid for by the author (Note: in-house publicists at traditional houses are paid by the publisher, not the author), and any other sums the author may or will spend on marketing and promotion. These numbers will vary widely, depending on the author’s needs and financial resources, but both traditionally published and independent authors will have these costs – and proper planning can significantly increase the return on this investment.
Using concrete numbers helps you you stay on budget and control your costs. Don’t forget to use the budget during the release process, too, to track which expenditures “work” to help your sales and which ones don’t.
If you’ve missed any part of this series on Writing a Business Plan for Your Book, here are links to the previous installments:
Part 1: How to Write a Business Plan For Your Book
Part 2: The Business Plan: Overview
Part 3: The Business Plan: Summary / Synopsis
Part 4: The Business Plan: (Pre-Release) Marketing Section
Part 5: The Business Plan: (Release Phase) Marketing Section
Part 6: The Business Plan: (Post-Release) Marketing Section
Part 7: The Business Plan: Competitive Analysis
Part 8: The Business Plan: The Development Timeline
Join me next week, when we wrap up this series with a look back on the author business plan, and how to use it effectively!