Treat it like a business: Cost Control

I know, business…marketing… quick run and hide, he’ll be talking about writing again soon. The whole business man’s head thing may be anathema to many creatives, but the hard fact of life for Indy authors is that its part of our jobs now, like it or not.

I’m a relatively new author – two years and two books – but I’ve been running small business and side hustles for most of my life, and in this blog I share my three top tips to not running your creative business into the buffers of reality at high speed.

Don’t spend what you haven’t got : One of the biggest flaws you see with Indy authors, and in fact with many new start ups is that the costs get totally out of control. I know of one author, it wouldn’t be fair to name him, who after 6 years and 9 books is still seven grand in the red (total income 4k , total costs 11k).  No one expects a business to be making a net profit in year one, but a business that’s not making money by year six (in fact I’d say year three) is essentially bankrupt.

Now I’m not saying spend no money . Some things are absolutely legit costs. You need editing, you need cover design if you don’t have the skill to do it yourself, you need website hosting, and like that. But what you don’t need to do is spend money unnecessarily. You don’t need a new state of the art Macbook. You’ve probably got a computer, and if not you can pick up a serviceable laptop on ebay for under £100 . You don’t need Vellum. You can get your formatting done via a service like Draft to Digital. You don’t really need Scrivener , although to be fair its pretty cheap and very useful, my fiction books are written in Open Office which is free.

Then there are best vs good enough choices. Take compiling a mailing list for example. Convertkit is reputedly the best service out there today and is widely recommended by people worth listening to (Joanna Penn, Jeff Goins etc) but Convertkit costs $29 a month. Mailchimp is about 90% as good and is free for under 2k subscribers.

Then there’s stuff like advertising. Facebook ads, Amazon ads, Email blasts and so on. For my money starting out they arent worth messing with. If you’ve only got one book you’ll not see much benefit. Better to focus on free content marketing, social media, blogging (hey), writing more books. Save the paid marketing until you’ve got more product to push.

Training is a difficult area – there are lots of courses that promise that you can do it the hard way or you can learn with my course and become successful more quickly. The good ones are telling the truth, but five or six hundred notes is still a lot to put out on info you could probably figure out on your own for free , especially with the plethora of blogs and podcasts and so on. My steer on these is that it can be a decent investment, if you’ve got the cash. But its not an essential if you havent.

Don’t be seduced by the trappings of success. This relates strongly to (1). You might think hey successful authors go to thrillerfest in New York, or to the London book show. You know they do because you’ve heard Joanna talk about it on her podcast. So that means I need to go too. And hey I need business cards, and flyers, and copies of my book,…. that flushing sound you can hear is your years profit disappearing down the u bend.

Yeah established successful authors do do those things, but you need to walk before you can run, and thinking like a business you need enough income from your books to warrant the cost (or expect to make as much money – looking at it objectively – from doing XYZ )

Another example is that I know an author who was on track to make a small profit in year two of her business .. then she decided she needed decent CRM software, and blew £500 on it. That’s her back in the red, and if you’ve only got a few hundred customers what the hell do you need CRM software for ? Those are designed for the big boys and girls.

Know the difference between capital investment and revenue : I’m not talking about the legal definition, I’m not an accountant. I mean in basic principals. Too often people justify spending what they don’t need by saying “it’s an investment.”

At the most basic a capital investment is money put into something that is an asset – either tangible like a computer, a software package or a car , or knowledge as with a training course. I wouldn’t advise you to invest a lot where you don’t need to, but at least money spent like this isn’t absolutely wasted (except in as much as assets depreciate, but I’m not going there, not an accountant remember). Revenue expenses are things you spend once and its gone, advertising for example, travel expenses, lunches, subscription software. Some revenue expense is to be expected. You have to eat, and put fuel in your car, and some subscriptions and fees are essential. But what you shouldn’t be doing is blowing hundreds or thousands of pounds on facebook ads or twitter blasts and kidding yourself that its an investment in your business.

The usual logic is that by promoting yourself you are building your platform, but that’s only true if the results are tangible. Books sold or mailing list sign ups for example. Otherwise social media is an ephemeral thing and your paid twitter blast will be forgotten virtually as soon as its seen.

The same applies to other who cares anyway activity. I know one bloke who had two thousand soft toy squirrels made with his web address on them, which was pretty random given his book is a hard gritty serial killer gore fest. He claimed they’d promote him because he’d give them to people who were nuts about his book. Yeah, um, right. He still has about £3k’s worth of soft toy squirrels sat in his house, and that’s a 3k millstone his profit and loss won’t overcome any time soon

So to wrap up this part – in essence don’t spend anything you don’t need to, don’t spend money on trying to be bigger than you are ready for, and don’t justify excessive spending by telling yourself its an investment.

Lots of don’t here – Next week I’ll move to some dos as part two looks at ‘treat it like a business- promote yourself.’

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