Business Planning: Let's Talk About Money

Hello, Lovelies! I am finally back to finish up the Business Planning for Authors series. Sorry for the delay, y'all. All the things. All. The. Things.

Anyway, I'm back and ready to talk about the thing nobody ever wants to talk about, especially when it comes to publishing: Money. All over the interwebs you will see the advice, Never Pay to Be Published. With traditional publishing, this is absolutely true; publishers pay you, not the other way. But we indies live in a different world.

(Disclaimer: Yes, I know that you can publish your book without spending a dime. I get it. But I also know that most people don't have all the skillsets needed to write, edit, design, format, and publish a book. I'm assuming you are one of us normal people, in which case some money will likely be spent.)

So where do you start with this whole budgeting your book thing? I'm sure there are plenty of ways you can go about this, but here is how I do it:

1. Write down your anticipated expenses. What will you be spending on this book? Possible money-eaters include editing (possibly several rounds - developmental editing, copy editing, proofreading), cover design (don't forget that you'll need an extended design for a paperback if you are releasing one), formatting (epub, mobi, and print book layout), and marketing/PR monies. Also: ISBNs and set-up fees for your printer, if they have any. Do your research and find out what these things will cost you. You will find huge variety in the costs for covers and editors, so don't just base your numbers on what your friend spent, unless you will be using the same vendors. (Check out the Vendors We Trust.)
2. Decide what your price point is going to be. Will you be selling your book for $2.99? $3.99? Now's the time  for some market analysis. What price seems to be the most effective for your genre? Readers have preconceived notions when it comes to prices. Too high and they will think it's not worth it. Too low and, no matter how great the book is, there will be some readers who think it is not good enough for a higher price and will skip it. 
3. Create a sales projection. This part is the hardest, as there is no way to know exactly how a book will do. Amazing books often have very few sales, and many books that skyrocket to success were ones for which the author had low expectations. If we knew exactly what makes a book successful, we would all be bestsellers (and then by default nobody would be a bestseller). Not a lot of authors share their sales figures online, but with some digging, you will likely be able to find someone to base your projection on. Look for an author who writes in your genre and who has a similar release history. (It won't work to compare your first-book projection to the sales on Author's ninth title.) I do my sales projections month-by-month.

Now that you have your numbers, add them all up. This will give you an idea of what you can expect to pay to make your book the best it can be. Once you know what your expenses are, go ahead and add some onto that number. Even the best budgeter can find herself overspending. :)

There. Really, it's quite simple. Even so, this will be the hardest part of the business plan for most people, as it is the part with the least concrete evidence on which to base the numbers. But I promise you, you will never regret planning it out in advance.