Starting a Small Press Publisher: Setting the Terms

It’s possible to just make up a name for a fake company and slap it on your books when you’re self-publishing. But once you decide to publish other people, you’d better gets some legal things in order first.

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Choose a Name

I did a poor job of this one. I didn’t take my time and just picked a name quickly. I didn’t think about how important a name is and how I needed to be able to say it with pride, tell friends and family about it, put it on everything. I think our name is okay but it’s not great.

So don’t do what I did!

If you’re starting your own company, take some time to think about the best name for it. Particularly think about the connotations of the name and what people (like your target audience) will think when they hear it.

The book The Brand Called You recommends always using your own name but I’m not sure how well that advice works for forming a publishing house. Perhaps your last name will sound good and elegant as a publisher name. I agree with a lot of the premise of the book, which is that the brand you are creating is centered on you and who you are as a person. I don’t think that means you have to name it after yourself, though.

Form an LLC

Okay, so it turns out some of my background actually has come in handy! For the previous five years I’ve worked as an office manager handling a lot of accounting for a small company. Before that I took a number of night classes in the paralegal field.

Both those things helped me understand how to go about setting up a legal entity and running it!

The LLC stands for “limited liability company” and this means, to my understanding (and please know this is NOT legal advice) that if something goes catastrophically wrong or you get sued, you personally are not responsible for the money. Just your company is. Keeping yourself a little separated from the entity of your company is a wise move.

It’s been two years, but if I remember right, I think a DBA, or “doing business as” is another option. You can find out what you need by doing some Internet searching. How to get an LLC or a DBA depends on where you live. I found the process to be very simple and easy. So easy I wasn’t sure I’d done it right! (One thing I did need to have was a mission statement/explanation of what my company is. See more about that below).

Apply for an EIN

An EIN is an Employer Identification Number and it is your business’s equivalent of a social security number. You’ll use that number rather than your personal ssn when doing anything connected to money and taxes with your business.

Apply for a Bank Account

Use that EIN to set up a business bank account separate from your personal one.

This is easier for taxes and it gives you a clear idea of what money is for use within your company and to pay your authors and which money is for you to take home. You’ll pay yourself either a salary or a royalty from the profits of your company and you’ll transfer it over to your personal account with the same level or paperwork you would for any of your authors.

I can’t stress this enough: keep your business’s money separate from your personal money!

How much money will you need as seed money? Not that much.

Some businesses require a lot of money in start up costs: renting a space, furnishing it, getting the things to sell. This is not like that. You’ll need money to pay for things like editing, cover design, ISBN numbers. The way I have started is by using print-on-demand for physical paperbacks and that means not having to pay to print thousands of books or warehouse store them. I’d say probably $1,000 to $2,000 will get you started.

Write a Mission Statement and Business Plan

A business plan doesn’t have to be the size of a PhD thesis. The word can be intimidating, but in reality it doesn’t have to be more than a single page laying out your intentions. Answer questions like why you want to go into business, what your company offers that’s different from what’s already available, your practical steps to get books visibility. It’s like writing a query letter for your business instead of your book!

As part of this you’ll want to create a profile of your target audience. Who do you think is going to want to buy the books you publish? Get as specific as you possibly can because you can use that profile to figure out where to go to reach those people.

Having a niche is a great thing. It gives you focus and allows you to remember what you’re doing that’s different from the big guys. On the other hand, you have to be careful in selecting your niche that it’s not so narrow that you have no audience.

Being small, we don’t have a lot of overhead so we can afford to take on these quirky books that wouldn’t find a home in a bigger publishing house. Also, because it’s our sole focus, we know where to market them to.

Having a Niche: It’s a double edged sword, as they say. You want a narrow focus so you know exactly who to market to but you also want an audience large enough to sustain your company. The balance that I try to find with Dev Love Press is to take on books that my core audience, people like me who enjoy “wounded hero” romances for whatever reason, will love but also promote the books to general romance novel readers who have never considered giving a disabled hero a chance. I love when we see reviews where someone says that they would never expect to find one of these guys sexy but they totally do. A mainstream person comes to realize that a guy with a disability is still a guy and still a viable romantic partner. Now that’s what I call success!

Make a Contract

Again my paralegal classes prepared me pretty well for this. I had taken one class specifically in business law and contracts because at that point I knew that I was heading towards creating a company.

I got a lot of inspiration and ideas from the book Business and Legal Forms for Authors and Self Publishers.

You’ll need to decide on a fee structure. How much royalty will you be giving your authors? Will that be gross or net? How much will you take as your own salary (in any) and what percentage will go towards advertising, towards getting new business, towards maintaining your office systems?

I regret the current way we’re set up. I think for future books I’ll do things a little differently. One thing that is a priority for me is getting the author’s a good royalty rate.  You’ll need to figure out what percentage of profits you’ll want to:

  1. pay authors
  2. pay yourself
  3. put into advertising and other promotional activities
  4. put towards physical copies for reviewers, giveaways, conferences
  5. save for taxes (I’ve been setting aside 14% for that)
  6. put into office supplies
  7. put towards future editing, cover design, ISBN numbers, etc.
  8. put towards future advances
  9. put towards professional development like conferences or organization fees

Since it’s a start up, you may want to not pay yourself for a while and put all your profits back into the business. That’s up to you. Luckily with Print on Demand and ebooks there is not much initial cost. I’ve focused on those while I build up enough money to branch into more traditional physical books.

In a later post I’ll talk to you about my favorite budget software and how to keep all these categories separate!

And make sure that you are clear on what rights you are getting! If you’re going to focus on e-books (as I do) then you’ll have to make sure that you have both digital and print rights!

Get an Accountant

Your taxes are about to get more complicated.

So get a professional to help you with them. No more TurboTax or Dad doing your taxes for you!

It’s going to be worth it because someone who understands taxes for small businesses will know what deductions you can get and will often save you money. So far for the last two years, my accountant’s fee has been completely covered by the refund he’s gotten me (and there was leftover too).

So you’re prepared for tax time, use having a business bank account (or budgeting software that I’ll talk in more detail about in the future) to keep totals of certain categories like: money spent on advertising, money spent on business travel, money paid to authors, money paid for office supplies and equipment (and keep receipts too)

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Does this sound horribly unsexy? Perhaps surprisingly, I found it fun. I enjoyed the process of getting all my ducks in a row.

 

Recommended Reading:

business and legal formsbrand called you(This last one recommended by Jane Friedman)

Last Week: Taking the Leap             Next Week: Finding Your Manuscripts

Starting a Small Press Publisher: Taking the Leap

It was suggested to me recently that people might enjoy seeing a behind the scenes look at Devoted Love Press and what it’s like to own a small indie publishing company. So I decided to share my story with you and keep you updated as we learn and grow and try new things.

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First of all let me take you back to the beginning of this journey…

My name is Ruth and in 1999 I started writing a novel. I’d been interested in being a writer since I was a child and at 18 years old I began to develop the plot that would become a novel that’s pretty unique in the marketplace: (W)hole. It took me seven years to craft this story that had me diving deep into my own psyche and laying bare my soul with as much honesty as possible. (To this day there is only one other book dealing with the same issue and it takes it in a very different direction).  Once I had it finished, I sent it out to agents and publishers. By that time I had a MA degree in Creative Writing and I knew the drill well. I sent it out over and over for three years. I got some positive comments and it won some awards but no one wanted to publish it.

Not enough of a market, they all said.

I had written my book with its paraplegic hero because there were not enough books in my childhood library with disabled characters. I wanted better representation for those with disabilities and characters that showed nuance instead of cliche. The publishing companies couldn’t care less.

In 2009, I self-published.

This was just before the huge boom in self-publishing. It was only in paperback at first because the Kindle revolution had not quite happened yet.

After a year or so on the market a friend suggested trying the new Kindle thing. So I put it up there too and began to see sales. Not huge numbers, but enough. People were hearing what I had to say. Eventually I found others like me who were looking for books like mine.

I was getting reasonably successful with (W)hole and then its sequel Breath(e) and a couple collections of short stories with the same theme of physically disabled heroes. But I’m just one author. My goal from the beginning was to get a good presence for these kinds of books and I couldn’t do that all by myself.

So then I started thinking about taking the techniques I was using to sell my book as an ebook and getting other people’s books up as well.

In the summer of 2012 I filed for an LLC and started my company: Dev Love Press.

The filing part was easy, but the sense of responsibility was scary. Could I really do justice to the books that people entrusted to my care? Could I build a successful company when my background was entirely in writing and not in business or marketing?

Those are questions I’m still working on two years later.

We’ve launched seven books (WOW!) from three different authors (including myself)  in those two years and we’ve gotten some good press for them. But now I want to expand beyond the techniques of a self-publishing and start utilizing traditional methods to get book sales.

In future posts I’m going to share with you what I’ve been doing so far and set plans and goals whose results I will share with you also. I hope you’ll continue to follow along, whether it’s because you’re curious about what a small indie publisher looks like on the inside or because you’re thinking about branching out into creating a company of your own!

low res breathe coverThe Boy Next Doorhow to book cover kindle

 

 

 

 

 

Next Week: The Legal Bits

Guest Post: The Thrill of a Published Book

by Ruth Madison

We who dream of being authors anticipate for years holding a book in our hands with our name on the cover, the pages filled with out own words.

It is an amazing moment.

 But if can also feel a bit…unreal.

You’ve waited years for what you’ve written to be a proper book and now when you flip through the pages and see your own words, it feels like it must be a joke. These are your words and someone has put a binding on them, but they still look to you like the words you typed into Scrivener and saw scrolling by on your computer screen every day. Who hid them inside a book cover?

And then for us worrying types, it gets worse.

You’re on a high for a week, showing your book to everyone you know. But then worry catches up with you. You’ve accomplished this huge goal, but there’s another one waiting for you.

Will anyone buy it? Will anyone read it?

You start to worry that it will just sit there and not move a single copy and your publisher will wonder why they gave you this chance.

Then you see your sales figures. And it’s selling.

Another huge thrill that lasts a week or so. People are reading your work! People are connecting with the story that you have told!

Until worry catches up again. What if everyone hates it?

What if they think it’s awful and feel cheated and get angry at you? And you become consumed with anxiety again.

Then some reviews get posted. And they aren’t terrible. No one is yelling. Several people liked it and they thank you for writing it and you read their words with tears in your eyes (authors need your reviews like faeries need your claps!)

Yes, having your book published is quite a roller coaster ride.

I feel a little foolish for exposing the truth of my feelings like this. Aren’t I supposed to be just glowing with pride from the moment I get a contract until…well, forever? Is there something wrong with me that the thrill wears off and is replaced by worry each time?

Maybe there is! But I think it also helps me in being a career author. The high has to wear off so that I can go back to writing the next book, seeking to feel it again. Writing and drug addiction. Yeah, that’s totally the comparison I wanted to make. It’s true, though. Thrills never last forever, but they feel so good that we go back to doing whatever it was that allowed us to feel them in the first place. I’m glad for me that’s writing books. I’ve got plenty more ideas and I’ll keep chasing the elusive high that lasts.

Ruth’s first two books have just come out in their second editions…

(W)hole 

Paperback / Kindle /NookSmashwords

 

 

 

 

 

Breath(e)

Paperback / Kindle /Nook/ Smashwords

Visit Ruth at her site www.ruthmadison.com!

Is it a scam to not offer an advance?

Something has been bothering me and when something bothers me, I write about it!

Writing and publishing scams are all around us. And there’s a lot of great advice out there about how to avoid fake publishers who are going to steal your work or make you buy author services that don’t do much to help your book.

I live in fear of someone accusing me of being such an operation!

The fact is, we are a very small press. We’re just starting out and we don’t have a track record yet.

The best way to tell what’s definitely a scam from what isn’t has always been this:

Money flows from the publisher to the writer and not the other way around.

If a publisher ever asks for your money, that’s a bad sign. The publisher takes on the risk of fronting the cost for editing, proofreading, cover design, review copies, etc.

I think that is absolutely true.

But yesterday I saw someone on Twitter claiming that if a publisher is too small to be able to offer you an advance, they don’t have the money to be handling your book.

That’s definitely your choice to make as you look at your options for who should publish your book. It is a warning sign that money is very tight at that company and you don’t want to attach yourself to a sinking ship. But many very legitimate small presses cannot afford advances. We’re in that position now. I hope someday we’ll be able to offer advances, but right now we’re stretched to the max, putting all our money and other resources into promotion.

I asked the woman on Twitter about this and she said:

1) Writers need a show of confidence in their work in the form of money, since a publisher is going to be making money off of their hard work.

2) She is owed thousands from a bad experience with an indie publisher

3) She’s never seen a good indie publisher, they don’t pay their royalties and they don’t promote

So let me address those. The first is a very valid way of looking at it. If you’re concerned that you might contract with someone shady, then you might want that good faith money up front. However, a company that doesn’t offer that is not necessarily a scam.

As I said earlier, the publisher puts a ton of resources into the book behind the scenes before they even know if it’s going to make any money at all. Most of the risk is the publisher’s (and I think that’s why so many look for short cuts or ways to make money off the author instead of from legitimate book selling). My good faith showing in your book is the money that I’m putting into proofreading, editing, cover design, etc.

An advance is a mixed blessing because it is an advance against royalties. That money is nothing more than royalties up front and you won’t make any more on your books until it is recouped by the publisher. Many small presses offer a higher royalty rate and one that you’ll earn much faster by not having the advance.

As far as number two, I’m not sure how it is possible for the press to owe her money. If she’s talking about a small press that didn’t offer an advance, but was otherwise identical to the large houses (in other words, if the maxim of money flows only from publisher to author and not the other way around was followed, then where is this missing money?) I haven’t asked because I was starting to feel like I was getting overly defensive in talking with her and I do think she has a legitimate point.

What I think could have happened is that when small presses fail and declare bankruptcy, it can tie up the rights to your work. You may end up fighting a legal battle to get your writing back. That really sucks.  Coming from the background of being a writer myself, I will never let that happen in my press.

Again, we are a baby press. We don’t know yet if we’ll be able to thrive. We’ve got hard work and passion on our side, but if it looks like we aren’t going to be able to make it, my number one priority is to get authors the rights to their works. As well as any money they are owed. The money coming in goes to the author first and then gets divided up for the rest of the company. That is how I operate. I will go into debt myself rather than see any authors not get their rights returned immediately if my business goes under.

The last point is the strangest to me. In a publishing house where money is never taken from the author, then promotion is the only way for them to make any money at all.

We’re in this together, my authors and me. The only way for either one of us to make any money is if I am working my butt off promoting and getting sales for their books. The only source of money for this business is through getting sales of the books. Unless you are an author services company and selling authors “promotional packages” or what have you, then you have to promote the books.

All businesses intend to make money. They see a need and decide to fill it, expecting to be able to profit from filling that need. If one is greedy or selfish, one might see the dreams of thousands of aspiring novelists as a place to get money. Many, many indie and small presses are not like that. We do not take money from authors, we find a way to get them money by working very hard ourselves.

I’m not asking you to trust me. If you decide to sign with this press, then you will know all the risks and benefits up front and that’s your choice. It might be the best option for some. It might be a terrible option for others and so you are not forced to become my author! It’s only if it’s the right choice for you and what you want for your career.

I hope to have a track record soon. I’m working on releases now so we can see if this little baby press can fly. I’ve advised more than one author to wait before signing with me, to make sure that I can do all that I think I can do for their books.

When vetting a publisher, look at their track record. Look at what they have done and how their books are doing. Make sure that you understand any contracts before you sign them. Writers, you are the ones with product here. You are the ones in control.

Don’t let anyone take advantage of you, but also don’t dismiss the small publishers just because we can’t offer an advance. Believe me, we are hungry to prove ourselves and sometimes that’s a big advantage for you.