Tuesday, March 05, 2013

Business nuts and bolts

There are several excellent blogs devoted to the business side of writing (you can read three of the best here, here and here) but few talk about the nuts and bolts of keeping track of your sales. Everyone seems to assume you just know how to do that.

Well, I didn't.

Not when I first started, anyway. My first book was published in September 2003 (ten-year anniversary's coming up - I think we should have a party!). I used a pen name because my husband was concerned about dragging his family name through the erotic romance mud. When I sold 173 books in two weeks and made a royalty check of $430, he changed his mind. There's money to be had in sex! Who knew?

(I did, but that was beside the point {g}).

But I was too new at the whole thing to really understand that being a writer means being self-employed. I happily wrote books, sent them off to my publisher and deposited the royalty checks with the bliss that belongs to the ignorant.

Then I went to my first Romantic Times conference and my eyes were opened. Promo alley? What was that? Who supplied all those goodies the readers eagerly gobbled up? The writers did? Where did they get the money to buy all that stuff? Did it work? Advertise my book? I was supposed to do that?

I'm a fast learner. Went home and got myself a DBA (Doing Business As), went to my credit union and started an account that would be solely dedicated to my Diana Hunter earnings - and went into business. Designed and bought some promotional items from a friend who runs The Copy Shop and started to keep track of money in and money out.

I like Excel. It's a good program and I'd used it in my day job for a number of years, so it was the database program I turned to. I still use it (the 2003 version - hate that Microsoft "improved" something that wasn't broken. But that's a blog post for a different time). You can use the program of your choice, but if you haven't started keeping track of your writing, it's time.

I've spoken of file management before; that was more about how to keep track of your stories on your computer. What I'm talking about now is how to keep track of what you've written and whether or not it's making you money.

First things first

If you don't yet have a DBA and a financial account dedicated to ONLY your writing career, go make it so. Your accounting will be so much easier on all fronts when you can do business, not from your family account, not from the same account with which you pay all other bills, but from an account specifically dedicated to your royalty checks and your expenditures as a writer.

Please note: That doesn't mean you can't use that account to pay for other things. I paid my kid's tuitions, I currently pay the VISA bill out of my Diana Hunter account. I have a line-item called "salary" for when I absolutely have to have that new blouse at JC Penney's. It just makes everything easier when it comes to tax time.

Second things second -- setting up your database (if you haven't already done so)

I set mine up (using Excel) with the entire year on one workbook page. I like to see the entire year in a single scroll (see below). The little red triangles in the cells means there's a comment there (I opened one so you could see it). The one in "expenditures" simply reads "all expenditures come out of the checking account". I leave notes like this so whoever takes over after I'm dead will have a clue (Kristine Katherine Rusch has a great series of posts about dealing with your writing after death. Read them later. Get your financial records in order first).

If you don't know how to use Excel, take a class at your local high school or a workshop at the local library. It's really a very, very valuable tool that you won't stop using. Being able to use a good database program is as important to your writing career as being able to use a good word processor. I can't emphasize that enough. I can show you a good set-up, one that works for me. I can't teach you how to enter the formulas or do the math.

I can, however, give you an example. Take it, tweak it to your needs and then - be faithful to it. At the end of the year, it makes pulling together the information you need to itemize for your taxes a breeze! I created a template (the above screenshot shows only a small piece -- all twelve months are on the same page) and then each year I simply change the year in Row 1 and fill in the balance forward cells and the sheet now will make all the calculations for me.

(sorry the picture bleeds off the side of the page. It doesn't in my editor. When I make it smaller, however, you can't read it)

If you haven't done so already, this week's activity revolves around the business side of writing and consists of three things to do:

1) File for your DBA if you haven't already done so (see your local county clerk for the forms). You are a self-employed business person now and need the paperwork to prove it.

2) Set up a financial account for your money. When I started, I put $400 of "seed money" into my account out of the family savings since I hadn't been keeping track of those early royalty checks. They'd been simply deposited into the regular checking account and I had no record of what happened to that money. Put in what you can afford -- it will grow as you get royalties from your work.

3) Set up a database that will allow you to see where your money is going. For some of you, this will mean taking a class in Excel first (Microsoft actually has several excellent modules if you want to self-teach yourself the program). If you already know how to do use a database (Excel or any other), then set it up in a fashion that works for you.

That's enough for this week! I'm planning a series of these Nuts and Bolts and will use that tag along with the writing workshop tag to help you find them. :)

Play safe, and drop a tip in the jar on the way out!

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