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Writing and Publishing, Part 24:
Becoming your own publisher:
The Money, Part 2.
In this essay, I simply want to cover, in a bit of detail, some
of the business expenses, which I pointed out last week.
First on the list is publisher's liability insurance. This is a major expense and, the worst of it is, I'm not sure how important it is. The truth is, I'm not even sure that I am adequately covered. Like all insurance, I end up taking the agent's word for a lot of this.
Right now, in theory, I am insured against errors of omission or defective advice. that's for self help books, etcetera. I am also covered for a bunch or other screw ups. Here is the legal jargon of it. A bunch of words which would make an attorney chortle.
In addition this policy covers libel, slander, infliction of emotional distress, trade libel, product disparagement and other forms of defamation. Also other perils, such as invasion of privacy claims against the media, and commercial appropriation of name or likeness. Additionally, this policy covers intellectual property violations including copyright infringement, infringement of title, slogan, trademark, trade name, trade dress, service mark or service name, plagiarism, piracy, misappropriation of ideas under implied contract, and unfair competition relating to intellectual property infringement.
The policy also covers Authors who write for me and just about anyone else who works for or with me on a world wide basis. Legal defense is guaranteed. The limits of coverage is $1,000,000 with a deductible of $5,000. All of this sounds expensive, and it is. Last year the premium was a bit over $2,000. This year, I expect it to be more.
There are also expenses for computer hardware and software, I like to keep reasonably current. This means upgrading my computer once in a while. It also means buying occasional software upgrades. These costs are somewhat subjective. Since I am working with other firms, mainly book manufacturers, I need to make sure my system is compatible with theirs. The people I normally work with help by making available lists of their equipment. For me, it's simply a matter of making sure they can read my files and use them. I usually figure on spending between $1,000 and $2,000 a year for this.
For education I regularly subscribe to a couple of computer magazines. I also used to subscribe to two publishing trade journals. I'll address this in a later essay. For now, it's sufficient to say that I no longer receive any trade journals. As to other education, in four years, I have attended two book manufacturers seminars for a total cost of $150.
One expense, which I believe to be very important is the cost of a website. Since I have a strong background in things electronic, I was able to design and build my own website. I'll get into this in detail in a later essay. I also update my own site on a weekly basis. After I bought the software to build the site and upload it, my expenses leveled out to $60.00 per month for server space with a large firm. This firm maintains the hardware and keeps it backed up. For sure, if you need to have someone else build and update your site, it could get a bit more expensive. Still, it is a necessary expense. This and you catalog will be your major interface with your customers.
The catalog is also a necessary expense. Currently, I manufacture my own, using a ledger sized (11X17) inkjet printer. Printers are inexpensive. This one cost less than $1,000. The ink is not inexpensive. It is the major cost of the catalog. Currently, my catalogs cost me about $4.00 each. Thus, I am carful where I send them. This is one area which I need to study carefully. I need to work harder on my marketing in all areas.
Last week, I listed the cost of my products. We notice that it was based on two major things. First is the kind of book we decide to publish. A hard cover can cost two or more times as much as a soft cover. Of course, we price the hard cover higher. There are pros and cons which we will discuss at the appropriate time.
The other factor is the number of copies we decide to print. I made one of my major blunders in this area. There is a very large set up cost for the traditional press method of book manufacturing. Thus the cost per book will decrease with quantity on some sort of curve. Although we would like to go to the diminishing-returns point on that curve, we must be realistic. What we don't want is a garage or basement full of unsold inventory. I have found that being very conservative about potential sales is a good policy for a beginner. Enough said.
There are a great number of other costs of business. A few of these are, postage, bank charges, membership dues, telephone, travel, and the post office box. It is very important to realize and account for all of the costs. We can always be reminded of the builder, working on a tight budget, who went bankrupt because he did not account for the cost of nails. Nothing is trivial if we don't know what it costs.
Next time, I'll be discussing our suppliers.
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