Tag Archives: accounting

Amateur or Professional?

As previously mentioned last weekend I was at Shamrokon – the Eurocon for 2014, which saw my debut as a convention panelist and something else I might be mentioning at a later time. But what I’d like to talk about the question of when does the amateur become professional?

To date in a little under three years the combined sales of my three titles are over fifteen thousand copies. It is always hard to get any serious data on what constitutes average sales. There was a report in the media a year or more back that suggested that the average self-publisher makes less than $500 from their books, which assuming it was true then or now, would put me well on the far side of that particular bell curve.

I’ve always referred to myself as an amateur writer but over the course of the con I got into conversation with a number of other creators, who felt that the word isn’t one that I should really be applying to myself. The argument was put that once being paid, a writer should call themselves a professional.

Before going any further let me to introduce the accountancy concept of materiality. It tends to be a big deal especially in auditing work, but basically it means at what point does a sum of money or figure matter or become material? For example ten thousand euros/dollars/pounds would likely be a material amount for an individual or small business but not so much for the Microsoft corporation.

Why do I mention this? Well my definition of professional writer has been: where writing represents the individual’s primary revenue stream – or in other words it is where they get most of their money. Clinical but it does get us to why call myself an amateur – my day job is the one that pays my bills, the writing income is a supplement.

Still, I do know writers who have number of titles to their name – through traditional publishing – who still have day jobs because that is what is necessary to bring in the necessary funds. But because it has gone through traditional publishing, no one would question their credentials as professional authors. Self publishing doesn’t have quite such a clear line and for my tastes as-soon-as-being-paid fails the test of materiality. Ten sales doesn’t make you a professional, nor does a fifty but a hundred thousand does. Where is the line? I’m not sure but think I am a bit close to it than ever expected.

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Filed under Random Rants, Self Publishing, Traditional Publishing, Writing

Professionalism and Future Earnings

Since I started self publishing I’ve occasionally been asked whether I plan to become a full time writer. To date the answer has been a firm no for two reasons.

1) Without a reason to leave the house each morning I suspect I’d go barking mad inside six months.

2) Whatever the aggravations of the day job I am rather attached to the steady income that it brings.

Writing is not the easiest way to earn a living wage. The amount of money I’ve made from writing in the twenty months I’ve been active would class it as a very well paid hobby but a very badly paid job.  To put a number to that, last year was my first full twelve month period.  I made (after deductions) the equivalent of 20% of my day job take home pay, so like I said, well paid hobby. In my previous post I commented that being a published writer – be it indie or traditional – means being a self employed businessman(woman), which in turn means basing decisions on the best information available.  So coming across a blog entitle What is Your Novel Worth by Jeff Posey, twigged my interest.

This blog revolves around the financial concept of NPV – Net Present Value. Loosely put this is a measure of what the potential revenue stream from your work is worth today. To take directly from Possey:

It’s easiest to imagine NPV in reverse. Let’s say you go to a bank and ask their financial wizard how much you’d have to give them to get, say, a $50 check every month for forty years. The number they give you is essentially the NPV of the future cash flow of $50 per month. NPV has a long track record in business and law.

We’ll make these calculations over forty years…

NPV was something I came across in university but haven’t really used since but it is a tool which has pretty solid applications for a writer. It’s useful for comparing two schemes that do the same thing in different ways. It tends to make a lot of assumptions but as a forecasting method it has its uses. Especially for a writer comparing self publishing to traditional publishing. Now it is hard to think forty years down the line. After all ten years ago who saw the rise of e-readers and self publishing as a viable means of reaching a mass audience? Well probably a few people in Amazon, who knows how many but likely no more than the number of fingers on the hand of a blind butcher. But a great many people out in the real world already do sign up to long term agreements. Do you have a mortgage? When then you’ve signed up to an agreement that is fundamentally based on the hope that you will be in a position to pay the monthly installments.  Sure various financial tests are applied but basically the whole thing is based on the hope that past performance does guarantee future returns.

Anyway, how do I think this relates to writing? Prior to the e-reader revolution an individual novel had only a fairly short life span. Once a book went out of print then it was of no further financial value to to the author. Copies might float around in second hand bookshops for decades but that has no effect on the authors bottom line. True there are timeless classics that will likely stay in print indefinitely but the seventy years of copyright post death was irrelevant for the average novel since a work that stayed in print ten years was probably doing well. Now, at least in theory, a book could remain available for the whole of the copyright period. Even if the number of sales per year is small, if those continue to tick away for years on end, the sums of money could be significant in the long run. Or to put it another way be the gift that keeps on giving. Just as important a writer’s entire work could remain available and if I have noticed anything it is that the best advertizement for one of your books is the existence of another.

Success in writing has by any measure always been about the long game, with most overnight successes being the result of years of effort, the changes in nature of publishing have made it even longer. If we take on board what Jeff Posey has said then we have to think in the long term as well as the short, make sure we make best advantage of our work. With a potential earning period of decades, it becomes important to keep that in mind when asked to sign any kind of publishing contract. Certainly any request for the rights for the whole of the copyright period should be viewed with extreme suspicion.

Jeff Posey’s article can be found here and I strongly recommend a read through.

There is also an interesting series of comments on this topic on the Passive Voice.

I’ll finish off with a final word from Possey

Lesson: Write more, do other stuff less.

Regards

The Nameless War, available on Kindle, Smashwords, Kobo and paperback.

The Landfall Campaign, available on Kindle, Kobo and paperback.

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Filed under Self Publishing, Traditional Publishing, Writing